Let’s take a trip to the not too distant past when hoteliers and other travel suppliers could put prices into a source market or country that were different than prices from other source markets or countries. Why the disparity in prices? It had to do with economics. The same room would cost more to a guest originating in a strong economy compared to a guest originating where the economy was weaker.
Thanks to the Internet and the information revolution that business strategy is no longer viable. Prices for all goods and services now have a global transparency. This is the distribution reality today and the onus placed on hoteliers is to ensure rate parity across all distribution “touch points.”
Demand is demand—no matter the source of origin—and a player within any demand universe expects to pay the same amount as someone else in a different demand universe.
So many choices
The traveler today has so many choices for researching travel: the brand’s own website, online-travel agents (Orbitz, Priceline, Booking.com, Jetstar, Agoda), meta-search engines (Kayak, Trivago), online-travel management tools (WorldMate, BlackBerry Travel), social-media websites (Facebook, Twitter), membership sites (Jetsetter, Rue La La) and even online classified ad sites (Craigslist). The challenge for the hotelier is to ensure that no matter where the potential guest goes, the same price is listed. If different prices are shown, the potential guest will start to question the “value quotient” attached to the price for the room.
The adage of “location, location, location” is getting that much easier to research. Travel sites are introducing mapping products that make location shopping much easier and more specific. The traveler can actually confirm the view out the window from the room being booked.
When you add the abundance of user-generated content to the research mix, you wonder how the traveler ever makes a decision based on the overwhelming amount of data and information. The reality, though, is that the traveler won’t make a decision unless all of this data and information is available.
For the hotelier, it brings up many questions in regards to Internet visibility: Where should I be? When should I be there? What should I be “putting on the shelf?” To use a restaurant metaphor, if you’re not on the menu, you won’t get bought. Recent research indicates a traveler will go to 15 to 20 different sites for research. But each traveler may be using different sites. Trying to pinpoint the crossover on those sites is not really a viable solution for hoteliers, but trying to be everywhere might not be possible, either. Unfortunately throwing your arms in the air and walking away from the madness is not an option.
From channel managers to reputation management firms, there are numerous tools to manage a hotelier’s presence in the online-travel research universe.
Getting the price right
The dynamic nature of the Internet means that getting the price right is not just a game show but a science. Adjusting prices in all of these consumer touch points is something that can be done in minutes. The effects of the adjustments can be measured just minutes later. Thus, the Internet has proved to be an amazing revenue-management tool to determine consumer reaction to pricing, offers, value adds and room amenities.
However, while you may be “on the menu,” there’s no point in offering Mexican food if you’re a Thai restaurant. The dynamic testing reality of the Internet enables hoteliers to ensure that they’re getting the right product in the right place at the right time to maximize the potential of the sale.
The Internet has enabled hoteliers to more closely match product offerings to demographics. Just as different hotel brands appeal to different demographics, the same can be said about different travel sites. You don’t need to be everywhere and hope for the best. Be selective as to what you “put on the shelf and which shelf you put it on.”
With all of these options available—not just for the buyer but for the seller as well—finding the sweet spot is possible on the Internet. It’s never been easier to track and analyze consumer behavior. While focus groups and consumer studies still play a key role in the art of marketing, the Internet has given us so much insight into behavior patterning. With that information, hoteliers can make more impactful decisions—or less successful decisions can be adjusted—all in a matter of minutes based on just hours of behavior. For a person who’s truly into statistical analysis, it’s like putting a child in a candy store.
The Internet has fundamentally changed the way business is done for the hotel industry—for some market segments more than others. Not only is more change going to happen, but also the pace of the change is going to increase, which brings to mind one last metaphor, “fasten your seat belts.”
Doug Carr is Executive Director Distribution, Fairmont Raffles Hotels International. A member of HEDNA’s Board of Directors, Carr is active in HEDNA U, the association’s e-distribution educational offering. For a list of upcoming HEDNA U sessions, visit http://www.hedna.org/networking/events.cfm
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