Robert Holland, managing director, UK & Ireland, HotelPartner Revenue Management, investigates taking a tailored approach to using the OTAs.
Hoteliers can often be reluctant to engage properly with the OTAs, but you need to think of them like the kid who was really good at football at school and knew it. You might not like that kid, but you still want them on your team.
Hoteliers often leave money on the table because they have reservations about using these channels which can in turn mean they don’t get the full potential out of the OTAs, or themselves. If, for example, you’re a conference hotel and you don’t have a conference this week, you can’t just leave those rooms empty. You may need to accept that you need a different audience. You may need to accept that you need to embrace the OTAs more. With a finite amount of demand, how are you going to attract those people to stay in your bedrooms, rather than them staying in one of your competitor’s bedrooms?
You need to understand where guests are booking from, and through which channels they are booking to make sure that you have availability and visibility on those channels. If they’re just looking for a bed for the night on a Tuesday night in rainy, dark, damp Reading, then how are they going to find your hotel? Have you maximised your visibility? Are you available for that particular day on every channel that they might search through? Are you available on mobile channels?
Are you offering a mobile discount through the OTAs? Are you offering the right incentives? There are other avenues where perhaps you can spend more on travel ads, on certain channels, on days that you know are going to be less busy for you.
There’s no point spending marketing funds and SEO and PPC funds on days when you’re going to be busy anyway. Make sure you don’t spend your marketing budget on getting people in on a Saturday night in June, when you know you’re going to be full. Make sure that you allocate more money to that Tuesday night in February.
Using the OTAs tactically is one way to avoid leaving money on the table, but you need to use them holistically, with an understanding of your competitor set. You need an understanding that pricing needs to be managed every minute of every day. So many factors can influence a change in the marketplace – if your competitor increases or decreases their pricing, you need to be on top of that.
We want to ensure that every room is sold for the highest-possible rate. If you’re left with the only five hotels in the market and everyone else is sold out, there’s a real opportunity for you to increase those prices.
If you have an event such as the London Marathon, as a hotel you have the choice to sell all your rooms in advance at a certain rate, which meets your budget, or you can hold onto some of your rooms. And as you get closer to the date of arrival, the price sensitivity of your clients changes.
You might get three times as much revenue for that room that you could have sold six months ago, but, if you had tried to sell it six months ago, then you would have had to be offering rates that were competitive in your marketplace. You may only have 50 bedrooms whilst one of your competitors has 250 bedrooms and will be using a very different revenue strategy. So, sell some at that level and get in some base business at the market rate, but then hold onto some rooms to meet the demand as the event approaches.
Someone that is running the marathon at five o’clock on Sunday morning doesn’t have the opportunity to take a train into London on the day in time for the start. Their family may want to come and cheer them on. Having this knowledge about your competitors and historical data helps you maximise these peaks. And at other times, think about how your frenemies can help you reach those important goals.
OTAs, a friend in need. By Robert Holland, Managing Director, UK & Ireland, HotelPartner.
