Great Opportunity for Independent Hotels: Cash-in on Electronic Sales.
By Neil Salerno
Wednesday, 1st February 2006
For many independent hotels, electronically generated sales are the only viable means to compete in today's hotel business environment. Yet, there are still many independent hoteliers who think that volume electronic sales are out of reach, too costly or too complicated to implement.

Perhaps the most frequently asked question I hear is "I know about electronic sales, but where do I start?" Start with a commitment to do more than simply hire someone to design a web site. There are several elements involved to create and maintain a successful electronic sales program. The primary three are the Global Distribution System, the Internet, and third-party aggregators.

Hotel Web Site Basics Revisited

In the last few years, hotel web site design has matured tremendously. Gone are the days of web sites designed by the office techie, ad agency, or by some company picked out of the yellow pages. Knowledge of hotel marketing has become a necessary ingredient in the process.

We've learned that there are several important factors involved in the design of an effective and productive web site; knowledge of how search engines function; utilization of hotel marketing techniques in the overall design; the great importance of text content; and that flashy design may be pretty, but seldom works well on hotel sites.

In the past few years, we've learned that search engine optimization is worthless unless a site's design has first been optimized. Please do not believe that hiring someone to perform search engine optimization, without first maximizing the functionality of your site, will do anything to help productivity. More people may find your site, but the primary goal is for them to make a reservation; not simply visit. Web site content is king.

Web site design optimization requires knowledge of how and why people choose hotels on the Internet; how visitors read and evaluate site data; the technical requirements necessary for search engines to find your web site; and ways to improve your chances of success against your competition set.

It's not rocket science, but it does take some technical and marketing knowledge. Many owners and managers still judge their hotel's web site by its aesthetic values instead of how well it functions. For those who are content with simply having an on-line brochure, instead of an online sales engine, sit-back, relax, stop reading, you won't read anything helpful here.

Online Booking Engines

With the sophistication and affordability of today's online booking engines, there is absolutely no excuse for not having one on your web site. Simply trying to impose your will on visitors to phone or email their reservation requests will not cause them to do so. The majority of online visitors want the gratification of making an online "real-time" reservation with an instant confirmation to complete the transaction.

I've heard all the typical excuses such as "we want to give people personalized service by making them call us" is hogwash. People who believe this simply don't understand the online traveler. Will some visitors see your site and then call to make a reservation, sure, but how about the many visitors won't?

Most people today don't want to deal with busy phone lines, being placed immediately on hold or the dreaded unanswered call. Sending an emailed information sheet into never, never net-land has too much uncertainty for most people.

For those of you who are concerned about the expense, booking engines are very affordable. With most, the return-on-investment is only one or two reservations a month. Shop around for the best booking engine for your hotel. Some are better than others in function and use; some are better for International feeder markets than others.

Finally, take a lesson for the big-boy franchises, they all have booking engines.

Electronic Marketing

Electronic marketing has evolved from a novelty, just a few years ago, into a necessity since the early days of the 90's; especially for independent hotels. Its affordability and effectiveness compared to the marketing days of old make electronic marketing the best value of our time.

Franchised hotels have taken the GDS for granted, ever since most franchises began to deliver GDS production automatically through their reservation systems. Although production from GDS travel agents has been negatively impacted by the Internet, their potential production could help to supplement any hotel's top-line.

The GDS is available through official GDS providers. You can find them on the Internet. Independent hotels need to take advantage of the Global Distribution System also for exposure to third-party business. Being online with the GDS automatically gets your hotel listed with third-party giants like Expedia, Travelocity, and Orbitz; powerful room producers.

First, put aside all those horrible stories you may have heard during the franchise-brand/third-party war of a couple of years ago. Those days are in the past. Third-party aggregators can produce valuable room nights and unprecedented world-wide exposure you could never obtain on your own.

Choose a partner among the top third-party aggregators and form a relationship. Some of them have special partner programs designed to pump needed business to your hotel. By managing rates and inventory, these marketers can provide your hotel with a base of business, which can enable you to leverage sales and increase your revenue-per-available room.

If no one on your staff knows how it works, get them educated by an expert. The return-on-your-investment can be huge. There are many knowledgeable hotel consultants who can coach your team in this invaluable market.

Revenue Management

Hotel Revenue management has many faces. No matter how you apply it to your hotel, revenue management can reap great rewards, if done properly. The basic principle of revenue management is that your occupancy will consist of several layers or types of business. Creating the maximum or optimal mix of business for your hotel is the key to profitability.

We know that each type of business will produce varying levels of rates. Rack rate business, corporate travelers, motor coach business, leisure travelers, and others all have different levels of rate tolerance. Revenue management can maximize occupancy and average rate.

Creating a base of lower rated business will allow you to appropriately close lower rates as room supply diminishes and higher rates kick-in. Remember, average rate is not what you sell some rooms for; it's what you sell all your rooms for. The goal is not 100% occupancy; the goal is to sell as many rooms as possible, at the highest rates possible.

The relationship between revenue management and electronic sales is obvious. Utilizing all forms of electronic sales can create that base of business which will allow you to get better rates from call-ins and walk-ins. Reach-out and take advantage of opportunity.


Neil Salerno

Hotel Marketing Coach



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