Gino Engels, co-founder and chief commercial officer, OTA Insight
With the change in the weather it feels like summer is finally here and as the sun starts to shine, it’s important for hoteliers to understand how best to utilise all the tools available to them to ensure their rates and revenues are equally sunny throughout this peak period.
To ensure you are offering the most attractive, and therefore the most profitable, rates available it is important firstly to understand which channels travellers opt to book through. In turn it is also important to understand why particular OTAs have retained their popularity over the years so you are best equipped to understand how to use them to maximum effect and for maximum return.
Research conducted by Phocuswright into reasons why travellers book with OTAs revealed that invariably it is having a user friendly website that is the biggest draw. This was quickly followed by simply being used to booking through an OTA so force of habit, brand trust and importantly for a third of those who responded it is the belief that OTAs typically have the best prices.
There is no doubt that OTAs are here to stay and there is concern from hoteliers about their role in the marketplace. This is largely due to the volume of business they feel they are dependant on OTAs to generate for them and the challenge of potentially losing some degree of control over price, positioning and branding. So how can hoteliers address this, particularly in the potentially lucrative summer months that lie ahead?
The key is finding the right balance. The guiding principle behind successful revenue management today is selling the right room to the right customer at the right moment for the right price and here is the important part, via the right channel. So should this be via your own brand’s website, an OTA or another channel? The answer is, it depends on the time of year. During periods of high demand (i.e. the upcoming summer) the onus should be on pushing for direct bookings with focus on support from OTAs during periods when demand is lower.
Throughout the summer there are many variables that can influence and help you set your rates. Keep a close eye on what events are taking place in proximity to your hotel – festivals, concerts and sports events to name but a few. Competitor analysis will also be key to ensure you aren’t priced out of the market before you’ve even entered it. Looking at the availability compared to expected demand in your market is also key. Visibility of your ranking across different distribution channels and knowledge of rate parity are also fundamental to enabling you to make an informed and profitable decision on rates.
There is no doubt that there is a wealth of data in the market that can be analysed. As the saying goes, knowledge is power. And certainly this is true in the ever fluctuating world of hotel rates. There is huge potential to boost revenue in these immediate months ahead and the time to research and act is now.