HMSthailand.com

Recently I came across this video, regarding the discounting price strategy of hotels. As I have posted before, discounting is a negative pricing strategy, which could cause more damage than good on the long term. As it is easy to drop the rates, but harder to increase the rates.

An alternative strategy would be to add value components to your room rate, or add items for which you would normally charge. (Wifi, newspaper, gym, etc). Understand your guest, their needs and their wants.Understand your surrounding environment, what is going on, what is the trend, who is moving for what.

Take you time to look at the video below.

If you have problems, please click the following link: Video

By far the most interesting supply chain in hotel industry is the development of the Online Travel Agents (OTA). As the competition is increasing, the OTA’s are continuous looking into ways how to improve business. The first start happened with preferred listings, which resulted in a higher commission charge to the hotels. Hotels could improve their ranking on the website, by paying a higher commission rate. Higher on the list, could results in more bookings.

Recently, OTA’s have been offering free booking engine, or low cost booking engines to use on the hotel’s own website. It will make updating of rates and allocations easier, as you will have to manage one extranet. As hotel’s are focusing on cost control, they should be aware that these models can push more business to the OTA website and results in more and higher commission payments. Alternatively, the hotel could sign up with a channel manager to create a solution to the distribution of all the Extranets. As the OTA has no strong commitment informs of investment, they will not have the real interest to sell you particular hotel, just any which will sign up. More can be learned at our page on Web marketing, how you can effectively market your website.

The latest trend to capture the interest of online shoppers would be to offer the complete package. Expedia, Orbits and Travelocity, have already long lasting relationships with the Airline industry and selling tickets online (even combined with the best hotels deals) As this has proven to be successful in the long haul market, Expedia has teamed up with Air Asia and selling also Air Asia flights in a very strong Asian market.  Also their biggest competitor in Asia, AGODA has entered into a partnership with Cathay Holidays Limited, the travel agency arm of Cathay Pacific Airways, through which Cathay Holidays will distribute agoda.com’s hotel product.

With the deal, travelers booking a ticket through CathayPacific.com will now have access to agoda’s worldwide instantly-confirmable inventory, while Cathay Holidays will be able to provide up-to-the-minute rates and promotions in more than 100 countries.

This will be the only beginning, as OTA’s have a very customer friendly business model, the classical travel agent is currently booking rooms via the OTA and soon they will book tickets as well. This would be the service of a travel agent to those travelers, who have no experience to book their trips on the internet.

Have a look at the side bar for the video