E-auctions hit by information gap

27 April 2005
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28 April 2005 | David Arminas

Travel managers don't give enough detail about their hotel needs when they ask potential suppliers to enter an e-auction, according to Paul Wardlow, senior global director of corporate sales at Starwood Hotels.

And this, he said, is because they don't know enough about their own spending.

Wardlow, a panel member who launched a debate at the Institute of Travel Management's annual conference on whether e-auctions are bad for the travel industry, said if buyers don't know their spending patterns, they should consult their hotel suppliers to get them. Panel member Ben Nelson, sourcing group manager at the Royal Bank of Scotland, said suppliers look on e-auctions with suspicion.

"Travel managers must ensure suppliers know e-auctions are not necessarily a losing proposition for them," he added.

He also urged buyers to familiarise themselves with the market before setting up an e-auction and to ensure suppliers know what is needed.

"Badly run auctions will not give like-for-like comparisons and don't take into account extra servicing levels by particular suppliers that add bid value."

Wardlow said some buyers get in touch with losing suppliers, explaining that the auction did not work out and ask if they can negotiate a deal.

Nelson countered that the reverse was also true. Losing suppliers may contact buyers and want to negotiate a deal based on the winning auction bid.

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