For a very long time, people in the hotel industry have talked about the idea of better educating people when it comes to the rates, what they mean and what exactly they stand for. And since there are numerous sites that offer hotel and apartment deals, people do need to know the real prices that these hotels bring, otherwise everything might lead to some very bad results in the end.
Hoteliers are however trying to educate the consumers in such a way so that they will follow the airline trend and book directly instead of using third parties that lower their revenues. The best rate guarantees of these websites aren’t that impressive and helpful, so most of the time they do require a lot of attention and commitment when it comes to getting the job done the right way, something that should be understandable from some perspective.
Transparency and trust
The hotel pricing structures aren’t that transparent, this is exactly what hurts the industry and consumers as a whole. The industry is continually trying to bring in better, more impressive prices but since a furore was announced recently, which directly relates to the pricing parity, now, more than ever, we have a need to clarify the current pricing and its clarity. Not only that, but metasearch and OTAs have started to consolidate recently, and this confuses the picture a little bit.
Segmentation and pricing
Sales with just three channels can range from 5-35%, and as you would expect this does hurt the hotel sales quite a lot, unfortunately. As you would expect, this is not a good nor a sustainable model, and because of that hoteliers have to focus on the missing pieces, the holes that aren’t bringing in that much revenue, so they can be enhanced and thus begin to provide a better outcome. Sure, this does inquire acquisition costs, but the hoteliers need to try and create a pricing strategy per segment, while focusing on the total revenue instead of the room revenue. Adding discounts is also another great idea to promote a better, consumer oriented pricing method.
Driving direct bookings
Metasearch should be one of the main places where the hoteliers need to spend. Sure, hotel pricing add (HPA) has a lot of potential, but the way that Google will continue to evolve will definitely impact the current state of the industry. By using the Google HPA, some hotels have gained a higher conversion rate, up to 45% higher, as well as 12% increase in the total ROI.
Tech and training
Tech needs to be included because it does a great job, alongside business intelligence. It brings in a strategic value, a better management of the resources, as well as a higher quality marketing. With tech, hoteliers can diminish the importance of the OTAs and thus increase their own revenue
Ancillary revenue and reputation
Hotel management companies are seeing an interdependency between the revenue management as well as hotel management companies. With the help of social tools, review websites and surveys, the revenue management decisions are becoming more and more directly.
Hotels with a lot of local knowledge are more efficient than the OTAs, so as long as the hotels manage to promote this idea, they are bound to get an extraordinary result.
References:
http://www.theguardian.com/money/blog/2015/feb/28/flights-rental-cars-booking-price-promises
http://www.eyefortravel.com/distribution-strategies/future-metasearch-2015
http://www.eyefortravel.com/revenue-and-data-management-distribution-strategies/ancillary-revenues-hospitality-industry
