News for the Hospitality Executive |
What If A Hotel Brand Could Ask The Same
Question
Southwest Airlines
Asks In Their New Ad?
By
Doug Kennedy
December 15, 2010 As a veteran hotelier who started in the
industry long
before there were OTA’s and the proliferation of “opaque” third party
distributers, I remember well the days when hotel controllers would
complain
about having to pay the “exorbitant” travel agent commissions that then
were
running 10%. I was a bellman back then
and since it was my job to walk the outgoing mail from accounting to
the front
desk I could always tell it was the day to run travel agent checks by
the weight
of the outgoing mail bag. Maybe if today’s hotel managers had to
actually print and
sign monthly commission checks to their OTA’s and other online
distribution
partners the industry would never have relinquished so much control
over its
distribution to these external partners?
This is not to say that hotels should not
work with their
vendor-partners such as the OTA’s and opaque websites, but when I see
countless
hotels relying more on these channels to fill their hotels than their
own
direct channels something seems terribly out of balance.
In recent weeks I have been watching the new
Southwest
Airlines television commercial that reminds the viewers that there is
only one
place on the entire world wide web where you can purchase Southwest
tickets,
which of course is www.southwest.com. What a clever ad campaign to simply ask
ordinary people this question and then to have them state the website
address. As I watch the ad I cannot help but wonder
what went wrong
with our industry that we ended up paying such exorbitant distribution
costs,
on top of what most properties are already paying for brand/franchise
flags or
affiliation/membership groups. How did
it become that for many hotels, the transient contribution from third
party channels
has outpaced direct channels?
While it’s nice to look back, to wonder, and
to reflect on
what went wrong, more importantly today we as an industry should start
thinking
more and more about what we can do to win back the loyalty of
our own
customers. Fortunately, travel marketing
technology continues to evolve and hotel managers have more tools than
ever to
reach out and connect directly with guests and prospects.
I concur with another recent hospitality
industry columnist
who wrote an article asking why it is that at least one of the major
hotel
brands has not had to confidence to take back control of its own
distribution
channels such as Southwest does. If only
a fraction of the funds currently spent on OTA commissions were
invested in
marketing of direct channels, it would seem to me that at least one of
the hotel brands could make this
transition. Some of the savings in
commissions could even
be passed along to the consumers in terms of lower-tiered and
“well-fenced”
rates, that while still being less than current selling rates on OTAs
would
still result in a larger “net” revenue per booking.
|
Contact:
Doug Kennedy
|
Also See: | Hoteliers
Should Utilize New Tools For Measuring Hospitality and Guest Service
Efficiency / Doug Kennedy / November 2010 |
Training
Your Team To Master “Channel Conversion” Techniques / Doug Kennedy
/ November 2010 |
|
Upselling
Strategies For Your Front Desk and Reservation Teams / Doug Kennedy
/ September 2010 |
|
Training Is Key To Turning “Desk Clerks” Into Front Desk Salespersons / March 2007 | |
It’s Time To Give Hotel Guests What They REALLY Need and Want Daily! Key Basics Some Hotels Still Fall Short On / Doug Kennedy / September 2006 |