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Accor Super Sale: The making of, and what it did for revenues.
By Yeoh Siew Hoon ~ thetransitcafe.com
Monday, 9th March 2009
 
The story of an online promotion that broke rules but made waves -

In putting together the Accor Super Sale, Accor Asia Pacific risked upsetting traditional partners and branding purists.

But the February 24-26 sale of one million rooms across its Asia Pacific network at one common rate across all brands (with the exception of Sofitel) will go down in the company's history as one of the most successful online promotions ever.

Yeoh Siew Hoon talks to Graham Wilson, Vice President Marketing, Accor Asia Pacific, about the bold online promotion that's got marketers talking.

Q: What was the thinking behind the promotion?

Our key focus was to add business that would otherwise not have been there. We weren't trying to undercut wholesalers, travel agents, corporate bookers or any of our traditional distribution channels. We saw at the beginning of the year that the global economic crisis was really affecting traditional corporate business particularly the MICE sector.

The major companies, a lot of them in the financial services sector, were simply not booking. This usually has a lag-effect of up to six months, so we targeted the April to the end of July period to build new business, principally in the leisure sector.

We knew that airlines were offering record-low fares, so if travellers were then able to get a similarly competitive hotel rate, we thought it would trigger the decision to travel. It certainly did. Areas served by low-cost air carriers, whether domestically or regionally, were the great benefactors, but also the local city market.

People were booking the hotel, then finding an event or some special concert, and then booking a complete package, even if they lived just half an hour away from the hotel. It was a small gesture of privilege in the tight economic circumstances.

Q: What did it take to put it together?

We put a million rooms up for sale. The biggest challenge was pulling this together across 13 countries and eight different currencies in such a short time frame. We know that some industries expect to sell between 5- 8% of their sale inventory, and there will always be the more preferred stock in any sale.

While we can't disclose full numbers, we certainly sold considerably more than our target, and not surprisingly it was the prime cities that attracted most of the business. Hong Kong, Singapore, Kuala Lumpur, Bangkok and Sydney were the key destinations, and probably up to 75% of the bookings for these cities were for "locals" who otherwise wouldn't have travelled.

We didn't want to cannibalise business, we wanted to add to it, to get people traveling who otherwise would have stayed at home and ordered take-away and a DVD. To some extent we have to re-build confidence in travel, and while it is easy to say "there is no better time to travel", until the dollars stack up, you won't get people to make that commitment, at least for the time being.

Q: Everyone's doing sales and promotions these days - what was different about this one?

Airlines have been doing sales for the past three years, very aggressively, because of the proliferation of new low-cost airlines. On the other hand, there had been virtually no new hotel supply in cities such as Singapore, Hong Kong, Bangkok, Hanoi, Perth and Sydney since 1997 or 2000, and so hotels didn't really need to discount.

In fact, they were doing fairly well because (for a rare occasion) the demand-supply ratio was in the hotel operator's favour. However, while it is pretty easy to introduce or move an airline to a new route, building a hotel from planning to opening can sometimes take as long as four or five years. Many of the developments about to open now were planned back in 2004 or 2005. Obviously that was earlier for Shanghai and Beijing, but for Bangkok, Singapore and other cities, 2009 became the first time in many years when demand plummeted while supply skyrocketed.

Also the depth of the economic crisis required something special and bigger, so a million room sale was designed to highlight just how significant it was. Clearly, demand for a room in the key cities and resort areas was always going to be greater than in secondary cities or suburban areas, but effectively we sold out of rooms in places like Hong Kong and Singapore, and had very strong demand in Australia, New Zealand, Thailand and Malaysia.

Q: Given it was the first such sale of its kind - one rate across all brands and 3-day only - did it break a few rules re-branding and positioning of the brands?

It broke many rules, but one of the Accor values is the "spirit of conquest" and this was the best demonstration. We knew we couldn't satisfy everyone, but the promotion was part of our strategic revenue optimisation programme it was never designed as a branding exercise, so the one-rate strategy was designed because we knew it would have maximum cut-through.

For instance, we could have sold 50,000 rooms at each of Novotel Sydney Darling Harbour, Novotel Singapore Clarke Quay and Novotel Nathan Road in Hong Kong. In fact, we could have sold even more rooms than that over 3 months, but these hotels run at 85% in peak times, so obviously we didn't want to exclude our traditional suppliers.

Wholesalers would have liked to have access to these rates, but we weren't actually competing with them because you had to book the rooms over three days, via the net and for selected dates. City hotels that traditionally did 90% of their business with corporate travel from Monday - Thursday didn't have many sale rooms available over this period but on weekends, when corporate bookers weren't as interested, they offered a lot more rooms.

You can never put together such a bold campaign without affecting some partners, but once we had spoken to those who were initially upset, they understood, even if they would still like to have accessed those cheap rates.

As for offering one price, yes, this was subject to considerable debate. In normal circumstances we wouldn't have done that, but these are not normal circumstances. Our competitors, who quickly followed our lead, offered staggered rates per brand, but we wanted to declare the situation as it was and offer an immediate stimulus package to the industry.

Interestingly, while you would have expected the top 10 list to be comprised entirely of 5-star Pullman hotels or top range Grand Mercure hotels, the majority were Novotel hotels and the new Ibis Singapore on Bencoolen. The latter probably reflects the fact that Singapore has been seen as being an over-priced hotel destination in past years and people have been looking for value.

Q: What was the response? Hits as well as bookings?

While achieving additional bookings was naturally a key priority, exposure to the www.accorhotels.com website was equally important.

Until last year we had specific country websites, but in the past few months we've migrated the country-specific sites to the global site and we wanted to highlight the sites' vast range of hotels - over 4,000 - and its user-friendliness. During the three-day sale we broke the record number of visitations to the site for any one-day, and broke the record for bookings.

Demand for some hotels was obviously much higher than others, and while we can't disclose the final number of bookings, it was in the six figure category and it exceeded our anticipated target by double.

Q: Would you do it again?

If you look at the airline case, they do super sales almost on a weekly basis. We won't get to that stage, but we will dertainly be looking at more tactical campaigns like this. We know how challenging the market is and given that the economic situation is exceptional, then we need to look at exceptional ways of addressing the issue, particularly as it targets the leisure market.

We know there is a great pent-up demand for local/regional short-break travel and we will be targeting that sector with tactical programmes designed to meet the needs of that market. We will also look at industry specific sectors such as MICE and business travel.

Q: Any lessons learnt?

Yes, good ideas are easily stolen! They say that imitation is the highest form of flattery. We were amazed at how quickly our competitors rolled out competing packages, though no one came close to offering one million rooms over three-days, and I doubt that they will be able to muster such a vast inventory in the future.

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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