I just have to get this of my chest, and share my latest experiences with you. I love it how many hoteliers complain about the fact that OTA are penetrating their hotel too far and are almost controlling their business. And not to forget the rants we hear about the ARR being too low. But sometimes we have to look at ourselves instead of blaming others. Some hotels just have to get their revenue management strategy in order, more than anything else.
A perfect example is what happened to me this week when reserving a hotel in Bandung, a large university and retail outlet city in Indonesia. I called a hotel listed in the first page of TripAdvisor to find out what their rates are. I was quoted Rp. 1.200.000. I decided to look around a bit more knowing I should be able to get a better deal in this market. When I looked on the hotel website and saw rooms available at Rp. 800.000. I decided to call back the hotel.
At the same time I was looking on HotelsCombined, a meta-search engine (price comparison), to check their rates on the OTA. I saw on Agoda, a leading Asia OTA the same hotel at Rp. 600.000. I told the reservations agent I would book their hotel and they could save their commission if they would let me book directly. Still over the phone the best rate they would give me was Rp 1.000.000. If I would want to have a better price I was advised to book on their website or on Agoda.
What is wrong with the management in this hotel? Giving a better price through a 3rd party channel? They would rather pay commission than take my reservation directly. I am sorry they simply deserve to go down in their own mismanagement. All rights to complain had been evoked when I meet with their owners tomorrow.
But really, come on? What are these guys on? They must be smoking some serious stuff, and are watching re-runs of Cheech and Chong movies.
Another great story was share to me by a dear friend working for a regional Asian chain. They have implemented several packages in their own hotel website as well as OTA and other distributors. Now he is faced with the challenge of some of the General Managers not understanding the need for dynamic package rates linked to the BAR.
The GMs think it so much easier to have a flat package rate. It’s just simple to load In the PMS and to advertize. They unfortunately overlook the overall objective, which is maximizing their revenues. Because what would happen if the package rate is US$99 and the BAR is US$150 (and mind you they don’t close the package)? Yes, you have guessed everyone would book the package and no-one would buy the BAR. The hotel would be losing out on their revenue potential.
It seems that the issue is that too many hoteliers are hospitality people and do not have enough technical and business insight to manage their systems and strategies. It is time these old-school hotelier either get trained or are assigned only to handle operations.
Don’t have the legacy challenges of the relic hotelier harm your hotel business. It’s a business that needs to make money, or rather profit.
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Patrick Landman @ Xotels