Sunday, March 31, 2013

Will Qualmark Soon Have Competition?

We see that our friends over at the Tourism Industry Blog have uploaded new post: Does New Zealand need another Qualmark?

Well right from the start, let's answer that question...probably NOT! Hasn't that boat already sailed?

We've been hearing rumours for some time about another company that may be considering getting into the quality benchmarking game in New Zealand.

From our position, deeply embedded in the motel industry, let us quickly dispel the myth that moteliers are desperately crying out for an alternative quality assurance organisation.

We predict that any future announcement of an alternative star-rating provider will be greeted by moteliers with the same groaning disinterest as if it were from a company planning to introduce another motel guidebook.

Yes, moteliers will bark and gnash their teeth whenever the subject of Qualmark is raised. They will drag out well worn knock-backs about inconsistencies, lack of consumer awareness and tall stories about losing stars because the assessor didn't appreciate their taste of wall-hangings.

From our knowledge of Kiwi motelier psychology, moteliers aren't so much about being anti-Qualmark per se. Any quality benchmarking system that awards stars based upon an annual site visit by a clip-board carrying assessor that have the gall to critique THEIR home and business will always be rigorously challenged.

In motel-world, no quality benchmarking system will ever be perfect. Moteliers are blighted by a mix of ego, ignorance and a vested interest that dictates "others" will never appreciate the work that goes-on behind the scenes of their motel.

Even if a "new" star rating company introduces an alternative scheme for a knock-down price, we believe that the few Kiwi moteliers that are still sold on the concept of star-rating are likely to respond with suspicion along with a surprising about-face devil-you-know loyalty to Qualmark.

In October this year, it will be 20-years since Qualmark was first incorporated by shareholders, The New Zealand Tourism Board and The New Zealand Automobile Association.

We've closely observed the changes that have occurred over those 20-years...especially more recently when Qualmark Chief Executive, Geoff Penrose stepped-down in 2010 after 5-years in the role.

When Geoff started his role with Qualmark, there were 1,300 Qualmark licensed businesses and to his credit this rapidly increased to a high of over 2,300 along with over 800 businesses that also displayed the enviro-award under his leadership.

Geoff's departure in 2010 signaled the beginning of a new era that "streamlined" Qualmark's operations and since then the customer base has been slowly depleting. We estimate Qualmark licensed businesses have dropped well below 2,000 with less than 300 businesses left displaying the ill-fated enviro-award.

While some may blame subsequent revolving management, poor communication and imposed budgetary restraints placed upon Qualmark for its declining popularity, we suspect that this was inevitable - Back in 2010 there were a few time bombs waiting to explode...

Qualmark remains addicted to corporate welfare. In spite of better-late-than-never efficiencies introduced, the New Zealand taxpayer continues to subsidise the benchmarking of tourism businesses by Qualmark. Past management have blindly avoided managing necessary efficiencies, growing core business and imposing orderly fee increases for fear of losing license holders.

While the numbers of licensed businesses in 2010 looked impressive, this was artificially propped up by Qualmark's expansion into numerous specialised tourism sectors that took away the focus from the core accommodation sectors that included  motels as the backbone.

Another major distraction from Qualmark's core business occurred with the introduction of an embedded compulsory, prescriptive environmental criteria into the accommodation quality benchmarking assessment system.

Qualmark took to their new enviro-accreditation role with the evangelism and intensity of an Amway sales conference. The long-term benefits and economic sustainability of benchmarking quality were ignored by Qualmark as the overstated benefits of environmental and socially responsible fads were enthusiastically thrust upon tourism businesses.

As the enviro criteria was embedded into the quality benchmarking system, it was immediately obvious to accommodation providers that in order to maintain their star ratings they had to play ball. With the promise of environmental and socially conscious guests beating a path to their reception counters, many accommodation businesses produced copious amounts of greenwash to game-the-system and protect their star ratings  

While Qualmark were politically pressured to spread thin resource into multiple new areas of operation, there didn't appear to be a strategic plan to sustain and keep the faith of their bewildered and distracted customer base.

In 2010, a hard core of Qualmark accommodation license holders belonged to a marketing chain and star-rating was a compulsory requirement. The trend for most accommodation chains to use Qualmark as a cost-effective, hands-off quality control mechanism looks likely to decline as consumers change behavior. Many accommodation chains have begun to question the validity of their members compulsion to join Qualmark and some have already started the process of exiting - Watch this space.

The continued dysfunction between Qualmark and the motel sector continues to be a growing problem. Not surprisingly, Qualmark have always struggled to interpret the dyslexic voice of the motel industry. While other accommodation sectors are able to communicate in a concise and orderly manner, inept motel industry representation has caused downstream issues. The most obvious was the recent changes to the assessment criteria that were bogged down for many years by unfocused, waffling consultation. By delaying the introduction of an updated assessment criteria, the motel industry has suddenly had to bear the brunt of changes that should have been slowly introduced incrementally.

As the tail of the Global Financial Crisis continues to hit home, many tourism business have started listening to their declining customer base and are discovering that they are not motivated by confusing layers of Qualmark badges that includes various versions of ferns, stars and multi-levels of meaningless enviro awards.

The world has moved on... savvy customers are moving online and are now making informed buying decisions based upon price, location, online availability listings and customer review sites such as TripAdvisor.

Not many customers seem to worry about what star rating an accommodation option may or may not have. While consumers continue to give lip-service to environmentalism and social responsibility, in reality they don't care if an accommodation option has a recycling scheme or a worm farm hidden behind the reception desk.

It would appear that anyone can award stars these days. A quick Google search will reveal all sorts of businesses and agencies that dish-out stars for such things as energy ratings, student housing, commercial transport operators, vehicle crash test ratings etc. On many OTAs, accommodation providers are able to self-rate and with consumers acting as a watchdog, this can work extremely well. The market is getting confused and crowded.

So it's a surprise that Geoff Penrose may have a second attempt to join the throng and have another crack at the star rating business in New Zealand by competing head-to-head with his past employers, Qualmark.

If this is true, we wish Geoff's private company World Class Tourism all the best and welcome him to the concept of running a private company in an open market. While some tourism businesses may bemoan the possibility of another choice, we prefer to stay upbeat - After all, private enterprise and competition can only lead to good outcomes. 

Hopefully Geoff's "unfinished business" is not relying upon the dubious demands of the motel industry for an alternative new star-rating service to make his new venture fly?

Saturday, March 30, 2013

Hot Babes At Murder Motels

Our good friends at the Murder Motels blog regularly delve into the dark side of the motel-world and get their kicks from staying at the most unusual, grungiest and trashiest roadside motels in America.

As they faithfully record their road-trips through the underbelly of dodgy American culture, the faded grandeur of once thriving motel businesses provide intoxicating centerpieces to their adventures.

While we enjoy reading about the dark side of motel culture, we appreciate that the good folk at Murder Motels do the hard yards and actually stay at these bizzare motels - readers are able to take a voyeuristic view from the safety of their computer screens without the worry of breaching hygiene standards!

While Murder Motels don't seem to have any difficulties regularly finding motels that have erred on the "dark side", we can at least be grateful that there are few examples of these domiciled in New Zealand :-)

From the early days, motels in America were associated with drugs, desperadoes, and declining moral values. Today, this notoriety continues with hard-core examples of "No Tell motels" that somehow seem to persist by diversifying into the heady budget long-stay market.

The most recent example of this ilk that is featured on the Murder Motels blog is the Jim Williams Motel in Grand Rapids, MI.

A 55 unit motel that features: "Full Kitchen, Direct Dial Phones, Bus Line, Weekly Rates, Super Clean & Reasonable Low Prices, Cable TV & Free HBO, Cable T V & Free HBO, All Air Conditioned Rooms..."
Delving into the dark recesses of the interweb, we were unable to find the motel's website (we doubt if they have one), but we did a drive-by on Google Street View and found a mixed-bag of guest feedback:  
"A great place for a great time!
Great place at a great price with friendly staff members you have got to try the food next door. The Place to be after 2 am".

"Acceptable emergency accomidations
For the For an emergency place to stay like a divorce or housing disaster where you have no does the job".

"A dump and unsafe place
Dangerous place, drugs and predators and murderers".
In their own provocative style, Murder Motels have managed to showcase the Jim Williams Motel in the best way possible:
"Yet another model shoot, this time with Jasmine and Jade in the Jim Williams Motel in Grand Rapids, MI. This motel was gross, but at least felt a little less serial killer-y than most motels found on Division Ave. in Grand Rapids. The room was also HUGE for some reason (with a tiny bed and a couple small chairs), which worked in our favor for the photo shoot.."
Better get over to visit our friends at the Murder Motels blog to check out how the rest of the photo shoot went: Click HERE

Thursday, March 28, 2013

More Legislated Holidays Will Boost Tourism?

The Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill or, as it is more commonly known, the “Mondayisation Bill”, looks likely to stutter into law with full support from opposition parties.

It is interesting that the disruption to productivity and an estimated $200 million impost to employers every time Waitangi or Anzac Day falls on a weekend does not appear to be a valid argument to oppose the bill. Even the Nats that stand alone opposing this populist bill, are suppressing the impost to business argument in favour of the more politically correct line that Mondayisation would dilute the importance of Waitangi Day and in particular ANZAC Day if a three-day weekend was indroduced.
While mainstream business groups oppose the bill, there is the irony that the Tourism Industry Association (TIA) that represents a wide array of tourism businesses support the bill along with Labour, the Greens, NZ First, The Maori Party, United Future, Mana...and Brendan Horan.

Ignoring the fact that tourism businesses rely on a productive, vibrant economy in order to thrive, maybe the TIA should be advocating that we have a three day break EVERY weekend to encourage more Kiwis to support the tourism businesses they allegedly represent?

PM/Tourism Minister John Key dismissed the TIA's self-serving support for the bill in the house yesterday as "The very people that promote holidays, want the thing...."

The video is worth a look as Key makes a mockery of David "Mumbles" Shearer's inept performance that includes flaunting TIA's support.

Tuesday, March 26, 2013

Motel Marketing - Digital or Paper?

As AA and Jasons travel media reps wind their way around the countryside, moteliers will be shaken from their usual routine and made to contemplate how they may be marketing their business next season...

Will it be digital or paper?

Hat tip Kiwi Blog

Monday, March 25, 2013

Jasons Expecting Pre-Tax Loss

Unlike AA Travel, Jasons Travel Media is a private company listed on the NZX so we get to voyeuristically peak at their financial performance.

We see that Jasons have today reported to the NZX that their trading result for the full year ending 31 March 2013 will be a net loss before tax.

Accordingly, the company has breached interest cover and debt to earnings before interest, tax, depreciation and amortisation covenants with their bankers.

Just like many of their advertisers, it would appear that Jasons will soon be in talks with their bank manager. In Jasons case, they have applied to have the breach waived.

Although the Motel sector's online and print publication is Jasons largest single income generator, this traditionally only represents around one third of Jasons annual revenue. 

In a depressed tourism market with the motel sector in particular the worst performing of all accommodation tourism sectors, surprisingly New Zealand sales have been reported only slightly behind budget.

The main drag in overall performance would appear to be with the operation in Australia with sales reported well behind budget. As a result, Jasons  will be reducing employee numbers and areas of operation in Australia for 2013/14.

Full disclosure follows: 

Sunday, March 24, 2013

Did You Miss Earth Hour Too?

The trouble with running a small business is that you often become distracted and miss important events...this year we completely forgot about Earth Hour!

Apparently Earth Hour took place last night - did you miss it too?

We've always been a keen supporter. In our tribute post last year: 
"Get ready to ridicule those blow-hard, hypercritical eco-show-off "celebrities" like Lucy Lawless, Robyn Malcolm and Keisha Castle-Hughes. They all seem to have a bit of time on their hands between acting gigs, so expect them to jump on the bandwagon and spout eco-slogans in an attempt to raise their fading profiles.

Due to the continuing demands in Christchurch, we are unable to hire our usual diesel powered lighting towers that we have used before to bathe our motel in light during Earth Hour. Being public spirited, we still intend to do our bit. Lurking in the back of our motel shed, behind old toasters, kettles, beds and piles of other motel chattels past their used-by date, we have several of these items purchased last year:
"WARRIOR HALOGEN WORK LIGHT. These handy portable units come complete with carry handle and the 500 watt halogen bulbs are included."
Our motel will once again be a beacon of light ensuring that we confront anti-human globalised gullibility while celebrating the advancement of human prosperity."
Sadly our portable halogen light units have remained buried in our motel shed this year and like the rest of New Zealand, Earth Hour has passed us by without a wimper.

Spartan online reports around New Zealand suggests that Earth Hour has fallen out of fashion.

Have our earnest, young hipsters moved on?

Maybe we are running out of smug, hypocritical enviro-activists and other associated loonies that can be bothered turning off their lights for one hour in order to protest the delusional ideals of man-made global warming?

Our "celebs" also seem to also be deserting Earth Hour - maybe they are laying low to  avoid the risk of being ridiculed?

Amusingly, the best front person Earth Hour organisers could coax this year to front-up was heavyweight intellectual social commentator, Levi Hawken:

Saturday, March 23, 2013

Motel Male Menopause

Part of the make-up of being a hapless 40-something male is to briefly fantasise that the following scenario is really possible if we really wanted it to be. Sadly, the realities of life dictate that that it isn't, but it still amuses us to dream...

 Hat tip: Whale Oil

Friday, March 22, 2013

New Motella 2013 Season Merchandise

We are pleased to announce that you finally have the opportunity to display with pride the mark of the Motella Blog by purchasing our new Motella Merchandise range that has been updated for the 2013 season!

Many weeks ago we engaged a third world sweatshop to update our exclusive range of Motella Merchandise with a specified level of quality fit for our dear readers discerning tastes.

After a long wait, we have just finished unloading a large container that recently arrived at the Motella secret lair.

You'll be delighted to know that our motel shed's mandatory contents of cleaning chemicals, carpet off-cuts and those old toasters, kettles and clock radios that no longer work have been cleared to make way for dozens of boxes bulging with exciting new branded Motella product.

You will find a "Merchandise" tab that will lead you to exclusive Motella Merchandise permanently displayed at the top of this blog.

More Motel Marketing

It looks like the motel season is well underway....AA and Jasons travel media reps have started their campaign and are busy setting up appointments with moteliers to discuss this year's advertising offer.

After casting a quick eye over the multi-level combo deals, it would appear nothing earth-shatteringly-different is on offer from previous years. Both travel media companies seem to have are adopted a steady-as-she-goes approach and have been unwilling to offer anything overly complicated that may scare the horses.

AA and Jasons (affectionately known in the travel industry as "The Ugly Sisters") have a privileged position amongst the motel fraternity. Unlike most businesses, their travel media reps are generally invited into the motelier's inner-sanctum to conduct business. As they sit around a motelier's dining table enjoying a granulated instant coffee, they are able to take-in the moteliers highly-tuned workspace that features various piles of assorted stacked paper, boxes of guest amenities and dishes from the morning's motel breakfast fry-up.

As the mandatory motel pet enthusiastically humps their leg, the travel media rep has the opportunity to discuss the motelier's future marketing plans and aspirations for next season...

Marketing a motel isn't what it used to be.

Times have changed and there now appears to be endless options available that can quickly carve-up a motel's meager marketing budget:

There's that pesky motel website that's been languishing unloved for several years. Does it need some love? Should it be redesigned, optimised, mobilised and some form of SEO be engaged. What about updating that old-school booking engine? What about considering a pay-per-click campaign, email marketing, online media and sponsorships, mobile marketing? Should you join or make better use of a motel marketing chain? How can OTAs be tamed and optimised? Does anyone still advertise with Yellow pages? Should you fill-up some of those dusty racks at the local iSite with some new rack cards? And what about adding some content to those social media platforms that have been created, but left abandoned?

For most moteliers, does this all seem too hard and overwhelming?

Maybe moteliers should simply do what we've always done and write out a (large) cheque so that we can continue to outsource the majority of our marketing to the Ugly Sisters?

What ever moteliers decide to do, I hope they are are polite to those nice travel media reps - they're going to have a tough few months ahead.

Thursday, March 21, 2013

TripAdvisor Partner With Samsung

The next big must-have consumer item will soon be the Samsung's newly updated hero smartphone, the Galaxy S4.

Several years ago a consumer product with a tagline "Life companion" would be naff and kinda sad...however smartphones are becoming such an essential part of many people's lives that this proposition would seem to be widely accepted now without question. Many of us habitually carry a smartphone or have access to one close by. We have rapidly changed into a culture that is always-on and always-connected - this is especially applicable with travellers that crave for information as their environment constantly changes around them.

Probably even more impressive than the features of the new phone itself, is the speed and efficiency of an incredible distribution network that is required to move these items from the factory into the hands of eager consumers. From the end of April this year, millions of the latest and greatest Galaxy smartphone will be dumped upon retailers and quickly snapped-up by end users.

Bedazzled consumers will soon be marveling at the bigger screen, slimmer profile, improved camera, faster processor and a long list of new how-did-I-live-with-out-it-before capabilities.

A feature that is well down the list of the Galaxy S4's new trumpeted features, is somewhat significant to the accommodation industry: TripAdvisor, will be the only pre-installed travel mobile app on the new Galaxy S4.

Sure, consumers will always be able to easily download other travel apps...and many of them will download thousands of others that are readily available. However, estentially the average consumer is lazy. They tend to use and accept decisions that are made for them...including the placement of pre-installed apps. Default settings can be used as a very a powerful tool that significantly influences consumer behavior.

So far, growth of TripAdvisor's app has been growing at a rapid rate. Since its release in 2010, TripAdvisor claims that their mobile app has had nearly 30 million downloads. Smart partnerships with companies such as Samsung will ensure that the use of TripAdvisor's app will be given a significant power-boost.

Overall, the Tripadvisor Juggernaut is showing no signs of flat-lining. Earlier this month, TripAdvisor announced that it is the first travel site to reach 100 million reviews and opinions – a more than 50 percent increase year-over-year.

A good bet would be that the phenomenal growth rate of use and acceptance by consumers of TripAdvisor as part of their usual travel decision making process is likely to continue for some time yet...

Wednesday, March 20, 2013

I Just Want One?

Cars are the lifeblood of most motels, so out of self-interest it's great to see an event that sparks up a bit of passion in the automotive industry that gives us a rest from gay battery powered cars, bland people movers and dreary SUVs

Here's something we've got on our eBay watch list. A 2002 Holden Monaro HRT 427 that was purchased in 2002 for $AUD 920,000. Apparently it was listed for sale in 2010 for $AUD 3 Million...but sadly there were no takers.

Obviously economic times have changed and the Monaro HRT 427 has come up again for a knocked down buy-now price of $AUD 1 million.

Click the graphic for more details:
While we love cars just as much as the next red-blooded male....would you fork out one million for a Holden?

Spending a Night at the Bates Motel

As the TV series, Bates Motel kicks-off in the States, it's interesting to follow the supporting promotional media.

The "Bates Motel" series is a prequel based on Alfred Hitchcock's classic 1960's Psycho movie that is weirdly set in current times. The series is a study on how a son's creepy relationship with his mother and spending impressionable teenage years growing up in a motel made the character Norman Bates the most well-known and infamous motelier of them all ;-)

For us the most alluring aspect of Bates Motel is the motel itself. The set is located in British Columbia and is true to the original that remains at the Universal Studios lot in Hollywood that I've visited before.

Interestingly the classic roofline of the separate Bates house facade located on a rise beside the motel has not been included on the new set. Is this some strange ode to Canadian health and safety or building laws? Apparently, to keep the faith, the roofline is digitally added to sweeping scenes that featured the building on the show.

The New York Times reporter Neil Genzlinger has done a multi-media puff-piece adding to the publicity for the Bates Motel TV series. The story appeared in the print edition with a link to the video below.

Interesting to note how traditional media reporting is changing:

Monday, March 18, 2013

In Praise of Godzone

Although Kiwis are generally laid-back, sombre and unemotive creatures, we seem to have the worrying trait of craving instant acceptance from those that visit our shores. One of the refreshing things about Americans is that they really don't care and any observations that you may have whilst visiting their part of the world are politely noted, but summarily brushed aside. It's the sort of arrogant self-confidence that Kiwis can only dream of.

Meanwhile in New Zealand, we constantly fret about what others think about us and earnestly dissect and examine any reaction from an overseas visitor...especially well known ones. How many gushing interviews have you seen from Kiwi media that ask that inane question "how do you like NZ so far" a bewildered celeb is making their way across the airport tarmac after alighting from an arriving jet.

Nice to learn that motor-mouth and fellow caravan and Prius hater, Jeremy Clarkson enjoyed his brief visit to Godszone. So much that he devoted the opening paragraphs and the last couple of sentences to New Zealand in his weekly Sunday Times column.

While we can be chuffed that Clarkson's praise for New Zealand may linger in the back-of-mind of a few UK readers, some Kiwis may be furiously worrying about the repercussions of elevating Palmerston North as the mecca of the South Pacific ;-)
"If you were God and you were all-powerful, you wouldn’t select Bethlehem as a suitable birthplace for your only child, because it’s a horrible place. And you certainly wouldn’t let him grow up anywhere in the Holy Land. What you’d actually do is choose New Zealand.

New Zealand causes anyone to question the wisdom of God. Because if he really were all-knowing, children at Christmas time today would be singing “O little town of Wellington” and people would not cease from mental fight until Jerusalem had been built in Auckland’s green and pleasant land. Jesus would have been from Palmerston North.

I’m in New Zealand right now and it really is absolutely stunning — bite-the-back-of-your-hand-to-stop-yourself-crying-out lovely. But sadly, because of modern technology, I can’t enjoy any of the things it has to offer. Not its wine or its sunshine or even the scrutiny of its fastidiously attentive paparazzi. Because on the way here I lost my credit card."
Read the full column HERE

Monday, March 4, 2013

Motel Problem Solving

It's been one of those days!

This sums up one of today's reoccurring themes while working at the motel coalface:

Disconnected Travellers

Google Glass
We've mentioned before:
" experiences (business or leisure) are often measured by the quality and availability of a wireless internet connection".
It seems bizarre that someone would go to the effort of travelling to all sorts of exotic locations (Hamilton, Palmerston North, Timaru etc) and spend so much time searching-out a wireless connection like a crack-addict, while being consumed with on-screen activity as real-world experiences pass them by.

I'm often amused by the now often occurrence of a guest zig-zagging their way into our motel reception with their eyes glued to a mobile device as they are about to check-in. While the guest's one hand is clutching said mobile device the other hand slaps a computer printout of their online reservation confirmation upon the reception counter. 

My well-rehearsed warm greeting is often ignored and an "awkward silence" ensues that is only broken by the actions of the mute guest shuffling the reservation form across the counter closer to me.

At this stage, a mischievous voice inside my head is screaming to channel my hero Basil Fawlty, however common-sense kicks-in and I assume professionalism by introducing myself and naively asking "how can I assist you".

Another scenario that slightly differs from the above is when the guest places their mobile device upon the reception counter with the reservation confirmation glowing from the screen and without a word spoken, stares blankly at some unknown object behind me.

Luckily Google are currently road-testing Glass. Essentially this is a heads-up display that projects smart phone like information onto the inside lens of some nifty looking glasses.

The main benefit of this device would appear to save the users' neck by eliminating the necessity of staring downwards all the time towards a hand-held screen.

Wearing a Google Glass device will soon enable the users to stare right through a hapless receptionist while they view more interesting dynamic information millimetres from their eyeball.

Watch out for even more disconnected travellers wearing these devices from early 2013:

Friday, March 1, 2013

Motel Harlem Shake

The "Harlem Shake" meme is currently exploding on YouTube with over 12,000 renditions, including the Te Arawa Kapa Haka team doing their thing when they got back to the motel after their finals performance at Te Matatini 2013


Can anyone name the Rotorua motel?


Hat tip to JS for pointing out that the motel featured in the video is the Havana Motor Lodge that is centrally located in Rotorua. It looks like a classic Kiwi motel!

Motel Census

Moteliers have to engage in a bit more extra work for the government next week by distributing and collating census forms to account for guests staying Tuesday evening.

I've just completed my individual/dwelling census form online - an easy process that takes about 10 minutes.

Good to see that those nice folk at Statistics NZ have once again chosen to prompt moteliers along with a few other specially selected occupations on the census form:

Special assistance continues for moteliers by suggesting that their main duties are "Running Motel":

So how many hours did you enter in question number 40?

Wotif takes a dive is probably the most successful Online Travel Agency (OTA) in the southern hemisphere.

After riding the wave as consumers shifted booking accommodation online and further boosting impressive growth with acquisitions, does recent trading results suggest that Wotif is now flat-lining?

Has the bubble finally burst?

After the departure of charismatic CEO Robbie Cooke that steered Wotif from private ownership to public listing resulting in formidable growth and profits, new CEO Scott Blume is attempting to appear upbeat about Wotif's recent pedestrian performance.

It's been reported that Wotif has performed positively in the Australian and Kiwi markets in a ''generally lackluster domestic retail environment". The strong Australian dollar has encouraged Australians that may have booked domestic travel on Wotif to travel overseas. Anecdotal evidence suggests that Kiwis that are still travelling may be mirroring this behavior, so how are Kiwi based OTAs fairing?

While Wotif has gained modest revenue gains from its core sites in Australia and New Zealand, its Asian business has underperformed. Further drags on performance have been blamed on increased costs from online marketing, web maintenance and staff.

As a player in a global market, Wotif is also facing increasing competition from offshore OTAs. The major threat that cannibalises potential online growth are OTAs dominciled in the northern hemisphere, where mega companies such as Expedia, Sabre, Orbitz, Priceline, etc are using larger economies of scale to elbow themselves in front of the global consumer.

In October last year, Wotif controversially announced to their suppliers increases in the 10 percent commission rate. From 1st January this year, commission was raised to 11 percent and on 1st January 2014, commission will be raised to 12 percent. Wotif qualified this increase by indicating that this will enable them to foot-it with their competitors that operate at "much higher commission levels" that "allow them to market themselves more aggressively".

Will this give Wotif additional fire-power to substantially increase marketing streams?

It will be interesting to track Wotif's performance over the next 12-months. Suppliers will be wondering if Wotif will consider returning to them again for further contribution if trade continues to flat-line...

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