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But Is The Enemy...Us? |
By Neil Salerno � November 2003
This is a good time of year to stop, gather your team around you, and reflect on the good, the bad, and the ugly results and happenings of 2003. It�s a great time to dust-off that 2003 marketing plan and review the actual results against the results you had planned a year ago. Oh, I can almost hear the initial reaction to that suggestion; who has the time to stop or even slow-down? That thought always reminds me of the woodcutter�s parable in Covey�s famed book, The Seven Habits of Highly Effective People. Sometimes, we need to stop cutting down trees and take time to sharpen the saw. Well folks, it�s time to sharpen that saw. Among my clients and friends, the prevalent concern appears to be centered on disappointing rate performance in 2003. As we have said for months, most people believe that the industry will see a gradual demand growth through 2005. Will we continue to sacrifice rate as demand grows? Recently, TravelClick announced that on-line room bookings have increased 10.5% over previous levels; with no growth in GDS bookings. It appears that on-line bookings are growing faster than the most optimistic estimates of just a few months ago. Their view is that this may indicate a solid recovery for the hospitality industry. It�s hard to argue with TravelClick, they are most often right. The big picture question is what is the actual cost of this on-line bookings increase? For many hotels, these increases came primarily from third-party discount providers. Their successes have generated an Internet climate of discount-rate driven selling and; in many markets, third-party providers are even competing with the hotels they represent. Recently, a client told me that, last month 25% of his total room nights were generated from third-party providers. The problem, he added, is that average rates were too low. Earlier, he had experimented by increasing third-party rates by only $1 and the results were disastrous; bookings decreased by 80%. So, who is controlling whom? Will we continue to allow third-party portals to control our rates and revenues by allowing them to sell by lowest rate alone? Will we continue to provide them with low net rates so they can continue to make the Internet a discount warehouse instead of the wonderful sales medium we all believe it can be? This will not change simply by wishing their demise. We need to wean ourselves from our dependency on them by developing our web skills and programs to produce more direct Internet business. Survey, after survey, has shown that people prefer to deal directly with the hotel. The answer is to make it easier for them to do business with us. I am constantly amazed that there are still so many individual hotel sites, which are confusing, difficult to navigate, outdated information, and so obviously designed by technicians instead of hotel marketing people. Many still lack any comprehensive search engine program so people can find them. Try this experiment; do a search for �hotel (any city)�. 99% of the time, search results will produce two, three, or more third-party portals and few, if any, individual hotels or franchises. To take back control, we need to do better. Building business is like filling a bucket with sand. In order to fill the bucket, we need to seal any holes in the bucket, first. Like any other market segment, we need to cultivate Internet business by developing a one-to-one relationship with those who book through or visit our Web Site. Are you building and marketing to a database of your guests and site visitors? Or, are you still trying to fill your bucket with new sand alone. The Internet market is still very affordable, if done properly. Check it out. Start taking back control of your rates and inventory. A good Web Site and Web Strategy evaluation is a small investment. Be sure to find someone with a hotel marketing and sales background, someone who has walked a mile in your shoes. |
Contact:
Neil L. Salerno, CHME Hotel Marketing Coach 1369 South Wembley Circle Port Orange, Florida 32128 [email protected] www.hotelmarketingcoach.com |