You know boutiqe and independent hotels have ‘arrived' when most of the franhcise chains now want to offer them franchise services and identities!
However, those that want to maintain their independence now have resources to level the playing field with out paying franshise fees to be successfull independents!
In a recent excelent article, Burl Hutchison, the manager of Sabre Hopsitlity solutions, empahsises several elements of effective revenue management for independent hotels starting with the GDS, the hotel web site and the OTAs (HotelNewsNow, April 2011) The GDs is the window to the world of online marketing and revenue management.
There is no online marketing and revenue management potential without the GDS. Customer buying habits dictate that there has to be that connectivity to make a reservation and receive confirmations online instantly. The majority will not pick up the phone or email a reservation with credit card info and wait for confirmation.
The GDS. Many independent hoteliers don't understand why the GDs is critical to their success. The first step is to identify and get demos on potential GDs providers so a cost effective choice can be made if the property is not connected. If the property is targeting corporate travel, a GDS ad campaign may provide a launch into that segment that heavily makes reservations through travel agents using the GDS.
The Hotel Web Site and Booking Engine. The design and functionality of the web site is the first consideration followed by the calls to action pointing to the booking engine – the source of the cheapest hotel reservations. The booking engine should be easy to use and enable customers to make a reservation win one or two clicks.
Revenue managers should check the functionality of the reservation booking engine to ensure that the calendar and the connections to the GDS provider are working smoothly! There is nothing more frustrating to a customer than a calendar function that does not allow them to enter their arrival/departure information seamlessly!
The OTAs. The online travel agencies assume a critical importance for boutique and independent hotels. This is where the level playing field begins. By ensuring rate parity across all channels and building strong relationships with the market managers, the independent can be positioned as effectively as franchises on the pages.
Independents should take advantage of every promotion on the OTAs that make sense from an RM strategy standpoint as well as Pay per Clicks – all of this assists in moving the hotel up the page and getting more reservations.
The Billboard Effect. Don't forget the Bill board effect! Expedia estimates that when a hotel goes dark on its site reservations to an independent's web site drops dramatically – far more than for the franchises in a market. Cornell University confirmed this effect in a separate study. (Cornell University CHR Study 2009 ) The percentage increase in reservations to the independent hotel's web site was 26% when the hotel was live, substantially higher than the franchise hotels in the market.
While this study only dealt with Expedia, it can be inferred to a greater or lesser extent to apply to a cumulative billboard effect when the hotel has a presence on multiple channels.
Social Media and Revenue Management. Facebook and Twitter have the power to drive business during special promotions. The booking widget on the hotel's page is an effective tool for customers to make a reservation without leaving the page. Facebook an Twitter ‘specials' when used judiciously to a well developed base of Fans and Followers make this an inexpensive way to drive reservations to the web site of to the Facebook widget.
Revenue Management – The Balancing Act. Strategic revenue management is a balancing act among all revenue drivers to the hotel. Allocating inventory, closing room types and platforms based on the cost of reservation and the hotel's revenue objectives is guided by the hotel's revenue management strategy but must be adjusted under changing conditions such as cancellations, etc and the can become more instinct than science. The H(human) factor of an experienced RM plays a huge roll in maximizing revenue through periods of demand and stimulating revenue during periods of low demand.
Campaigns need to be managed and measured and adjusted when necessary. Rate positioning must be evaluated often and also adjusted when necessary as conditions change. Reports that are both evaluative of the success of the most recent activity must be balanced with forward looking reports that include comp set information.
Any and all of these topic sections could become an article unto themselves but his brief overview gives independent and boutique hotels an image of how effective revenue management and online marketing can assist them in leveling the playing field between their hotels and the franchise competition.
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