Pardon the turkey pun, but Thanksgiving marked the beginning of a critical time of year for most hotels; This year's performance results are being dissected and analyzed and next year's budgets are frantically being tweaked and finalized. Hopefully by now, everyone's marketing and operating plans include some kind of strategy to capture more sales from electronic sources in 2006. Electronically generated sales from travel agents on the Global Distribution System; partnerships with third-party aggregators, like Expedia, Travelocity, and Orbitz; and dedicated real-time reservations from your web site are finally getting the attention and respect they deserve. For independent hotels, eMarketing is a great opportunity to play on the same field with franchised competition...and win.
Room night production, from electronic sources, has reached upwards of 30-40% of total room sales for many hotels; that kind of production is serious business.
What role will electronic sales sources play in your hotel's plan for next year? It's fair to say that revenue from this market should represent a third or more of your total room sales. If it doesn't, you can fix it. No longer just a novelty, electronic marketing should represent a significant portion of your overall sales expenses and effort.
Just a few years ago, many hoteliers thought I had lost it when I suggested that hotels should include dedicated eMarketing dollars in their annual operating budgets. I hope this is now a standard department for all hotels in 2006. You won't do what you don't plan. Is anyone out there prepared to give up eSales revenue to their comp set?
I'm happy to say that eMarketing on the Internet is still one of the best return-on-investment values available to hotels today. You can literally reach the World market for just a few dollars a day. What other medium can do that?
From the many emails I receive every day, I believe that many hoteliers are now convinced about the benefits of eSales, but are uncertain about the 'next steps' to boost their share.
Travel Agents Still Count
If you have a franchised property, your franchise, most likely, handles the GDS market on your behalf. But, you are still in control. You control the rates offered through your franchise. I couldn't count how many times I've seen hotels offer lower rates direct-to-the-consumer than those posted through travel partners, like the GDS. This is not only short-sighted and frustrating to your travel partners, but confusing to the traveling public.
I've heard the arguments; 'But I have to pay a commission and fees if the business comes through the GDS'. This implies that hotels don't profit from GDS bookings and are in competition with GDS agents rather than using them to sell incremental rooms for their hotel. Would you hire new sales people and make them sell higher rates, than are offered at the front desk, because you have to pay sales people a salary?
Independent hotels can also cash-in on this important business source. You can be posted on the global distribution system through companies like GenaRes.com. They provide full reservation services as well. A big plus is the fact that access to the GDS will also get your hotel listed on major third-party aggregator (online travel agents) sites as well.
Third-Party Travel Aggregators
Has anyone noticed lately, that there is far less bashing of third-party online agents emanating from the franchises? Fortunately, franchises and third-party agents are learning to work together. Many hotel franchises have now cut deals with third-party aggregators for their member hotels; working together instead of against each other. Now we can make some real progress.
A disturbing trend, which appears to be emerging, is that more and more hotels are playing rate games with third-party sites. Some hotels are actually submitting higher rates to third-party agent sites than those offered on their hotel web sites. Rate parity is very important on all public sites. What kind of image does one create for the consumer if your direct-to-consumer rates are lower than those offered by your travel partners?
'Plan your work and work your plan'. Electronic sales take time and some money devoted to it. There is no free ride, but the return is bound to make you very happy.
Neil Salerno, C.H.M.E., C.H.A.
The Hotel Marketing Coach www.hotelmarketingcoach.com