Managerial Accounting Online \"Opaque Booking Websites\" Such

Managerial Accounting

Online "opaque booking websites" such as price-line and Hotwire are profiting in the existing economic climate since travelers are progressively using the internet to scout for better online packages. Similarly, "opaque pricing" has started to become ever more popular as shrewd customers respond to offers where they can book together and benefit or take their shot at purchasing a surprise proposal that safeguards the veracity of their fares and rates.

By preferring to use an online service like Hotwire or price-line, in conjunction with their own marketing campaign or as a standalone outsource for selling their vacancies and getting future bookings, the companies benefit greatly on multiple levels.

Firstly, they gain from absolutely free advertising that has tremendous outreach; these intermediaries market the products and services without any charges -- they earn from the commissions on the proceeds or through other means. Another advantage for high-priced services like hotels and airplanes is that a convenient comparison is available at most websites as opposed to the tedious process of going back and forth between different the websites of the different service providers.

Further owing to the fact that these websites have become the go-to forum for anyone looking to travel via air and stay at a hotel, the service providers may actually lose out if they do not have an online presence on these forums. Furthermore, they can only result from the high volume of online traffic that is bound to raise their visibility and brand awareness.

Lastly, both the airlines and hotels are willing to forgo a certain amount in profits that may be generated from selling their reservations at an exorbitantly high mark-up for a confirmed reservation because that not only aids them in the long-run but also allows them to operate at full capacity instead of simply recovering a small surcharge on customers who have not been able to meet their reservations.

2. In the prevailing situation of dwindling hotel occupancies, the managements are poised to offer their potential customers huge discounts through an online intermediary, usually in the form of a travel agency that operates based on the opaque booking models. As mentioned before, these websites including Hotwire and price-line have gained from employing the opaque booking model even as a downward trend throughout the economic system can be observed.

Other factors include the huge databases of clients these agents have. Furthermore, they are continually in touch with multiple corporations that have to travel for business activities, regardless of the rates. This allows for potentially greater amounts of revenue generation for both airlines and hotels.

However, the single biggest reason with outsourcing part of the marketing and sales department in both the airline and hotel industry would be the avoidance of the enormous expenses associated with these departments that would arise out of training, time and customers lost, installation of infrastructure and a team dedicated to its upkeep and updating to new offers apart from an entirely separate customer care unit.