OTA’s….Gimme That Quick Fix or is it Time For Rehab?

Posted in: Bob's Blog, News by Travika on October 8, 2010 | No Comments

We all know when times get tough the tough get going….with low rates to OTA’s. We saw this back in 2001/2002 and again last year and in to 2010 and continuing. Ultimately, the argument in 2001/2002 was not all about rate but increasingly a concern about losing brand visibility at the expense of building the OTA brand. Oh well, that horse has bolted. Today it’s a question of channel optimization and revenue management (rate optimization).

As we ponder the real cost of doing business with OTA’s we have to address the bigger challenges of guest acquisition, guest loyalty and guest retention. The OTA channel is only one of many channels. It is a short term fix. It’s a “lazy” channel. Lazy, in as far as you offer a deep discounted rate, hope you are competitive and you can pack up shop and go to the beach.

As my old Choice Hotels boss, and segmentation champion, Bob Hazard used to quip..there is not an over supply of rooms there is an under supply of guests! So how do we do that today.

As hoteliers, the longer term goal is more significant. Longer term is about brand building and everything that goes with that. Longer term is about developing a guest acquisition strategy, a strong and innovative guest loyalty program and monitoring your high valued guests to make sure they don’t jump ship.

There is an interesting article in Hotel Interactive by Kristi White, who is Director of Revenue Optimization at TRAVELCLICK, where she lays out the dollars (and perhaps lack of sense) involved in working with OTA’s.

We both reach the same conclusion albeit from different starting points. Who do you want to end up owning the customer? OTA’s or you, the hotelier?

Developing the framework for, and the refining of, an integrated relationship marketing program is essential to successfully owning the customer. (That is, if we can actually use the word “own” anymore). Getting close to your guest, knowing everything about your guest, engaging your guest in a personalized manner, providing them with relevant information in a timely fashion, listening very well to what they are telling you (including Social Media), flagging triggers that may signal you are about to lose a valuable guest…all of these elements today are considered Marketing 101.

It requires smarts, experience, determination, imagination and the guts to stay the course. Getting the customer on your side means knowing your customer better than anybody else. Do you understand and have you mapped out the life cycle of your customer? Do you know the cost of guest acquisition? Do you know the cost of losing a guest? Do you know the costs of winning them back? Hard questions to answer but information you need to know. Or just lower your rates and throw them out there to the OTA’s. They will be very happy…and sometimes that may be the right thing to do….sometimes.

Final thought…..Over the years I have learnt that it’s better to avoid getting in to a hole than having to claw your way out of it.

US Outbound Visitors Slide and Spend Less in 2009

Posted in: Bob's Blog, News by Travika on September 13, 2010 | No Comments

Via Travika Insights:

2009 statistics just released from the US Department of Commerce, Office of Travel & Tourism Industries show a (not surprising) drop in international trips and a drop in spending. The total outbound number totaled 61.5 million which was a drop of 2% from the previous year. Travel to Mexico dropped 4% and travel to Canada dropped 7%. Related spending dropped 12%, meaning travelers that did venture overseas spent less. We are however seeing signs of early recovery especially in Mexico for 2010, (sources tell this blogger), as confidence gets a little stronger in certain parts of the USA. I predict the trend of thrifty travel will continue and become a fad.

They Came. They Saw. They Spent. Was it with you?

Posted in: Bob's Blog, News by Travika on August 20, 2010 | No Comments

International visitor spend to the U.S. up for sixth consecutive month.

The US Department of Commerce announced that international visitors spent an estimated $11.1 billion on travel to, and tourism related activities within, the USA during June. This represented a 15% increase in spend generating $1.4 billion more than June 2009. This is the sixth month of consecutive growth.

• Travel Receipts: Purchases of travel and tourism-related goods and services by international visitors traveling in the United States totaled $8.6 billion during June, an increase of nearly 14 percent when compared to last year. These goods and services include food, lodging, recreation, gifts, entertainment, local transportation in the United States, and other items incidental to foreign travel.

• Passenger Fare Receipts: Fares received by U.S. carriers (and U.S. vessel operators) from international visitors increased by nearly 17 percent to $2.5 billion for the month, an increase of $362 million when compared to June 2009.

International visitors have spent an estimated $64.6 billion on U.S. travel and tourism-related goods and services year to date (January through June), an increase of 7 percent compared to the same period last year.
International visitor spending in the USA has increased, on average, $732 million a month in 2010. Let Travika assist you in getting in to the international arena. We are in 25 countries and are very well credentialed in growing international business. Contact us today !