Price cutting is not the answer independent hotels are looking for, new report claims

AccomNews Sunday, October 11, 2015

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Independent hotels need to develop an online marketing and distribution strategy that will lower the cost of acquisition and boost revenue via bookings, according to a new report by Skift and SiteMinder.

“The demands of online marketing and distribution are evolving for hotel operators of all kinds. For independent hoteliers, though, the scale and scope of industry competitors in major chains, online booking sites and Google can be a daunting challenge.

While price cutting is one way to meet this threat, the report posits another in the form of converting loyal guests with an integrated online marketing and distribution strategy.

“In this effort, the balance that independent hotels can strike between direct and third-party (indirect) bookings is a critical consideration. While travellers are showing a greater tendency to book directly, hoteliers can’t ignore the advantages of reaching thousands of consumers in the indirect channel space.

“Technology, such as channel management tools which let hoteliers discover and have some control over third- party sales opportunities, can help marketing leaders not only identify and focus on key OTAs for conversions, but also discover new indirect channels they might not otherwise have found or had access to.”

All this relies on visibility though, so there are some crucial things that need to take place, outlined in the report. The first is negotiating a partnership with an OTA service, “demanding that the OTAs no longer bid against their own client hotels on the same property keywords and hotel names for which the independents have to pay in the form of cost-per-click”.

Metasearch functionality is another proactive step , according to the report. “Combining technology with the other approaches touched upon above will drive improvements and returns from search, website, new markets, incentives and social-media word-of-mouth.”