One of my new clients has recruited a "Revenue Manager".
We sat down last month to look at pricing strategies for the rest of the year.
Nowadays, hotel pricing is full of jargon: BAR; ADR…blah, blah. You know the sort of thing I mean? Well, this chap knew every term and was equipped with a special program on his PC that told him what rates he should be using to sell online every day.
Online sales hadn't been so good, so he calculated the "optimal" prices, and he loaded them online. These were special prices! carefully crafted to wrest sales away from competitors. You might call them "cheap", but I couldn't possibly comment.
This week we were reviewing progress for the past month. If anything, online sales were down.
Continue reading "Hotel Pricing and Getting a Good Deal"
Another Groupon offer for a hotel deal landed in my inbox today.
As regular readers of this blog will know, Groupon offers suit businesses with low marginal costs. Hotel rooms are a good example of a product with a low marginal cost. If you spend £100 on a hotel room, the direct cost of providing that room to you is pretty low. Which means that there is a lot of profit available to the hotelier. Of course the hotelier then has to pay for stuff like heating, rates and refurbishment, but let's not digress at this point.
The hotel "room night" is also a very perishable product. If you don't sell a room night tonight, it's gone. You can't store it and sell it tomorrow night. So hotel rooms which remain unsold are ideal for flash sales. That's what websites like Laterooms were originally designed to sell - rooms that hotels couldn't sell and had no prospect of selling, at significant discounts. It's sometimes called "distress inventory".
But we're talking about Groupon and today's offer. Let's see if it makes sense.
Continue reading "Groupon for hotels - the arithmetic for disaster?"
My thanks to the Lodging Interactive Blog for this post
which raises the topic of Google+1 and what it might mean for hotels.
Continue reading "Google +1 for hotels and hotel marketers"