For all hotel development, there are plenty of variables that must be considered if we want our company to succeed in a competitive market. We are not just talking about the services we provide in our establishment, but also of many other external variables, such as advertising, and managing the relationship with suppliers with the reservation center. Today, we are going to talk about the last one.
Today, the reservation center have reached a central role in many important aspects of our company, so we must pay attention to the relationship that we have with these companies if we expect our business work. There are several advantages to working with a booking center as Booking, Expedia or Catch, among many others, but there are also many disadvantages. That is why, today we will dedicate ourselves to analyze one and the other, in order to understand what would be the most beneficial relationship for our establishment.
The first advantage of having a deal with a reservation center is very simple: we generate sales. Getting a reservation is always great, and if there are many, much better. However, you need to keep in mind that our mission is to get as many sales as possible, through a direct channel. With all this, the first thing we can conclude is that while it is necessary to have a deal with some reservation center, we must strengthen our own sales channel by promoting the booking in our own website and not in others websites.
However, we have to consider one small detail: If we want our customers to book from our website, first they must know of our existence. That’s where the second advantage of a reservation center appears: visibility.
With a lot more money for communication that most hotels and resorts, the online reservation websites, provide us visibility both online (search engines, forums, social networks) and offline (TV, print, etc.), making competition against these companies be like a struggle of David against Goliath. Nevertheless, difficult is not impossible. That is why the solution is not to resign and accept the situation, but on the contrary, we have to work to improve the natural positioning of our website by exploiting the visibility of the reservation center in our favor. If 70% of the market will enter to Booking, to name one, our job is to direct them from there to our site. With this, we will get more customers to book from our direct sales channel and not from the reservation center.
Now, what about the costs of being present in a reservation center? That is one of the most tangible benefits if we do things well, but one of the biggest disadvantages if we do it wrong. We will develop this point below.
The reservation centers do not charge anything for incorporating our hotel to its database, so the main advantage we have is to win free ad. If we do things right, we will achieve that a good portion of our customers know us through the hotel booking center, and end up booking in our website. In this way, we would achieve an ideal relationship: the reservation center will be working for us and not vice versa. However, if we fail to do this, we will bring a disadvantage: the commission
The fees to be paid to each reservation center varies depending on the site and the type of service that is expected to achieve each of them (if we pay more we will get more visibility and, in general, more reserves). However, regardless of the percentage, it is always lost money, and we should try to reduce it to a minimum. This is how the costs of our relationship with the central will be variable; not only according to the booking center, but also in the work you will perform to reduce them.
So far, we have seen that the three main advantages are connected with getting a huge visibility, the ability to increase our sales, and the opportunity to make ourselves visible through them free. What more can we say about these companies? In general, we will be able to find more disadvantages than advantages for our business, such us:
– It’s going to be really difficult to get into a price war with them. Therefore, we’ll have to discard the option to apply promotions or discounts. This will make us lose a major level marketing
– Differentiation is minimal. We are a hotel, among thousands of other hotels, so it is hard to stand out from the competition (from there it becomes more important to use quality images and content to attract customers).
– A reservation center, works for itself, not for its hotels. If you do not have availability for the dates that a customer wants to book, in some cases, the booking center will provide another date, but also will show all competing hotels where rooms are available. Is that what we want?
– Finally the most dangerous problem: dependence. Believe that because a reservation center gets better results than our direct sales channel is reason to leave aside our website is the most dangerous thought we could have. Relying on a third party will make that any changes affect our business because we do not have much control over it.
With all this, we can draw the conclusion that the presence of our hotel on various booking centers is necessary to achieve visibility, sales and customer confidence (an establishment that does not appear in these booking engines has a more negative image than those who shown). However, we must work so that the influence be minimal and indispensable. To achieve this, we must work in many factors such as organic positioning, that the website works well on mobile devices (nowadays, more and more customers make their hotel reservations using mobile devices), generating quality content, efficient processes reserve and many other variables. With this, we will seek to turn the money “spent” in reservation centers into a real investment, generating greater benefits for our establishment. If we succeed, we will have taken a giant step towards a more profitable model in the medium and long-term business.