Hotel Online  Special Report



Itís Time To Take Back Control Of Rates & Rooms - 
But Is The Enemy...Us? 
By Neil Salerno Ė 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. Itís 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 woodcutterís parable in Coveyís 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, itís 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. Itís 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 ďhotel (any city)Ē. 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.

Neil L. Salerno, CHME
Hotel Marketing Coach 
1369 South Wembley Circle
Port Orange, Florida 32128

Also See: Booking Engines Are Like A Box of Chocolates...You Never Know What Youíre 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 Doesnít 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' ? Itís 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.... Youíll Always Get What You Always Got! Hotelierís 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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