How to Build an Online Quality Hotel Directory

Online directories are beneficial and useful tools to traveling consumers seeking quality hotels located on one convenient site. Building an online directory is of moderate difficulty depending upon the approach. However, with over 30 online United Kingdom hotel directories online, the question becomes, “Is this an economically sound investment?” The answer depends upon several criteria. In this guide, the economic viability of an online directory and the dangers of establishing an online directory will be explored.

Question 1: Is it Possible to Build an Online Directory Listing Quality UK Hotels?

The answer simply is yes. Building a directory website of only top quality hotels would be easy to build physically. Currently, there are over 12 hotel directories that offer lists of the four and five star accommodations in the United Kingdom. Therefore, this need has been met by 12 other websites other than yours.

Question 2: Is a Quality Online Hotel Directory Economically Viable?

Since 12 or more other websites are already listing quality hotels, you will not have a competitive advantage in this area. Your company will have to establish a unique service or presentation of the information in order for the site to be competitively positioned. The economic viability of the website will depend upon a number of criteria:

1. Partnerships with Hotels Listed on the Website
2. Marketing and Search Engine Optimization
3. The Layout and Design of the Website
4. Pay-Per-Click Advertising
5. Tourism in the United Kingdom
6. Demand for Quality Hotel Accommodations
7. Knowing the Target Audience

Each of these criteria is essential in establishing an economically viable website. The success of the website will depend upon the number of partnerships established, the ability to drive traffic to the website and the ability to convince customers to sign up through the website. Income will be generated by advertising on the website through Pay-Per-Click campaigns and through referral fees from the hotel partnerships. To become economically viable, the website would need millions of visitors interested in the third party products advertised or several thousand to millions of referrals. With over a billion users on the Internet, the numbers are reasonable. However, the challenge becomes finding consumers interested in quality UK hotels. This will require investing in advertising on other websites and through social media. If the marketing aspects of the plan are executed properly, the economic viability will only depend upon the demand for quality hotels within the United Kingdom and the number of visitors to the website.

Traditionally, the United Kingdom has been in the top ten tourist destinations in the world. In 2003, the country was ranked 6th in the world with 24.8 million visitors. Tourists reportedly spent $17.2 billion in 2003. In 2009, the global economic recession deterred tourists from traveling abroad. During this time, most individuals traveling were taking shorter holidays in mid-tier hotels. Though tourism numbers increased in the third and fourth quarters of 2009, the industry has not fully recovered. Therefore, the economic viability of this type of website may be dependent upon the recovery of the tourism industry or the targeting of a specific audience, such as business travelers or other interest groups. Investors are encouraged to purchase reports regarding the economic forecast of tourism in the United Kingdom prior to making an investment.

Question 3: How Would You Establish an Online Hotel Directory?

Develop a Business Plan

Before physically building the website, you must first develop a business plan. Set your financial goals for the website. Determine if the income generated needs to be immediate or if you can wait for the industry to recover. Ascertain how much capital will be needed to build the website, host the website, establish business partnerships, market the website and any other pertinent expenses such as research, equipment, travel, etc.

Determine your Niche or Competitive Edge

What will your website offer that no other website currently offers? Will you offer current pictures of the rooms or a 360 degree video cam? Will you guarantee the quality of the hotel through your site? Will you send someone from your company to verify the quality of the hotel? Will you have a location for guest's comments on the hotel, as well as, individuals from your company? Can you guarantee a lower rate than booking directly through the hotel?

The company must establish why the consumer should visit your quality online hotel directory over the 12 others available.

Identify the Partnership Hotels

If you decide to develop partnerships with hotels, this may be the single most challenging aspect of the entire business plan. You will have to convince the hotels to develop a relationship with your company and pay a referral fee for any client they receive from your site. Each hotel must determine that your company is providing a value-add service.

Establishing business partnerships with the hotels listed on your website may prove lucrative, depending upon the referral fee. Hotels may pay your company a pre-established referral fee each time a customer reserves a room through your website. The price cannot be too exorbitant, because it will reduce the hotel’s profit margin. Therefore, your income will be dependent on the sheer numbers of individuals who sign up through the company’s website.

Market the Website

To increase the number of referrals, the company must launch an effective marketing campaign. The most important part of the campaign is driving traffic to the website. As a business owner, you will want to use Search Engine Optimization (SEO) techniques to drive your site to the top of the search engine’s list. This is accomplished through using keywords and other techniques. Once the visitor is on the website, the site itself must be attractive enough to convince them to review the information. The site should be professional, informative, user-friendly, intuitive and organized. Business owners should consult a professional website designer to ensure the site is superior to the competition’s website.

Other aspects of the marketing campaign may consist of email marketing campaigns, Pay-Per-Click campaigns and marketing through social networking tools, such as Facebook, MySpace and Twitter.

Question 4: What are Some Anticipated Pitfalls?

Since the website is the face of the company, all of the interaction with the customer will be strictly online. Therefore, the website must develop a significant following on the web. Awareness of the company will be instrumental in encouraging individuals to use your company’s website over the competition’s website. A company will need an initial investment of at least $2,000 to $5,000 to build a customized professional website. This price should include databases, search engine optimization, copy, banners and all of the features of an online store. Depending upon the type of marketing, the owner may need between $3,000 to $50,000 or more to successfully market the website.

The two major pitfalls of this company will be establishing effective partnerships with hotels and driving a significant amount of traffic to the website to generate revenue. Without these two items, the website will be profitless.
 

Interested in a project like this or any other similar online business? For free initial impartial advice please contact me, Jim Davey, by mail at

jimdavey (at) webtradersonline.com