Reverse auction sites

What their benefits on hotels revenue and occupancy growth?

Reverse travel auctions' history

•Reverse auctions exist since 90s and become popular thanks to Internet.

•The first web site which use reverse auctions are FreeMarkets.

•Priceline was the first reverse auction website for travel. It was founded in 1998.

•They are different type of reverse auction.

How do they work?

Buyer / Seller status reverseReverse auction web sites offer the

possibility for buyers to post their particular needs and purchaser compete to win the deal.

Purchaser will offer, in order to win, progressively lower quotes until no supplier is willing to make a lower bid.The buyer

NEEDS

Suppliers 1

Suppliers 2

Suppliers 3

How do they work?

The winner is the unique and lower bitReverse auction web sites offer the

possibility for buyer to bit at the lower price for the product there are expected.

Lowest but not unique

To high!

Uniqueand lowest

To win the buyer have to make the lowest and unique auction.

«  www.smallclic.fr » Study

•SmallClic is one of the most French web site known for reverse auction and downward auction.

•On SmallClic website you can find offer from an International Hotel group which can do importante promotion, Club Med.

Customers advice

•Some websites give advices and explications to customers to understand and use Reverse auctions.

•http://www.encheresinversees-zen.com•http://www.reverseauctions.com/•http://encheresinversees.eu/

Key points

•This is a new trend,•Several type of reverse auction exist,•The definition and the use is not clear,•A lot of website had to close,•There are advantages in the B2B sector

because buyers and sellers are well known.

•Buyers have more power in the negotiation.

ConclusionAs there are two types of reverse auction there are two types

of politics.

Buyer / Seller status reverse• This allow hotels to be more competitive and fish guests!

They can keep their price so their politic.

The winner is the unique and lower bit• Hotel can participate to this reverse auction but only for

specific product and exceptional promotion.• They should use it to fill in their hotels in low occupancy

period but they have to be careful about their reputation because guest will not continue to pay the full price if they can pay less on internet.