Exercise for class 10/12

Reverse Travel Auction

Definition of reverse auction : same rules as a regular auction except that sellers compete to obtain a buyer’s offer and prices usually decrease over time.

Reverse auctions became popular in the late 1990s due to internet evolution

Reverse travel auctions’ history

Boom these past few years :first with online auctions then reverse auctions, especially in the travel industry.

Very popular in the travel industry because it is a way of selling perishable excess inventory.

Reverse travel auctions’ history

In most of reverse auctions, customers don’t know – until the offer has been accepted – which hotel they will be staying in.

However, according to the customers’ preferences, it will show them example of hotels that might accept their offer so customers can still have an idea.

Customers need to set up their preferences and wait if their offer is accepted.

Overview of reverse auction OTAs

Customers need to create an account to make their offer (emails are being sent)

Types of hotels you will find on this website :◦ Hotel resort (as the name indicated)◦ All-inclusive resort◦ Mainly located in islands or beautiful places (with

swimming pool or near beaches)

www.resortcompete.com

Websites : ◦priceline.com◦oltiby.com ◦resortcompete.com◦cruisecompete.com◦zujireverseauction.com◦ehow.com

Advices on using reverse auctions

Different steps to follow to make the offer :◦Choose the location and dates◦Choose the hotel star level◦Set up the preferences (wifi, spa, room-

service…)◦Name the price we are willing to pay◦Wait for an answer

Advices on using reverse auctions

As we saw before, reverse auction can be used as very good tool to sell excess inventory. Thus, hotels can participate in order to fill their free accommodations, especially during low frequency periods.They can follow as well their competitors prices. Besides, if they are not interested in an offer, they don’t have to participate to the auction.

Conclusion