News for the Hospitality Executive
What If A Hotel Brand Could Ask The Same
Southwest Airlines Asks In Their New Ad?
By Doug Kennedy
December 15, 2010
As a veteran hotelier who started in the industry long before there were OTA’s and the proliferation of “opaque” third party distributers, I remember well the days when hotel controllers would complain about having to pay the “exorbitant” travel agent commissions that then were running 10%. I was a bellman back then and since it was my job to walk the outgoing mail from accounting to the front desk I could always tell it was the day to run travel agent checks by the weight of the outgoing mail bag.
Maybe if today’s hotel managers had to actually print and sign monthly commission checks to their OTA’s and other online distribution partners the industry would never have relinquished so much control over its distribution to these external partners?
This is not to say that hotels should not work with their vendor-partners such as the OTA’s and opaque websites, but when I see countless hotels relying more on these channels to fill their hotels than their own direct channels something seems terribly out of balance.
In recent weeks I have been watching the new Southwest Airlines television commercial that reminds the viewers that there is only one place on the entire world wide web where you can purchase Southwest tickets, which of course is www.southwest.com. What a clever ad campaign to simply ask ordinary people this question and then to have them state the website address.
As I watch the ad I cannot help but wonder what went wrong with our industry that we ended up paying such exorbitant distribution costs, on top of what most properties are already paying for brand/franchise flags or affiliation/membership groups. How did it become that for many hotels, the transient contribution from third party channels has outpaced direct channels?
While it’s nice to look back, to wonder, and to reflect on what went wrong, more importantly today we as an industry should start thinking more and more about what we can do to win back the loyalty of our own customers. Fortunately, travel marketing technology continues to evolve and hotel managers have more tools than ever to reach out and connect directly with guests and prospects.
I concur with another recent hospitality industry columnist who wrote an article asking why it is that at least one of the major hotel brands has not had to confidence to take back control of its own distribution channels such as Southwest does. If only a fraction of the funds currently spent on OTA commissions were invested in marketing of direct channels, it would seem to me that at least one of the hotel brands could make this transition. Some of the savings in commissions could even be passed along to the consumers in terms of lower-tiered and “well-fenced” rates, that while still being less than current selling rates on OTAs would still result in a larger “net” revenue per booking.Until then, smaller brands, independent properties, and even branded or franchised properties can take some steps towards taking-back control of their distribution channels and thus minimizing the use of OTA’s and opaque websites. Here are some suggestions:
Should Utilize New Tools For Measuring Hospitality and Guest Service
Efficiency / Doug Kennedy / November 2010
Your Team To Master “Channel Conversion” Techniques / Doug Kennedy
/ November 2010
Strategies For Your Front Desk and Reservation Teams / Doug Kennedy
/ September 2010
|Training Is Key To Turning “Desk Clerks” Into Front Desk Salespersons / March 2007|
|It’s Time To Give Hotel Guests What They REALLY Need and Want Daily! Key Basics Some Hotels Still Fall Short On / Doug Kennedy / September 2006|