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I'm based within a world heritage site where there is a large concentration of hotels and tourists activity. I've identified a gap for a highly optimised hotel booking website.

Now, I'm toying between 2 options:

1. Creating a website where I list all available hotels and handle their bookings...which will provide ongoing revenue stream...though involves too much work.

or

2. Create a hotels portal where all booking enquires will go directly to the respective hotels and I charge an annual listing fee.

Option 1 - appeals to me based on the ongoing revenue potential and it should be easy getting the buy-in of the hotels since I'll not charge them anything to list them. However there is just too much work involved...and I'll be doing everything on my own and work from home.

Option 2 - would be ideal for me since less work is involved, however the earnings will be very limited since I'll charge an annual listing fee. Again as a new portal without a track record, it's not going to be easy getting their buy-in.

On both options, my strength lies in optimising the website so it ranks high on search results, since that is where all the hotels are weak.

What would you advise to be a better option to use?

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Hi Muzi

Very good question.

On the SEO question have you been following the recent changes that Google has been making (that is likely to seriously change the game for hotel search engine optimisation)...

They are big changes so the chances are that you are going to spend money on advertising in order to drive traffic to your website. If you are going to spend money on advertising then option 1, taking revenue from bookings, is pretty much the only way you will be able to easily budget for how much money you can afford to spend on advertising

e.g. if you are making 15% on a hotel transaction and are spending 8% on advertising... you know where you money is coming from and how you are spending it.

With option #2 although you have plenty of money to start with, your income isn't directly associated with the amount of money you can afford to spend to promote the website....

Do you see what I mean?
Hi Muzi,

Small world ... you and I spoke about this on Skype a while back I think.

The SEO change Alex is referring to is that Google now uses up most of the first page of results for listings which have a physical presence in the area searched for, i.e. actual hotels rather than directories of hotels. These were previously clustered next to a map, now they fill most of the first page, leaving little space for other results. (Covered in more detail in SearchEngineLand here)

Key issue if you are going to take online bookings is getting live availability data. There are broadly three ways to do that: take an alloction, which you sell exclusively, so you always know whether you have rooms to sell or not (risky, of course, because you might be left with unsold rooms); build an extranet and ask hoteliers to manually update their availability each day (headache for them, especially if they already have to update other channels manually); persuade them to use software which can send you an automated feed of availability.

Or kind of hybrid solution: persuade them to use software which has a booking widget you can embed anywhere (ours --KeepMeBooked -- does this, so does Guestcentric), so you can embed the hotel's widget in your directory. That way you can effectively take online bookings, and charge commission, but have someone else deal with the technical implications of the actual availability data and making the booking.
I would suggest Option 1 which gives you freedom more control and play with the rates.

I can help you with the software required which is sort of off the shelf and if you can do the SEO work and get the hotels listed, you are off to a start.
Appreciate all your feedback, I've resolved to going the affiliate route since it's automated and I'll only focus on marketing my website. Using the Booking.com co-branding affiliate option appeals to me since I'll be associating with a well known brand as opposed to building my own from scratch.

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