The Hotel Marketing Blog from HotelSphere

News today that a class action has been raised in the US against just about everybody who owns or sells a lot of hotel rooms made me smile.
It illustrates how silly the whole OTA sales model became under "rate parity".

Rate parity agreements must have made sense to someone at some point, but they've never made sense to me. I started my hotel career in an era when the internet didn't exist and we choked at the prospect of paying a travel agent anything more than 8% commission. Travel trade net rates were used frequently, but as a hotel general manager, you were constantly trying to find new customers, interest new markets and gently drive your selling price up. That's what we were trained to do, that's what we did. Most of the time... Then the internet came along and everybody got lazy. Or were they just confused? Nah. Lazy. Hoteliers all want sales but they're rarely prepared to invest the time and effort to make them happen. In their world online sales:

- Must cost nothing
- Must involve little effort
- Must be immediately and spectacularly successful

The OTAs delivered a sales proposition that sounded like it delivered on all these things. They could sell "unsold" rooms and everyone believed that (come on guys, like you can sell a sold room...); they could remove the need for the hotelier to make much of an effort (and hoteliers just LOVED that); and finally they could demonstrate quick wins, because that's what you can do when you know how the interweb works.

For hoteliers to want to abdicate their sales responsibility to a third party is one thing. However then agreeing eye-watering commission rates and guaranteeing that you won't compete on price is quite another. Because the result was that the industry did compete on price, encouraged price competition as a sales proposition and then paid the OTA's a commission to do it. It completed on price because price was the ONLY lever available to the OTA's. Then the whole thing was packaged up with rate parity agreements which prevented the hotels from selling their own rooms using special offers and undercutting the agents, despite the fact they could still reduce prices by 15% and be better off than selling the room through the agent. So in times of low demand, hotel prices are artificially set 15 - 20% higher than they would naturally be, because there's a 3rd party who has rigged the market to be able to take their cut no matter what. And the hotel industry lets them do it.

Sure, it's price fixing. But it's very silly price fixing.

Posted by HotelBlogger

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.

Posted by HotelBlogger

The announcement of an investigation by the DTI (reported here) could signal the end of Rate Parity - a clause used by many online travel agents to control pricing of hotel rooms.

Continue reading "The end of Rate Parity for British hotels?"

Posted by HotelBlogger

Finding your own niche on the internet is tricky.
It's a very competitive market place.
So what is a fledgling website to do, when confronted with a very similar name already established with the search engines?

Quite simply, it has to clarify its position, both to you the reader and browser and to the Search Engines.

This website is having a problem because at present, Google can't distinguish between people wanting to book the Merchant Hotel in Belfast, and people using Hotel Merchant to search for hotels using the iPads.

Do you want to book the Merchant Hotel Belfast, or do you want to search for hotels using the new Hotel Merchant website?

You decide - read about it here.

Posted by HotelBlogger

Here's an interesting guide to hotel flash sales - written for customers, not hotels.

Read the article on the Hotel Merchant website here.

Posted by HotelBlogger

You might have noticed that I'm not a fan of Groupon.

Offering "Kamikaze discounts" to "Bottom feeding customers"

...are just two of the problems I have with their method of operation.

I don't have a problem with "Flash Sales". In fact I think they're a great idea if done properly. I just don't think you need to drop your price round your ankles and let someone blow smoke ** **** **** in order to make them happen.

And now I discover that Groupon isn't even in the "voucher" business!

Continue reading "Why using Groupon for your hotel is a BAD Idea"

Posted by HotelBlogger

Lots of hotels use Facebook to engage with new and existing customers. Is yours one of them?

If you have logged in to your Facebook business page recently you'll have noticed a change in the layout is coming.
The changes are significant and could help you achieve so much more with Facebook marketing for your hotel.

Is your hotel ready? The change in layout will happen on 30th March - whether you're ready or not.

Continue reading "Is Your Hotel Ready for Facebook Timeline?"

Posted by HotelBlogger

The introduction of the new Timeline page structure on Facebook serves as a reminder to all hotels that Facebook could be a useful addition to their marketing efforts.

As part of the Timeline upgrade, Pages on Facebook will become even more powerful as a way to engage Facebook users who visit your fan page. If you're not using pages (sometimes called "page tabs") yet, you should really start thinking about using them soon.

Continue reading "Facebook pages for hotels"

Posted by HotelBlogger

If you use a Facebook page as part of your hotel or restaurant marketing, you may already be aware of the changes that will take place (whether you like it or not) on 30th March. The layout of your business fan page is going to change dramatically. Are you ready for it? Facebook calls it Timeline.

Whilst the changes are compulsory and you won't have a choice, I think they represent a huge opportunity for hoteliers and restaurateurs all over Britain - they give you the chance to present your business as never before to a growing online community.
And actually, it's not all that hard to do if you know the right people (as a reader of this blog post, you now know one of the right people…).

Continue reading "Facebook Pages - news about the timeline changes and why they're good for Hotels and Restaurants"

Posted by HotelBlogger

I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

Posted by HotelBlogger

I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

Posted by HotelBlogger

I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

Posted by HotelBlogger

The CAP code is in place to protect us all from the influence of naughty marketers.

Naughty marketers aren't always deliberately naughty. Sometimes they make mistakes. Sometimes they are just plain ignorant.

For an example of ignorance, see what happened when someone raised a complaint about a recent De Vere Hotels email campaign.

The campaign obviously assumes that the target market is stupid and that people won't check and research prices and offers. That's a mistake.

Failing to ensure the point of differentiation really existed in and between the offers. That's a mistake.

However when CAP raised the matter with De Vere they received no response. That is not only against the CAP Code, it is also just plain ignorant in my opinion.

As marketers we all make mistakes. The biggest one you can make is to ignore the regulator when they have reason to pull you up. It sets an unfortunate tone...

Posted by HotelBlogger

Are you let down by the words on your website?

Do your sales letters bore the socks of your target market?

Do you know if people are even reading about your business?

Now you can discover the real secrets which can help you to write compelling sales copy for your website, sales letters and adverts. training and coaching in sales copywriting techniques are now available from our friends at Better Direct Marketing. There are places available in Inverness. Check out their website for more information today!

Posted by HotelBlogger

If everybody does the same thing when it comes to marketing, how do you differentiate your hotel from your competitors?

There is no excuse for boring marketing!

Check out this website - Better Direct Marketing.com

For an alternative to being boring and staying anonymous!

Posted by HotelBlogger