by Amanda Bryant
It’s no secret that third party services and new intermediaries are popping up faster than we can keep track of, however as revenue and e-commerce managers we should constantly be evaluating new services as opportunities to not only improve RGI, but optimize channel mix by improving ADR and reducing guest acquisition and distribution costs.
Let’s admit the fact that intermediaries have scale, which individual hotels and small portfolios will never achieve, especially when we try to affordably compete in SEO and SEM. While we wish the marketing fees paid to our franchisors are the only investment we need to make in filling our rooms, we know that chains have created a hyper competitive environment, meaning we must actively find new ways to shift share and drive more organic business.
On the other hand, marketplaces and intermediaries have created options for consumers that our brand.com sites have not been able to fulfill, and so we either lose out on some business completely or pay to play as the OTAs have taught us.
Here is a curated list of the more unique intermediaries available and when and how often to use them.
Purpose: Drive Brand.com Traffic
Cost: 5% to 10% Commission
HotelUpgrade is the newest of the bunch here and promises to drive guests to book on a hotel’s brand.com website when the hotel offers some sort of upgrade such as bonus points, WiFi, or food and beverage vouchers. They claim their typical user is a business transient guest, and since we can never have a shortage of corporate travelers and direct bookings, this is one you always want to keep in your revenue tool kit. Since HotelUpgrade is a mobile only app, this service will also help ensure you are staying competitive on mobile bookings as travelers look to third party apps that are more convenient to use.
HotelTonight / Roomlia
Purpose: Distressed Inventory
Cost: 20% Commission
HotelTonight, once known for same day bookings only, now allows guests to book up to 7 days out. Their launch coincided with the recession, which meant hotels were willing to give up deep discounts to fill unused rooms. In the long tail, as an industry, we’ve conditioned our guests to become accustomed to this deeply discounted booking channel, however the large user base they have means smart revenue managers should occasionally leverage this intermediary to fill distressed inventory. You won’t be creating loyal guests, however sometimes it’s better to sell that room and collect the revenue than think about guest lifetime value. If you operate a brand within IHG, Hyatt, or Best Western, likely you won’t get any incremental bookings through HotelTonight since they now use Pegasus to sell regular third party rates, therefore check out the new kid on the block, Roomlia, for a direct connect.
Purpose: Priceline for Boutique Hotels
Cost: 10% Commission
If you operate an independently branded boutique hotel (sorry Hotel Indigo, you don’t count) and have flexibility with channel distribution rules, Stayful allows you to stand out without having to worry about competing against chain hotels. It requires some manual work, and of course doesn’t condition the right type of behavior, but can help optimize your opaque strategy beyond Priceline and Hotwire when needed.
RocketMiles / PointsHound / Kaligo
Cost: Variable Commission (10% to 20%)
These sites are a new twist on OTAs and reward hotel guests with additional airline points with each booking. For example a one night stay in San Antonio made via RocketMiles might get the guest another 1,000 AA Advantage points. These points are extremely valuable to the frequent traveler, but these sites have less competition than the big OTAs making it easier to stand out in your market. RocketMiles was just acquired by Priceline, so let’s hope Priceline doesn’t start offering points for each stay because if they do, we can kiss brand.com reservations goodbye.
Tripadvisor / Tripconnect
Purpose: Drive Brand.com Traffic
In recent years, Tripadvisor has made a push to become a player in the metasearch market and introduced their Tripconnect product to help hotels drive direct bookings. If you operate a booking platform that integrates with this feature, this is a no brainer as it is a cost effective way to drive direct bookings. Unfortunately most chain hotels are still not participating.
Purpose: Small Group Business
Cost: Setup Fees Plus 10% Commission
Group business has only become a revenue management function in recent years as new technologies have become available and brands have started creating rate codes for this segment. Groupize aims to help convert more small group business bookings by allowing guests to instantly book. This solution is especially helpful for limited service to small full service hotels that operate with no or smaller sales teams, allowing them to automate this manual function and not having to worry about the overhead of additional sales staff and only pay the industry standard 10% commission.
Long gone are the days of trying to convince our Expedia market manager to give us first page placement. Instead of trying to compete on legacy concepts, create a unique revenue management strategy by participating in and optimizing with new off the shelf technologies and services that are easy to implement.