May
6
One major OTA - Orbitz - has announced that it is using a "revolutionary" new pricing model.
Essentially, they're offering customers yet more peace of mind that they have booked at the best possible rate. Note, not the best available rate, the best POSSIBLE rate.. If you make a booking at £90 and somebody later books the same offer in the same hotel at a lower price, say £80. Orbitz will send you a cheque for £10. Although I must admit, it is not clear at time of writing, just where that £10 comes from...
So what effect might this have on the way you promote your hotel online?
Essentially, they're offering customers yet more peace of mind that they have booked at the best possible rate. Note, not the best available rate, the best POSSIBLE rate.. If you make a booking at £90 and somebody later books the same offer in the same hotel at a lower price, say £80. Orbitz will send you a cheque for £10. Although I must admit, it is not clear at time of writing, just where that £10 comes from...
So what effect might this have on the way you promote your hotel online?
It certainly makes you think about the way you structure your offers.
It calls into question the whole concept of late booking discounts (which, if you are doing your yield management and your marketing properly, you shouldn't be doing very much of, should you?).
If it is the hotels who have to pay the rate difference, it will act as a penalty on late availability rates. Of course, it might be that Orbitz will pay the difference out of its own pocket. What do you think?
In part, this is an OTA doing a bit of after sales massaging for the customer. And a very good idea it is too. They're making sure their sale holds up all the way through to the end, by making sure the customer has no cause to be dissatisfied with their deal.
As a by product (or perhaps it is intended) this method will force hotels to reconsider their rate profiles. Will we start to see a move away from panic late rates? Will hotels finally see the light and promote value based offers on long booking lead times?
Just what is a bird in the hand worth?
Only time will tell. Watch this space.
It calls into question the whole concept of late booking discounts (which, if you are doing your yield management and your marketing properly, you shouldn't be doing very much of, should you?).
If it is the hotels who have to pay the rate difference, it will act as a penalty on late availability rates. Of course, it might be that Orbitz will pay the difference out of its own pocket. What do you think?
In part, this is an OTA doing a bit of after sales massaging for the customer. And a very good idea it is too. They're making sure their sale holds up all the way through to the end, by making sure the customer has no cause to be dissatisfied with their deal.
As a by product (or perhaps it is intended) this method will force hotels to reconsider their rate profiles. Will we start to see a move away from panic late rates? Will hotels finally see the light and promote value based offers on long booking lead times?
Just what is a bird in the hand worth?
Only time will tell. Watch this space.
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