December 03, 2012

TravelClick highlights demand’s effect on rate

Many hoteliers panic when they see market rates go down, and start lowering their rates. Yet, just slashing rates is not the solution. When one person in the market does it and everyone follows, it gets messy. What hoteliers should do instead is determine if negative performance is due to a demand problem or a rate problem.

In order to get conversion, hoteliers need to learn how to effectively market the value they are offering to consumers, said John Hach, senior VP of product management for TravelClick.

For example, “if you lower rate and don’t tell anyone, what you have done is just lowered profitability,” Hach said. “We see hotels constantly trying to drive conversion off low rate alone. I would advise against that.”

The No. 1 value driver for hotels in today’s marketplace is communicating that free Wi-Fi is available, he said. That’s “what really drives (return on investment) now,” Hach said.

Hoteliers that have a competitive edge should use it as part of the hotel’s marketing strategy, Hach said.

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