5 Reasons to Display Best Room Rates on Your Website

August 16, 2010

Selling room inventory is a multi-channel endeavor as people’s reservation patterns differ. Some like to make reservations through travel agents while others like to call and book. Today, majority of people like the convenience of making room reservations on the internet. The reason for this preference is ‘transparency’ of the internet. When a person books online, he or she has the option of comparing hotel amenities and price before booking. This comparison is not only between the many hotels online competing for market share, it also between the many 3rd party travel websites and the hotel’s own website. So, unless, you want to become your own competition, you need to display the best rates/deals on your website.

If that alone doesn’t convince you that displaying the best room rates on your website is essential, here are 5 more reasons: 

Understand Guests’ Mindset
: Whether a person is purchasing a TV or making a reservation at a hotel, he will buy or book with the dealer offering him the best product for the lowest possible price. If you do not offer the best room rates on your own hotel website, then in addition to competing with nearby hotels, you will also end up competing with your own distributors i.e. 3rd party travel websites.

Limit Commissions Paid
: Every time you pay a commission, you reduce your overall profits. While it is not possible to eliminate paying commissions, you can reduce the amount of commission payable by offering the best price/deal on your hotel website. So, what are you waiting for? Increase your direct-to-consumer online sales and limit the amount spend on paying commissions to your 3rd party intermediaries.

Growth, Sales & 3rd party intermediaries: Many of you might think that offering the same packages or prices on all distribution channels is the best way to simulate growth in sales and profitability. Wrong! Yes, a sale is a sale but how much profit you get from that sale differs drastically. A direct sale equals to total profit. An indirect sale is total amount minus the high commissions charged by 3rd party intermediaries. This will eat into your profit margins.

Retain Competitive Edge
: The internet has made the Hospitality Industry transparent. Guests no longer have to spend hours calling up each individual hotel to learn what packages are available and at what price. They can simply go online and compare packages and prices at click of a button. This ease in the reservation process has made guest more ‘Price Conscious’ and has made Price a key component in sales. If your intermediary is offering your rooms at a lower room rate, you can bet your profit that the guest will book with said intermediary.

The Pavlov Effect
: As children, we are taught to say ‘excuse me’ if we burp, ‘god bless you’ when someone sneezes, stand when a lady leaves the table and more. By the time we become adults, this training/conditioning is ingrained. If you begin conditioning your guests now to expect the best rates on your hotel website, in the future, if they are travelling to your location, they head directly to your hotel website to make reservations.  So, start conditioning guests by consistently displaying the best rates/deals on your hotel website.

By adopting a Direct-to-Guest online business model, you can dramatically boost conversion rates on your hotel website, reduce your dependence on 3rd party travel intermediaries and retain your competitive edge that can help sustain you through low periods.

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