What I am about to report is not unusual. It is happening around the world every day and it is gradually changing the way our customers think about the price of a hotel room, with potentially damaging consequences for all hoteliers.
A customer looks on the web at a couple of attractive destinations and in so doing her eye is drawn to the web sites of several decent hotels. Having glanced at some of these there is one that appears just right. Looking in more depth she finds the rates and availability for various room types and thinks about booking directly with the hotel.
However, being a canny individual she knows that it is probably possible to book the very same hotel through a third party site which promotes itself as a source of “cheap” rooms. And so it turns out. She can have a deluxe suite for £60 per night less than if booking direct with the hotel. This is because the third party has been given lower rates and a generous commission which they are free to eat into if they want, enabling them to reduce the rates even further.
So, our well-informed customer calls the hotel to ask if they would like to match the rate she has just seen, cutting out the middle man and therefore the commission payable by the hotel. Surprise surprise…the answer is “no, I’m afraid you must book through the third party to get that rate”.
What is all this saying to the customer?
1. We’re overcharging anyone who is stupid enough to book with us
2. Our rooms are not worth what we say they are
3. We actually prefer it if you book through a third party
Why is it happening?
I believe it is happening because too many hoteliers still regard occupancy, rather than profit, as the main measure of their success.
What’s the cure?
Use a professional Revenue Management expert – even if only for a short contract – and regain control of your business.