E-business Models and Their Application to Two Different Hospitality Industries
Hilton Hotels
Many hotelmotel chains have developed their own websites so travelers can book online. The Hilton Hotel chain has taken advantage of a successful online strategy that requires forming alliances with other hotels in a single combined e-booking website. Five major hotel chains (Hilton, Hyatt, Marriott, Six Continents, and Starwood) launched a single allied online booking website called Travelweb.com in 2002 to compete directly with online travel agencies (e.g., hotels.com or Travelocity.com). This combined discount room site provides negotiated cut-rate deals at more than 10,000 properties and nearly 100 hotel brands. The advantages to online room hunters include a better deal in room rates, a direct link to all airlines websites, reservations are made directly into hotels systems to eliminate any potential snafus, and fast payments to hotels where rooms are booked online. The Hilton chain maximizes flexibility by developing programs to provide its hotels with more flexible room offerings and pricing schedules on an available-as-needed-basis (Yang, Flynn, Anderson, 2010). In 2001 InternetWeek recognized the Hilton Hotels Corporation as the E-Business of the year. The survey conducted by InternetWeek evaluated 400 candidates in several critical areas, including improved relationships with customers and suppliers, and the extent of involvement in electronic marketplaces. The Hilton Hotels Corporation was named the travel and hospitality winner, and top e-business overall, due to the huge volume of online business booked through its brand websites Hilton, Doubletree, Embassy Suites, Hampton Inn and Red Lion Hotels Inns, which booked more than 300 million total online business during 2000, double the previous years, said Bob Violino, Managing EditorFeatures for InternetWeek. Hilton did an extensive website enhancement and redesign project that integrated and improved Internet information and transaction services on a single platform for the companys family of nearly 1,900 hotels across North America.
Dominos Pizza
In the autumn of the year 2000, Dominos Pizza started using BSkyBs satellite-based Open TV service to increase sales. Internet ordering began at Christmas. The pizza delivery firm declared online sales averaged 50,000 per week in the United Kingdom and Ireland. Customers were quick to use both methods of ordering, with interactive television in particular helping total sales pass 1m. A spokeswoman for the company said that TV orders where customers use their remote control were selling three times higher than Internet orders. The spokeswoman said this was due to TV watching being a primarily leisure as well as a communal activity versus surfing on the Internet. This made the television seem more ideal for ordering pizzas. TV and Internet orders represented 3 of weekly sales for the company that year. The companys goal was to sell one third of its pizzas through the Internet or interactive television within the next ten years. The value of TV and Internet orders is considered to be higher than that of phone orders. A difference the company attributes to the menu looking more appetizing on screen than on paper. Dominos expects to see a fast rise in its interactive TV and Internet sales as more customers get access to ordering services. There are also deals in the works to join cable interactive shopping services. Another development during this year was how e-pizza sales aided pre-tax profits during a twenty six week period to rise from 349,000 last year to 1m this year (BBC News 2010). This year Dominos can lay claim to having one of the most successful iPhone apps released by a business. The company revealed that its pizza ordering app generated 1314659.95 worth of sales in just twelve weeks. As of the year 2010, online ordering is now accounting for 28 of sales. The iPhone app has paid impressive dividends. Chief Executive Don Meij declared that the companys menu range was a big contributor to their excellent results, but the companys embrace of new technology also paid critical dividends (Thomson, 2010).
The Internet is an amazing conduit of information exchange and sharing. The key for online businesses has been to provide lower prices, wider selection, better choices, and more convenience. The hotel and pizza delivery industry capitalize on this through the creation of their own websites, the formation of alliances, integrating new technologies, and providing the consumer with the ultimate website experience. This trend has shown no signs of slowing and will continue to provide fodder for researchers of online business models.
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