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Getting Around Rate Parity Agreements With OTAs

November 21, 2018 at 8:52 pm · · Comments Off on Getting Around Rate Parity Agreements With OTAs

Getting Around Rate Parity Agreements With OTAs

This has been a difficult one, and more and more countries are kicking OTAs rate parity agreements into touch.

For now, in the UK it seems like the independent hotelier doesn’t have the clout to utilise their own loyalty programme incentives enough to get around rate parity like the big boys, but there are still ways to achieve direct bookings at ultimately attractive rates by using utilities such as the ‘Special Offer’ feature on Trip Advisor’s Business Listings.

Offer a discount or upgrade or some other incentive, but let it be known that this only applies to direct bookings made on the hotel’s own website by entering a promotional code on the booking page.

Another way to get around rate parity is through packaging – including a meal with a two or three night stay, or a spa treatment or a complimentary upgrade, at a price which when compared to the OTA offering has obvious appeal. This can be done on a ‘Special Offers’ section on your website.

Really it seems like the OTAs are most concerned with price parity being maintained between them and their competition, with them constantly trying to outflank each other by offering hoteliers optimised exposure in exchange for reduced rates (then when you go for it, all the other OTAs contact you too, asking [demanding!] that they receive that discount too…)

One hotelier I know consistently displayed marginally lower rates on his website than those made available to the OTAs, and when questioned said that his direct booking rates were calculated in relation to foreign currency conversion rates and were updated bi-monthly, and they seemed to swallow that, and he consistently landed direct bookings of all the most cost conscious guests – sure, they didn’t spend much at the hotel, but at least they were ‘commission free…!’

Germany, Austria, Italy and France have all shrugged off the OTA burden of rate parity agreements, but for now it’s up to UK hoteliers themselves to see the best way to circumvent such constraints and incentivise those vital commission-free direct bookings…

Best of luck!

What are your views on the Rate Parity debate?

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Sustainability, PR and Reducing Costs

November 21, 2018 at 8:50 pm · · Comments Off on Sustainability, PR and Reducing Costs

Sustainability, PR and Reducing Costs

Today’s guests want optimum customer service coupled with maximum environmental awareness.

Getting the balance right is one of the challenges hoteliers face in today’s market.

Letting guests know you share their environmental concerns welcomes them into the brand and makes them feel more at home, more connected…

Putting a little card on the the bed with the heading ‘A Good Night’s Sleep Needn’t Cost The Earth,’ and displaying your environmental credentials by saying ‘To minimise our impact on the environment please only leave towels and bedsheets on the floor if you’d like them to be washed’ can work wonders.

It engages the guest with the ethics of the brand whilst also reducing costs.

Such cost cutting measures can enhance the guest experience, and effective PR needn’t cost the earth!

What do you think?

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Inflated Rates vs No Availability

November 21, 2018 at 8:46 pm · · Comments Off on Inflated Rates vs No Availability

Inflated Rates vs No Availability

The idea of increasing prices according to occupancy will be no news to you. Indeed some OTAs will penalise you with decreased visibility as a result of having repeated dates of ‘No Availability,’ so many hoteliers post massively inflated rates for dates they’re close to capacity, to dissuade guests from booking, at the same time as not jeopardising their ranking on their primary booking sources.

I remember a colleague once told me he’d massively inflated the rate for one of his rooms for precisely this reason, but it still got booked. We’re talking about a rate increase of about 1000% so he was thrown – what would the guest think? Sure they’d have a lovely suite in a gorgeous boutique hotel, but they’d paid enough for an uber-chic beachfront villa! He rallied around and arranged an upgrade for them – beachfront with a private pool on the roof and a jacuzzi on the bedroom balcony overlooking the ocean. They could spend three nights of the seven nights they’d booked at another prime location of the other side of the island – breaking their stay and optimising their trip (or so he thought…) Complimentary airport transfers were put in place, everything…

When the guests arrived they didn’t want to leave the original hotel – they loved their suite, they were tired from an extended work project and just wanted to lounge around, order room service, and relax…

The offer of a temporary relocation met with ‘Thanks, but no thanks…’ they said – somewhat bemused…

They must have been okay with the price they’d paid – the same price had been offered on all OTAs for those dates so maybe it didn’t seem overly extravagant to them (as presumably they’d only checked for the dates they wanted – and it was a last minute booking…)

A week of great service, judicious use of complimentary meals and drinks, and the guests felt both refreshed and revitalised…

Rather than feeling that they’d been ripped off and posting negative reviews they were gushing with thanks, which just goes to show the power of exemplary customer service…

Compared to risking being penalised by OTAs for posting ‘No Availability,’ in this case using the ‘radically elevated rate’ tactic produced the perfect result.

Big smiles all round!

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Dynamic Pricing Directly From PMS

November 21, 2018 at 8:41 pm · · Comments Off on Dynamic Pricing Directly From PMS

Dynamic Pricing Directly From PMS

As technology moves forward perhaps the most surprising thing is that we don’t have more and more time to ourselves…

Strategic price increases to reflect occupancy isn’t a recent advance, but now this facility is being included in some PMSs, so that rate increases are put into place automatically.

This is particularly useful for when a significant number of bookings are made out of hours – as availability goes down the rates go up and revenue is optimised!

Sometimes when I go to the technology shows I’m dazzled by the exhibits, but left wondering if many of them are really useful or just another thing to potentially go wrong…

Nothing wrong with having a dynamic pricing facility on your PMS.

When they get it right it’s great!

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Renegade OTAs Undercutting Your Direct Booking ‘Special Offer’ Rates

November 21, 2018 at 8:31 pm · · Comments Off on Renegade OTAs Undercutting Your Direct Booking ‘Special Offer’ Rates

Renegade OTAs Undercutting Your Direct Booking ‘Special Offer’ Rates

This really can be a headache.

Lost revenue due to lost direct bookings, plus you’ll have other OTAs on at you to offer them the same rates available elsewhere.

We’re talking rates discounted by as much as 20% compared with the correct retail rates…

Add in guests who’ve already made bookings calling up unhappily asking for partial refunds as a ‘pricematch’ and ‘Thiiiings can only get betteeeeer…!’

You check on the link you’re given to the site offering the discounted rate, and there it is, a discounted rate being offered by a provider you’ve no contract with – Hmmmmmmm

They get their rates via wholesalers like Hotelbeds.com and GTA, apply a minimal markup and then sail to the top of the price comparison sites – a good business model and good for consumers, but they grab direct bookings from right under your nose (and then the aggravation from other OTAs asking for parity, and requests from existing bookings for partial refunds – plus the damage that does to existing customer loyalty / negating the value of the customer loyalty programmes you went to so much trouble to put into place…

The solution…?

Contact the renegade OTAs directly and you get nowhere – they know what they are doing…

The only way to solve the issue is to get the wholesalers to close off access to that channel, but you’ll need to do it on all your wholesalers, as just as soon as you have one closed off those renegade OTAs find supply through another; again and again and again…

Cut off their supply and you’re free from them!

Have a look on the metasearch engine price comparison sites to see if you’re suffering from this issue.

Nobody likes their direct booking ‘special offers’ being undercut!

Have you experienced this? What solution did you come to…?

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Best Use of Non-Refundable Rates

November 21, 2018 at 8:23 pm · · Comments Off on Best Use of Non-Refundable Rates

Best Use of Non-Refundable Rates

First of all we need to dispel the myth of the non-refundable bargain, and replace it with the idea that making a booking which is changeable is a premium product to be charged for accordingly…

Think of the airline industry…

Non-refundable bookings are great, they provide guaranteed income, they reduce losses due to cancellations (in fact when non-refundables are cancelled they give the opportunity for resale and maximised income!) They negate the need for overbooking to compensate for cancellations, and they also prevent guests cancelling and rebooking if you decide to run some alternative promotion to increase uptake.

By having the refundable / changeable booking at a premium rate, the non-refundable will look like a bargain – and the bigger the difference the better the bargain / incentive to book.

If you don’t use the refundable option year round, aim to offer it well in advance for high season, decreasing the level of saving the closer to high season dates. Here you are using the non-refundable option to avoid having rooms cancelled and left empty at times when they achieve maximum rates.

So if you haven’t done so already, make your current rates non-refundable, and add in a premium refundable option to get the best of both worlds!

The level of cancellation experienced from OTAs can reach as much as 50%, so drive that number down significantly with non-refundable rates!

What do you think?

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