From Peter Tucker, President CTEX Group…

The writing is on the wall, regarding threats to the commercial barter industry from cash or new cash-equivalent online systems. Because, essentially these live 24/7 online systems are producing technology that empowers the buyer to clinch “deals” (smartshopper.com) that might otherwise be a market open to a barter pitch.

These systems can monitor specific products by location, price, you name it…and then notify the buyer so that a transaction can be completed at the very last minute. Thus it enables the seller to practice a form of yield management.

This is particularly true with intangible services such as hotel accommodations, which is the focus of our group. Online technology allows rooms to be sold as commodities, prices rising and falling with market demand. Try getting a room in New York City next week on barter. It’s almost impossible to find for cash, in fact Intercontinental Hotels do not have a single room available mid-week.

The technology itself enables the sharing of small transaction fees between aggregators (Mobissimo.com, Kayak.com, Sidestep.com, etc.) and travel companies, and is offset by enormous volume when there are open markets.

This technology allows for “accessible/available” products and services to be available in database after database, but on a live, first come, first served basis.

For example, a company might have 100 SKU’s of product available, however the ubiquitous nature of the online technology has these products omnipresent on 200 different sites simultaneously!

Seemingly 20,000 units are available in cyberspace at a particular instant. That’s a mind-boggling 2000% factor, that’s leverage. In the blink of an eye these rooms can be sold before the hesitant buyer hits enter!

If the commercial barter industry embraced open cyber trading systems and volume based fee sharing, similar leverage factors of 2000% and greater could be achieved. That’s velocity.

(Editor’s note: The CTEX Group CTEX has been working within the barter industry since 1992, providing various services to hoteliers.)

This entry was posted on Monday, August 27th, 2007 at 2:26 pm and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.