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A Gamble Or A Golden Goose? - Former Franchisees Talk Specifics About Channel Loyalty and How They Leverage VIP International Channel Marketing to Succeed as Independents |
Calgary, Alberta, Canada � March 29, 2004 � As major brands become
more expensive with franchise fees and marketing and reservation fees,
franchisees are feeling the squeeze. Because of new Internet marketing
options, some owners are asking, �Would I make it on my own as an independent
hotel? Can I sacrifice the brand identity, but use the Internet to
give me the same distribution, revenue management assistance and marketing
as before, perhaps more cost-effectively?� The answer for three successful
independent operators is �yes;� but not without hard work and marketing
savvy.
Reasons for going independent vary. Some owners feel they do not have the capital to make brand-required compliance upgrades; others have seen their revenues flatten or dip while franchise fees and expenses erode profitability forcing them to reexamine brand ROI. For many operators the transition to independent status is a temporary measure while they shift to a different flag. Regardless of their reasons, owners considering independent operation agree they need sales strategies and solutions that will continue to drive reservation volume after they leave their franchise. Listen to three leaders in the de-flagging trend. HVS Guides Boulder Property to Independence,
Increases Revenue 40%
King estimates that of about 187 hotel brands only a handful are strong, although fees are roughly the same. He believes the key to running a profitable independent property is knowledge of your market�s demand generators and how to sell to them. �A growing number of people are on the Internet buying rooms through Travelocity, Hotels.com, and others, and they are becoming channel-loyal, rather than brand-loyal,� HVS Management�s Dan King continued. �If a property has a good presence on the right sites they can compete against the flags; but you cannot do it in a casual way. We partner with VIP International, a reservation channel sales company, to maximize the Boulder Outlook�s eChannel bookings and revenue. The bottomline is that it is important to work with a specialist in on-line marketing and sales, regardless of whether you are franchised or independent.� An additional challenge concerning hoteliers evaluating independent operation is their property�s loss of brand advertising and priority placement on leading Internet search sites. To reduce the potential loss of position, channel sales partners like VIP International help independent properties compensate for brand neutralization by providing search engine optimization services to give a client hotel�s website the most prominent positioning on most Web search engine results. Often this positioning will put an independent property�s listing on the first page of search results. This same reservation sales support is valuable in raising property screen ranking when independent properties offer rooms over third party travel sites. Former Choice Operator Creates Independent
Alaska Brand, Pulls 15% Web Reservations
To increase booking efficiency Aspen Hotels is leveraging its channel sales provider�s technology to distribute Aspen�s availability and rates through a single point of contact with all the third party Internet sites selling its rooms. Carol Fraser explained, �We give our vendor one rate and they sell our brand and rate across the Internet, GDSes, and to TAs. The system works; over half of Aspen�s reservations came from the Internet last year.� Almost 13 percent of the chain�s reservations come through its website, and it is viewed as another key revenue source. Rooms for all five properties are sold from the Aspen site through its channel partner�s booking engine, which is invisible to guests. �Revenue management is my specialty, and this is why I like VIP,� said Fraser. �They specialize in driving sales for independent operators and make us look like a big franchise to shoppers and travel agents.� Operator Goes Independent with Health & Fitness Focus
Kelly Blake, President of VIP International, the second largest channel reservation sales and marketing provider, explained that it is imperative hoteliers understand the myriad of marketing options available to them and how to optimize each alternative. Blake said, �The key question franchises are asking themselves is, �What does a brand offer me that I cannot get elsewhere for a lower price and often with better quality?� The marketplace sees brands as vanilla offerings with little differentiation. This is one reason why Expedia and other �on-line brands� are successfully making the game all about rate.� To optimize revenue, hotel operators must understand how to play the revenue management game on the top e-Channels. Being profitable is a matter of finding the proper sales channel mix that maximizes revenue and profitability. �The move to be independent has never looked so good,� concluded Blake. About VIP International VIP International (www.vipintcorp.com) is a channel marketing organization that drives revenue for hoteliers, car rental owners and regional airlines through a multi-channel reservation sales center, the adoption of leading-edge technology, and partnerships with clients to provide ongoing education. Founded in 1979, the privately held Calgary, Alberta-based firm pursues a mission of being "The number one producer of bookings per client." This is accomplished through mastering the electronic channel marketing environment, developing and implementing strategies for each client's unique position, and educating customers about how to optimize participation in the changing electronic marketplace. VIP International is the industry's second largest provider of reservations sales services with more than 5,000 clients worldwide. A sister subsidiary of VIP International acquired Lexington Services in November of 2003. The combined companies are a central distribution point to every viable Internet web site, and to all of the major global distribution systems including Sabre, Galileo, Pegasus, WorldRes, Amadeus, and Worldspan. VIP International is headquartered in Calgary, Canada with a USA headquarters in Dallas, Texas and significant development office presence in Denver, Colorado, London, United Kingdom, Hong Kong and other cities located around the world. |
HVS Hotel Management
Aspen Hotels
Rolling Oaks Hospitality
VIP International
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