Tuesday, July 12, 2011

Hotel Sector v Motel Sector

Museum Hotel owner Chris Parkin featured in The Dominion yesterday and while I was reading, I couldn't help to wonder how different the article would be if an operator from another accommodation sector was featured.

When discussing Online Travel Agencies (OTAs), Mr Parkin accepts the 5 to 30 per cent commission rates and the delay in receiving funds once a guest checks out. 

Mr Parkin willingly lists his hotel on all the OTAs and instead of wasting energy bagging them, he works with them and accepts that they are around to stay. The decision to be in this space is easy: "You can't afford not to be". He acknowledges the marketing costs that OTAs' invest and that they attract a different type of guest that rarely cancel.

There is mention of the thorny topic of rate parity (when OTAs have policies that prevent accommodation providers from offering lower prices direct to customers), which Mr Parkin respects, however to get around this trading restriction his hotel offers added-value packages on their own corporate website eg: offering breakfast or late checkouts for a token extra charge.

Interestingly, Mr Parkin claims that Museum Hotel currently source 25 to 30 per cent of bookings from OTAs and almost 20 per cent from online direct bookings. While apparently happy to work with OTAs, there is a strategy to drive customers to the hotel's website with the goal of increasing online sales to 50 per cent over the next few years by investing in the hotel's website and search engine optimization.

Is it surprising that there doesn't appear to be a focus on print advertising...?

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