How to leverage private sales sites in your online distribution strategy

Online bookings have grown beyond the traditional distribution channels like OTAs & GDSs with a consistently increasing influence of social media, e-commerce sites and private sales channels. Breaking the monopoly of OTAs, these platforms have emerged as a profitable option helping hotels maximize revenue. While there is a level of uncertainty amongst hoteliers to use these sites for tactical inventory disposal, it is also true that a lot of these arguments stem from a lack of foresight hampering business to flourish all year long. Amidst this scenario, the role of a revenue manager is constantly evolving. A sharp analyst will start exploring new areas/channels and establish closer relationships with strategic partners.

It is important to bear in mind that no economic situation is permanent so a revenue manager should review and install strategies that will hold good in the long term. A short sighted outlook will only help you in the current scenario but less likely to prove helpful in a changing scenario. The way your hotel is positioned now, will greatly affect how your hotel comes through a period from cautious to optimistic market outlook. A well thought out strategy is not about constantly changing direction; it is about setting your hotel up for the future with a range of longer term objectives.

Be it guest satisfaction, your own standards or prices, the best wholesome strategy is to make your hotel the leader in revenue optimization. Close relationships with a hotels distribution partners should be an aim of revenue managers at any time, these closer relationships can go a long way to driving volume, if revenue managers approach this opportunity cautiously. Focus should be on establishing a Win-Win situation that protects your inventory and pricing integrity.

Poor pricing has a lot of dangerous consequences but the biggest of them all is bloodbath in the market. This helps no one apart from a discount seeking customer and ironically, in many cases, the same customer would have happily paid more instead of availing of an existing discounted rate since it's available. Reacting to market pressure by slashing prices may provide some short term benefits, but it could pull down the entire market to lower ADR levels which take significant time to even come up to the previous price points. This is where responsible discounting comes in and a partnership with a private site helps you in building base business in your tertiary booking window without impacting your transient or negotiated segments.
However when working with Private sites the hotelier must be careful about the following:

1. Integrity of the private site they partner. It must be a true member only site and the membership should be available with a fence around it and not just something sold easily on e-Bay.
2. The deals must never be put out in a predictable manner.
3. Private sites must be the chosen option to keep the customer excited so room deals, Day package, Spa package, F & B deals, MICE deals all should be flashed instead of just promotional room packages.
4. The deals must be put out with a time limit or stocks last banner and not just one of the two to make it less structured and predictable.
5. The deals should be fenced, well ahead in time and attractive. Remember you are attempting to garner latent demand here.
6. Measure the performance of private sites and monitor them from time to time, if a site is not performing evaluate if it fits with the property profile that you represent.
7. Don't overdo it.

For OTAs: The option of offering Opaque pricing can come closest to competing on the same turf. It is important to speak to your valuable partners to make sure that the Mystery hotel or Hotel Roulette (As some opaque products are termed) deals are different from private sites in the content and value offering. It doesn't have to mean better or flashy but just try to make it sound different to serve its purpose.

There is no denying the fact that these new sites definitely have emerged as an interesting option in online distribution. However, in order to combat a few uncertainties that have prevented hotels from expanding their revenue and client base, hoteliers must choose the right private site while conducting a thorough analysis of their demographics in order to ensure brand integrity.

In addition, a certain level of foresight is expected from hoteliers wherein they target or not, a new segment which is unable to afford the product today. Nevertheless, hoteliers should adapt their pricing and distribution strategy that certainly incorporates a thorough feasibility evaluation around these sites besides the traditional OTAs and GDSs.

source: hospitalitynet

Madeep.com

OTAs are the clear beneficiaries when it comes to rate parity

Based on new data from RateGain, a maximum of 1 in five hotels in major cities in Europe have introduced a rate parity based rate strategy for the coming three month. Even worse, for the vast majority of hotels, prices on OTA sites were lower than on their own website.

OTAs are the clear beneficiaries when it comes to rate parity.

A new hotel rate parity trends from RateGain for November to January 2012 of three, four and five star hotels across some of the major cities in Europe, shows that the vast majority of hotels don't apply a rate parity pricing strategy.

In top destinations like Paris and London, only a little over 20% of three, four and five star hotels have a rate parity strategy in place. Amsterdam leads the list with the lowest rate parity adoption, with 3% of hotels having a rate parity strategy in place, and 87% of hotels offering lower rates on OTAs than their own website.

Like in Europe, the beneficiaries of rate parity in North America are OTAs and not hotels, in fact only about 10% of hotels apply rate parity strategies at all, with 90% of the remaining hotels offering lower rates on OTA sites than on branded hotel website, or viceversa.

Hotel rate parity trends for December to February 2012 of three, four and five star hotels across some of the major cities in North America. The report shows the percentage of hotels with cheaper rates on their own brand site compared to their rates on other OTAs.

Los Angeles and Toronto leads the report as destinations with no hotels offering rate parity. What's more, both lead also the report with almost 90% of its hotels offering lower rates on OTA sites than their brand websites.

Compared to RateGain's findings on rate parity in Europe, the results look even more troubeling, with OTAs being the clear winner when it comes to rate parity.

Get the full data for Europe and North America.

Madeep.com

How OTAs boost illegal hotel conversions

Law-breaking residential hotel operators aren’t hiding their illegal activity, they are advertising it – listing their illegal rooms on popular Internet travel sites like Booking.com, right next to and competing against legal tourist rooms.

The rise in the number of residential hotel rooms being rented illegally cast a light on the role that Internet travel sites play in facilitating this illegal practice. In many cases, law-breaking residential hotel operators aren’t hiding their illegal activity, they are advertising it – listing their illegal rooms on popular Internet travel sites like Booking.com, right next to and competing against legal tourist rooms. Call it a strategy of hiding in plain sight. But a closer look at the economics of the travel industry shows that in many ways, illegal tourist hotels and websites like Booking.com were made for each other.

With the high end and middle class hotels off the market, the pressure is on the lower end of the tourist market to meet the demand for rooms. It’s no wonder residential hotel owners are looking to jump into the lower end of the hotel market and no wonder that there is a market for their rooms.

Websites such as Booking.com manage to evade liability because owners and operators are clearly responsible for the content of their postings. But shouldn’t Booking.com know local laws governing residential and tourist hotels in the city, especially since they have an office here? Shouldn’t they know this is an illegal unit? How culpable are they?

Madeep.com

source: HotelMarketing