viVIBE

Project Study- Vigilant App Review

17.2.2020
Overview of the app:
Vigilant app review(VAR) is an online marketplace for arranging or offering stays. VAR works for
both host and the user exchanging the information needed by the said groups.

Aim:
The app aims to provide a platform for guests who look for the quality in rooms. The app focuses
on users who are willing to pay a decent price for the experience given. The app facilitates its
users with the crème de crème of hotels in a particular locality.

Objective:
Providing unbiased reviews for rooms on the app, VAR strive to make a win win situation by
bridging the gap between host and the guests.

Scope:
Guests can search for stays using filters such as room type, dates, location, and price. Guests
have the ability to chat with hosts through a secure messaging system. Pricing is determined by
the host, with recommendations from VAR.

Limitation:
The company does not own any of the real estate listings, nor does it host events; it acts as
a broker, receiving commissions from each booking.

User group:
VAR focuses on family groups, trekkers , pilgrimages. The target price ranges about Rs.1500-
Rs.3000 per room. The affordability of the user groups sorts the list. ( Above average income,
below high income)

Individual requirements:
• Branding
• App development
• Legal auditing
• OTA (Online Travel Agency)

Branding:
Branding strategies are the action plans that organizations use to differentiate their products,
services, and identities from their competitors.
A brand strategy is your long-term brand, which helps to identify what kind of image you want to
build for your customers. This means thinking about what kind of feelings and expectations you
want your audience to associate with your company.

1- Company Purpose
2 - Consistency

3 - Emotional Connections

4 - Employee Empowerment

- https://getbambu.com/blog/branding-strategies/ & https://cmgpartners.com/blog/branding-

marketing-strategies/

App development:
Mobile application development is the process of creating software applications that run on a
mobile device, and a typical mobile application utilizes a network connection to work with remote
computing resources. Hence, the mobile development process involves creating installable
software bundles (code, binaries, assets, etc.) , implementing backend services such as data
access with an API, and testing the application on target devices.
 Mobile Applications and Device Platforms:
There are two dominant platforms in the modern smartphone market. One is the iOS platform
from Apple Inc. The iOS platform is the operating system that powers Apple's popular line of
iPhone smartphones. The second is Android from Google. The Android operating system is used
not only by Google devices but also by many other OEMs to built their own smartphones and
other smart devices.

Although there are some similarities between these two platforms when building applications,
developing for iOS vs. developing for Android involves using different software development kits
(SDKs) and different development toolchain. While Apple uses iOS exclusively for its own
devices, Google makes Android available to other companies provided they meet specific
requirements such as including certain Google applications on the devices they ship. Developers
can build apps for hundreds of millions of devices by targeting both of these platforms.

Alternatives for Building Mobile Apps:

There are four major development approaches when building mobile applications

• Native Mobile Applications

• Cross-Platform Native Mobile Applications
• Hybrid Mobile Applications
• Progressive Web Applications

Each of these approaches for developing mobile applications has its own set of advantages and
disadvantages. When choosing the right development approach for their projects, developers
consider the desired user experience, the computing resources and native features required by
the app, the development budget, time targets, and resources available to maintain the app.

Comparing Native vs. Hybrid Applications

At the highest level, there are four main ways that native apps differ from hybrid apps as
illustrated in the following table.
 The Mobile Application Development Lifecycle
There are two interlinked core components of a mobile application: 1) the mobile application
“Front-End” that resides on the mobile device, and 2) the services “Back-End” that supports the
mobile front-end.

Key Mobile Application Services

There are hundreds of cloud and 3rd party services that mobile application developers can
leverage to speed up the development and delivery of their applications. However, it’s unlikely
that a developer is going to be able to become an expert in each of these individual services.

Instead, the mobile developers should look for a development environment that makes it easier
for them to integrate, use, and consume the most commonly required capabilities into their
application quickly and easily, while still preserving the freedom to take advantage of the many
individual services available.

Essential

• User Sign-up/Sign-in and Management

• Social login (Facebook sign-in, Twitter sign-in, etc.)
• Analytics and User Engagement
• Push Notifications
• Real Device Testing

Data Services

• Cloud Storage
• Real-time and Offline Data
• Application Logic/Cloud Functions

Machine Learning

• Conversational Bots
• Image and Video Recognition
• Speech Recognition

OTA (Online Travel Agency):

The role of an online travel agency (OTA) is becoming increasingly important in the
accommodation industry as they provide a convenient way for travelers to arrange their
stay. From the comfort of their home, travelers can compare hotel prices and book them
over the internet.
An online travel agency (OTA) arranges and sells accommodations, tours, transportation and
trips on an online platform for travelers. They are third parties who sell services on behalf of
other companies.

How Do Online Travel Agencies Work?

OTAs generally work on two models. They are,

1. Merchant Model
In this model, hotels sell rooms to OTAs at a discounted or wholesale price. Then,
the OTA sells them to the customer at a markup price

2. Agency Model
This is a commission-based model where OTAs acts as a distribution partner. OTAs
receive full commission after the stay has taken place. The hotel directly receives
the payment from the end customer and does not wait for the payment transfer
from third-party distributors.
Advantages of Online Travel Agents
• Low-cost method of selling accommodation services
• Reduced online marketing spend as OTAs invest in advertising to attract
potential customers
• Impartial reviews give customers the confidence to book
• Users can easily compare various accommodation costs at one place

Disadvantages of Online Travel Agents

• Commission rates are charged on every sale. It can range between 10-
15% of the gross cost
• Restrictive cancellation terms
• Even if accommodation businesses use OTAs, the need for their own
website and booking engine does not go away
• Investment in a balanced multi-channel strategy may be needed to boost
sales

Here Are Some Points You Have To Consider When Starting

An Online Travel Agency.
• Register the name of your agency and if applicable, take a license as per
your local laws
• Try to get a membership in IATA or any other reputed travel organization
• Gain more knowledge about the travel industry and particularly the nice
you want to concentrate
• Get your travel website designed by a professional company
• Offer deals that focus on a specific geography. Focusing on a particular
niche will also bring more success
• Publicize your business in the online space
• Utilize the power of blogging
• Create a good social media presence
https://colorwhistle.com/online-travel-agencies/

OTAs: The Most Pervasive Problems in the Online

Travel Agency Model

That pretty much sums up the relationship between travel industry suppliers and
online travel agencies (OTAs). On one hand, the OTAs provide a steady source of
hotel bookings that reliably puts heads in beds, all without that much effort on the
part of suppliers. On the other, this “effortless demand” comes at a hefty cost: up to
30% commissions on each booking.

That steep price can be either seen as a marketing cost (something hotels would
spend regardless to generate demand) or a tax (something imposed unwillingly on
hotels by a powerful intermediary). Whichever the perspective, the cold, hard truth is
that commissions are often a hotel’s second largest expense after labor. In fact, one
of the core focuses in revenue management is decreasing reliance upon OTAs with
smart pricing strategy.

The French Competition Authority found that:

- Booking proposed an online lodging reservation service where the lodging
operator (hotel, apartment, etc) offers rooms for rental whereby visitors to
the Booking website can make their reservations directly on Booking.

- There are three principal methods of selling hotel rooms i.e., those sold (i)
individually or (ii) as part of a package including transport, car hire, etc., or
(iii) through arrangements with companies where preferential corporate
rates are negotiated.

- With regard to the sale of isolated room nights, these can be sold either
directly by the hotel, on- or-offline, or through online agents (i.e., OTAs
who specialize in hotel reservations or generalists who offer other travel
services alongside which they also commercialize room-nights). Booking,
Hotels.com and Venere.com are categorized as reservation platforms
(PRH), i.e., specialists in hotel reservations, whereas entities such
as Expedia are considered to be general travel agents.

- It is the PRH that has a direct relationship with the hotel operators who
make available to these OTAs the number of available room nights which
are then advertised through a variety of internet portals, including those of
the general travel agents. The room nights distributed by the PRH are
generally sold in isolation, while the other OTAs can sell the room nights
as part of pre-assembled packages.

- More than 90 percent of potential clients consult an online service,

although for the time being, the majority of reservations are still made
offline. The OTAs represented approximately 70 percent of online
 reservations made between 2011 and 2015, and about 24 percent of gross
revenue of hotels, all of which pay commissions to the OTAs equivalent to,
or less than, 5 percent of their total gross revenue.

- The importance of the OTAs is not simply the reservation itself. The public
uses their services to find hotels and for price comparison. It is, therefore,
essential for the hotels to be represented on the OTAs' websites, thus
assuring visibility to the public. The commission charges by the PRH are
between 10 percent and 30 percent of the retail price including VAT. In
certain cases, if a hotel wishes to achieve a better placement on the site,
the commission can exceed 30 percent.

- Booking, as well as the majority of the OTAs who have a direct link with
the hotels, only act as an intermediary between the hotels and guests.
Booking does not buy or sell room nights. Guests do not pay a
commission or other remuneration as they pay the hotelier directly. The
hotelier transfers the commission to Booking once payment for the stay
has been made. This is in contrast with tour operators who buy room
nights from hoteliers after which they sell them to customers at prices
determined by the tour operators. Accordingly, the intermediary model
permits the hoteliers to control the price of the room nights. This is
necessary for proper yield management, and also because it is the hotel
that will be at risk as far as empty rooms are concerned.

- In the general scheme of things, the OTAs rank below search engines.
Below them sit the specialist hotel pricing comparison services such as
Trivago, TripAdvisor and Kayak. In particular, the PRH are by far the most
important clients of the price comparison services. They are remunerated
by a fixed payment per click for each visit to their website.

- Generally, it is only the largest hotel chains that are direct clients of search
engines and price comparators, while other hotels can appear on these
two platforms via the OTAs which reference them on their sites.

- Accordingly, the OTAs who have a direct link with the hotels are placed at
the heart of the business of the sale of room nights.

- This inevitably gave rise to complaints concerning certain practices,

principally the parity clauses, excessive commission rates, appropriation of
hotels' clients, clauses permitting suspension or unilateral termination, and
clauses exempting responsibility.

As a result of the commitments made by Booking, the following rules are to apply in
the European Union from July 2015:
 - Hotels can propose lower prices and offer more favourable conditions to
other OTAs.

- Similarly, these lower prices can be offered directly to customers offline

(i.e., not published online or through an app).

- Better availability of rooms for sale can be proposed to other OTAs and on
the hotel’s own website.

- Booking cannot impose clauses to the contrary nor incentivise hotels to

accept such contrary clauses.

- https://www.oxfordacuity.com/blogs/otas-tax-and-legal-issues/ &
https://hoteltechreport.com/news/otas-problems &
https://www.mayerbrown.com/en/perspectives-events/publications/2015/10/online-
bookings-competition-law-impacts-online-tra

Singapore Hotels Fined for Exchanging

Commercially Sensitive Information Over WhatsApp
The information exchanged in this case included the following:

- Bid prices in response to corporate customers' requests for room rate

quotes

- Percentage by which customers asked for prices to be dropped, and the

position that each hotel would take in response

- Customers' potential room night requirements in the coming contractual

period

- Customers' current and/or historical room rates and/or room night take-
up

- Perceived price sensitivity of a particular customer

- Whether or not a corporate customer is a key account of the hotel

- Whether or not one hotel intends to pursue the other's corporate customer

- https://www.mayerbrown.com/en/perspectives-
events/publications/2019/02/singapore-hotels-fined

5 Things You Need to Know

 - Do your Market Research
- Register Your Business
- Becoming a Government-Approved Travel Agent
- Registering a Company
- Registering a Trademark
- Service Tax Registration
- https://www.techjockey.com/blog/start-online-travel-cms-agency

BACK END MANAGEMENT

How the OTA Back Office Works?

An Online Travel Agency consists of three basic building blocks.
The front end side is a website or app where travelers come to make a booking.
The back end side is the booking engine, the heart of an OTA.
And the provider side is the connection to GDSs, CRSs, wholesalers, and so on.
Here are the main back office systems and their functions:

• Inventory management – organization of connectivity to suppliers via different

channels
• Booking desk – manual or automatic handling of bookings
• Business rules – the logic behind an organization’s decision-making
• Accounting – payment processing and reporting
• Analytics – metrics and reports about business, customers, and employees
• Customer relationship management – tools for understanding and handling
customer activity
• Customer service – managing different channels for engaging with customers
• User management – tools for establishing user roles and permissions

Typically, this is the succession of processes that happen when a customer

searches for a flight or a room and then books it:

Checking availability. - A booking engine receives the availability request

and checks it from all the different providers via an API.
 Sending availability back to the user. Providers then return this information,
which the OTA processes and filters according to a user’s preferences and
their own business rules.

Sending a booking request to a supplier. Once a user confirms a booking

and pays via an integrated payment gateway, the booking request is sent to a
provider (GDS, hotel, airline, etc.)

Receiving a confirmation. The provider must issue a ticket (in case of

airlines) or send a booking confirmation (hotels). The confirmation is received
by an OTA booking engine and then is sent to a traveler via email or is
displayed on the front end side for download.

Documenting customer data. All information a client leaves on the website

(their name, email, location, etc.) is carefully documented in a CRM system.

Managing back office users. The user management system also records
and stores data about the agents working with the back office.

Analyzing booking data. Both customer and employee data can then be
used by the Business Intelligence module in creating insightful reports.

Communicating with customers. In case of any problems or questions,

customers contact customer service staff via accessible channels.

- https://www.altexsoft.com/blog/travel/managing-an-online-travel-agency-how-back-office-
system-of-an-ota-works/ & https://www.oracle.com/technetwork/systems/ota-
156595.html

Legal auditing:
Dispute resolution - Since the OTAs are in the business of providing services, there
are possibilities on dispute over services. The dispute resolution mechanism in the
case of OTAs is rather inaccessible for a common user.

For example, booking.com is governed by the Dutch law and submits to the
jurisdiction of courts in Netherlands3. Back to our illustration, it would be completely
impractical for the user in South Africa to follow this dispute resolution mechanism,
should there arise a dispute on services.

Currently, this may not be so much of an issue for the OTAs but it puts them in a
position of weakness in the competition against “brand.com” (hotel operator branded
booking sites) of various operators. The brand.com are becoming stronger with the
consolidation of the hospitality industry and it would be imperative for OTAs to work
towards user convenience.

Establishment of local entities will be a major step forward in this direction.

Cybersecurity – As the entire business of OTAs are online and OTAs store sensitive
user data including their credit card details, cybersecurity is a major concern.
General Data Protection Regulation - GDPR is a recent development that OTAs
need to seriously take into account. GDPR applies to all OTAs as they deal with EU
customers and it requires complex data management with high liabilities.

It is presumed that OTAs would have undertaken a data protection impact

assessment to identify risks and would have instituted structures in compliance.
However, given the complex business structure of OTAs and multiplicity of parties
involved, there is high risk of leakages. This may lead to hefty fines and loss of
business (GDPR-imposed fines and fees can reach €20 million or 4 percent of the
organization’s worldwide revenues for the preceding year, whichever is higher).

Consumer Regulations – This is a relatively new area of concern or OTA whereby

their selling tactics have come under the scanner of regulators. The Competition and
Markets Authority in the UK started an investigation in 2017 on the following areas .

• Search results: how hotels are ranked, for example to what extent search
results are influenced by factors that may not be relevant to the customer’s
requirements, such as the amount of commission a hotel pays the site.
• Pressure selling: whether claims about how many people are looking at the
same room, how many rooms may be left, or how long a price is available,
create a false impression of room availability or rush customers into making a
booking decision.
• Discount claims: whether the discount claims made on sites offer a fair
comparison for customers. For example, the claim could be based on a higher
price that was only available for a brief period or not relevant to the
customer’s search criteria, such as comparing a higher weekend room rate
with the weekday rate for which the customer has searched.

Hidden charges: the extent to which sites include all costs in the price they first
show customers or whether people are later faced with unexpected fees, such as
taxes or booking fees.