Mark Buwalda, business unit manager at Ananzi, says local auction sites need to begin diversifying by starting niche sites with material of specific interest to certain groups. The market is not too small for this. One company that has already launched a niche offering is the Protea Hotels group. When it began experimenting with online auctions, the classic auction model was used. It did not work during off-peak periods.
Prices converge to a point where buyer and seller agree.
This is a major advantage over auctions that could take a week before they are concluded and in which your success is not guaranteed. Next for Protea is a spot-pricing system, where prices will change in real time as the variables pertinent to the hotel industry change. The system can be linked to a hotel's internal yield management system or to external variables such as the rand-dollar exchange rate and competitors' prices. The price is dynamically adjusted, but it is not negotiable. This could alleviate a problem auctions face - the hassle factor.