Hotel Distribution Strategy: Flash Sales—Deal or No Deal?

There’s an ongoing debate among those in the hotel industry about the wisdom of using flash sales as part of a hotel distribution strategy. Let’s take a look at the good and the bad and how to guarantee these quickie deals make your bottom line shine.

 

What Exactly Is a “Flash Sale”?

A flash sale is exactly what it sounds like—a special deal on a product or service that’s here and gone in a flash, typically 24 to 36 hours. Flash sales are usually offered through deal-of-the-day type sites that require customers to register before viewing these specials. If you’ve ever bought and downloaded a Groupon deal, you’ve participated in a flash sale.

 

The Downside

To make the deal attractive, though, you have to slash prices. Really deep. Probably well below your normal rock-bottom discount rate. In addition, you’ll have to pay the hosting site a commission of up to 50% of that already subterranean offering price. Over the long term, this could devalue your hotel in the eyes of potential customers, and you might lose your target audience as well as profits.

 

The Upside

However, if your hotel needs a boost in visibility, a flash deal can accomplish this very successfully. You can gain a lot of new customers in a short time, customers who might not have considered staying at your hotel until the deal appeared on a site like Groupon. Once you get those customers into your hotel, convince them that your hotel is worth the extra cost of a non-flash-deal stay.

 

You’re also likely to experience a significant increase in web site visits as those considering the deal drop by your site to check out your facility. If you’re looking for a quick, relatively low-cost way to market your hotel, a flash deal could be one of many tools to get your hotel’s name out there.

 

Flash Sale Tips

When it comes to flash sales, also keep in mind the following:

  • More flash sale sites are out there besides Groupon. Look into travel-oriented sites like Jetsetter and Vacationist too.
  • Only offer a limited number of rooms at the flash-sale price. The good news is, customers who buy these deals aren’t going to book their stays for the same dates, which will spread the cost over a longer period of time. An exception would be if the deal is for a stay booked within a limited time span.
  • Stick to your yield management pricing principles. While you’ll be offering the rooms at a narrower profit margin than normal, be careful not to take a loss.
  • Make sure your web site is search engine optimized, and consider increasing your pay-per-click keyword budget for the hours of the flash sale. In addition, fine-tune your web site so it’s running flawlessly for the extra visitors.
  • Timing is everything. Is your hotel brand new? A flash deal is an effective way to get the word out. Once you’re past the first big publicity push, another well-timed hotel flash deal will keep people from forgetting you’re there.

 

Need More Help?

If you’re thinking of running a flash sale as part of your hotel distribution strategy, let Smart eHotels™ help you make the most of it. Contact us today!

Hotel Distribution Strategy: 3 Tips for Analyzing Your Channels

Hotels that are part of large, well-branded corporations often have the luxury of fully staffed marketing departments to help develop an effective hotel distribution strategy. Managers of independent and small-chain hotels, however, are on their own when it comes to identifying potential revenue streams, determining what works best for their facility, and figuring out how to beat the competition. Below are three tips for analyzing your strategy to determine if you have the right channel mix.

 

Tip #1: Think Globally, Grow Locally

With good portal management, a hotel can expect to earn roughly half its income from a modern global distribution system (GDS). After that, it’s time to get creative—and maybe start thinking locally.

 

For instance, a hotel with attractive and well-equipped meeting spaces is probably bringing in another 25% of its total revenue with business meetings and conferences. Even if the hotel is not considered a popular destination locale, local groups and organizations always need meeting space, and a smart hotel manager will fill this need.

 

Here are some other local connections that could get your hotel’s name in front of a surprisingly large number of potential customers:

  • Local convention and visitors bureaus
  • Local and regional chambers of commerce
  • Colleges and universities
  • Parking facilities
  • Sports teams (professional all the way down to peewee)
  • Entertainment venues

 

Tip #2: Evaluate Your Online Presence

Look at your hotel’s online presence with an objective eye to determine if the image you’re presenting is appealing to your target customer.

  • Web site—How does your web site compare to the competition’s? This is one instance where it’s perfectly okay to “look off your neighbor’s paper.” Is the copy compelling, and is the site functional? Is it interactive? Are the images of high quality, and are there plenty of them? Is the content search engine optimized?
  • Social media—Does your target customer have a lot of time to spend on social media? For example, busy corporate employees probably don’t, so you wouldn’t want to spend an inordinate amount of time on your Facebook presence. However, if your hotel attracts a lot of college students, you might start posting regularly on Twitter or Instagram.

 

Tip #3: Conduct a Cost/Benefit Analysis

To develop the right mix of distribution channels for your hotel, don’t just throw things out there and wait to see if something “sticks.” Open a spreadsheet and do a cost/benefit analysis.

  • Estimate the demand for each channel. For example, would your typical customer pay extra for exclusive amenities like a flexible check-in, tiered-speed Internet, or a streamlined check-in? Would your customer be interested in gift cards?
  • Determine which channels are most likely to attract potential customers, convert them into paying customers, and keep them coming back.
  • Divide your limited resources accordingly.
  • Develop a strategy to track how much revenue each channel generates.
  • Monitor the competition to determine where you’re going head-to-head and where your facility is tapping a previously ignored niche.

 

Need help developing a hotel distribution strategy? SmarteHotels.com can help. Contact us today.

Hotel Global Distribution System: Questions and Answers

Confused by what a hotel global distribution system is or does? Read on for answers to some of the most frequently asked questions about GDS.

What is a Global Distribution System?

Put simply, a global distribution system (or GDS) is a network that links the four vital sectors of the travel industry: airline reservations, car rentals, hotel reservations, and destination activities. It facilitates automated transactions between vendors (airlines, hotels, car rental agencies, attraction tickets), travel agents that subscribe to the service, and the average travel consumer.

When a travel agent books a reservation for a client, they’re using the GDS. So is the customer who books reservations himself or herself through a site like Kayak or Travelocity.

Like the Internet itself, there is no one company that runs the global distribution system. It doesn’t manage a hotel’s room inventory – the hotel retains control of that. Rather, it’s a real-time network of linked databases that routes user requests for information to the right place.

Similar to how a user gains access to the Internet through a vendor like a phone or cable company, vendors gain access to the GDS through providers like Travelport, Sabre, and Amadeus.

How does a global distribution system differ from a central reservations system (CRS)?

A central reservation system (CRS) is a system used by individual vendors (hotels, airlines, etc.) to book their own reservations and manage their own inventory. There can be as many CRSs as there are vendors, all using packaged or customized software. The customer interacts directly with the hotel via Internet or phone to book a room.

The GDS lets a customer (travel agent or consumer) search and compare prices, features, and amenities among several hotels, then select and book their stay at the hotel they choose. There often isn’t any direct contact with the hotel itself. Services like Kayak, Expedia, and Travelocity are the portal most consumers use to access these databases.

How does a hotel get into the GDS?

A hotel hooks its room inventory database into the GDS through a portal like Travelport, Amadeus, or Sabre (there are a growing number of portals out there; these are just some of the most well-known). Hotels will pay these portals a fee to facilitate access, not unlike how a private Internet user contracts with an Internet service provider (ISP) to gain access to the web.

As with any business transaction, it’s a good idea to do your research before selecting a portal. Different providers may have access to different types of travel-related databases, so make sure you go with one that specializes in hotels and their needs!

Does my hotel have to have a CRS to get into the GDS?

Not necessarily. A hotel that uses a central reservations system can indeed connect its system to the GDS. Hotels that don’t have a CRS can use a portal service to get listed.

How can the GDS help me stretch my hotel’s marketing dollars?

The global distribution system can help level the playing field between smaller, independently operated hotels and the “big boys” with bottomless marketing budgets. For example, a customer who googles hotels near a major event venue will see what Google wants them to see (Read some of our previous articles on hotel SEO).

On the other hand, the customer who goes onto a booking site like Expedia to search for a room is more likely to spot your hotel, because your two-double-bed rooms will be listed right along with the big chains’ two-double-bed rooms.

Does participating in the GDS mean I lose control of my hotel’s room inventory?

Absolutely not! Whether you connect your CRS to the GDS or work with a provider to get listed, you’re in control of inventory and pricing. It’ll integrate seamlessly into your overall yield management strategy.

Got questions about hotel edistribution? We’ve got the answers. Contact us today!

What’s New in Hotel Revenue Management Systems—Part 2

Continuing our look at What’s New in Hotel Revenue Management Systems, this time we cover two more stars on the software horizon, both traditional and cloud-based. Whatever your management style, there’s a software package that fits it perfectly. Even when you feel like changing things up a bit, these software systems help you keep from running off track in your quest to maximize your bottom line.

Here are a few hotel revenue management systems creating a buzz right now:

i-Rates
i-Rates is starting a revolution aimed at increasing your hotel’s bottom line. This innovative hotel revenue management system is based on what developers call “reinforcement learning.”

It’s almost like you have an intelligent being learning your hotel facility, your management style, and your customers to make sure every one of your rooms is competitively priced 365 days a year. You can adjust the degree of automation to allow for maximum flexibility, plus you can input your own data, which the system will then take into account for this and future dates. Any room rate changes are automatically transmitted to all hotel global distribution channels.

Duetto

Another hotel revenue management system on the cutting edge, Duetto saves your hotel from the dreaded “room rate slide” that happens all too often when managers figure that simply offering cheaper rooms will draw more customers. Duetto helps protect your brand and your bottom line by keeping your focus squarely where it belongs – your target customers.

Using algorithms based on past history, the software quickly gives an accurate picture of future demand, allowing you to keep your target customers filling rooms during peak-demand periods while attracting new customers with special (but not artificially low) pricing during off-peak periods.

Unlike some other hotel revenue management software programs, it’s cloud-based so there’s nothing to download, upgrades are automatic and free, and the monthly fee you pay is often earned back in the form of a healthier bottom line.

Some of its productivity-enhancing features include block allocation management, event tracking, reporting of competitors’ rates, and web shopping data.

Let Smart eHotels help you choose the best hotel revenue management system for your hotel. Contact us today!

Hotel Global Distribution Strategies: Maximizing Your Online Footprint, Part 2

In Part 1 of this topic we discussed a few negatives to watch for when developing your hotel global distribution strategy. This time, let’s take a look at how to effectively balance and maximize your hotel’s digital presence.

  1. Spiff Up Your Hotel’s Website
    All things being equal, most customers would rather book directly through a hotel’s website rather than going through a third party. A sharp-looking and easy-to-use website is often a potential customer’s first impression of your facility. Make sure that impression is a positive one.
  2. Be Seen In More Than One Place
    Make sure you choose reservation channels that fit your hotel’s unique attributes. In addition to the large-audience channels like expedia.com, look for channels that cater to small-scale specialty hotels, such as splendia.com.
  3. Go Mobile
    When a business or leisure traveler is far from home and needs reservations fast, most of them are going to turn to their mobile devices. Reservations via mobile devices are increasing by the day, so make sure both your website and booking tools are optimally formatted for small mobile screens.
  4. Encourage Customer Loyalty
    Keeping a careful eye on information you collect about your guests will help you send promotions and rewards to your best customers to keep them coming back – or recommending your hotel to friends and business associates.
  5. Get Social
    Establish a presence on the most popular social media sites, such as Facebook and Pinterest, but don’t just toss up an attractive page and leave it there like a brochure flapping in the breeze. It’s important to interact with your fans and “likers,” so check the page daily to responds to questions and comments, address complaints, answer private messages, and of course, offer web-only promotions.

Let SmarteHotels.com show you how to step ahead of the competition. Contact us today!

Hotel Global Distribution Strategies: Maximizing Your Online Footprint, Part 1

Getting your hotel visible in the fast-moving world of the Internet is what a global distribution strategy is all about. It’s increasingly the best way to get your hotel rooms in front of the right customer, at the right time, for the right price.

While there are a number of advantages of weaving your hotel into the worldwide web (easy transaction processing with instant confirmation, customer information capture, and demand management), all this new technology may come with a few unexpected drawbacks, particularly if you rely too much on one online reservations channel.

 

Commissions and Transaction Fees Eat Profit Margins
Putting all your marketing eggs in one distribution channel basket may fill more rooms, but at what cost? Sites like priceline.com and booking.com use one criterion to lure customers: rock-bottom prices. But is the lowest price always the right price? Not for your target customers—the ones who would have been willing to pay more for the right mix of service, value, location, and amenities.

Worse, offering the lowest price doesn’t always get your hotel front and center on a potential customer’s search results. That’s right—these sites want hotels to pay a premium commission rate for that privilege.

Giving Up Control Over Customer Relationships
In addition, they may withhold vital customer data that prevents you from establishing the bread and butter of hotel management – personal contact.

GDS Ease of Use
When considering making a hotel global distribution system a part of your strategy, don’t forget to examine how easy it is to use. If your target customer is an older, retired, leisure traveler who isn’t as likely to be tech savvy, is it worth it to pay a steep commission for customers who aren’t there?

The solution? Balance. In Part 2 of this two-part article we’ll take a look at how to spread your hotel global distribution efforts in an effective pattern.

Step up your hotel global distribution strategy and get noticed. Contact us today!

Hotel Distribution Strategies: Ways To Build Customer Loyalty

Even with the best hotel distribution strategy, it can be tough to get inside customers’ heads. Offering a great combination of value, service, and amenities at your hotel is still the foundation of running a successful hotel, but a different mindset is evolving among travelers.

More and more, businesses of all kinds are using customer loyalty programs to attract new customers and hopefully maintain a current roster of repeat bookers. As the popularity of these programs grow, the customer is adding one criterion to their search for a hotel reservation: “What’s in it for me?”

It’s not hard to set up a loyalty or rewards program as part of your hotel distribution strategy, but then the question becomes: how do you know if your customer is only in it for the reward, then will move to the next shiny new offer? How do you know if the customer will become the long-term gem you covet?

Answer: You don’t. Not until that customer follows through with another reservation, and another.

There are a few things you can do maximize the chance that your hotel rewards program will draw customers and keep them coming back.

Engage
Build in a variety of ways to interact with your customers, either online or in person. Make it even more attractive by not requiring a purchase to participate.

Load Up Offers With Value
When you’re coming up with rewards to add to your program, make sure they’re at high value to the customer but low cost to the hotel. For example, offering a free service instead of a free night’s stay.

Know The Customer
Reward the customer with things they really want. This means knowing your customer base inside and out. For example, if your customer base consists mainly of business travelers, what are they going to want at the end of a busy, stressful day? Dinner for a family of four or a free cocktail? Free Wi-Fi access, or a free massage?

Don’t Make It Too Hard
Building tiers of increasing reward values is a good idea. However, don’t make it so hard to reach the next level that the majority of your customers bail after the first reward.

Join Forces With Other Businesses
You don’t have to go it alone! Partner up with nearby businesses and attractions to enhance the variety of “prizes” you can offer. The possibilities are endless: restaurant meals, movie tickets, museum or zoo passes, night clubs, off-site gyms or spa services, beach toy rentals, merchandise discounts, and more.

Add Enticements
Offering smaller, intermediate rewards between major tiers is a good way to keep customers engaged and working enthusiastically toward that next step up.

Offer Choices
It’s best not to place strict limits as to how and when customers can redeem their rewards, once they’ve achieved that elite status. Give them the flexibility they feel they’ve earned for sticking to the rules of your game.

Add Value Beyond The Dollar Sign
Granted, some customers will always be about price, price, and only price. However, offering price reductions as the main rewards could focus your customers’ attention on the bottom line—which could hurt yours. Sure, most customers think about price, but remember your target customer: is price the only reason they book with your hotel? Probably not.

Pay Attention
If you offer Internet access at your hotel, don’t be afraid to use technology to be just a little bit nosy about what your guests are looking for online. Knowing which local attractions they’re searching out most will help you tailor your rewards program to the things they want most.

Let Smart eHotels help you reap the rewards of an effective hotel distribution strategy. Contact us today!

Hotel Distribution Strategy: Tips to Maximize Word-of-Mouth Business

According to a recent consumer survey, hotels are among the most likely businesses to get word-of-mouth recommendations, only few percentage points behind restaurants and doctors. Therefore, it’s essential that your hotel distribution strategy takes every opportunity to maximize word-of-mouth referrals.

These days it isn’t enough to wait for your (hopefully satisfied) client to eventually find themselves in a situation to share their positive experience with someone else in person. It means giving the client incentives to make that referral before their event is over—sometimes even before the sale is closed. It means diving headfirst into the fast-moving world of the Internet to interact with past and future customers who are leaving a trail of comments about your hotel all over the web.

What are the steps you can take to make word-of-mouth business perhaps the most important tool in your hotel distribution strategy?

  • Offer top-notch service, without fail.
    Train your staff to make eye contact and greet everyone who walks through the hotel door. Engage the services of a CRO (central reservations office) voice service to cover the phone so your front desk personnel don’t have to turn away from a customer to answer a call.
    When a wedding, business meeting, or other event is under way at your hotel, make sure your on-staff event planner is accessible and poised to handle any questions or problems, and to go above and beyond the customer’s expectations in solving them.
  • Provide good value for the customer’s dollar.
    Among the top reasons a customer recommends your hotel for someone else’s event, right up there with professional service, is a good price or special deal that closed the sale. Offering a coupon or a special deal for those who come to your hotel based on a past customer’s referral will help build a loyal following.
  • A little thanks goes a long way.
    Never underestimate the power of five little words: “Thank you for your business.” A smile and thanks should be the last impression a departing guest gets of your establishment. After a wedding event or business meeting, a follow-up letter is a nice touch, especially when accompanied by a customer satisfaction survey.
  •  Interact on the Internet.
    As part of your hotel marketing strategy, you probably have a presence on social networking sites such as Facebook and Twitter. Don’t just set these up, post occasionally, and ignore them. Check frequently—at least once a day—to respond to comments, questions, and “re-tweets.” Post exclusive social media deals and encourage fans to hit the “share” button.
    Never, ever respond to negative online reviews with more negativity. Remember you’re in a public arena and online posts are forever. A sincere apology and an offer to make it right will be more likely to win over dissatisfied customers and shows a professional face to those you hope to have as future customers.
  • Yelp travels!
    Encourage customers to talk up their experience with your hotel on high-profile review sites such as Yelp and TripAdvisor. It’s a good idea to start a channel for your hotel, and link to increasingly popular video reviews that customers upload.
    Find out who the top travel bloggers are, and purchase ad space on their blog. It’s usually inexpensive and could garner your hotel a highly visible review.
  • Be shameless—for a good cause.
    Another way to increase the percentage of customers who recommend your hotel to others is simply to ask them to do it. But do it for a good cause; for example, tell customers that for every send-a-friend referral, the hotel will make a donation to a reputable charity.

Let SmarteHotels.com help you develop a hotel distribution strategy that will reel customers in! Contact us today.