December 18, 2002 - How can a management firm divert the fast growth and continual change of the Internet into bottom line revenue for its hotels?  That is what Gloriann Kueter asked herself a year ago when net rate programs changed the ground rules for booking reservations over the Internet.

As corporate director of sales and marketing for Sioux Falls, South Dakota - based Regency Hotel Management, Kueter oversees the booking of all 34 Regency properties, and is especially focused on the company�s expanding Clubhouse Inn & Suites flag.  

Kueter needed proactive advice about the properties� central reservation offices, but it was not forthcoming from the company�s previous reservations service provider.  So, a year ago she tapped an aggressive new channel marketing provider, VIP International, known for being �the number one producer of bookings per client.� 

�Our new channel marketing vendor advises me now on new Internet sites, and I make decisions several times each week on the net rate programs for our 12 Clubhouse Inn & Suites,� said Kueter, who noted that the management resources required to profitably participate in net rate programs outpaced the company�s internal abilities.  Kueter used all of the vendor�s available channels including Global Distribution Systems, the Internet, 1-800 voice numbers, and Clubhouse�s proprietary Web site, to book rooms.  The result?  Clubhouse Inn & Suites realized a 69% increase year-over-year in rooms booked from January through October 2001 and 2002

Net Rate Programs

How do net rate deals work?  The Internet is becoming an increasingly rich reservations channel for hotels, particularly for net rate program participants.  VIP International steers their clients through the thousands of Internet rooms-booking sites available with ten net rate programs including Oribtz Promotional Rates, Travelocity Last-minute deals, Lodging net-rate program, Travelocity Hotel Only, Travelweb Net Rate, Priceline net rate, and Hotwire net rate.  By agreeing to a net rate, each hotel agrees to offer a rate at least 25% to 30% lower than their published rate in return for a more prominent listing, which could be on page one instead of page three of a travel Web site.  Properties find this is an effective way to sell off blocks of rooms and get business in the lobby, but it requires daily management.  VIP International connects each Clubhouse Inn & Suites to all the sites via one central point of inventory, and each hotel manages its own rate.

During her search for a channel marketing partner, Kueter looked with companies with expertise in these key areas:

• Driving incremental revenue through the GDS and Internet; 
• Pro-active, education-oriented advice regarding their reservation channel mix; 
• On-demand competitive-set property audits; 
• Twenty-four hour turnaround on loading new rates;
• An incentivized call center team, which delivers a high call-to-reservation conversion rate.
• A sales-driven corporate culture that emphasizes long-term relationships.

Government Travelers Boost Occupancy in 2002

Kueter�s move last year to tap Calgary, Alberta-based VIP International Corporation; which drives revenue via a multi-channel reservation sales center, the use of leading-edge technology, and ongoing client education, also helped increase revenue from government travelers.  Through their new vendor, Regency participates in the top three travel consortia targeting the military market: Sato Travel and its parent company, Navigant International; and Rosenbluth International.   

During 2002 when corporate travel was slightly down in most markets, Kueter explained that her team worked closely with military bases and local recruitment offices.  �During the past several months, we realized you can run 40% occupancy, or you can fill rooms with government travelers that come back every week, and run a much higher occupancy,� said Kueter, who noted government does not know a recession.

�We appeal to both federal and state employees because we are in that mid-market price range, and yet we provide a hot breakfast buffet and evening service, which saves the traveler their per diem,� Kueter explained.  �There is a personal feeling when you walk into the room.�   
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Based in Sioux Falls, South Dakota, Regency Hotel Management has been running hotels and affiliated businesses for nearly four decades.  Through a strategy of controlled growth, the firm currently owns and operates 34 hotels, and is affiliated with over 30 more through sister companies that include a commercial interior décor business and a restaurant company.   Regency purchased 12 Clubhouse Inn & Suites, and the flag�s brand name, from Wyndham Hotels and Resorts in 2000. The properties are all from 125 to 145 rooms with interior entrances, and an average of two or three levels; just the kind of easy accessibility that attracts corporate business travelers, government workers and their families.  Two of Regency�s independent hotels and the new Arrowwood Resort and Conference Center by ClubHouse also use VIP International�s channel marketing services, as will another Arrowwood Resort and Conference Center that will be added early 2003.