Wednesday, April 29, 2015

Booking.com fires away strict rate parity: What it means for hoteliers

Just when we have been thinking that the rate parity issue have been sorted out, comes the news of Booking.com amending their parity agreement in Europe. In an announcement last week, the OTA giant has said that they are abandoning its price, availability and booking parity provisions with respect to other online travel agencies. Putting it simply, this means, as an hotelier, you can now sell the same room in another OTA at a lower price. As Booking.com CEO says: “We welcome and encourage fair competition in the marketplace because competition drives innovation, efficiencies, and most importantly, greater value for consumers.”



For independent hoteliers, and smaller OTAs, this development can be ‘THE BEST THING’ that has happened to them for a long time. And they are thanking regulatory bodies in Sweden, France and Italy, who have forced Europe’s biggest online channel to bend its rule. Investigation on Booking.com’s alleged ‘anti-competitive clauses’ are going on in Germany, Austria and UK. So does that mean that the rosy days are in the corner for the hotel industry?

A quick recap of rate parity controversy

For long smaller OTAs have been alleging against unfair arm-twisting by big OTAs to maintain rate parity. Based on claims made by Skoosh, a pan-European hotel booking site, UK’s Office of Fair Trading (OFT) has investigated allegations that hotels are colluding with Booking.com to keep room rates at an artificially high level. Following a three-year investigation by the OFT in 2013 ruled that InterContinental Hotels Group, Expedia and Priceline Group could no longer enforce rate parity agreements for certain types of bookings.

Since then, hoteliers in the U.K. have been able to offer discounts to “closed groups,” such as members of their loyalty program. And third-party distributors will be allowed to reduce their commissions and margins in order to discount hotel rooms to certain “closed groups,” such as website members or travellers who download their mobile app.

Europe now, world awaits

The latest move by Booking.com is somewhat similar to their stand in UK after the OFT verdict, but has broader scopes. Effective from July 1, the amendment will allow an accommodation provider the freedom for properties to offer different pricing and booking policies (e.g. free cancellation, WIFI, breakfast) through different online travel agencies. For independent and smaller hotels, who cannot afford to stay away from the mighty channel, but are burdened with  paying high commission (up to 20% in some cases), price parity has always been a bone of contention.


With the recent changes, does it mean hotels now have regained control over their pricing?

In my next edition I'll talk about how hoteliers can utilize maximum opportunity from the rate parity amendment by Booking.com

Cristina Blaj is Sales Director at eRevMax.  She can be reached at cristinab@erevmax.com

Thursday, April 23, 2015

Last Minute Booking: How big is it?

The rise and rise of last minute booking has become a double edged sword for revenue managers. On one hand they have opened up an opportunity  to sell otherwise perishable inventories even if at a discounted rate to make some money; on the other hand guest, more smarter than ever with wide range lodging option, is now in charge, and forcing hotels to lower prices.

With increasing ubiquity of mobile devices, there is a certain change in consumer behavior. Guests today are more confident than ever to research and find lodging option at the very last minute. According to a recent study by PhoCusWright, about 30% bookings come from Hotel Mobile booking  platform; 70% of them are from same day bookings.



A look at last minute travel booking

It all started in 2010 with the launch of HotelTonight. Since then there have been multiple entrants and OTA majors like Booking.com, Orbitz, Priceline, HRS and Expedia are making investments in this segment. For example, Expedia has been aggressively building its presence on mobile to meet its customers changing needs and 70% of its travel booking comes from last-minute bookings.
So what really is last minute? In the hospitality industry, bookings windows of up to seven days in advance are known as last-minute booking. Within this there are three categories- seven days or less, three days or less and same-day. Same-day booking are done on the day guests wants to stay. Mobile applications like HotelTonight allow travelers to book a room for the same day.



How big is last minute travel?

While researching on how the growth of last minute booking segment, I has come across some eye-catching stats which I would share with you.  PhoCusWright reports   that overall mobile search and booking volume is growing rapidly with gross travel bookings via mobile (phones and tablets) accounting for 27% in the US, up from just 5% in 2012. In UK, 1 in every 3 Britons book on the same day. The trend is more or less same in Asia Pacific as well, with 70% of mobile booking coming for same day stays.



Don’t ignore last bookers

As a major share of all hotel bookings are shifting from desktop to mobile and it is done at the end moment you can’t deny its importance in your business. Sojern research data shows Tuesday is considered for the most productive day for last minute bookings and Friday for same-day bookings. Last-minute travel accounts for 25% of trips lasting a week or less. When travelers prefer to go for short vacation i.e. for two to three days the likelihood of their last minute booking increase significantly this means if you are not prepared to serve these last-minute travelers then you are losing a large share from your unsold rooms. Keeping in mind everything about last-minute travelers, you should ask yourself a few questions to understand your potential guests and take right strategy to avoid revenue disaster.

1. Ask yourself what does last-minute travel mean for your product or location? Know what are the latest trends in the hospitality industry by analysing big data generated from own PMS such as guest information, length of stay or you may avail it from third party. This will help you acquire key information to understand travel journey of your potential guests and take right action by offering them suitable offers.

2. Are your revenue managers are taking right decision and promotional tactics which is compatible to fulfil increasing demand for last-minute travelers? Review closely your current revenue & marketing strategies and analyse how can you attract and win more last-minute travelers.

3. Make a plan how can you reach to this group of travellers.  To understand you need to analyse your revenue management tactics and find out gaps in occupancy. List your unsold room in last minute booking sites such as HotelTonight, Jettsetter, PriceLine, Travelocity which is more affordable to you.

Image Source: PhoCusWright, HubSpot

Thursday, April 16, 2015

The impact of guest review on Hotel Business - Part II

In my first article (see it here) I've discussed about how to understand guest's emotional journey and hidden story behind guest reviews. Here is the second part of the article.

More positive reviews, more bookings and more revenue

According to a TripBarometer report by TripAdvisor, 90% travelers choose an accommodation based on ratings on a review site and 88% travellers are guided by online reviews and posts on TripAdvisor. Reviews with a rating on 4 - 5 generate more than double the conversion compared to a review with 1.0 – 2.9 rating on Expedia. Hotels that have a higher guest score typically will have better placement on the travel sites.  A better placement on the travel site means more bookings and more bookings mean a higher room rate, and eventually higher revenue for the hotel.  Identify what emotions your guests’ value at the key touch points in their journey with you and also those they want to avoid. No matter how difficult it is if you are not taking care of your guests’ emotion then you are doing a terrible mistake.




Go for Reputation Management Tool

As a hotelier, keeping track of who is saying what on which channel can be a nightmare.. Hence, it is essential to take an analytical approach to understand your strengths and weaknesses as per your guests and take a cohesive approach to address these issues. Guests share feedback on various review and travel sites – all this valuable information lay scattered and unstructured. Online reputation management tools play a big role in consolidating these guest reviews and presenting them to hotels in structured report formats. Usually, these tools pull guest feedback from various review websites including Qype, Holidaycheck, Yelp, Expedia, Facebook, Twitter etc. Data is then compiled together into review reports which include guest details (as it appears on the site) along with their feedback and the rating they provide to the hotel. A strong visible position on guest review websites indicate that your Price Quality Index is working well, that will enable you to make the right pricing decisions based on RevPAR performance.  This will allow the hotel to flex their rates based on a number of pricing strategies depending on booking levels. However, there are no short cuts. It is an evolving process that has to start today! As we move towards the age of consumer controlled brand conversations, hotels need to integrate customer feedback into their business approach and strategy planning.




















Contrary to popular belief, the greatest pitfall to customer reviews isn’t negative feedback. If all reviews are positive, or considered too similar, then the validity of the reviews can be called into question and the credibility of the brand put into doubt. The greatest mistake is actually not responding at all to your negative reviews, leaving your brand exposed and your customers find alternatives who give more attention to their needs.

So what’s the next step? Here are some suggestions for you to optimise the benefit of customer reviews:

- Encourage feedback, both on the brand website and third party platforms.
- Respond to comments quickly, outlining any action planned to address concerns.
- Ensure all reviews are genuine and never consider creating feedback artificially.

- Monitor brand noise across the entire web with regular online searches to ensure all channels are managed.


Francesca Stagi is Sales Manager at eRevMax.  She can be reached at francescas@erevmax.com

Friday, April 10, 2015

The impact of guest review on Hotel Business - Part I

Being a part of the industry, hotel reviews are something I always take with a pinch of salt. Especially those on the extreme sides.  However, internet is a place for opinions and if many more people join in the chorus to say negatives about a property, then I would rather give it a miss instead of taking a chance. But does that really make it a bad hotel? 

Truth be told, if most people are un-happy with the property, then there must be something wrong with it. Guests are expressing their dissatisfaction as they have had bad experiences. And hotels need to take them seriously. As the first rule of the service industry says customer is the king, and in this age of hyper-internet activity, they rule.



Understand your guests’ emotional journey

While interacting with hoteliers and visitors at ITB Berlin this year, I realized that in coming years personalised content will going to be a priority for hoteliers. With 3 billion internet users and 1.96 billion social media users in the world it is no wonder that key hotel investment trends in 2015 would include the development of one-to-one relationship with guests through reputation management and personalized marketing. As a form of direct communication, customer reviews clearly identify what are the most important things to the customers and what’s not. This also highlights where the hotel is performing well and where there is more room for development. Engaging with your guest in a direct conversation can possibly expose a more personable side of the hotel, build a greater level of trust with the customer and in the course spread a positive brand story. With TripAdvisor now offering direct bookings from their platform, a strong social media presence along with intelligent meta-search marketing can give hotels a real chance of improving, increasing conversion rates.

The Hidden Story within Reviews

A recent survey by Laterooms.com suggests that 90% of travellers would avoid booking hotels labelled as “dirty” in online review sites. Sure, the situation might not be as bad as the guests made it seem, but the hotel cannot prevent the reviewer from expressing his/her opinion. However the beauty of online reputation sites is that most will give the property an option to respond. And it needs to do just that - Respond! More so for negative reviews. No hotel deliberately sets out to create negative emotions for guests, but it happens, and you need to know what those are so you can work out how to reduce their impact on your guests.




As revenue management evolves, it is getting away from simple rate management and is now incorporating customer relations and social media into its strategy. The more satisfied guests you have, the more likely they are to return and spend more money, as well as recommend you to others. Reputation has a positive correlation with the hotel’s overall Average Daily Rate (ADR) and revenue. It’s time now for the revenue management department to work hand in hand with the marketing team, if they are not already doing that.


In my next edition I'll talk about how positive reviews and reputation management tool can can add more revenue to your hotel.


Francesca Stagi is Sales Manager at eRevMax.  She can be reached at francescas@erevmax.com