With one foot on the gas pedal – and the other on the break!
The most common mistakes that hotels or holiday home complexes make in distribution. When the department ‘sales defense’ is active.
Imagine that there are hundreds of room requests for next week, and your hotel is not bookable. This actually happens in most private owned hotels on a day to day basis.
Simple reasons are:
- Guests want to book three single rooms. Only two single rooms are made available.
- Guests want to book a three-bed room. Only single- and double rooms are available.
- Guests want to stay for five nights. The night from Tuesday to Wednesday is not bookable, due to a group staying, and nobody knows how to create a soft close, in order to still accept people for those five nights.
In all three cases, the house will be shown as not available in most booking machines on your own website – and also not in the online travel agencies. Thus, your hotel won’t be visible anymore in google searches. Many hoteliers are optimists: they hope the guest will call, to see if there are any more options. I think, the room will stay empty. Or, it will become a ‘walk in’ on the arrival day – for a smaller price. Unfortunately, most people still think: Rather a 50 Euro walk in, than to sell the room as a three-bed room via Expedia for 120 Euro, and having to pay 18% commission. Weird calculation, no?
This checklist should help to recognize the most common mistakes in online sales, which may also be made in your house! Mistakes, that will cost you a lot in sales. Unfortunately, most hotels think that avoiding commission is the best optimization profit strategy. Existing commissions are easier to calculate, than the profit you do not make.
Mistake # 1: Manual care, missing interfaces
Rates and availability are cared for manually in extranets. Only a small room contingent is prepared. Thus, a smart category sale or a dynamic price strategy is impossible.
Mistake: No channel manager or missing 1-way interface to the hotel software. Estimate: Costs 80-100% of possible profit.
Mistake # 2: Lack of category management
Too many room categories. Wrong rate gaps between the categories. No checking, if guests comprehend the rate/service differences exactly as it is needed for sales results. And, of course, in addition to that: Only a part of the categories is distributed. And: standard rooms are always fully booked the quickest. Thus, guests have no real choice. Upselling as a forced measure just does not work.
Mistake: increased hotels, missing strategy in category management, no analysis.
Mistake # 3: Too little scope, not all relevant sales options are tied
Actually, it’s hard to believe. But the most privately owned, smaller hotels, can only be found on booking.com, and booked there. Maybe with the HRS. Seldom with expedia. Almost never at kurzurlaub.de! Mostly not with a way of booking via their own destination. Almost nobody knows, that the apartment can also be booked via holiday home portals. Or that the family room can also be placed at hostelworld, or similar providers. It’s not like there are ‘too many’ requests! Too many requests need to be answered with higher rates. When my window cleaning business cries that there is too much to do, and they cannot find any workers, then I need to tell them: You are too cheap! (By the way, this is why he does not have a website – it would mean he could get new clients…)
Mistake: missing analysis, which sales options are there, and where does your own target group search?
Mistake # 4: no training, no analysis, too much ‘gut feeling’
Let’s be honest: the possibilities for analysis in most hotel software programs is limited. It can take a while, until you realize, that a sales option is weak. But there are many, even free options, to analyze if you get your ‘fair share’ from your digital business. The most OTA, like expedia or booking.com, offer very good tools for analysis. If you are not one for sales options, however, and don’t want to visit one of their webinars, then you may not even notice all this.
Examples are Analytics from Booking or also Rate Intelligence from Booking. In Hotels, that I constantly support in revenue management, I use the free tool rate intelligence in order to answer two questions in just minutes:
- Where are we too cheap, because more requests allow for higher rates?
- Where are we just too cheap, because the main competitors are not bookable at all – for example, in the standard room area
Rate Intelligence from booking.com
Mistake: Key sales figures not in focus of management
Mistake # 5: No focus for long term requests
You can notice this every year: In September, more than 50% of the hotels are not booked for January of the following year. A mistake, that is coupled with ignorance: If you do not honor the long term guest, you need to use last minute offers to fight the strategies of smart competitors.
Mistake: The conviction, that all guests will book short term
Mistake #6: Partaking in every discount from the OTA! The own website doesn’t even know what is going on
Genius, summer sale, corporate rates, exclusive rates. The most OTA are great sales experts. The test, measure, improve. Continuous learning makes success. No matter which special you offer, there will ALWAYS be enough hotels, that will participate. And at the same time, your toilet will show a sign saying ‘direct booking, please!’. Do I have to add anything?
Mistake # 7: Not enough automation
The call for qualified staff is big, but the existent staff will be given tasks, that good software is better at doing, and moreover, quicker. More willingness and investment (and training, to invest just right), is suggested. The attitude: “We don’t want any requests that need to be worked on manually” would be the right one. For groups, seminars, table reservations, brunch tickets, vouchers, massages, rental bikes, and more.
Mistake: costs for staff, who are ‘there anyway’ are underestimated. Fea of technology
Mistake # 8: not enough focus on guest reviews
If you have a review score of less than 7 (if 10 is highest from 1-10), in a OTA or meta search engine (such as trivago), this could cost you up to half of your revenue, that a score above 8 could produce. This seems to be not well known, otherwise even individual hotels would take the issue of review / rating and quality management more seriously.
Mistake # 9: too much trust in mediocre web agencies
Web sites are on desolate configured content management systems. Booking engines show almost no production. Key figures like conversion or cost per order are still unknown. And the excuse ‘my agency takes care of this’ is comparable to an outsourced room cleaning, who leave behind dirty rooms and unhygienic bathrooms. You would do something about that, no?
Mistake # 10: People who are especially affected, do NOT read such blogs.