How to convert calls, lower distribution costs
 
How to convert calls, lower distribution costs
24 MARCH 2015 7:31 AM
Hoteliers can offer phone-only rate specials to circumvent OTA bookings, thus lowering distribution costs.
Hotel revenue managers are looking to reduce distribution costs by encouraging direct bookings; however, most only are focusing on increasing online bookings at their hotel website. 
 
Yet, when you invest time listening in to live calls being fielded by reservations and front-desk sales agents every day you will frequently hear callers voluntarily mention comments such as: “OK, I see that same rate at (online travel agency’s) website; I’m going to book it there.”
 
Smart revenue managers recognize that voice is still a powerful distribution channel; many have observed that the number of voice calls has actually increased a bit in recent years as those searching on smartphones are clicking to call to check the rate.
 
A few have even empowered their staff to match whatever verifiable rates the caller has found online. Despite the intention of most to have rate parity, it seems that invariably, online rates are sometimes lower for whatever reason. Still, far too many agents I speak with are under the impression that they are not allowed to match online rates. I cannot imagine why this would be the case, so I’m guessing they are simply confused between policies for not matching opaque versus matching transparent rates. 
 
While it is good to empower the staff and encourage them to match verifiable rates that callers mention having seen, it is even better to give them the tools they need to further increase conversions of these online shoppers. 
 
How to convert more calls
First, post your hotel’s direct phone number prominently in a call-out button at the top of the home page. I suggest using a local phone number, as callers will be more likely to perceive it being direct to the hotel than if they see an 800 number. Include on the call-out button text that states something such as “Call direct for lowest rates.” 
 
Next, review your OTA agreements carefully. Chances are that you will find you are restricted from offering published rates that are lower than what you are marketing through your OTA partners. However, if you read closely you might find that lower rates quoted privately via voice channels, such as group/contract rates, are not published and are therefore permitted.  If not, you can probably still offer those who book direct special rate options such as offering other services and amenities including:
 
  • a choice of early check-in or late check-out;
  • a preferential room type or location;
  • complimentary Internet; and/or
  • free parking.

These and other ideas can be found in my previous article here.
 
Even if the special voice-only rates are just 5% less than what the caller is seeing online, most travelers these days prefer to book direct as they recognize the benefits of dealing with the hotel itself versus going through a third party. When you consider that hotels might pay as much as 15% to 30% in OTA commissions, offering this discount is definitely a good revenue decision.
 
Of course, there is a small extra labor cost for fielding a voice call. However, many hoteliers are still entering OTA bookings manually; even those that are seamless are still paying someone (usually their high-salaried revenue manager) to review all OTA bookings anyway. 
 
Finally, it is also important to train your reservations and front-desk agents on the sales techniques they need to convince callers to stop shopping and start committing. Given that most online shoppers are overwhelmed by the number of choices they see online, it is important for today’s agents to recommend, suggest and/or endorse the room types and rate options they are quoting as being the best value. They should also create urgency by mentioning that the phone-only rates are subject to limited availability and the remove barriers to booking now by reminding callers they can always cancel if plans change. 
 
By offering phone-only rate specials, and by providing some basic sales training, you can help your reservations and front-desk colleagues to covert more direct bookings and thus reduce your hotel’s distribution costs. 
 
Doug Kennedy is President of the Kennedy Training Network, Inc. a leading provider of customized training programs and telephone mystery shopping services for the lodging and hospitality industry. Doug continues to be a fixture on the industry’s conference circuit for hotel companies, brands and associations, as he been for over two decades. Since 1996, Doug’s monthly hotel industry training articles have been published worldwide, making him one of the most widely read hotel industry training writers. Visit KTN at www.kennedytrainingnetwork.com or email him directly.
 
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that might be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
 

1 Comment

  • Liberte April 9, 2015 1:55 AM

    We have found that discounting rates to match the published rates from owners do 2 things. Lower the rack rates in battles against the owners that can again drop rates to compensate for your matching their, and second it reduces the rate of returning guests (our most important) due to discussions around the pool etc. We have found that more rentals is not better than qualified rentals paying rack rates. Discounts bread discounts and lower star ratings for the resort and you end up with a "personal resort Trivargo", bring that back takes years. Convince your owners that not always is something better than nothing, the cost to renavate a room is more expensive if you earn $50,000.00 annually vs $65,000.00 and have to do it more often.

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