Aug
7
You can read about the new Expedia agency model all over the internet today.
Industry watchers and experts have queued up to share their opinions of Expedia's new way of doing business. Articles abound on the interweb, full of TLAs (three letter acronyms - one you get to my age you come to loathe them...), trying to rationalise the pros and cons.
Now I have joined the queue, here's my take:
As a hotelier, you now have a wonderful opportunity to take the fight for (a) new customers and (b) more profit from each room you sell to the online travel agents. The opportunity is called social media. Use it properly as a marketing tool (which means you need to use it to listen and interact) and you can get really close to your customers.
Businesses like Expedia have earned loads of money by occupying the territory closest to the customer. The hotel industry withdrew from that ground and now pays between 15 and 20% of every sale made to rent it and have the customer stay at each hotel.
Having customers pay Expedia directly represents a reinforcement of Expedias position as "closest to the customer". Some hoteliers will love it. Some will hate it. But remember, the closer you are to your customers throughout the buying process, the more profit there is for you.
At 20% commission, online travel agent websites are often making more money on the sale of a hotel room than the hotel is. Can your hotel sustain that? If not, you have an opportunity to adjust the balance by engaging customers using social media (and offline techniques too - it's all a battle to get and keep attention).
...or you can let someone else decide when you get paid for your room sales.
Industry watchers and experts have queued up to share their opinions of Expedia's new way of doing business. Articles abound on the interweb, full of TLAs (three letter acronyms - one you get to my age you come to loathe them...), trying to rationalise the pros and cons.
Now I have joined the queue, here's my take:
As a hotelier, you now have a wonderful opportunity to take the fight for (a) new customers and (b) more profit from each room you sell to the online travel agents. The opportunity is called social media. Use it properly as a marketing tool (which means you need to use it to listen and interact) and you can get really close to your customers.
Businesses like Expedia have earned loads of money by occupying the territory closest to the customer. The hotel industry withdrew from that ground and now pays between 15 and 20% of every sale made to rent it and have the customer stay at each hotel.
Having customers pay Expedia directly represents a reinforcement of Expedias position as "closest to the customer". Some hoteliers will love it. Some will hate it. But remember, the closer you are to your customers throughout the buying process, the more profit there is for you.
At 20% commission, online travel agent websites are often making more money on the sale of a hotel room than the hotel is. Can your hotel sustain that? If not, you have an opportunity to adjust the balance by engaging customers using social media (and offline techniques too - it's all a battle to get and keep attention).
...or you can let someone else decide when you get paid for your room sales.
