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Neil L. Salerno, CHME, CHA

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"What the Heck is Hotel Revenue Management, Anyway?"


Why Some Hoteliers Excel and Others Donít

By: Neil Salerno          

Last week, I had the pleasure of speaking at a senior management conference for a hotel company celebrating its tenth anniversary. Their enthusiasm and excitement was pervasive; capturing a larger share of business through the Internet is their focus for í08. Their enthusiasm for the magic of the Internet was obvious, from their president on down. This is a company that excels.

For the past few years, the Internet has played a major role in hotel marketing and an increasing number of hotels are reaping the benefits by embracing the electronic media. This is good news for our industry. More than 60% of hotel revenues will be influenced by the Internet in 2007; thatís a ton of business.

Franchise Internet Marketing Has Improved

Most franchises have vastly improved their web sites to make them more competitive with each other and online travel agents. Some, are now permitting their franchisees to have their own proprietary web sites to supplement franchise Internet marketing efforts. This marks a giant step forward in franchise thinking; their only proviso is that the hotel site must use the franchise booking engine for online reservationsÖthatís fair enough.

The fact is that ďsearchĒ is the major vehicle used to find hotels on the web and only a small number, roughly 22%, of hotel searches are performed by franchise brand name. That, in itself, is a pretty good reason for franchised hotels to have their own property web sites to capture generic search.

A franchised hotel site can create a strong synergistic relationship with its franchise site by capturing generic-driven searches and driving that additional traffic to the franchise booking engine. Generic search is the single biggest weakness of franchise web sites.

Hotel franchise companies can relax; they should know, by now, that their fear of the loss of strength or control was unfounded; permitting or even encouraging franchisees to have their own property web sites will strengthen their franchise Internet marketing position. Increasing the possibility of being found on the Internet is a good thing for franchisor and franchisee.

Franchises, that are still resistant to this idea, need to apply some common-sense to their thought process. You cannot be everything to everyone; third-party aggregators have taken possession of destination search on the Internet; just try searching for a hotel by its location. Franchised hotel web sites can capture their fair share of those searches.

Some companies, like The Preferred Hotel Group, are way ahead of the internet marketing curve, they encourage, even assist their hotels to develop proprietary web sites and support them with in-bound links to improve their search popularity. Their Internet marketing and revenue management programs lead the industry.

Understanding How & Why People Choose Hotels

We know that generic search, based upon destination or trip purpose, is by far the number one hotel search criterion. With very few exceptions, staying at a hotel is not the purpose of a trip; people choose to visit an area for many varying reasons, and then select a place to stay, near where they want to be and the value they perceive.

Sometimes hoteliers get so self-absorbed as to think that people are traveling just to stay in their hotel; maybe this is the reason so many hotel web sites look like hotel brochures instead of being designed for the Internet.

Knowing this, common-sense tells us that location is still the number one hotel selection criterion; so why donít more hotel web sites better define their location? The mystery to me is why so many web site designers think that the hotelís address is an apt description of the hotelís location; or worse yet, simply show the hotelís location as a point on a map.

My hope is that common-sense will prevail among franchises to finally understand the synergy they can develop by working with and supporting their franchised hotels in their Internet marketing effort. The Internet is now a major source of business; its nonsense to think that franchise web site portals can do the job alone.

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