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    The Hotel Industry Should Stop Treating the
Channels of Distribution as Their Enemy
.
By William D. Peters, July 2003 

Why Beat the Intermediaries at their own game? Is this wise on your part?  Have you not gone after these channels of distribution to enhance your occupancies and to bring guests to your hotel?  Is it not your hotel that contracted these lower net rates with the Intermediaries?

I suggest that the industry stop treating the Intermediaries as their enemy.  The Intermediaries are spending millions of dollars in marketing their service to the general public.  Why?  To generate bookings/revenue for themselves which turn into bookings/revenue for your hotel.

I have been in the hospitality business for over thirty years and am never amazed how our industry blames other industries for its failures. 

  • All opaque websites cannot sell your hotel unless you have contracted with them.  Your hotel or company authorized that special rate for them to offer.  This was done to gain some of their market share and bring their customers to your hotel.
  • All merchant model websites, which is almost all now, sell your hotel with a mark up from the net rate you have authorized them to sell from.  Again, you wanted to gain some of their market share.
  • All wholesalers and Tour operators can only sell from the net rates that you have authorized.
  • There still are a few websites out there that sell your rack rates.  Again, those are the rates that you are authorizing them to sell.
I believe the hospitality industry, which is very diverse, has to change with the times.  The industry has to be accountable for its own mistakes.  We cannot continue to confuse the general public in regards to what it costs to stay at your hotel.  We cannot continue to confuse our Intermediaries that we want their business today but tomorrow I may change my mind. 

Let age old marketing tool of Price Guarantees be gone.  What is needed in most hotels and hotel companies is Channel Management.  Understand your business channels.  Understand your hotel.  Pick your partners, Intermediaries, wisely.  That�s correct; Intermediaries are your partners in this business.  Don�t agree to net rates or special rates that you cannot live with.  I would strongly suggest that a business evaluation be done on each Intermediaries channel of business.  Then if it indicates that it will enhance your business by using this channel, by all means play in it.  Be prepared not to cry about it later.  Playing in these channels can be very costly to your hotel.  There will also always be some channels that you have to play in because of your competition.  Understand that and play smartly.  You actually still control your ADR and RevPar not your Intermediaries.

Be smart, play smart and use your partners wisely.  They are in the same business as you.  Unfortunately they have one up on the industry, they have been smart, played smart and have used their partners wisely to create worldwide distribution channels that you may have to play in.  Remember; even though you play in them you still control all the marbles.

 

Contact:

William D. Peters
Vice President Reservation Services
Outrigger Hotels & Resorts/OHANA Hotels & Resorts
3443 South Galena Street, 3rd Floor
Denver, Colorado 80231
Office - 303-743-3219
[email protected]

Also See The Internet verses Company CROs; That Is Not the Question! / Bill Peters / June 2003
Lowest Price Guarantees in Hospitality; Age Old Wisdom to Beat the Intermediaries at Their Own Game! / Max Starkov / July 2003
Hotelier�s 2003 Top Ten Internet Resolutions / Max Starkov and Jason Price / January 2003


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