Hotels: What are some of you guys smoking?
I just have to get this of my chest, and share my latest experiences with you.
I love it how many hoteliers complain about the fact that online travel agencies are penetrating their hotel too far and are almost controlling their businesses.
And not to forget the rants we hear about the average room rate being too low. But sometimes we have to look at ourselves instead of blaming others.
Some hotels just have to get their revenue management strategy in order, more than anything else.
Pass the light
A perfect example is what happened to me this week when reserving a hotel in Bandung, a large university and retail outlet city in Indonesia.
I called a hotel listed in the first page of TripAdvisor to find out what its rates were running at. I was quoted Rupiah 1,200,000 (about $120).
I decided to look around a bit more knowing I should be able to get a better deal in this market. When I looked on the hotel website and saw rooms available at Rupiah 800,000. I decided to call the hotel back.
At the same time I was looking on HotelsCombined, the metasearch engine, to check its rates on the OTAs from which it gets rates.
I saw on Agoda, a leading Asia OTA, the same hotel at Rupiah 600,000. I told the reservations agent I would book the hotel and they could save their commission if they would let me book directly.
Still, over the phone the best rate the hotel me would give me was Rupiah 1,000,000. If I want to have a better price, I was advised to book on the website or on Agoda.
What is wrong with the management in this hotel? Giving a better price through a third party channel?
They would rather pay commission than take my reservation directly. I am sorry, but this property simply deserves to go down in its own mismanagement.
All rights to complain had been evoked when I meet with the owners this week.
But really come on? What are these guys on? They must be smoking some serious stuff, watching re-runs of Cheech and Chong movies all day long.
Another tale was shared to me recently by a friend working for a regional Asian hotel chain. The company has implemented several packages on its own hotel website, as well as OTAs and other distributors.
Now he is faced with the challenge of some of the general managers not understanding the need for dynamic package rates linked to the best available rate (BAR).
The GMs think it so much easier to have a flat package rate. It’s just simple to load such rates in to the PMS and to advertise.
They unfortunately overlook the overall objective, which is maximizing revenues. Because what would happen if the package rate is US$99 and the BAR is US$150 (and they don’t close the package)?
Yes, you have guessed correctly: everyone would book the package and no-one would buy the BAR. The hotel would be losing out on its revenue potential.
It seems that the issue is that too many hoteliers are hospitality people and do not have enough technical and business insight to manage their systems and strategies. It is time that the old-school hotelier either gets trained or is assigned only to operations.
Don’t have the legacy challenges of the relic hotelier harm your hotel business. It’s a business that needs to make money, or rather profit.
Ban the bong!
Patrick Landman is a contributing Node to Tnooz and founder and CEO of Xotels. This hotel management group assists independent hotels with revenue management, online marketing and internet distribution strategies.
They offer outsourcing services, coaching, consulting and training. In his blog, Patrick challenges hoteliers to think out of the box and not to accept the established order.
Through a passionate drive for growth and improvement he brings creative tips, ideas and best practices to the table that can help hotels drive up their bottom line.
In previous roles he has helped to develop businesses like RateTiger and Hotels.com into industry leaders.