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Neil L. Salerno, CHME, CHA

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Featured Article

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

 

You Just Gotta Love The Hotel Business! In Spite

of its Self-inflicted Roadblocks and Blunders

By: Neil Salerno

I really love this business, but lately it seems to be saturated with gamesmanship, innuendo, and unusual interpretation of data. There’s actually so much data available that I guess one can find data to support almost any position one may want to take. An adaptation of the old saying “Figures can lie and liars can figure”. 

One of my favorites is the data which shows the increase in direct-to-supplier Internet bookings versus third-party aggregators. The last article I read elaborated on the huge increases in direct-to-suppler bookings. I guess this was supposed to demonstrate that consumers now prefer to book direct with supplier sites. What a turn-around in just a couple of years, but as you might also wonder, perhaps, the numbers are now where they should have been four years ago; and what was the cost.  

Has anyone stopped to consider that maybe direct-to-suppler bookings could and should have been at today’s levels, years ago, if hotel franchises and others were not fast asleep at the helm a few years ago? Thank goodness many people woke up in the last couple of years. Let’s face it, third-party aggregators believed in the power of the Internet at a time when most hoteliers thought the Internet was just a cute novelty. Are the increases in consumer direct-to-supplier bookings merely a result of finally getting our act together? 

When the big wake-up call occurred the industry scrambled to play catch-up with third-party aggregators, but third-party aggregators already had a firm foothold on the Internet. They still have marketing power which is unequalled in the hotel industry and have carved-out a niche market; packaging air travel with hotels and car rentals. 

In the process of playing the catch-up game, franchises did their best to destroy their enemy; third-party web sites. Several franchises created “guaranteed lowest rate” programs to thwart third-party preferences; and it did make things difficult for third-party aggregators. This rate guarantee worked well for promoting brand web sites; hence the current increases, but this tactic did little for the profit lines of their franchisees. These programs also threatened to turn the Internet into a shopper’s bargain basement, as well.  

If franchises concentrated more on marketing their web sites with programs like pay-per-click and advertising like the third-parties do, they would not need to resort to selling by rate alone. Has anyone ever considered value-added programs? Thank goodness most of those rate guarantees are not as prominently promoted as they once were. Maybe franchises are starting to realize how silly it is to sell hotel rooms by lowest rate available instead of the merits of their products. 

The hotel industry needs reservations from all sources in order to grow. Third-party sites are here to stay. Many hotels need a good close relationship with every potential source of business. Hotels that need base business to build average rates need a healthy third-party structure to promote their products.

It took a while, but now, most hoteliers are finally believers in the Internet’s power. Web site design is improving. No longer are hotel web sites just the end-product of the “office techie”; many hotel web sites are now being designed by hospitality professionals working with technical designers to develop searchable web sites that work the way they should… by producing reservations.  

We now know that web sites are interactive sales pieces, not online brochures, which need input from genuine hotel marketing people in order to function at their best. We learned that hotel web sites must contain specific information in a specific order to convert “Lookers to Bookers”. We learned that there is a difference between site design optimization and search engine optimization. We learned that search engine optimization without site design optimization is often a waste of money.

We learned that there is help available for web sites which are not producing well. There are now many qualified hospitality professionals who will analyze your site and recommend improvements at reasonable rates. In most cases, this can be much more economical than starting all over again with a new site. 

We learned that a hotel web site has to be built to work within accepted hotel marketing techniques and it must conform to the rules of search engine parameters and not just look pretty. We learned that a site’s text is critical and it is text which enables the site to be found in organic searches. We learned that “location” is still the most important factor in choosing a hotel; the hotel’s address is not the hotels location. 

We learned that a properly designed web site involves more than that which one actually sees online; proper construction involves properly defined Meta Tags, links, well developed text, and properly selected key words and phrases in its design to gain popularity. Content is king. 
 
We learned that a web site is always a work in process. Independent hotels are learning that an online booking engine is essential to maximize booking results; most consumers searching online want to make a real-time reservation, online. Frankly, I have never seen a poor rate-of-return on online booking engine expense. 

We learned that eMarketing is especially important for Independent hotels in order to keep them competitive with their franchised competition. Independent hotels can obtain the same exposure on the Internet as their more popular franchised competition; that exposure translates to increased reservations. We know that eMarketing is still the best value in one’s marketing budget; cost versus net results.  

We learned that the Internet, as wonderful as it is, is only one segment of our business. Traditional sales and marketing is still an important part of the overall effort to generate revenue. We learned that a good sales solicitation program is still a necessity. 

In spite of our self-created roadblocks and blunders, the hotel business appears to be alive and well. You just gotta love it. 

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