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Some Hoteliers Still Don’t Recognize the Benefits Derived from
Third-party Listings;  Shame, Shame, Shame on You!

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By: Neil Salerno – January 2006

Every now and then, I read an article that really gets my blood boiling. Recently, I came across one such article; it implied that there are some hotels and airlines that are discriminating between direct-booked guests versus those coming through a commissioned third-party. If there is even a modicum of truth to this, I can honestly say that now, I’ve seen and heard it all. 

Wasn’t it bad enough when the franchises woke-up from their deep sleep a few years ago, to declare war on Internet third-party aggregators with their self-imposed “lowest rate guarantees”? I was amazed at the great number of hotel owners and managers who jumped on that bandwagon. Fortunately, that kind of thinking subsided when hoteliers finally realized that we need third-party business and third-party booking portals are not going away anytime soon. 

I guess there are still some hoteliers out there who don’t recognize the benefits derived from third-party listings like the GDS and booking portals. They obviously haven’t learned that it’s a little extreme to actually punish guests because they booked through a commissionable third-party instead of booking direct. Those who do this are very shortsighted. 

Good leaders share a natural talent to see and understand the big picture and are not blinded by personal prejudices; and, above all, they avoid making shortsighted decisions. Discrimination based upon net rate or source of business, without consideration of the overall importance of that business, is shortsighted and dumb; pure and simple. 

At times like this, I am always reminded of those general managers who feel that a complimentary room guests should be given that bad room next to the elevator; because they are non-revenue guests. This “punish by net rate” mentality is really disconcerting.  If a guest is important enough to get a complimentary room or deep discount, aren’t they important enough to get a good room? 

Now, we learn that there are managers who believe that those guests booking through a third-party deserve a lesser or more poorly located room because their net rate is lower. When researching this article, I talked to one general manager who actually tossed around the idea to punish third-party generated guests by eliminating their free continental breakfast, while still providing it to direct-booked guests. Can anyone be more shortsighted than that? 

I readily admit that commission-free direct booked business is ideal and certainly more profitable. If your hotel can fill-up at the best rates possible, without any help from third-party vendors, good for you. You are indeed very fortunate. But, if you are part of the majority of hotels on planet earth, you should be grateful for every room booked, no matter what the source. 

We all know how bad it is to assume anything, but I think it’s fair to assume that most hotels today are using revenue management techniques to max-out their room revenue. Revenue management utilizes the business principle of supply and demand to maximize occupancy and average rate. Basically, as occupancy demand increases, rates move upward as well. Create a base of business, even if it has to be based on discounted rooms, and build your RevPar. 

Demand is a fickle mistress; here today, gone tomorrow. There was a day, not that long ago, when independent hotels and some franchises suffered from a lack of exposure in the marketplace. Prior to the Internet, giant franchises held most of the cards in the advertising arena and, therefore, got most of the exposure to the public. The Internet makes it possible for everyone to be a contender. 

Today, even small properties can compete with their bigger-box franchise competitors through the Internet; at a fraction of the print and media advertising costs in the good ‘ole days. Third-party aggregators offer world-wide exposure to all hotels; but they can’t do it for free. Collectively, they spend $millions on pay-per-click, consumer advertising, and generic search technology to expose your hotel to the public. Why would any hotelier resent paying a commission for that?

What other advertising medium would allow a hotel to advertise on consignment and pay as business comes in? Many hotels spend $thousands on print and broadcast media advertising with no promise of any return; a little like shooting craps in a casino. Should a guest, booking as a result of media advertising, be treated any different from a third-party guest? 

For those of you who believe that, one day, all your business will book direct, get real and please join us on planet Earth. Developing a good market-mix for your hotel, starts with understanding that guests will use all channels to make reservations. All channel resources need to be developed and nurtured. If you are not fortunate enough to be able to develop a base of business solely through group and corporate transient business, you need third-party partners. 

Let’s stop this nonsense before some franchise decides it’s a good idea. They tried “lowest rate guarantees”, now what, “special amenities for direct-booked guests”? 

The last I heard was that we still need to “earn” our business. Take those third-party guests, provide great service, and those guests may become direct-booked guests when they return. 

To clarify the record, I do not, have not, and will not ever accept any compensation from third-party aggregators for what I say in my articles. I hope it just makes good common sense. 

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Contact:

Neil Salerno, C.H.M.E., C.H.A.
The Hotel Marketing Coach
www.hotelmarketingcoach.com
NeilS@hotelmarketingcoach.com
607/331-3626

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Also See: Online Hotel Rating Sites Driving Anxiety into  the Hearts of Many Hotel Managers / Neil Salerno / December 2005
Hotel Web Site Priorities –Some Do’s, Don’ts; Why the Heck Did You Do That? / Neil Salerno / November 2005
The Best Hotel Sales Director I Ever Met; What Do The Good Ones Have in Common? / Neil Salerno / November 2005
The Best Hotel General Manager I Ever Met / Neil Salerno / October 2005
What’s your eMarketing Proficiency? Using Electronic Marketing Tools / Neil Salerno / October 2005
When Times Get Tough…Get Tougher! Sell Harder Before You Cave-in on Rates / Neil Salerno / September 2005
The Web Site Conundrum…Are You Winning the Electronic Marketing Game? / Neil Salerno / August 2005
Lions and Tigers and Bears…Oh My; The Hotel Yellow Brick Road is Less Scary than It Used to Be / Neil Salerno / August 2005
Running Dry on Good Hotel Ideas? It’s not What You Know - It’s Who You Know / Neil Salerno / July 2005
Revenue Grabbing Tips for Independent Hotels; Start Thinking Like the Chains / Neil Salerno / July 2005
Hotel Web Basics That Really Work…Content is King / Neil Salerno / July 2005
Hotel Supplier Sites versus Online Travel Agents; The War Chronicles / Neil Salerno / June 2005
New Hotel Technology Surround Us; Yet Face-to-face Selling is Still Most Productive / Neil Salerno / June 2005
The Internet…The Great Equalizer For Independent Hotels / Neil Salerno / June 2005
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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