subject: Are Flash Sales Really Good For Your Hotel Business? [print this page] Are Flash Sales Really Good For Your Hotel Business?
We've all seen websites selling designer stuff for a lot less online. And this sales channel has been very effective in catering to women who love designer goods but do not necessarily have the means to pay for them for full price. And for a few years now, the same concept is also introduced in the travel industry. Flights have been offered for really low fares and the same applies to hotels now too. The question is whether this is good for the industry in general.
Perceived Value Is Getting Lower And Lower
If you just bought a designer bag for the full price at the store and find that the same one is sold online with a thirty percent discount, obviously you'd feel bad about it. But at least you can be sure that what you bought is authentic. This is not exactly the same when you are booking a hotel. If you are able to get it for a lot cheaper online, the hotel room is just going to be the same. For hoteliers, this is a problem. There really is no difference in the value proposition when booking a hotel directly versus booking it from a third party website. Third party websites offer instant guarantee anyway so the customer is assured that their bookings are confirmed. Yes, the hotel benefits from more guests booking rooms due to the reduced rate but over time, this also changes the perceived value of hotels. If all the hotels are offered on discounted rates on a website in a particular area, this cancels out and customers remember the discounted rates to be the standard rates. If in the past you can get bookings for full price for most of the time, you would see a decline when you start offering them on these third party websites. This is because your customers no longer accept that your standard nightly rate is 150 dollars but just 120 dollars because it is discounted anyway the whole year round when booked on a third party website
High Commission Rates
These third party websites charge a high percentage for commission. It is true that in the short term, you get more guests coming in but you need to look at the long term picture. If these websites will hike up their already high commission rates and you are already heavily dependent on them for bookings, your average room rate will continue to go down.
Since the industry players are becoming even more competitive, don't get left behind from the newest trends through a hotel management software.
Listen to the experts' advice at FrontDesk Anywhere.
