TUI takes commissionable rooms global

TUI Travel’s AsiaRooms.com has followed the lead of laterooms.com and dropped the merchant model in favour of an exclusively commission-based relationship direct with hotels.

TUI Travel’s AsiaRooms.com has followed laterooms.com in dropping use of wholesalers in favour of an exclusively commission-based relationship with hotels.

Chris Morris, managing director of the business-to-consumer section of TUI Travel’s accommodation and destinations unit, told Travolution: “Using the merchant model, buying through wholesalers, we were able to get strong brand penetration for AsiaRooms, but the best long-term proposition for accommodation-only is the commission model, because hoteliers want control of rates and availability.”

AsiaRoom, which concentrates on English-speaking source markets in the Asia-Pacific region, now sits on the same platform as TUI Travel’s laterooms.com. Hoteliers load inventory via an extranet which allows them to set the rates at which both sites sell beds – and sell through both brands.

Morris said: “It is a fairly simple route to market for hoteliers looking for global reach.” He added that the commission model “gives us more information about customers” which is being used to improve pay-per-click returns.

AsiaRooms is popular in Australia, New Zealand and South Africa, and picks up some business from Europeans looking to visit the region. It only exists in an English-language version, but Morris said: “We will look at adding local language sites. It’s quite a complicated process, but we need to do it to maximise profitability over the long term.”

There are close to 30,000 hotels on the combined database. However, Morris said: “It’s not really about the total number of hotels, it’s about getting the right spread of product for each country and city you operate in. You need a range of properties from five-star chain hotels to independent bed-and-breakfasts to appeal to the widest range of customers.”

He acknowledged TUI had spent “very large sums” on paid search for laterooms, but argued this was done within strict return-on-investment guidelines. “We’ve had great success in raising brand awareness through offline activity for laterooms,” said Morris. “We will do the same for asiarooms at some stage.”