How will online hotel booking change in the near future?
In recent years, supplier sites have gained at the expense of OTAs. Hotels want to drive bookings to their own channels because the payouts to online agents for hotel bookings are huge. To be sure, commissions seem to be declining lately. I used to see major chains paying out commissions in high 20% ranges, while more recently such high payouts seem to apply mostly to independent hotels. The savvier big chains like Marriott, depending on the online channel, may have negotiated down the payouts to the high teens.
http://www.tnooz.com/2013/05/23/news/how-will-online-hotel-booking-change-in-the-near-future/#dqApEQ1SIyQGSugH.99
Addressing the 3 Cs of same-day bookings: Control, cannibalisation, commissions
With the recent surge worldwide of same day booking apps, hotel chains know they need to get on board but there are significant challenges to overcome in the same-day booking market – to avoid cannibalisation, to avoid paying high commission on already discounted rates and not relinquish control of how their last minute inventory is sold and promoted via third parties. Let’s take a look at how hotel chains can address the 3 C’s when considering how to tackle the same-day booking market.
http://www.webintravel.com//blog/addressing-the-3-cs-of-sameday-bookings-control-cannibalisation-commissions_3799
Connect to your hotel guests – directly!
Travel brands have a huge opportunity to circumvent the OTAs and connect directly with consumers searching for their products and services through paid, earned, and owned media strategies. Many travel brands are missing basic SEO strategies that would help them compete with OTAs.
http://www.hotelmarketing.com/index.php/content/article/more_on_how_travel_brands_can_connect_directly_with_consumers_online/
Brands, OTAs mending relationship
Although large-scale hotel brands have denounced online travel agencies in recent years, instead focusing their efforts on driving travelers directly to their own websites, there seems to be a shift in attitude of late. Hotel brand executives are beginning to embrace OTAs again, even calling them partners, as companies such as Expedia and Priceline work through complex negotiations with many of the major brands.
http://www.hotelnewsnow.com/articles.aspx/10542/Brands-OTAs-mending-relationship?utm_source=feedly
LifeClass Hotels doubles direct booking with RateTiger
Slovenia-based LifeClass Hotels has successfully utilized the Billboard Effect to increase direct bookings by over 100% with the help of RateTiger, the integrated channel manager, pricing data and guest review monitoring tool.
“RateTiger has certainly made it easy for us to set rates and update all the sales channels very quickly.” said Alen Milosevic, Revenue Manager, LifeClass Hotels & Spa. The 4/5 Star hotel group of six properties has been able to introduce a substantial expansion of its product offerings from one room rate plan for four room types to 16 rate plans for 6 to 7 room types. With the help of RateTiger review the property has been able to monitor guest review on various social channels like TripAdvisor, Facebook yelp etc. this has resulted in 30% revenue growth in 2012.To read the full story, click here.
New hotel online sales techniques forcing offline agents “Go Fishing”
Hotel revenue managers are driving the advancement of sophisticated fishing techniques that are forcing the closure of traditional travel agents. Littered across South Africa are small high street businesses shutting shop plastered with “Gone Fishing”.
These travel agents made a grave mistake; they were fishing in the wrong pools. The fish had moved to newer waters, challenging the hotelier to find new ways to bring bookings. Hoteliers began fishing themselves. Hotels have had to understand how travel shoppers think, how they behave and how to sell direct to secure the best specimen, at the best price, from the right location.
Pre-2000
Pre-2000 hotel sales derived from the traditional ground travel agent, sales teams were outsourcing new business.
TODAY
Hotel operators have hundreds of OTAs (Online Travel Agents) to choose from. This choice offered both traditional as well as specialist OTAs. This brought forth the Revenue Manager!
Now selling is much like the Airline model. The fuller the plane, the higher the price! Then the global recession forced hotel operators to drop prices to create demand. Five star properties clawed into the four star market, the four stars worked its way into the three star market, etc. Sales strategies collapsed. Average rates plummeted, making it very difficult for the industry to reestablish the pre-recession rates.
New fishing techniques by “revenue managers”
If you ask me – they go fishing every single day! Revenue Management is now – know where to fish, what bait to use, and react to the weather. Follow these principles and your baskets will get fuller, giving a mixed bag of fish of different values. The heavier the specimen, the more it’s worth.
Revenue management is all about understanding and selling the right room, to the right person, at the right time, for the right price. Very much like our rule in hotel operations, pertaining to service delivery – do the right thing, at the right time, in the right place, for the right reason, the first time.
Airlines fish well. Seats that are sold on the same day of the flight have secured maximum revenue. It is not uncommon for two people, sat next to each other on the same flight, to have paid completely different prices. Airlines look at the purpose of travel and the flexibility of their potential passengers. A business traveler has less flexibility than that of holidaymakers. A person planning a holiday plan their trips in advance; a business traveler travels mostly on short notice, with very little lead time. Airlines also offer short-term specials to reward existing clients, attract new clients and fill as many of the empty seats as possible, during a time-specific promotion.
FISHING PONDS – here is where you find the fish, the more fish the higher the volume
You need a source for your fish, so you need ponds, rivers or seas. Consider the type of fish you want and the value each fish will bring from the different ponds, understand the volume of fish available to calculate the demand. Do you need a net or a single rod? Therefore select and subscribe to a portfolio of at least ten OTAs, which should cover your consumer bases across several different demographic and geographic areas/markets. This practice is crucial to stimulating and creating demand.
Having selected the right ponds that will bring the right type of fish for your hotel, you can now promote your presence. And in this case it’s good to have as many ponds (online distribution channels) as possible.
One fish caught is one fish you would not have had. One room sold is one room that you would never have sold.
FISH BAIT – what you use to attract the fish, the bigger the fish the higher profit available
Drop your bait in the wrong place and you may not get the type of fish you want. Therefore the location of your hotel plays a crucial part in selling and marketing the property appropriately. Highlight the main events and attractions surrounding your property and make this information prominent to all searching travelers. Emphasize the facilities you have to offer including those in your immediate surroundings. Understand where your customer-base comes from and where they go after their stay, this information will open other doors of opportunity to sell the right package.
The right bait is also essential, are your fish actually interested in what you’re offering? What are you presenting them with? Managing your content on all online distribution channels is vital. Consistency is key! Always select a portfolio of pictures which is used on your brand website, promote the same on the OTA sites – never load different pictures on different sites as this creates confusion and displays untidiness! Your write-up about your property, rooms and facilities should be the same and consistent across all channels of distribution. Never forget content is marketing and marketing builds reputation, the consumer’s purchase decisions are based on reputation.
REELING FISH IN – the act to secure the fish on dry land
The right bait in the right pool with the right fish, once they bite its time to get them in fast before they let go. There is one key way to achieve this – Pricing your product in line with the current market conditions. Pricing should be seasonal and highly focused on adjusting rates during the troughs and peaks within the seasons.
Pricing should be kept in parity across the board without undercutting on selected platforms. Understand demand and forecast demand. Subscribe to the newsletters of all major airlines that operate in your city. Know when they advertise special fares into your area and “piggyback” them by promoting your own specials; your competitor is probably doing it already. You will find that when the airlines are in distress, Hotels are in distress.
FISH WEIGH-IN – to get the best profit for your fish
Each fish now comes with its own associated value and you need to make sure it balances the books. Pay close attention to achieved rates, ADR (average daily rates) and your RevPar (Revenue per available room). Room rates should be set according to these achieved statistics and kept realistic in your market. Know what your competitors are doing.
Sales strategies should be aimed at the customer, their needs and the current market conditions, considering what the achieved rate was for the same period. Budgets are the guidelines set out for us and forms part of the wish list for the year, however it is not and should not be the deciding factor for your sales strategy.
No man enters a fishing competition without trying to figure out what their competitors are doing. Understand what your local market is achieving, and aiming to achieve. Even more is crucial in understanding how to position your rates to create or stimulate demand.
FISH MARKET OPENING HOURS – knowing when to capture the best fish
Fish have routines, they sleep, eat and play, and each specimen has its routine. Knowing when to fish the best fish is essential. Understand your booking window. This type of information is easily obtainable from the different distribution channels. Promote early bird specials instead of last minute deals. Consumers have grown comfortable with this last minute selling technique, making it difficult for the Hotel Operator to stop (as I would refer to it) “chumming” for fish. Last minute deals are not about maximizing revenue; it is all about minimizing revenue.
YOUR FISH BASKET – how you carry your fish
Always know how much space you have left for more fish, and avoid having too many fish. Manage your inventory correctly. Offer different minimum stay and maximum stay promotions. Assign only the minimum required amount of allotments to Agents and Operators and take heed, along with allotments are fixed rates.
DON’T LITTER – telling people not to leave rubbish or belongings behind
Your pools need to remain clean; a visible amount of damage or pollution will keep the fish away. Manage your reputationand invest in all guest feedback you receive. Consumers shop and base their final decisions not only on price, but what people say about your property.
FISH WELL
The Revenue Manager certainly has a daunting task ahead if this is all still managed manually. Updating content, price and availability steals the focus away from strategizing, planning and making real decisions that will maximize your revenue. Begin automating your fishing techniques for the benefit of your business.
Fishermen need the right technology that is flexible to the changing needs of the waters, and that is adaptable to global markets and delivers access to the relevant pools when needed. Hotels need to manage all the aspects of online distribution, analyze the market, calculate rates, monitor rate parity and position, distribute rates and availability to multiple distribution channels and manage all online reviews. Hotels need to be connected to these pools 24/7 to send and receive the market data to make more intuitive pricing and distribution decisions, through a single source.
Fisherman haven’t been able to avoid technology, who have had to invest in depth-sounding and radar technologies to gauge where the fish are, the type and the quality, plus meteorology reports to understand the farming conditions. Therefore neither can hotels avoid systems to report on their market.
Go fish – before you’re Gone Fishing.
Evolution waits for no man – Happy Fishing!
Clinton Du Toit has over 16 years experience in the hotel industry. The former hotel General Manager, with experience in revenue management, as well as hotel sales and marketing functions likes to educate the market on hotel online distribution. Clinton is based out Cape Town and is currently working with eRevMax as Sales Manager – South Africa.
You can also bview this article on Tnooz
BW Belgium Achieves 5% Revenue Growth in 2012
Hospitality Solutions has reported 5% growth in revenue for Best Western Belgium with a slight increase in direct online sales for the regional property portfolio. The Group which is using RTSuite in its 25 properties has achieved this growth by using RateTiger channel manager and pricing reports, to improve benchmarking and visibility of prices and packages across third party sales channels (OTAs), while systematically improving operational efficiencies for the revenue management team.
“By implementing a quality standard in strategy and technology we can homogenize the sales environment for hotels to make it easier for all staff members to understand. RateTiger, for example, will allow any member of staff to simply Close-Out the hotel across all sales channels should it become fully-booked. This control ensures we maintain good relationships with OTAs.” said Michael Thiry, Distribution Manager. The key strategy for Hospitality Solutions was to draw reservations from OTAs towards the direct brand website of the member property. In 2012 OTAs achieved a minimum revenue increase of just 1.02%, compared to the 5% increase in overall revenue performance.
Full story on erevmax.com
Channel Management & OTAs
Are hoteliers keeping pace with the changing online booking space?
With a handful of powerful OTAs dominating the market, hoteliers are identifying ways to sidestep the high-commission they command. OTAs can be useful to engage a new guest, but many hoteliers are now aiming to drive repeat bookings to their own direct booking engines.
Ryan Haynes discusses Channel Management and OTAs on Hotel-Industry.co.uk – http://www.hotel-industry.co.uk/2012/12/erevmax-ratetiger-on-channel-management-and-otas/
Newshound: Trends and Reports – Hotel Online Distribution
Automation is on the up and could hold the key to increasing online sales
In today’s multi-channel environment, hoteliers need to have quick access to hotel-rate data and inventory positions on various sales channels. “Over the last couple of years we have seen an increased focus on integrated applications, allowing hotels to do most of these complex tasks through a single system,” says Michael McCartan, chief executive officer, eRevMax International.
Analyzing the OTAs
Whether you’re in the camp that believes online travel agencies are single-handedly ruining the hotel industry or in the camp that looks to them for a majority of your demand, there’s one thing almost all hoteliers agree on: Third-party room distributors are here to stay. However, while OTAs serve an important role in the industry, it’s no secret their relationship with hoteliers is not perfect, said Brian Mullan, a research analyst with Janney Capital Markets in New York.
The end of the rate-matching machine: ways to count on competitive pricing
Competitive pricing is an element of pricing decisions in any market. How this is done depends on the availability of such data to providers, the visibility and comparability of it to customers and the level of fragmentation in the market. In hospitality and travel, thanks largely to broad Internet distribution, all of these factors make competitive pricing particularly important.
TripAdvisor tests hotel metasearch service – now the fun really begins
User review giant TripAdvisor is finally doing what pretty much everyone involved in the hotel sector expected it to do years ago – consumer metasearch for its vast portfolio of properties.The company confirmed this week that it is currently testing “new search functionality” for hotels, covering both desktop and mobile versions of the service.
The total cost of travel technology [INFOGRAPHIC]
From individuals who have implemented a small system to those coordinating major overhauls of existing platforms in large companies, organising travel technology is not an easy process. It is clearly a combination of establishing the business and technology requirements, alongside budget, expectations, crystal ball-gazing and market analysis.
Report: PwC European Cities Hotel Forecast 2013
Overall, RevPAR growth is expected to slow in 2013, held back by strong economic headwinds across the eurozone. But there will be thrivers; cities expected to show robust RevPAR growth include Paris, St Petersburg and Edinburgh and more modest increases should be seen in Frankfurt, Berlin, Dublin and Moscow.The second edition of PwC’s European cities hotel forecast for 2013 features 19 of Europe’s most important gateway cities.
eRevMax Launches Hotel & Channel Eco-System
eRevMax International, owner of premium hotel channel management application RateTiger, has launched its Hotel & Channel Eco-Systems. The launch will support enhanced and sophisticated connectivity between global OTA’s, Tour Operators and Wholesalers (IDSs) and Hotel Brands’ PMS and CRS.
“We’re forming a stronger bond between demand and supply partners to help them build their business while supporting distribution with scalable connectivity technology.” said Greg Berman, COO, eRevMax International.
The Hotel and Channel Eco-Systems will allow both parties to create more relevant and meaningful business partnerships to enrich the online sales opportunities and streamline reservation management processes. The Eco-System utilizes a powerful XML gateway that enables hotel companies to connect seamlessly with distribution partners and system providers.
For more, please click here
Newshound: Trends and Reports – Hotel Online Distribution
eRevMax Restructures Customer Service To Deliver Product Consultancy
eRevMax International has restructured its customer service to deliver 24/7 technical support and full service product consultancy for revenue managers. Customers of the RateTiger Suite portfolio and RTConnect will benefit from immediate attention on all technical issues relating to product performance and channel connectivity with a ‘Follow the Sun’ approach adopted by the hotel technology specialist.
http://www.hospitalityupgrade.com/_news/showNewsDetail-docID-5809.asp
Individuality is key for proper channel mix
An overall strategy for managing a hotel’s distribution channel mix should include individual plans for each of the channels, according to several industry experts on the topic. Experts said that while revenue management and channel management practices have become more technical over the years, neither of them should be considered rocket science.
http://www.hotelnewsnow.com/Articles.aspx/9081/Individuality-is-key-for-proper-channel-mix
Victory for value: good deals drive bookings for corporate travel
Corporates are getting savvier about the way they choose and procure accommodation, and a key influencer today is value for money. Firms are trying to extract more for their hotel stays by cashing in on value-added incentives. Recent data released by hotel distribution technology provider Hotelzon has highlighted the growing popularity of five-star hotels with business travelers.
http://www.eyefortravel.com/distribution-strategies/victory-value-good-deals-drive-bookings-corporate-travel
Distribution challenge: how OTAs are making appropriate use of online technology
To ensure the best possible yield for hotel partners, online travel agencies (OTAs) must ensure that they are compatible with most of the key channel management solutions. At the same time they must aim to increase accommodation choices for travellers. The ultimate aim of the OTA is to expand their global coverage to offer a range of properties from ordinary global chains to elite hotel groups and unique, independent hotels around the world.
http://www.eyefortravel.com/mobile-and-technology/distribution-challenge-how-otas-are-making-appropriate-use-online-technology
Infographic:Turning social media reaction into booking action for travel brands
We know the basics – social media allows travel companies to engage with existing and potential customers and can act as an unofficial watchdog of products. But with 61% of travellers apparently referring to some kind of user review and almost a third posting reviews of placed they’ve visited, for example, what can companies do to increase booking conversions as a result of activity on social networks.
http://www.tnooz.com/2012/10/04/news/turning-social-media-reaction-into-booking-action-for-travel-brands-infographic/#FH7CCAC6MYpKpQ7g.99
Online travelers in Europe visit fewer websites
When it comes to online travel shopping, European consumers are keeping it simple. According to PhoCusWright’s European Consumer Travel Report Third Edition, a Global and European Edition report, online travel shoppers in France, Germany and the U.K. trimmed down the number of websites they visited when shopping for travel in 2012. The percentage of online travel shoppers who used only 1-2 websites to shop for travel products increased within the past year – to 41% in France, 30% in Germany and 37% in the U.K. http://hotelmarketing.com/index.php/content/article/online_travelers_in_europe_visit_fewer_websites
Selling hotel rooms – An NIHF event
At last week’s Selling Rooms event with the Northern Ireland Hotel Federation, hotels were very interested in learning how they could control their own inventory. Most of the attendees acknowledged that through OTAs they were losing control over pricing and distribution as they fought to manage the cost of selling through third parties.
While many are trying to sell direct, it beggars the question – how much inventory is allocated to the direct channel and how much to third party, when in fact all channels should have access to the same availability. In many cases there can be as much as 24% profit difference selling direct than across OTAs.
Many consumers have a hard time booking across hotel websites, unfortunately the journey can be clunky without a clear and easy-to-use booking engines. Hotels need to invest in booking engine applications they can easily install in their website that is similar to the OTAs, this will optimize the booking journey for conversions and mobile bookings.
Northern Ireland has experienced a very strong year, with most guests being domestic tourism. The national tourism office will be launching a new website at the end of the year that will incorporate direct booking initiatives from the main OTA providers, giving hotels in the region an additional option for exposure and visibility.
While many are trying to sell direct, it beggars the question – how much inventory is allocated to the direct channel and how much to third party, when in fact all channels should have access to the same availability. In many cases there can be as much as 24% profit difference selling direct than across OTAs.
Interestingly, hotels struggled to manage their budgets effectively as some of the revenue management or OTA costs derived from the Marketing budget and others from the Reservations. Why should the direct selling channel come from Marketing, while OTAs are paid by Reservations? Marketing will always achieve a higher profit margin and is therefore unrepresentative of the financials of e-sales.
Many consumers have a hard time booking across hotel websites, unfortunately the journey can be clunky without a clear and easy-to-use booking engines. Hotels need to invest in booking engine applications they can easily install in their website that is similar to the OTAs, this will optimize the booking journey for conversions and mobile bookings.
It was also noted the value of Voice bookings, training the reservations, call center and front of house team to offer packages based on internet rates, and upgrade if necessary to avoid losing the booking to a third party website, which will cost them dearly in commission fees.
Northern Ireland has experienced a very strong year, with most guests being domestic tourism. The national tourism office will be launching a new website at the end of the year that will incorporate direct booking initiatives from the main OTA providers, giving hotels in the region an additional option for exposure and visibility.
Ryan C Haynes is VP – Marketing Communications at eRevMax. He was one of the speakers at the event and shared his insights on how hotels can use technology smartly to distribute rooms online and make the most of direct channels as well. Ryan is based out of London and can be reached at ryanh@ratetiger.com
Newshound: Trends and Reports – Hotel Online Distribution
Reviews and more reviews: a question of confidence
Efforts are being made to ensure that travellers are getting accurate information that is relevant to them. Even online travel agencies (OTAs) are now diligently integrating reviews on their sites, e-newsletters, promotional campaigns and other outlets. Firstly OTAs are improving descriptions of hotels across the board so that customers can more directly compare rooms and facilities at different hotels. This includes more photos and videos for travellers to browse through. Secondly, the overall contribution from various stakeholders including employees, fellow travellers, hoteliers and so on is on the rise on their sites.
http://www.eyefortravel.com/social-media-and-marketing/reviews-and-more-reviews-question-confidence
How Facebook is Shaping Your 2012 Travel Decisions
Recent studies reveal that what matters most when planning a trip is not where you’re going, but rather who you know that has already traveled to that destination. Without a doubt, the ubiquitous marketing tool’s unique brand interaction is setting a new beat to the travel pulse. While trusted travel brands unquestionably provide valuable trip advice, word of mouth from a loyal group of friends may be more worthwhile.
http://www.forbes.com/sites/traceygreenstein/2012/07/06/how-facebook-is-shaping-your-2012-travel-decisions/
Hotel Industry Business Outlook: Summer 2012
What does the summer have in store for the hotel industry? The recently published Christie + Co’s Business Outlook Summer 2012 report reveals all. With the banks coming to terms with their positioning and exposure in the hotel sector, the year to date has been typified by some reasonable transactional activity, according to the publication.
http://www.hotel-industry.co.uk/2012/07/hotel-industry-business-outlook-summer-2012/
What online retailers can learn from Orbitz
All stores – both online and physical – should tailor offerings to their purchasing segments. In an online environment, that might mean offering different choices to customers based on their purchase history or the kinds of products they’ve clicked on in the past.
http://hotelmarketing.com/index.php/content/article/what_online_retailers_can_learn_from_orbitz