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Controlling the Path the Consumer Wishes to
Take to Book a Room at Your Property

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by William D. Peters, VP Reservation Services, Outrigger Hotels & Resorts/OHANA Hotels & Resorts, June 15, 2005

A marketing firm based out of Boston, just released a recent report about the up and coming summer. It was published yesterday in another on-line news letter. Some of you may have seen it.  The report issued a stern warning to large hotel companies.  It warns the hospitality industry that without a change in their marketing, hotels will experience another seasonal slip in their share of web based consumer bookings. The Industry stands to lose millions of dollars as consumers go and make their reservations with third party aggregators. 

Letís take a pulse check here!

Yes, they are probably correct but how does one control the path the consumer wishes to take to make a booking at your resort, hotel or destination?  As we all know it takes a large amount of marketing dollars to mine for new guests.  Do most companies have a marketing budget to change the path of that consumer?  Or do you really want to at this time? 

Consumers are consumers and they will decide which path they will use to make a reservation at your hotel, resort or destination.  Those consumers going downtown for a long weekend will most likely make their reservations directly on the hotelís web site or call the hotel directly.  Other consumers will shop the web for hours to get the cheapest price for a room for that weekend.

Some of the consumers that are driving to a resort for a vacation will make their reservations on the resorts web site while others will use a third party aggregator.  The consumers using the third party aggregator are not just looking for the cheapest of all cheap prices, some are, but they are also looking for things to do.  Most feel that they get a better bang for their time when they also reserve excursions and activities while they are making their reservations with the third party aggregator.

Then we have those consumers that are going on vacation abroad, Europe, Hawaii, The Caribbean, Mexico, etc.  The majority of these consumers are going through third party aggregators.  These include your traditional wholesalers and also all the new large dotcoms such as Expedia, Orbitz, etc.  These consumers want the additional help and information provided by the third party suppliers.  They also are looking to reserve air seats at the same time since most of these destinations have not built tunnels or bridges that make driving there practical.  Donít forget, they are also looking to reserve excursions also.  What a deal!  Not bad! One stop shopping and then the consumer may call the hotel or resort directly to see if they can upgrade their room accommodations etc.  That is the summer business we have always had to manage to.  Except now our customers have become more sophisticated in their travels and know what to expect and want.

This is not to say you should not increase your marketing for the summer.  The more we advertise as an industry the more the American public travels.  Unfortunately you have to balance that out on your P&L.  In a lot of instances it is more cost effective to yield more rooms to the third party aggregators than it is to market on your own.  Why you say?  The third party aggregators already have established the following by the consumer.  It is in every marketing study that the consumers start checking with the third party aggregator sites first.  This is already June and for you to spend marketing dollars trying to mine for new guests may be a mute point.  Those new guests that you acquire from your last minute marketing will most likely be more expensive than if you allowed the third party aggregator sell the room for you.  Again, this depends on how good you managed to contract with your third party aggregators and also with your cost of marketing.

Everything has a cost associated with it.  If you decide to use the third party aggregator great, but understand the cost.  If you decide to market your own web site, understand the cost in trying to get the consumer to use it.  If you need immediate last minute business, you know where to go. So in my opinion donít alienate your third party aggregators.  They are your partners in this business.

Again, everything is a balancing act to achieve that 100% occupancy with the highest RevPar that is practical for your business.  Please remember that no matter how the consumer made a reservation with your property they are now your guest.  You can turn that guest into a repeat customer year after year by doing your own in-house guest ďWOWĒ campaign.  Once Wowed, they will back and that will be your golden opportunity to create the proper path for them to book with you in the future. 

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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
bill.peters@outrigger.com

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Also See: Another Point of View Concerning the Merchant Model / William D. Peters / March 2005
The Hotel Industry Should Stop Treating the Channels of Distribution as Their Enemy / William D. Peters / July 2003
The Internet verses Company CROs; That Is Not the Question! / Bill Peters / June 2003


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