Here are some simple tips so you can easily start your own pricing strategy and build profitable special offers that will help you to differentiate yourself from OTAs.
Let’s start by looking at what type of special offers there are:
> Discounts: offer travellers a price reduction, for example 20 percent off, or a free night
> Added Value: additional services or products included in your room rate , for example a free City Pass, free breakfast, free parking access
> Cashback reward: an amount of money or a voucher given to customers to enjoy a service, for example lunch in the restaurant, a discount voucher for an excursion that they get if they book in your hotel.
Based on that, let’s look at the steps you need to follow to build your special offer strategy:
Back to Basics! Today’s distribution landscape makes it necessary to effectively identify the main purchasing behaviours to properly address our potential customers. The act of purchasing really depends on the travel context.
Our research on more than 2000 city hotels shows that there are 4 main basic purchasing behaviours:
For example, if you manage a city hotel this should be step 1 of designing a basic rate structure! Of course, it’s very much linked to your hotel’s strategy.
A simple way to define the ratio between business and leisure for your hotel is to isolate the bookings with single occupancy, naturally the majority of business travellers stay alone and the majority of leisure travellers stay accompanied. Then split those into room only and B&B to understand your guest behaviour.
Once you have more insights on customer behaviour you will be able to create segmented offers.
It is easy to make segmentation mistakes especially when we are designing a rate strategy. I remember a consulting session with a hotel located in front of Paris’s Montparnasse train station. The hotel manager thought giving free breakfast to all the clients would make a competitive advantage for the hotel, but after adopting this breakfast-included policy the reservations dropped significantly.
That is a quite common segmentation error, since the hotel is located in front of the train station most of the clients have to catch a train before the breakfast is even open.
The hotel manager argued “but the breakfast is free” and I said, “nothing is free in this world and nobody likes to pay for a service which they cannot use, so part of your clients moved instead to a hotel where they can pay for the room only”.
Next day we reintegrated Room Only Rates and the situation went back to normal!
You may be asking yourself: but if we only sell 4 basic rates, how can I integrate early booking, last minute or LOS discounts for marketing purposes?
a. Long Stay offers: calculate the average LOS of your hotel, add 2 more days to the result and apply an extra discount.
b. Early booking Offers: calculate the average Lead Time of your hotel, add 10 days and apply an extra discount.
c. Last-minute deals. If your market has a last-minute tendency, it is important to display discounts during that pickup period to maximise results, just make sure the discount is less than the one proposed during Early Booking periods: you don’t want to make people wait for last-minute discounts.
In order to be effective, your special offers also need to be consistent – if you promise something to customers they should be able to find it in your Booking Engine. Your offer must be real and effective: that’s why you need to allocate enough inventory and enough available dates for the offer. If someone sees a communication regarding a discount, they must be able to find it. This is key to reassuring travellers during the booking process and engaging them to book on your website.
Moreover, to drive more direct bookings, you can easily create exclusive special offers only accessible with an access code, for example for corporate or even on Mobile-only to display a last-minute offer.
Last but not least: create offers not present on OTAs and only present on your hotel website to drive more direct bookings and ensure that your hotel website is more attractive.
Highlight your special offers to show customers how much they will save, not only on your website, but also in your Booking Engine. You can also use stress marketing techniques to drive travellers into your booking funnel. For example, a countdown or a banner indicating the discount percentage or free benefits (SPA Treatment, free Parking …) you will offer them.
And remember: the magic formula is to effectively identify the different booking behaviours, establish your goals and design tailor-made offers to address each goal and of course don’t forget the cost and operational feasibility of your offers.
Do you want to know more about how to easily manage special offers and stand out from OTAs? Contact us.
To help hoteliers drive more direct bookings and ease their special offers management, FASTBOOKING has launched the Marketing Campaign Manager:
More info about the Marketing Campaign Manager here
An elegant 4-star Parisian hotel with 82 rooms, the Tsuba Hotel opened its doors a few months ago in Paris'… + Read More
An elegant 4-star Parisian hotel with 82 rooms, the Tsuba Hotel opened its doors a few months ago in Paris' 17th arrondissement, a few steps from the Arc de Triomphe and the Champs-Élysées. Behind its beautiful 1920s façade, spacious interiors are inspired by the precision and pure elegance of Tsuba (鍔),…
Today, a hotel’s pricing strategy is defined according to 3 main criteria: Segmentation: who are the customers you are targeting and… + Read More
Today, a hotel’s pricing strategy is defined according to 3 main criteria: Segmentation: who are the customers you are targeting and what they can afford or are willing to pay Demand: the volume of travelers looking to stay in a hotel at a given price in a given time period, and for…
We met Carole between two customer appointments. 590 hoteliers have chosen FASTBOOKING Web Studio to develop their sites this year,… + Read More
We met Carole between two customer appointments. 590 hoteliers have chosen FASTBOOKING Web Studio to develop their sites this year, so one meeting follows another! With her team of experts, project managers, developers and graphic designers, Carole has enabled the launch of nearly 400 sites for individual hotels and groups since…
Just a few days away from Paris fashion week, the main hotels from the City of Lights are preparing to… + Read More
Just a few days away from Paris fashion week, the main hotels from the City of Lights are preparing to fill up. For this occasion, the legendary Parisian Royal Monceau Palace website has been redesigned and offers a new haute couture online showcase! The Royal Monceau, renovated in 2012 by Philippe…
As a Hotel Manager/Director, have you ever felt uncertain or slightly overwhelmed by the number of partners and tools you… + Read More
As a Hotel Manager/Director, have you ever felt uncertain or slightly overwhelmed by the number of partners and tools you need to manage to properly market your hotel? It’s a fact that in today’s hotel marketing world, managing online distribution performance, hoteliers need to activate various triggers and a…
By 2016, business travel spending was US $ 1,300 billion, and the Global Business Travelers Association expects it to grow… + Read More
By 2016, business travel spending was US $ 1,300 billion, and the Global Business Travelers Association expects it to grow by 6% by 2020. Are business clients an opportunity for independent hotels and how can you capture it? Breakfast on-the-go, early departure, quick check-in..., business customers are often easy to manage. Moreover,…