Regensburg: The little city that took on the OTAs
Regensburg: The little city that took on the OTAs
10 JULY 2017 7:42 AM

Hoteliers often feel incapacitated in attempts to drive up direct bookings and force down OTA commissions, but those in one city, Regensburg, Germany, decided they had had enough and came together to try and do something about the situation.

REGENSBURG, Germany—Tired of paying online travel agency commissions, one small city in Germany decided to do something about it and set up its own hotel booking platform that went live in 2014.

On the River Danube in Bavaria, Regensburg—population approximately 165,000—now is about to embark on the portal’s second phase: to attract conference groups. The city’s hotels hope to collectively host these groups, including those attending conferences in larger-capacity cities that may want to visit this UNESCO World Heritage city en route, according to sources.

The booking platform was the brainchild of Kathrin Fuchshuber, GM of Regensburg’s 59-room hotel Münchner Hof.

Fuchshuber claims to know “nothing about hotels,” despite being born in one and the third generation to run the Münchner Hof.

Formerly a communications designer who sold an agency in Munich to take over the hotel, she said initial inspiration for the booking platform came from the disbelief she felt when she saw one of her first monthly statement commission breakdowns.

“When (an online travel agency) sells a room for €100 ($114), they take €10 to €15 from the price. I just believe that when you take more than 2% or 3%, it is not real business. Handling fees must be clear for the client,” Fuchshuber said.

Her idea was to bring Regensburg’s hoteliers together to take on the OTAs.

Ralf Leidner, GM of the 96-room Atrium im Park, is one of the hoteliers on board.

“Working together gives you that power—and in Germany, that power can be extraordinary—and with this awareness, we were able to do things that other hotels and cities could not do,” Leidner said.

He added that city and regional politicians now regularly share information and ask for advice and opinions from the hoteliers group.

“That would not happen if you are on your own,” Leidner said.

Numbers also speak loudly, Fuchshuber said.

“It is going very well because we are all together. We usually get one booking per day on our site. Maybe that is not a lot, but that one booking is a good booking and adds up to €8,000 ($9,123) a year we do not pay in commission.

“We started with 38 hotels, with two in renovation, and now we are 35. I was standing in front of (hoteliers) and I said I have an idea, and they believed me. I told them I needed from every hotel €500 ($570) to start, and €22 ($25.98) a month, and I told them we needed time,” Fuchshuber said.

“It takes three to five years. You do not start on the internet on one day, and on the next you are famous. Two (hotels) went away as they said they had not had a single booking. I said, ‘Yes, that is normal,’” she added.

“And then we asked, what can we do next?”

“Next” is the idea of launching a second initiative in an area that, Fuchshuber said, has been a problem for Regensburg: attracting conventions of approximately 500 persons. Individually, the city’s hotels do not have sufficient capacity for groups of that size.

Fuchshuber hopes if that initiative is successful, it will also help to encourage leisure and meetings attendees to visit the city any time of year, regardless of possible bad weather and even if their final destination is in another region.

Early successes are evident, she said. “Since 2015, we’ve sold €2 million ($2.28 million) of rooms directly, which is €280,000 ($319,000) in commission we would have had to pay out,” she said.

The timing of the initiative is also good in that it can take advantage of Germans now stay-cationing in larger numbers.

“Germans are spending three days in towns and then heading to the country. We see an opportunity to put together packages for stays in hotels in Regensburg and its region,” Fuchshuber added.

If you’re ready, start
Fuchshuber said the Regensburg portal was still a little rough around the edges in aesthetical terms, but she believed it was necessary to get the product out as quickly as possible.

“We have to think in another way, as the client is not looking for hotels, they’re looking for destinations. So let’s start a destinations website,” she suggested. “I can do it. It is not so complicated, but (some hoteliers) said it might be (complicated because hoteliers) all have different systems in their hotels,” she said.

Fuchshuber drew on the knowledge of her brother, who owns an internet and media business and had a contact who offered a small destination platform at a fair price.

The initial launch coincided with a 14-day period in September, during which, for reasons still not understood by the hoteliers, Regensburg hotels are always sold out.

“In the second and third weeks in September, we are famous. It’s an ideal time to launch. Yes, it may result in a few less bookings, but it will be a marketing victory,” Fuchshuber said.

Anton Sedlmeier, head of the office for urban development in the municipality of Regensburg, said the city soon put its weight behind the initiative.

“(Fuchshuber) is engaged, and hoteliers and other organizations meet several times in the year,” Sedlmeier said. He added that three new hotels are in the development pipeline for Regensburg, and the population of the city in the last couple of years has increased by 3,000 a year, whereas the historical average has been nearer to 1,700 a year.

“We have 1 million overnights per year,” Sedlmeier said.

According to Regensburg’s official tourism website numbers, there are 2,546 keys in 60 properties in the city’s Old Town, commercial center and surrounding area. Branded hotels include the 159-room Mercure Regensburg, 128-room Best Western Premier and 82-room Star Inn Regensburg Zentrum.

Hoteliers in Regensburg are clear to say the site is not the end to all their worries, but that it is necessary to throw their weight behind direct initiatives.

“We’re first a business hotel, although with a leisure component for both groups and individuals. The Regensburg portal for sure is not the winner in terms of bringing in revenue—very little that is for sure. But on the other hand, our conferences are getting very strong, and as customers gain knowledge of us and understand what we have collectively, the city can start to organize conferences of 500 or 600 directly, and that can be a lot of income without commission,” said Atrium im Park’s Leidner.

“The website might not be nice, but it is online. Do not wait until it is perfect, as by the time you get it perfect, everyone will be running faster than you,” Fuchshuber said, adding that an improved website will launch by the end of July.

About a month after that, the initiatives will launch to boost directly meetings and conference business.

Fuchshuber said she asked her partner hoteliers to obtain a working link to the Regensburg portal website and to send in good ideas if they have them.

“Other cities have come to us,” she said, “but the problem is city hoteliers have to be connected. You do need an engine. I work on this between 9 p.m. and 2 a.m. after I have finished at my hotel and also seen my family.”

“The rooms belong to us. Hoteliers have to realize this,” Fuchshuber added.

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