Three Tough Questions For The Hotel Industry

By Jean Francois Mourier, CEO of REVPAR GURU

I was taking a road trip a few weeks back that really started me thinking about the current state of the hotel industry. The trip started in Miami Beach, Florida and over the span of ten days/nine nights, I drove to Georgia, South and North Carolina, where I was attending a conference.

During the drive, I stopped in various cities where I stayed in a variety of hotels for a single night ­ some pre-booked, some bookings made at the last minute via OTAs (using both mobile, tablet and desktop versions of the sites). In general, the hotels that I selected were either 3, 3.5 or 4-star properties, located close to the major highways in each city.

As an experienced revenue manager, I always check the rates online (via OTAs) and then contact the hotel directly to see if they can match (with incentives) or beat the online rate when booking a hotel room. Why do I do this? When I was a revenue manager at The National and The Palms hotels in Miami Beach, Florida at the beginning of my career, I always instructed my reservations team to offer a better rate to any customers who call in after finding our properties via an OTA. If we weren¹t able to offer a lower rate, I empowered my team to match the online rate and offer a value-added incentive to encourage the customer to book directly, such as free parking, free breakfast or a free airport transfer.

During this trip, I realized that I am in the minority in regards to this revenue management strategy ­ and I am continually baffled that this is the case. While it may seem counter-intuitive to offer a discount on a booking that (assumedly) the customer will make online for full price, it is actually a strategy that will increase your property¹s profits drastically over the long run.

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