Monday, June 18, 2012

A Reality Check For The Motel Industry - Part 2

The Motel Association of NZ (MANZ) seem to have taken a bizzare position against overseas based Online Travel Agencies (OTAs) with an alarmist opinion piece that has been widely circulated in various publications - Read it HERE.

In the second of a two-part post, Tania Witheford, managing director of takes a more realistic tact and urges the motel industry to stop grizzling, catch up to the realities of an evolving world and make informed decisions when choosing marketing opportunities with OTAs - no matter where they are domiciled.

Tanya responds to the quotes (in green) that have been extracted from comments written by MANZ CEO, Michael Baines:
“ the fact they are not investing back into New Zealand. They have no vested interest in ensuring that New Zealand-owned businesses prosper, as the New Zealand based online reservation companies do.”
Whether the business is on or offshore based the reality is they are all commercial operations  with stakeholders to please, and business objectives to meet. Ultimately these operations rely on their established databases and brands to drive traffic, increase databases, sales and conversions.

Many of the OTA’s have worked or work with  TNZ in varying forms  and/or a number of regional RTO’s to help improve the visibility of the regions to their consumers and databases, above and below the line advertising.

The offshore OTA’s have recognised and established brands, with users and databases in markets that the average property could not be readily seen and this means accessibility, value and opportunity .
“Secondly, a number of the off shore booking companies are, in essence, high jacking the name of properties by bidding on Google search engines for use of the name and providing a booking link at the top of any Google search page”.
The consumer has the choice. The information is available; there is no cloaking of names or entities. The monies are being invested on paid search adword campaigns and website optimisation, with the aim of increasing the visibility of the OTA’s website and the name of the property concerned to increase sales. Good or bad? This can be argued, however  make sure your own website is of a good standard, is current, invest in good site construct and optimise, participate in applicable social media, so that when the consumer decides to find the source website they can do so easily and when they get there, their needs are meet, reservation and payment can be made securely online.
“In actual fact, looking at the advertising blurbs that come through my computer, the international based companies are always promoting “sales” and trying to push down prices as much as possible"
Let’s turn this around. Retailer’s know that a special or promotion for a nominated period stimulates the market and a “good value price” can spur sales, impulsive or otherwise.   Therefore  you need to understand your pricing structure, your tolerances, know value can be added with high perceived benefits and how participation will meet your objectives.

There are a variety of OTA’s and each engage with their consumer very differently. The way OTA’s works and presents information to a customer should be understood. Some run varying “offers or sales” around which they build additional advertising and exposure and the properties have a choice to participate or not. As there is “NO cost” for participation except for commission on success – where else could you have opportunity with this level of exposure.
On other sites  promotion is managed differently some vary commission levels for a period of time in exchange for the exposure, again all success based promotion.

So if you plan and have a good pricing structure in place,  these can be managed and participated in when the business deems it beneficial and align with objectives.

What about all the voucher based sites - now that is another discussion as well – How to use and when to use? Is this type of  activity good for business? Is this discounting or a promotional “sales and marketing” activity? 

In summary 

As the business owner,  the choice is yours.  Make informed decisions and understand how the variety of different tools can be employed within your business to meet  your business plan objectives. Embrace online, as  it is all about visibility. Invest time to understand the OTA websites you choose to participate on and invest in your own website and presence. It is easier for a business with focus on a smaller set of keywords and terms to potentially elevate visibility.

Own your decisions and take responsibility, review price structure, offers and tolerances. Meet the market and do not be afraid to innovate. Sitting there and waiting for business to “come to you” will guarantee you one thing –  you will sit there! 

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