5 steps to building a successful special offers strategy

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Today’s distribution landscape makes it difficult for independent hotels to take back control of their own distribution and to stand out from OTAs. Price is the first decision criteria for travellers in the hotel reservation journey. They are looking for the best deal. Have you always wondered how to make special offers that will convert more travellers into customers?

 

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:

 

STEP #1 Understand online travellers’ behaviours

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:

leisure vs business

 

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.

 

STEP #2 Identify your own Segmentation and create segmented offers

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.

image 2

 

STEP #3 Define efficient and segmented offers according to your target

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.
What happened?
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!

 

STEP #4 Build a consistent online rate strategy

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?

Here are some simple tips to build special offers:

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.

 

image 3

 

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.

 

STEP #5 Highlight and broadcast your offers

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.

Screenshot

 

Let’s play!

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

Published on: April 25, 2017
Author:
Antonio Anguiano

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