Part 4: Where has the profit gone?

The new wave to restore profits for property managers

In part 3 of this series we looked at the new reality of dwindling profits, increasing technology costs and their impact on the manager’s bottom line.  We posed the questions ‘who should bear these costs and who is the true beneficiary of the new technology?’

The crux of this industry lies in the property manager’s ability to attract and match guests with their property.  In achieving this against a backdrop of competition, managers have sought a competitive advantage through OTA’s, direct marketing and the latest technological tools.

Profits have slowly whittled away by our response to competition and the growing ancillary costs of commission and technology. In the good ol’ days, a wholesaler acted as a booking facilitator and took care of the marketing in return for his 25%.  By contrast today, everyone has a finger in the pie, taking their own little chunk out of the manager’s profits.

The OTA’s capture and deliver bookings, but manage to do so because they have invested in building superior technology and have become experts in marketing. They excel in their business and are a critical part of your revenue stream. However, it does seem that they have lost the craft of personalisation unless the price is right, many even making providers pay to be included in the OTA loyalty program. Independent Accommodation Managers now have no chance of standing out from the crowd even when they tick all the demand boxes, especially in an environment where consolidation seems to be on the rise again.

Without stock, the OTA’s have nothing to sell. So again, we pose the question: maybe it is time for the property’s operational technology costs to be shared by all beneficiaries?

Our industry needs to continue to evolve until we find a functional solution without the negative impact on the manager’s bottom line.  We need to eliminate the standard of biting into the managers profits while expecting to uphold a sustainable industry. As the slices of pie get smaller, we have to make sure the industry doesn’t become unviable.

Guests want an easy experience.  We’ve all endured the frustration of dealing with the middle man when what we really want is a quick answer. We know that guests don’t want to see every accommodation property available, they want to be fed what they want as quickly as possible and simply make a booking. The crowded online platforms are off-putting to those seeking justified simplicity.

When Stayz initially launched on the Australian market, part of their instant appeal was that they facilitated direct contact with the property.  You could ask questions of the owner and get a speedy and tailored response.  You could build a relationship with the manager or receptionist that continued throughout your stay. Unfortunately, these personal approaches often get lost, simply due to the economies of scale as businesses fold into larger organisations.

So, where to now?

We are very pleased to let you know that we have discovered a platform that is a new game changer in the market.  We believe it is the next step in the evolution of the industry. 

Ozbreaks is a booking facilitator, not an OTA.  It brings properties and guests together, and then gets out of the way.  It is a platform that has grown out of what property owners, managers, guests and our industry bodies all say they need.

After years of development, Ozbreaks has created a platform that understands what is needed to capture direct bookings and effectively deliver.  It purports a frictionless customer experience and a personal approach, at a much lower cost of acquisition.

Customers deal with you on your terms and yours alone. No one can bid for the top spot, no loyalty program to commit to, properties randomised every time someone searches. Only available for independent properties to list on, it’s a platform built to provide visibility to the independent accommodation operator who struggles to find a voice in the online space.

Ozbreaks offers different commercial models depending on what works best for the property.  Agreements are fair to both parties, with long term sustainability in mind.  Some of those commercial models even include provision of the management software, so that costs are shared more equitably by the beneficiaries.

It is Australian designed and Australian owned, and shares a percentage of its profits with Aussie charitable organisations (at a time when they most need our support). HiRUM has been engaged to help build the software for the use of Ozbreaks, and we have worked closely with the Ozbreaks team to ensure that it delivers on its promise of being the fair platform for the accommodation industry. 

To answer the question: where has all the profit gone? We look to the new evolution of software to put the money back in the pockets of property managers. A solution to the changing face of travel that works for the industry.  Everybody wins.

Learn more about Ozbreaks here.

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