There is huge industry and media focus currently around the lack of power hotels and hostel have when it comes to negotiating with the massive OTA’s.
As the General Manager or Revenue Manager of an independent hotel or hostel you could be forgiven for feeling a little helpless with so much happening on the the global and national stage. However, there are some things you can do to make sure your customer acquisition costs from all your booking booking channels are reduced.
Here are our top 3 tips. There is huge industry and media focus currently around the lack of power hotels and hostel have when it comes to negotiating with the massive OTA’s.
Since Expedia’s $703 million acquisition of Wotif last year the Accommodation Association of Australia has said in a submission that the playing field between hotels and OTA needed to be leveled.
Meanwhile, nothing stands still very long these days and the OTA’s themselves along with hoteliers are keeping an eye on Google’s latest move into hotel bookings. While the jury appears to be still out on Google’s latest plans, some industry voices have welcomed their potential role in hotel distribution as it offers an alternative to the major OTA’s and might reduce their power.
As the General Manager or Revenue Manager of an independent hotel or hostel you could be forgiven for feeling a little helpless with so much happening on the the global and national stage. However, there are some things you can do to make sure your customer acquisition costs from all your booking booking channels are optimised.
Here are our top 3 tips…
1) Do you know your profit margins for each booking channel and we are not just talking the commission percentage?
Ok, so not necessarily a direct tip, but a tip for a question you should be asking yourself. You should be able to get access to reporting data that shows, for each booking agent; which rooms they are selling, length of stay, cost, and total revenue per booking (eg food and beverage and other sundry revenue lines).
Is it time for a booking channel audit at your property to change the mix of agents you partner with? Or could you adjust the rate plans that you provide to some OTA’s to achieve better returns?
2) With OTA’s producing a large percentage of your reservations why should these bookings cost you even more to process into your reservation system?
Much of the concern around the mega-OTA’s involves the risks of them raising commissions given their global dominance. But hotels who have not integrated their systems to have bookings auto-processed from their own website, channel manager or GDS aggregator direct to the Property Management System are in effect paying between 1-2.5% extra per booking to manually enter the reservation. A great solution like GuestCentrix connects to a range of leading channel managers enabling you to free up hundreds of hours of staff time. An automated reservation processing connection also eliminates the easy mistakes that front desk and reservations teams may make when entering hundreds of bookings manually.
3) Hold back rooms or beds to give your property an advantage
Recently we talked about how to save time and make more money by performing revenue management tasks in the Property Management System integrated with a great channel manager.
Most channel management systems work on a ‘pooled inventory’ concept where the hotel makes all its rooms available to all booking channels. In a relationship sense the model involves the booking agent ‘owning’ the properties availability after receiving the update from the channel manager. Knowing this, and also understanding your properties peak booking seasons you can elect to limit the amount of rooms or beds you make available to the channel manager / OTA ‘pool’.
The benefit of this is ensuring that some or all of your online channels do not oversell the property at peak times and last room availability stays on your own website, and not with the OTA!