The collective gasp from the audience was audible when Paul Southey, vice president of Asia Pacific for TravelCLICK, shared year-to-date performance figures for the region at the HEDNA conference in Singapore last week.

Every column in the graph pointed south. Across the region, RevPAR for April was down 30% and May was minus 28%. 

Beijing was worst hit – a drop of 46.8% – and there are no signs of a quick recovery in that city thanks to a combination of political and economic reasons. China, Southey said, is "impinging on an ability to recover" due to imposed medical and visa restrictions.

There was very little good news in the charts he showed for the past six months. The good news however is there are opportunities. Southey observed that "stabilising economic conditions are creating local market segments as an incremental opportunity". Furthermore, he remarked that "multi segment lead rate strategies have become competitive differentiators".

Warning the revenue managers in the room about rate parity, Southey said, "Fifty per cent of your pricing decisions will determine ninety per cent of your profitability."

"Resist the temptation to uniformly lower your pricing, especially when responding to market conditions."

He sees partnerships with OTAs (Online Travel Agencies) as the key going forward.

Illustrating that partnerships between hotels and OTAs were working, he said that hotels were able to reach new customer segments through the OTA and that "enriched visual content is increasingly important in maintaining a competitive web presence".

Albeit mainly American figures, in 2009, offline sales clearly took the biggest hit, with 15% growth in 2008,  a drop of 3% in 2009 and a projected 3% growth in 2010.

Southey showed a shift in booking patterns, especially for the leisure sector, to online bookings, in part due to the fact that young people were shopping with the OTAs and that the baby boomers were spending less.

Interestingly, he showed, branded websites are taking the biggest hit. Merchants, the opaque and retail sectors all showed limited growth, which demonstrated that third party bookings were receiving the volume.

Southey said that merchant channels were driving more business. "They are asking, ‘how do we work with the OTAs as partners?'" 

Southey's recommended strategies for hoteliers are:

Pricing. Price parity will influence the customer in the public space. Your opportunity lies in the opaque space. Hoteliers will do themselves a disservice through leakage in the channel if there is no price parity.
Perception. A positive guest experience online impacts the value received from OTAs.

Marketing Tools. Merchandise your hotel throughout the travel shopping process, price parity across channels, richness of content and messaging.

Visibility is everything. Not just search engine marketing (SEM) or the GDS, but through preferred booking methods. Leverage the popularity of searches via the OTAs to connect the booking through yourbrand.com. Don't treat the OTA as an adversary, treat them as partners and you'll be pleasantly surprised by the outcome.

4Hoteliers is the "Official Daily News" of WIT09

www.webintravel.com - October 20-23, 2009 Suntec Convention Centre, Singapore

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