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Article by Mark Lewis-Brown

Hospitality Industry Amateur Hour: Hotel & Resort Fees

Vertical Booking USA 3 August 2018
After you've been in the hospitality industry for as many years as I have (more than 30 years... how time flies when you're having fun!), you get used to seeing human error manifest in so many truly unfortunate instances: from putting the decimal point in the wrong spot (hello, $10 rooms!) or using overbooking as a revenue management strategy, I've seen it all.While these types of mistakes may make the front page (of our favorite hotel trade publications), there are also a HUGE number of mistakes caused by human error in all types of operational processes that are (almost) never talked about.One of the biggest mistakes - one that separates the winners, from the losers and the amateurs, from the experts - that a hotel could make today is:DRUM ROLL PLEASE... Hotel and resort fees! Fees are the thorn-in-the-back of every, single guest that walks through your doors. There has never been a guest who responded positively to a bill with double-, or even triple-digit, surcharges unexpectedly added at check-out!(An aside... can you even imagine how that interaction would go?Front Desk: "Hello Ms. Smith, how did you enjoy your stay?"MS: "It was lovely. Never slept so well in my life!"FD: "Glad to hear it! Btw, here is your final bill; please note the extra $100 that we tacked onto your agreed upon booking rate. Cool?"MS: BEST. VALUE. EVER!!Head slap emoji!)Since we, as an industry, decided that we wanted to follow the 'yellow brick road' to ancillary revenues, there have been many consumer articles and TV travel segments warning guests about hotel fees, all of which make hotels sound like evil monsters, out to steal every last dollar from travelers' well-worn wallet(s). Even though these fees are a legal business practice, consumers don't see it that way; they see it as a "trick" to get guests to booking, which could be supported by the fact that, most properties that do charge fees, go out of their way to hide the fact that the fee exists. Talk about fine print!While I fully acknowledge that it's not a fair portrayal industrywide - we are businesses, just like any others, and we need to maintain profitability - some properties have been taking the fee frenzy to a whole new level of sketch:Ever heard of a hotel that, all of a sudden, became a resort overnight - just so that they can charge a resort fee? I have... talk about sketchy, right?!And excuse me for harping on about semantics but, if you're charging a fee, don't call all the items paid for by that fee "complimentary." Every single person knows that charging $32 per night is the EXACT opposite of free - and reasonable, to be honest.These bogus tactics are what make consumers think of the rest of us are a bunch of crooks. And it's not right. In the end, it comes down to this: our profitability shouldn't come at the cost of our guests' satisfaction.Hotel and resort fees do help us to cover the ever-increasing cost of doing business, without decreasing bookings (hello, low price!) but they will not work in your favor in the long-run; in fact, they will ruin your property's reputation and decrease your occupancy - and profits - over time.So, how can we, the hotel industry, ensure that we are covering our costs, without making our customers think that we are scheming, lying, money grubbers? There are two ways:1: Disclose your fee upfront (MAKE IT VISIBLE!!) and show the full amount that the customer will owe upon check-out (including fees) before the customer clicks "Book."This should only be the option that you choose to implement if one or both of the following statements are true:You are legally required to charge a special fee because of the area in which your property is located (valid).If you want to continue p*ssing off your customers - but not quite as much as before.At least with Option #1, guests are getting visible, full disclosure on the actual rates that they will be charged; however, it won't help hotels who need a get-rich-scheme to keep their property in business, since consumers won't book a stay at a sky-high daily rate or if they see that your fee is more expensive than your actual room rate (what happens in Vegas, stays in Vegas... am I right?!).Which brings me to the only real, viable way to deal with hotel and resort fees:2: JUST DO(N'T) DO IT!We're in the business of pleasing our guests; it's called the hospitality industry for a reason. Because of the availability of online reviews, today's customers make decisions, more often than not, on the reviews of your property's past guests; obviously, unhappy guests can impact a property's financial performance, even years later.And the fact remains: sneaky business practices - even if they are fully and visibly disclosed (see #1) - are never going to produce happy guests.When you opened your doors for the first time, you knew that there would be costs of doing business - and that, like all other industries, those costs were very likely to increase over time. Just because commission rates are surpassing next-level status, it shouldn't be something that we turn into a pass-along charge, throwing all the rules of true hospitality out the window.Yes, the airlines are doing it. (There's an important BUT to this argument: airlines are required to show the total cost of the ticket, including all fees that need to be paid to board the flight, before the passenger books. Airline's fees are for optional services, like baggage fees or picking your own seat. That's a big difference from mandatory hotel and resort fees applied daily, like in the hotel industry!)Yes, people are paying their fees... VERY begrudgingly. But, are airlines as profitable as possible, even when using these tactics? Are airlines' passengers happy and excited to fly with them again? NOPE. Even with the ancillary revenue earned from fees, airlines continue to show lower profitability than they would if they focused on offering passengers' a better in-flight experience:According to a 2017 Fortune article, which examined the correlation between airlines' service levels and profits: "Running an airline on time and with customers properly served means performing hundreds of tasks on thousands of flights a day--millions of tasks in total. Yet airlines typically perform at only a 90% success level on these tasks, which leads to a 60% overall total success rate...If carriers could complete these smaller tasks with over 99% accuracy, their overall success rate would approach 90%. This, in turn, would reduce defects and complaints by 75%. Airlines would operate much more reliably and on time... They could have higher-quality flights, lower costs, greater customer satisfaction, and improved airline profits."You can see that, even in the airline industry, where fees are old news, improving operations and focusing on customer satisfaction will yield increased profits.The same can - and should - be said for the hotel industry. FACT: The latest annual J.D. Power and Associates North American Hotel Guest Satisfaction Survey showed that, while overall guest satisfaction went up (from last year), guests' satisfaction with "service or staff touch-points, such as check-in and check-out, or food and beverage options" improved the least.To become more profitable, the entire hospitality industry need to move away from taking advantage of customers (NO MORE FEES!) and realize that keeping them happy, keeps our bank accounts happy.Don't believe me? Here's what Jennifer Corwin, J.D. Power associate practice lead for global travel and hospitality, had to say on the subject: "(They) need to shore up the services area and make sure that's still a focus... (They) can't forget about what makes the industry what it is."As Corwin said, we need to re-evaluate our customer service principles and implement out-of-the-box ancillary revenue options that won't make our customers head for the hills (or the nearest Airbnb). We should use technology that supports and boosts the earning potential of the booking cycle. Think beyond the booking cycle; look for value-added service options instead, which customers can choose when needed and which will truly improve their experience.Future guests, get ready for the best hotel stay of your life - no bogus fees added!
Article by Mark Lewis-Brown

Discounting is for Dummies - Part Three

Vertical Booking USA 9 July 2018
One of the best - and worst - things about the hospitality industry is how much most hotels have in common: they're offering relatively similar products and have a great deal of competition within their immediate marketplace - other hotels, alternative accommodations and the OTAs - which, in most cases, leaves hoteliers waging an uphill battle to profitability.But instead of thinking outside of the box when it comes to boosting direct bookings, decreasing the cost of acquisition and increasing overall RevPAR, most hoteliers continue to follow the old-school playbook (which probably smells as musty as my Great Aunt Tessie at this point) every day, every month and every year, hoping and praying for a different result.Making an already difficult, competitive and complex market even more so, technology - and consumer demand - continue to evolve at a lightning-fast pace with the coming-of-age of the newest generation of travelers: Millennials (cue groans here!).So, obviously, that's the bad part of our current shared experiences. But, wait... it's not time to run for hills just yet!Let's not forget all the good happening in the hospitality industry now: legislations are changing that help hotels win back market share from the OTAs, Airbnb began allowing hotels to list their rooms on the site (giving hoteliers a new sales channel) and we, as an industry, are learning, each and every day, how to improve our operational strategies and, as a result, boost our bottom lines. Today, hoteliers also have access to a smorgasbord of operational technology that helps boost direct bookings and RevPAR, without even lifting a finger. Three cheers for automation!All that is to say that today's hoteliers have a great opportunity to use innovative, out-of-the-box reservations, revenue and channel management strategies that will differentiate your property from the hundreds or, even, thousands of direct and indirect competitors in your marketplace - which is the subject of our article, the third and final part of our Discounting is for Dummies article series. (If you've fallen behind on your reading, read Part One and Part Two here). Today, we will examine how automation - using technology that you may even already have - can help boost your property's bottom line: more specifically, I will share tips and tricks that will help your property leverage the power of your CRS to improve your direct booking conversion rates AND boost your RevPAR.Of course, we all know what a CRS is: it is the hub connecting all your distribution channels - including your brand.com website, metasearch engines, the GDSs and online travel agencies - to your property management system (PMS). You may (or may not) also be familiar with the top benefits of a CRS:An effective CRS gives your property access to ALL your distribution channels through a single platform, making it quick and easy to manage inventory, pricing, the property's website, among many other valuable features.A good CRS grows as your business does. Whether your property gets a huge influx of reservations at one time (because of a special event) or because your property continues growing in popularity over time, your CRS should adjust its performance accordingly to ensure that it is as productive as possible - no matter how meteoric your growth becomes.Your CRS can make it much easier for your property to handle complex reservation requests (hello, bleisure travelers!) with no extra muss or fuss.But, there is one additional, lesser-known benefit of using a CRS: by using a sophisticated, integrated, well-rounded CRS solution, your property can increase your direct booking conversation rates.**MIC DROP**Just kidding, I'll pick it back up to tell you how to get your CRS started on boosting your direct bookings, TODAY. By adding these built-in CRS features into your reservation management strategy, your property will quickly see the impact that it can have on your property's occupancy, ADR and RevPAR.So, let's get started now with the first CRS feature that you should leverage NOW:FEATURE: OTA Rate Comparison Pop-UpThe new and largest generation of travelers (read: Millennials) are primarily looking for a great travel experience, BUT they also prioritize value, as they often travel for much longer periods of time than previous generations did. Unfortunately, most consumers believe that the room rates on the OTAs are much lower than offered through properties' websites, making it unlikely that a Millennial will book directly without double-checking rates offered by the OTAs and metasearch engines.But there's an app (platform?!) for that!Your CRS can enable OTA Rate Comparison Pop-Ups to potential guests who are checking the availability and pricing of your rooms on your brand.com website; the pop-ups show real-time rates from the top OTAs and metasearch engines, making your potential guest comfortable that he/she is getting the best rate on their upcoming trip - and making them more likely to book directly.This feature also benefits hotels; using OTA Rate Comparison Pop-Ups is a great way for your revenue management team to ensure that the property's OTA room rates automatically match the lowest rate, while remaining in parity.FEATURE: Persuasive Messaging & TaggingWhile shopping online, have you ever seen a message in the corner of your screen saying: "Hurry, there is only one more of this item in stock!" If you're like most people, you will click BUY immediately; the fact that it is almost out-of-stock made you realize that you CANNOT live without it. The Persuasive Messaging & Tagging feature shows a potential guest that others are looking at and/or booking rooms, at that exact moment (social proof) and that the property is so popular that they are almost completely booked (scarcity). The combination of these two psychological triggers are powerful ones, and ones that your CRS can help your property leverage to boost direct bookings. This strategy is especially effective when marketing to Millennials; experiencing FOMO (fear of missing out) is highly effective at driving action, as "the majority of adult Millennials stated that they want to say yes to everything due to the fear of missing out (as shown in a study done in the US and UK)." And, the best part of using FOMO to boost direct bookings: vacations and travel are the one of the most FOMO-inducing experiences for Millennials, making this feature is a MUST if you want to boost bookings with this valuable demographic. FEATURE: Secret, Locked DealsThis feature helps hotels to use the psychological trigger of reciprocity, in which the property gives the potential guest something special (access to lower rates) in exchange for their email address (and permission to add them to your email marketing list). Secret rates make potential guests feel like VIPs, which makes them more likely to book with you AND it gives you the opportunity to market to them regularly (a good way to increase repeat visits - the most profitable ones for hotels!).FEATURE: Abandoned Cart Recovery Strategy Like in the retail industry, this feature encourages guests who are about to abandon the reservation to complete the booking, using a fully customized pop-up message. Simple but also, highly effective! FEATURE: Competitor's Rate CheckerAre you always competing for guests with one (or many) direct competitors in your city? Looking for an easy way to compare their rates without having to search each property's site manually? The Competitor's Rate Checker feature makes it easy for the revenue management team to monitor the rates of your pesky competitors, in real-time, from the main online distribution portals; this enables rate changes on the fly and an increase in occupancy because your rates will continue to beat the rates of those dorks over at INSERT COMPETING HOTEL NAME HERE. FEATURE: Metasearch Management ToolConsumers LOVE metasearch channels, as they are the OTA equivalent of the OTA Rate Comparison Pop-Up feature that we discussed earlier: they allow potential guests to see ALL of the available rates on ALL of the OTA sites and, therefore, feel more comfortable knowing that they got the best room rate possible. But, I would bet than many hotels don't feel the same way about metasearch channels. Managing, monitoring and updating rates on the OTAs, PLUS the metasearch engines can get tiresome; after all, revenue managers are already spending, what must feel like one million years, looking at data, making calculations and updating rates across all these channels. Having a Metasearch Management Tool integrated into your CRS allows the property's revenue management team to manage, monitor and connect with the top metasearch engines, all from one simple platform. Rates and availability are pulled from the booking engine and sent to the metasearch platform, with all clicks directed to the booking engine on the property's website. Metasearch, managed! FEATURE: Alternative OffersMost hoteliers and revenue managers focus on two opportunities (during the consumer booking cycle) to boost revenue: when the guest chooses their room type and then once they have checked-in, with the possibility of buying additional services or food and beverage on-site. But how many hotels are thinking about the opportunity to upsell (beyond the basic: "Want a fancier room? No? OK.")? I'll tell you, it's not as many as there should be. Major key alert: upselling is a huge revenue booster and your CRS should integrate functions that automate upselling for every customer who moves from looking to booking, via your brand.com booking engine. Instead of just offering a fancier room (as ALL hotels do, and which most customers rarely consider because it's so unnecessarily expensive), the Alternative Offers feature in a CRS can automatically suggest special promotions for guests who choose to stay for additional nights and/or can offer bundle packages during the room selection phase of the booking cycle (among many other upselling options, designed according to your property's business goals and amenities).Upselling is basically free money, so shouldn't you have a CRS who will handle that for you, with no muss and no fuss? (Hint: the only right answer is YES!!)FEATURE: Flexible Date CalendarMy favorite airline booking tool is Google Flights; using their calendar feature, it's never been easier to compare rates and determine which days make it most affordable to fly. Today, there are so many travelers (i.e. digital nomads and business travelers) who have the flexibility to choose their travel dates to decrease their overall spend - instead of making decisions based on a set date of travel, as was traditionally how people booked flights. Until recently, there was no tool that allowed travelers the same flexibility when booking a hotel stay; now, sophisticated CRS solutions can show potential guests room rates for a specific date range on a calendar, making it easy for them to find and book the least expensive stay possible - no extra clicks required! Now, I know that was a long one article so thanks for sticking with me all the way to the end! Let's finish this article with one very simple question: does your CRS offer all these revenue-boosting features? Once again, the only right answer is YES!!
Article by Mark Lewis-Brown

Discounting is for Dummies - Part One

Vertical Booking USA 20 June 2018
For many years, hoteliers have been throwing away potential revenues right-and-left, offering huge discounts to lure bookers back from the OTAs and alternative accommodation options. I'm here today to tell you something that I need you all to hear: discounting is the best way for your hotel to go from profitable with a high cost of acquisition, to a property with high occupancy, a low cost of acquisition, but (and this is a BIG but) one that is barely able to afford to stay in business.I know that if I listened very carefully right now, I would hear many hoteliers angrily protesting: "That's not true; my hotel has used discounting and it always yields positive results for us. That's why we keep doing it!"In response to that, I say: "True, discounting can increase occupancy in the short-term - through both the OTAs or direct channels; however, in the long-term, you will be severely undercutting your ADR and RevPAR."Remember, occupancy isn't what keeps the lights on and bank accounts full; ADR and RevPAR do. To those hoteliers who are still grumbling in disbelief, let me share an example of why discounting is NEVER a good strategy - even in the short-term - no matter what type of hotel, flagged or independent, size or its geographical location. It always starts out well; the revenue manager at your hotel decides to offer a small discount, but only for a short period of time so that you don't drastically decrease their ADR or RevPAR, or undercut the property's brand value proposition. Sounds good so far, right? Good news! Your property's occupancy increases... for a short while. But then, the competition in your destination catches wind of your successes and discounts their room rate even more. Your revenue manager doesn't want to lose bookings over a few dollars, so he/she lowers the room rate one more time, to get back on top. Then, the other hotel goes even lower and... In many cases, hoteliers and revenue managers repeat these price reductions again and again, until the hotel is full but barely earning the money that they need to cover the cost of doing business. Food for thought... I'm convinced that every revenue manager has seen and is very familiar with that tried-and-true 'Price is Right' strategy: betting $1 lower than the lowest price - and, on the show, the contestants would often win, making it a great gameshow strategy. Could we all have woken up one day and decided that this was our new modus operandi (for those whose Latin is a little rusty, that loosely translates to "a method/mode of operating" and is "used to describe a firm's preferred means of executing business")? My answer: I am sure of it because discounting is the hotelier's version of that strategy; but, as I said earlier, it's not the right way to increase occupancy, direct bookings or profit. Why? This isn't the 'Price is Right'; this is the highly competitive and ever-changing hospitality industry. By using the 'Price is Right' strategy, your hotel must continue discounting your room rate (whether it's by $1 or $10 each time) on the already discounted rate to remain competitive, creating an ongoing race-to-the-bottom and a recipe for financial failure over the long-term - not just for your hotel, but for all hotels, industry-wide. Because, while we're over here giving away the house (or room, in this case), the OTAs are sitting back, watching as we price ourselves out of business - even further compromising our ability to drive direct bookings, while maintaining profitability. I'll say that one more time (for the cheap seats in the back!): in our search for hoteliers' elusive holy grail (direct bookings), we're helping the OTAs keep their death-grip on their share of the market and hurting our bottom lines in the process. And when you combine that with the OTAs' HUGE marketing budgets and high-tech everything (another advantage), hotels' outlooks are looking more and more 'sad face emoji' by the day. So, once and for all, let's throw the old standby, 'Price is Right' method out the window and shout it loud-and-proud from our rooftop patios: "Discounting is for dummies!" Thumbs-up emoji! Want to know what revenue management strategy you should be using to boost direct bookings without discounting? Check back next week to read Part Two of this article where we will outline how to boost direct bookings, minimize the cost of acquisition and take back their fair share of the marketplace - without negatively impacting your bottom line at all. Trust me, you will be happy to that you did!
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Vertical Booking adds more than 1000 new hotels in 2017

Vertical Booking USA 13 February 2018
Vertical Booking, a recognized leader in global reservation technology, announced today tremendous growth in 2017 with the addition of more than 1000 hotels utilizing their revenue generating solutions."Vertical Booking continues to expand and grow worldwide because more and more hotels are realizing the benefits of a real-time, centralized solution designed to assist hoteliers in making more informed decisions and maximizing revenue," said Mark Lewis-Brown, President/CEO of Vertical Booking USA.Hotels rapidly jumped on board to utilize the plethora of reservation upselling tools designed to achieve higher conversions. Popular tools include the new premium booking engine, the enhanced channel manager, OTA/competitors rate checker, and a host of other features developed to engage the guest during the booking process and maximize revenue."At Vertical Booking, we understand the challenges hoteliers face in this highly competitive market and having the right technology solutions is a must have to meet both the guests and the hoteliers' expectations," said Alberto Guadalupi, Founder and CEO of Vertical Booking.Vertical Booking will be exhibiting from March 7-11, 2018, at ITB Berlin, Germany Travel Trade Show. Please stop by Hall 10.1 Stand 101 to learn how Vertical Booking can help you optimize distribution at your property.
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Vertical Booking to Showcase Innovative Hotel Booking Tool Kit at HITEC

Vertical Booking USA 20 June 2017
The Vertical Booking Enhanced Tool Kit includes a host of features developed to engage the guest during the booking process. The Recovery Strategy prompts guests who are about to abandon the reservation process with a fully customizable pop-up message to reel them back in. With Secret/Locked Deals, guests can enter their email address to unlock special offers, which grows the hotel's email list and makes the guest feel special. The Alternative Offers tool suggests special promotions for additional nights or services, which translates into higher revenue per stay.The OTA Rate Comparison Pop-up builds guest confidence by displaying OTA rates and can automatically match the lowest rate while remaining in parity. The fully customizable Persuasive Messaging increases conversion by encouraging the guest to proceed with the booking.Finally, the Competitor Rate Checker allows hotels to check their prices against those of the competition in just a few clicks."Our focus is on enabling hoteliers to stand apart in this increasingly competitive hospitality market," said Mark Lewis-Brown, President/CEO of VBUSA. "These tools allow the hotel to make more informed decisions while optimizing the guest experience and maximizing revenue."Vertical Booking will be exhibiting at the HITEC Hospitality Conference in Toronto, ON, Canada, from June 26-29, 2017. Stop by booth 634 to learn how Vertical Booking can help you optimize distribution at your property.

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