I agree with the fact that it is better for hoteliers to get direct bookings rather than reservations through OTAs as they have a high commission rate. As Emilie pointed out, it is important that hoteliers understand guests booking priorities. This article and Emilie's comment are interesting and relevant when they state that hotels should be more visible on search engines and social media. These web tools are part of the booking process, as well as hotel reviews websites. Hoteliers should also bear in mind that nowadays, customers are looking for the best deal rather than brands.
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mardi 11 janvier 2011
dimanche 9 janvier 2011
Buyers Facing Longer, Tougher Hotel Rate Negotiations
Within the last context of economic crisis, the international tourism has decreased since end of 2008. This decrease has touched all segments related to the tourism industry: airline companies, touristic monuments and mainly hotels. Both individuals and companies had reduces their travel expenses in order to make savings.
As companies had reduces their travel expenses, they reduced the budget allowed to hotel negotiated rates. Therefore some companies had to negotiate rates with 3 star hotels instead of 4 star hotels for example; they reduces hotel ranking. In order to stay competitive, 4 star hotels decreased a lot their usual rates and did not automatically include amenities such as breakfast, internet access or access to the fitness center.
Today, hotels activity has started back, but is not as successful as in 2007. Consequently hotels are increasing their negotiated corporate rates, which I believe is a right thing to do; but companies do not really see the situation as being positive. Hotels have increased their rates by 10-15 %, and I understand that companies are not willing to pay rates that high. This leads to long negotiations.
In my personal opinion, I believe that it is important for hoteliers to increase their rates in order for them to recover from the economic crisis. Rates have considerably been reduced during the last 2 years. If hoteliers do not increase their RevPar and GopPar, it will be very difficult for them to stay competitive and regain their 2007 health.10-15% is a high rate increase, but it is essential on along term basis.
Link to the article
As companies had reduces their travel expenses, they reduced the budget allowed to hotel negotiated rates. Therefore some companies had to negotiate rates with 3 star hotels instead of 4 star hotels for example; they reduces hotel ranking. In order to stay competitive, 4 star hotels decreased a lot their usual rates and did not automatically include amenities such as breakfast, internet access or access to the fitness center.
Today, hotels activity has started back, but is not as successful as in 2007. Consequently hotels are increasing their negotiated corporate rates, which I believe is a right thing to do; but companies do not really see the situation as being positive. Hotels have increased their rates by 10-15 %, and I understand that companies are not willing to pay rates that high. This leads to long negotiations.
In my personal opinion, I believe that it is important for hoteliers to increase their rates in order for them to recover from the economic crisis. Rates have considerably been reduced during the last 2 years. If hoteliers do not increase their RevPar and GopPar, it will be very difficult for them to stay competitive and regain their 2007 health.10-15% is a high rate increase, but it is essential on along term basis.
Link to the article
mardi 4 janvier 2011
Comment on Deborah's article - Are customized prices next for the travel industry ?
I believe customised prices can be very tricky for consumers. Indeed, some people may not understand the variations of prices as they do not automatically read the conditions of sales involved, so they book the cheapest price without reading the sales policy. I believe their is a duty for the company to be very clear with these sales conditions, as they are not always very well explained. On the other hand, there is a duty for the guest to read these sales conditions.
I agree with the fact that airline companies can sell additional services such as additional meal, or a bigger seat. I encourage upselling as long as the guests are willing to pay for these services. We can already find this time of upselling in the hospitality industry. Some hotels have added the dynamic packaging to their booking engines, to encourage consumers to book additional services while booking the guest room.
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I agree with the fact that airline companies can sell additional services such as additional meal, or a bigger seat. I encourage upselling as long as the guests are willing to pay for these services. We can already find this time of upselling in the hospitality industry. Some hotels have added the dynamic packaging to their booking engines, to encourage consumers to book additional services while booking the guest room.
Link to comment
dimanche 2 janvier 2011
Do hotel brands still matter?
Today, the hotel industry worldwide is full with thousands of hotel brands. Some brands are much more internationaly known than others. But the real issue here is to understand if brands still matter. Customers have changed their booking priorities since the Great Recession. This article points our these new priorities as being price & value and the rise of generation Y.
Nowadays, customers book a room based on the price. They look for the cheapest price, the best deal rather than the brand behind. They also look for the added value to this price such as breakfast included; free internet access; or if they are additional charges. According to a survey, the attribute "brand name of the hotel/resort" was further down on the list of priorities compared to the value attributes. People also like to compare the hotel prices through OTAs, and therefore do not really look for the hotel brand.
The generation Y is feared by the hotel professionals as these new travellers seek for authentic guest experience, and are much more willing to discover new places each time, which makes brand loyalty much more difficult.
I believe that since the economic crisis, customers have neglected integrated hotels and franchises towards independent hotel, which means they have neglected famous hotel brands. Some people have the impression of entering into a factory when staying in a hotel like Marriott, Hilton or Holiday Inn. They believe they receive a more cheerful and welcoming service from independent hotels. In my personal opinion, I would rather stay in an independent hotel for its uniqueness rather than staying in a franchise. I am not really brand loyal, but more looking for a unique experience.
These new booking priorities have led to an increase of voluntary hotel chains on the hospitality market. They are being more and more competitive as they reprensent independent hotels. Hotels need to take into account the changing needs of travellers. They need to be very well positioned on the market in order to stay competitive, which they can do by being very creative and attractive towards OTAs, customers, etc. This makes the business even more challenging!
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