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Welcome Anywhere Property Managment System > Blog > 2016 > December

It’s a small world, isn’t it?

I don’t mean that I know your next-door neighbour or went to school with your aunt - I’m referring to the fact that the world is literally quite small. Or so it appeared to me this week when I left Birmingham and arrived in Amsterdam an hour or so later.

Sure, there were a few obstacles I had to factor in; the Christmas hoards at BHX, out-running the perfumery consultants in the departure lounge and finding somewhere - anywhere - to sit. But, still - it really didn’t take that long at all.

The flight itself was quite enjoyable and I settled into that warm, sleepy fug unique to air travel and which brings on dozy thoughts like “will the plane still fly if it loses one propeller?”. When awake, I amused myself until landing by watching other passengers’ behaviour (and why, may I ask, are some people obsessed with getting up and down every five minutes to rummage through the overhead lockers, mid-flight? Do they do this with their cupboards at home?  I just don’t understand it and never will. I call them ‘locker people’).

[caption id="attachment_14322" align="alignnone" width="669"] Hello, Amsterdam![/caption]

A relatively short transfer followed, tempered only by an unfamiliar ticket machine into which I accidentally fed some litter and the constant need to dodge the myriad of trams and bicycles. But you know what? It was totally worth it, as I was visiting one of our key partners - Booking.com’s BookingSuite.

Following our project which saw Welcome Anywhere become the first UK-based hotel booking system to integrate with BookingSuite, both sides wanted to celebrate the partnership. We use the “p” word a lot here at Welcome, and we make no apologies for it. Partnerships are an essential part of our business and we firmly believe that we are stronger together if we work with strategic partners. The relationship with BookingSuite is an exemplar of that thinking.

Meeting the guys who have helped put this partnership together was incredibly rewarding and it really felt like we’re among friends; nothing quite beats the warmth of the Dutch people, and I was instantly made to feel at home.

[caption id="attachment_14323" align="alignnone" width="1000"] John Jones, Welcome Systems Ltd (left), Bernard Willems, BookingSuite (right)[/caption]

Nuno Sequeira and Bernard Willems showed me proudly around their offices, plied me with tea and when I’d stopped admiring the fabulous vistas, sat me down and went through a fascinating presentation which had clearly been meticulously put together. We talked plans, technology, consumer habits; we discussed next moves in the relationship, further projects and drank more tea. I liked these guys - they clearly shared our values.

Towards the end of the afternoon I had the honour of presenting to all the BookingSuite staff a synopsis of where we see the market, what excites us, and Welcome’s role as a hospitality original. Topped off by a very engaging Q&A session, I realised that we are all going to get on just great.

Returning to Birmingham via trains, thick fog and thwarted in my efforts to leave the plane quickly by a man who took twenty minutes to put his coat on while standing in the aisle (I bet he was a locker person) I dodged the perfumery consultants again, rubbed my eyes and found myself spat out into a sea of arrivals.

For the sake of extending a partnership, would I go on another trip like this? No.

I’d go on a hundred.

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How often do you update your room tariff? Does it reside on the check-in counter, laminated and curling slightly at the edges? Or is it something you constantly monitor, change and adapt to fit market conditions and demand?

Bearing in mind this post is labelled ‘B&B rate management’, it may sound like we’ve inadvertently strayed into hotel chain territory with the last suggestion, but in the dynamic, digital marketplace in which we now find ourselves, every accommodation business owner has to get serious about strategic rate management.

That includes you!

In fairness, though, you’re probably not blessed with the presence of a revenue manager. You’re a small business owner who has to pour their heart and soul into every area of the operation. You clean the rooms, cook the breakfast, welcome guests through the doors and do everything in your power to ensure there’s a healthy number of bookings in the diary.

Rate management? Who’s got time for that in the B&B trade?

You have! And you know why? Because it can be devilishly simple.

So simple, in fact, that we’ve set ourselves a challenge; we’re going to attempt to provide the simplest B&B rate management guide you’ll find on the web - in just three steps.

Here goes…

1. Pick the right tool

Do you have a hotel booking system? No? Well, it’s time to invest in one. Thankfully, they’re now incredibly low-cost and, in some cases, packed with features that were once only present in expensive, large hotel property management systems.

Online travel agencies (OTAs) are increasingly jumping on the rate management bandwagon, too. Booking.com, for example, has recently introduced BookingSuite, which offers properties of all sizes the ability to get a handle on market demand and competitor pricing. It’s powerful - and genuinely useful - stuff.

If you’re a B&B owner, it really is worth checking out the new connections offered between hotel booking systems and OTAs - they’re capable of taking a great deal of the work off your hands when it comes to rate management.

2. Deciding how much to charge

Check out your competitors. What are they charging? Do they appear to be full regularly? If so, there’s a chance they’re either A) well-priced, or B) too cheap. Go with your gut instinct; if you wince at the rates being charged by the competition, price your rooms aggressively.

Don’t focus solely on the small properties, either - take a look at the big boys, too. You have a far more interesting proposition for guests when compared to soulless chains, and if you can match or beat their pricing and extol the virtues of staying with an independent operator, you should be able to steal some of their business.

3. Get strategic about price increases

When is your B&B most in demand? Are there tangible peaks during certain times of the year? Is there a local event on the horizon that will signal a higher demand for accommodation in the area?

You know your market better than anyone. You know your guests like the back of your hand. There’s nothing wrong with charging a little more when demand is higher - it has been a tactic long used in the hotel trade.

That’s it!

Simple, eh? No spreadsheets, no calculations and no finger-in-the-air guesswork - just good, honest common sense - that’s all your rate strategy needs.

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For far too long, online travel agencies (OTAs) have been considered a ‘necessary evil’.

We think that’s a little unfair.

However, before we duck behind the safety of the sandbags once more, we’ll explain why we think they deserve a slightly less critical eye…

Granted, OTAs often charge significant sums for the privilege of sending bookings to hotels, but that’s exactly what they’re good at - introducing new business.

If you perform a Google search for accommodation in any given area, the first few results will almost certainly be OTAs. This is because they have huge search engine optimisation and Adwords budgets - far  larger than any of us could dream of having access to. There’s nothing we can do about it; it’s their money and they choose to spend it on paid advertising.

As a hotelier, however, you can benefit significantly. Think about it - every penny spent by an OTA on an Adwords campaign that leads a potential guests to your hotel has directly benefitted you. If you can then tempt the guest to book their return stay directly, you’ll have potentially earned a customer for life, all for one, simple commission payment.

There’s still no getting away from those hefty commission bills, though, is there? As a hotelier, you are, after all, running a business, and in uncertain economic times, keeping a close eye on overheads is absolutely vital.

Good news - you can reduce the commission bills you receive from OTAs. You just need to get smart about online booking.

In this post, we’re going to list three tried-and-tested methods for reducing OTA commission.

Here’s how to get those bills down:

1. Don’t ignore your own website

With so much focus placed on OTAs, it’s easy for the poor old hotel website to sink into a corner, untouched, unloved and, as a result, nowhere to be seen once the guest starts their booking journey.

So, how do you make your website sing and attract direct bookings?

A great online booking system is a must, but so too is beautiful imagery, a compelling story about what makes your property special and guest experiences that aren’t available on your OTA listings. And don’t worry - you can do the latter and still achieve rate parity - simply add an extra rate or two that features something more exciting than ‘just a room’.

2. Spread your wings

This one is really simple. Are you listing all of your rooms on just one OTA? If so, your commission bill will be far higher than it needs to be.

Spread your wings online and sign up to as many OTAs as you can. Pick those that best reflect your property’s style and values and provide them with every ounce of availability. In the world of online booking, it’s first come, first serve and you’ll often find that an OTA with a lower commission rate is the first to grab a new reservation.

3. Focus on repeat bookings

We alluded to this earlier, but by focusing on increasing repeat bookings and doing so via direct booking methods, your commission bill will drop dramatically.

Think about it - how many times has a guest returned to your hotel having booked again via an OTA? Sure, they favourited your property on the agency’s app, but you still have the power to divert them to your own website.

When guests depart, ensure they have everything they need to rebook with you direct. Add a note to the room invoice that features your web address and ask if they wouldn’t mind receiving emails from you in the future. They’ll likely say “yeah, why not”, which means you can periodically email them with offers and further reminders that your website is the place to book.

Conclusion

It’s time to reduce that OTA commission bill. The advice we’ve offered above only forms a small part of the cost-saving techniques you can employ, and if you have any of your own that you don’t mind sharing with the independent hoteliers that read this blog, please get involved in the comments section, below.

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It's been quite a year, hasn't it? And, with so much political uncertainty hanging in the air, you'd be forgiven for scouring the news headlines for something - anything - positive to brighten your day a little.

As is often the case, you need to dig a little deeper, but when you do, there are signs of hope - particularly if you operate within the hospitality sector.

Brexit has stolen the headlines since the British people voted out of the European Union in June, but it turns out there's an underlying feeling of optimism for UK tourism as a result of the decision.

Retailer, JD Sports, appears to be feeling rather bullish about a potential increase in the number of 'staycations' predicted to follow Brexit. So bullish, in fact, that it has just purchased Go Outdoors, adding yet another outdoor equipment and clothing retailer to it's portfolio (it already owns Blacks, Ultimate Outdoors and Millets).

Consumer uncertainty following Brexit and a weaker pound has already led to an increase in staycations of 10% during the first quarter of 2016, yet the latest acquisition by JD Sports appears to suggest that there could be an even greater reliance on tourism in this country in the years to come.

What do you think? Let us know in the comments!

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Not so long ago, combining the phrase ‘online travel agency’ with ‘revenue management’ would have referred principally to the process of scouring every agency website for competitor room pricing in a bid to get a feel for the market.

Unfortunately, and as any revenue manager will tell you, that simply isn’t a particularly efficient away to build a profitable rate strategy. Trawling websites to check how much the hotels in your surrounding area are charging and hitting the ‘check availability’ button to get a feel for demand is a long and fundamentally flawed process.

The term ‘revenue management’ was once reserved for large hotel chains and brands that had specific departments created for the task of devising tariffs, but it has gradually made its way into the realm of the independents. This may explain why OTAs are now entering the revenue management arena with compelling solutions that provide hoteliers with a top-down view of the competition and wider demand for accommodation.

Beyond these new tools, we think there are four reasons OTAs can aid the revenue management process in hotels, no matter their size:

1. Rate parity

Ah - that phrase again. The debate over whether or not rate parity benefits hotels or puts them at a disadvantage will continue for as long as it’s a rule instigated by the OTAs, but the fact is it’s here to stay - for now.

With that in mind, let’s consider one positive aspect of rate parity. OTAs typically implement this strategy to  remain competitive and, in doing so, create a level playing field for hotels. Rate parity violations are therefore monitored closely, which in itself instils a conscientious mindset for those tasked with managing rates.

Adhering to rate parity lessens the chance of losing preferred status on OTAs and, given that such websites are often the premier source of new business for hotels, ensures a rate strategy that won’t harm future revenue.

2. Dynamic pricing

Responding to fluctuations in the market is a task hoteliers have had to undertake for decades. Up until now, however, it has required a mixture of unwavering patience and significant experience.

Love them or hate them, OTAs are privy to a treasure trove of industry data. Thanks to the rise of the channel manager, they have a better insight than ever before into guest spending habits and seasonal occupancy trends, enabling them to develop systems like Booking.com’s BookingSuite, which are designed to help hotels with pricing decisions.

For a hotel to be competitive in today’s society, it needs to be able to turn on a sixpence when the market fluctuates unexpectedly, but also be ready in good time for forecasted demand. OTAs are well placed to help with this process.

3. Guest demographics

Although not widely available at this moment in time, OTAs are increasingly passing key demographic data from customer bookings to the hotel. This bolster’s a hotelier’s understanding of their target market and even enables them to create tailored offers and packages for individual types of guest.

The modern consumer wants greater choice and personalisation, and if OTAs are able to offer revenue managers an insight into what makes guests tick, they’ll be able to far better tailor their tariffs and room pricing model.

4. A level playing field

With rate parity and the ability for hotels of all shapes and sizes to gain listings on OTAs, revenue managers now operate within a far more level playing field. This encourages creativity, because the fact remains that an OTA is only one channel through which rooms can be sold; there are others that don’t attract any form of commission.

The realisation that you can’t - and, indeed, shouldn’t - depend solely on OTAs is rather liberating. Their rules and desire to offer relatively simple rates prompts the creative hotelier to consider how to divert guests to the hotel website and usually results in new packages and guest experiences that are only available if booked direct.

Wrap up

Online travel agencies are often viewed as ‘the enemy’, but if they’re instead considered a source of data and insight that can aid your revenue management strategy, they become a far more compelling tool.

Use OTAs to your advantage and be the master of them!

If you’ve got any thoughts on this post (we’re almost certain you will have), please do contribute to the comments section below.

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