Monday, August 31, 2009

Motel online sales

For some motel operators, selling inventory online goes against the personalised and controlled approach that they have used so effectively before. There is a nervousness of overexposing themselves to the world (including their competitors!) and opening up the risk to the much feared double booking scenario.

Yield management in the accommodation industry involves identifying market segments, manipulating tariff, room types available, minimum stays and packaging inclusions etc. There is still a mentality in the motel industry for tariffs to be set in stone for 12-months in advance and maintained regardless of demand. The one size fits all, first-in-first-served price setting process makes it easy for the operator but does little to maximise yield.

The popularity and success of selling online inventory is slowly changing the way motels set tariff, package rooms and manage yield. But is this happening fast enough? Hotels have always been the market leader in the art of selling rooms on-line and have heavily invested in distribution channel marketing and yield management. In our opinion, motels are moving forward but are still woefully behind the hotel sector in this area.

In recent years there has been a steady lift in room nights sold on-line and hotels seem to be benefiting more from this consumer shift in the buying process than motels. We believe that this is one major reason why motels have lost their once dominant position in the market place and now lag behind the hotel sector in the race for the most room nights sold.

There seems to be difficulty in the motel sector in understanding and maximising the relationship with the property's PMS (Property Management System), channel management and individual on-line resellers. There is however an armory of cost effective solutions now available.

The recent issue of Tourism Business Magazine has an excellent article by Steve Davies from Accommodate Me that outlines the online booking systems and channel management available for New Zealand operators.

Michelle Ackers of ADEPT Marketing has summarised the following key points from the print article and has added links to the major suppliers:

Key Popular Systems

What you choose to enable online bookings in your website and receive bookings from other online sales channels will depend on your business products, size and strategy – for the use of a system do you prefer paying set regular amounts or nothing upfront with a commission on success model?

Research the differences, the costs and what works best for your business. In addition to the below considerations and others mentioned in the full article, I suggest you also look at how easy the booking system is to use for your guests – can they easily view your availability and then book and pay for it without too many clicks or forms to fill in? It’s ease of use will be a large factor determining it’s success in your website.

Here are some options:

AA Travel – Only available for those who advertise online with AA Travel. Free to set up as an advertiser – 1.75 to 3.75% for bookings. Sales channel also include AA Centre retail network. AA advertising costs range between $299 and $9000+ per year.

Availability – Uses ResBook online inventory management system popular with B&B’s and Lodges. Can integrate with resellers sites but leaves it up to the tourism operator to negotiate terms and commissions. Starts at $480 per year and no commissions.

Bookit – One of the few to offer a solution for accommodation, activities, tours and car rentals. Growing number of sales channels including key sites such as NZ Tourism Guide, Yellow Maps and some Regional Tourism Organisations. Free to use system, 6% fees for bookings in own website plus commission from sales channel bookings.

Jasons/Holiday Guide – Using the Holiday Guide System it is commission free with monthly charges starting at $10 per month. Can be used in your own website, and if a paid advertiser on the Jasons website.

Seekom – Their IBEX system is for accommodation, activities/tours and car rentals with comprehensive options for selling via wholesalers and retailers. Also offers effective sales channel management for online availability and pricing updates. Connects to popular property management system (PMS) Callista with more to come. Pricing from $39 per month.

SiteMinder – Australian based but offering effective channel management for a wide range of NZ, Australian and international online sales channels, plus have more recently added “The Booking Button” for online bookings in your own website. Channel management starts from $44 per month with additional per month for the Booking Button. No commissions. (Sales Channels will still charge their commissions however).

Tourism Exchange – Air NZ owned, the newest system on the market offering integration with your property management system or use of their Eviivo Frontdesk to manage all your bookings. Provides online bookings on your own website and from their sales channels including Air NZ (online, retail and wholesale channels) with many more promised to come. Monthly charges from $0 to $79 depending on room numbers, 6% fee plus cc charges for your website bookings, plus commissions for sales channels bookings that you opt in to.

Vianet – Now Trade Me owned offers a booking tool for your own website and comprehensive network of sales channels including Travelbug, tourism websites and several Regional Tourism Organisations. Free to use the system, 3% fee for bookings from your own website plus commissions from sales channels you opt in to.

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