When a customer books through the hotel call center or website, the hotel operates more like a retailer. When they book through an Online Travel Agency or Travel Agent, the relationship is somewhat removed and is more like a consumer goods company providing a product to customers through a retail channel.
Both types of channels offer different degrees of merchandising options – specifically the opportunity to present the consumer with additional options and value adds that may increase the hotel’s share of wallet.
But to think like a true merchant, hotels must treat each room as a product on the store shelf. Not all rooms are created equal – sometimes you can get a premium price, and sometimes you cannot.
Each room also should come with an assortment of products that goes beyond the mini-bar and Pay TV to drive organic revenue growth. The business traveler who is staying midweek might enjoy access to the concierge club, with its luxurious reception area, complimentary hors d’oeuvres and drinks, and a concierge to help them with requests. Offer them a car service to and from the hotel, and you’re likely to generate additional revenue.
Tourists might be interested in food and beverage packages, excursions such as jet ski rentals, tours, golf, spa services, or even dinner at a nearby restaurant. The sky is the limit – and the premiums may be as well.
To think like a merchant means to act like a merchant. This requires a more critical analysis of merchandising and marketing effectiveness, to engage the consumer. If the manner in which you present products to your customers overwhelms them, then that will hurt sales, impacting organic revenue growth opportunities. It would be better to limit the choices to a reasonable list that is more relevant to each guest.
Marketing effectiveness begins by measuring the real impact of the offers and products that a hotel is putting out there. The problem is that many companies aren’t so good at measuring the effectiveness of their merchandizing decisions and marketing campaigns.
Historical booking, folio, and web traffic data contain vital information that informs those measurements, and it is readily available. This data can be mined to determine the effectiveness of a particular marketing campaign and the effectiveness of web merchandising/assortment decisions. In addition, this analysis is far more preferable than what most companies rely upon to test how their customers will respond to offers, such as panels and surveys conducted in a controlled environment. It’s better to know what a customer has done – making actual purchase decisions – than what a customer says they will do.
Companies on the cutting edge of these Revenue Management strategies have built entire systems dedicated to measuring marketing effectiveness. These same systems also can predict what marketing campaigns will work best, triggering offers to customers most likely to respond to them.