Hotel Online  Special Report

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The Internet…The Great Equalizer
For Independent Hotels
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By: Neil Salerno, Hotel Marketing Coach June 2005

With the continued growth of the Internet’s popularity, Independent hotels have their best chance ever to truly compete with their franchise competition. For many years, hotels have chosen to flag their hotels in order to cash-in on franchise loyalty and popularity and the resulting reservations contribution. 

Although franchise contributions to reservations vary greatly by brand and by hotel, buying a flag almost always provided a hotel with a base of business to ensure successful sales numbers. The franchise flag provides big budget advertising, promotions, reservations services, and, in some cases, group sales services; a combination unavailable to most independent hotels.

But, thanks to the Internet, all that is changing. Internet marketing is still affordable and effective. The Internet provides little known hotels with unprecedented exposure to millions of travelers. It allows smaller independent hotels to advertise their hotels to the traveling world, finally at rates they can afford. 

Through the Global Distribution System even smaller hotels can take advantage of the sales efforts of thousands of travel agents, just like the franchises have for years.   

Although Global Distribution System contribution has been stagnant for many months, many experts predict that this will begin a reversal in coming months. Franchises have held on to mandatory GDS rights and for years GDS production has been at the heart of their contribution numbers for their hotels for years. Independent hotels now have the same access to joining the GDS though companies like GenaRes, an independent GDS service provider. 

Fortunately for independent hotels, third-party internet suppliers are still “ruling the roost” in Internet generated room nights and revenue. Franchises have made great progress over the last two years playing catch-up with third-party web suppliers, but there has been a cost to doing so. Their primary weapon in the fight with suppliers has been the amazing “guaranteed lowest rate”. This tactic has met with some success, but it is creating havoc with the hotels they are duty-bound to help. 

Selling hotel rooms by lowest rate has never been a good idea; especially while so many hotels are trying to get higher rates. I see more and more hotels spending time “explaining” exactly what “guaranteed lowest rates” mean while they quote higher group and corporate rates to their potential clients. In a short two years, we evolved from selling “value”, while displaying our rack rates, to showing the world how low we will go to get their business. 

The current online marketing superiority of third-party suppliers has helped many independent hotels to achieve the same or more total Internet contribution as many franchises. Third-party suppliers helped many hotels to stay afloat in the aftermath of 2001. The battle between hotel franchises and third-party online suppliers needs to come to an end…sooner rather than later. 
 
Third-party suppliers have held the number one position in search engine marketing as well. They single-handedly took over the pay-per-click search world. It’s difficult to find a city in which a search does not reveal a third-party supplier in the results. 

Independent hotels are starting to understand and use pay-per-click search technology for their own web sites. It almost always produces a great return on their investment and is easy to implement. Many franchise hotels are also boosting their results by using pay-per-click for their own web sites. 

It seems that many hotels are being disappointed by web marketing companies touting that search engine submission is the complete answer to low room night production from their web sites. Submitting a web site to the search engines, without first making certain that the site is compatible with search engine rules, is a total waste of money and time. Submitting a non-functional site, no matter how pretty is futile. 

Independent hotels can compete with their franchise hotel competition on the Internet. Many independent hotels are getting upwards of 30% or more of their reservations online. 

Some Suggestions for Independent Hotels

  1. If you are not on the GDS, consider joining. It’s a worthwhile investment.
  2. Make certain your web site is working for you. Before you simply hire someone to submit your site to the search engines, make certain that it is a functional searchable site.
  3. Determine which third-party suppliers are strongest in your market and get listed with them. You control rates and inventory. Get them working for you.
  4. Consider hiring a hotel marketing consultant to provide you with a consistent flow of ideas. Most consultants work on an hourly business rate; work out an agreement based upon your budget. 
  5. Look around for additional marketing partners to create reciprocal links to add popularity to your site. 

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Contact:

Neil L. Salerno, CHME, CHA
The Hotel Marketing Coach
www.hotelmarketingcoach.com
NLSalerno@hotelmarketingcoach.com


 
Also See: Third-Party Booking Sites Still Dominate Internet Sales;  Why Do So Many Consider this Bad? / Neil Salerno / April 2005
Now That Online Hotel Booking Is Here to Stay, New Challenges Emerge / Neil Salerno / April 2005
Independent Boutique Hotels Can Compete With their Big Box Neighbors / Neil Salerno / April 2005
Who Are Your Most Important Guests? We’ve Come a Long Way, Baby! / Neil Salerno / March 2005
New Consumer Hotel Booking Preferences - They Love the Internet…Now What? / Neil Salerno / March 2005
Who Would Have Thought - Today's Hotel Marketing Necessity Is Also its Best Value / March 2005
Time For a Hotel Web Site “Make-Over”? Methods for Building a Successful Web Site Change / Neil Salerno / March 2005
Create Impact by Developing a Link Strategy For Your Hotel Web Site / Neil Salerno / February 2005
Steps to Develop Your Hotel's Presence on the Web / Neil Salerno / February 2005
Five Hotel Internet Marketing Myths - Busted!/ Neil Salerno / January 2005
How Does Your Hotel Web Site Measure-Up? 2005 Will Be the Internet’s Most Productive Year so Far / Neil Salerno / January 2005
Are You Being Out-Hustled By Your Competition? How to Dominate Your Hotel's Market Set / Neil Salerno / December 2004
Why Are Some Hotel Companies Plagued By Management Turnover? Is This Systematic of Poor Performance? / Neil Salerno / December 2004
Basic Components of a Hotel Website: Current Weather, Flash Animation, and Virtual Tours?? Plain Talk About Internet Sales / Neil Salerno / February 2004
Don’t Compromise Your Goals In 2004; Five New Year’s Resolutions You Will Want To Keep / Neil Salerno / January 2004
No More Whining About Third-Party Suppliers; You Control Your Own Fate On The Net / Neil Salerno / December 2003
Six 'Maxi’s' Guaranteed To Boost Hotel Sales / Neil Salerno / November 2003
It’s Time To Take Back Control Of Rates & Rooms - But Is The Enemy...Us? / Neil Salerno / November 2003
Booking Engines Are Like A Box of Chocolates...You Never Know What You’re Gonna Get! / Neil Salerno / October 2003
Hotel Web Site & Search Engine Optimization; Always A Work In Progress / Neil L. Salerno / October 2003
Hotel Budgets and Marketing Plans; Oh No, Is It That Time Again? / Neil L. Salerno / September 2003
Increasing Hotel Internet Sales Is Not Rocket Science...And It Doesn’t Have To Be Costly Either / Neil L. Salerno / September 2003
Are You Treating Third Party eWholesalers As Competititon Or a Valuable Marketing Partner? / Neil L. Salerno / August 2003
How Often Have You Heard, 'I could have gotten a better rate but the client saw our rates on the Internet' ? It’s Time To Get Back To Selling Location, Facilities, and Services / Neil L. Salerno / August 2003
Before You Begin that Marketing Plan Challenge Your Sales Team; Expect More and Get More / Neil L. Salerno / July 2003
Jump Up and Shout Yes - Delivering Best Online Customer Experience, Nice Job Vividence! / Neil L. Salerno / July 2003
Is The Internet Delivering On Its Promise? Well, It Depends on How you Look at It / Neil L. Salerno / June 2003
Coaching and Mentoring, Sometimes A New Paradigm Can Go A Long Way / Neil L. Salerno / June 2003
Sales Training Works Well, But Sales Mentoring Makes It More Effective; Mentoring Lasts a Lifetime / Neil L. Salerno / May 2003
Is It Time For A Sales Tune-up? How Healthy Was Your Last Forecast? / Neil L. Salerno / May 2003
Hotel Web Sites; Want it Creative or Effective? / Neil L. Salerno / May 2003
If You Always Do What You Have Always Done.... You’ll Always Get What You Always Got! Hotelier’s Mantra... Thinking Outside The Box / Neil L. Salerno / April 2003
Good Sales Planning - The Basics Still Work / Neil L. Salerno / April 2003


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