Online Shopping Requests Burden CRSs: Balancing the Looks with the Books
By Mike Kistner President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions | June 25, 2010
Hotel transaction volumes in 2009 increased by nearly 50%. Did your hotel realize a 50% increase in bookings as a result, or even close? It’s doubtful.
Odds are, you saw quite a different picture. Odds also are, not only did you see fewer guests, but you also saw even fewer guests willing to pay what they would have paid in 2008.
There’s much behind what we’ve seen here, all set in the context of the global economic turmoil we’ve experienced these past couple of years. Consumer behavior is radically different these days and we’re seeing the consequences. Processing anywhere from three to five billion transactions per month last year, Pegasus Solutions handled 48% more shopping transactions in 2009 than we did in the travel heyday of 2008. The reason comes down to one issue: changing online consumer shopping behavior.
This online “bargain shopping” trend is the key contributor to your hotel’s look-to-book ratio, and it hugely influences the number of rate and availability requests your hotel receives for every individual booking generated. Today’s common ratio of 3,000 to 1 means that your hotel was considered by 3,000 shoppers, and received only 1 booking as a result. A look-to-book ratio as high as 3,000 to 1 should be a point of deep concern.
Issue #1: Bargain-hunting technology
Online travel sites hold as much promise as peril to hoteliers as these sites become increasingly more efficient at letting travelers quickly and easily compare features and prices for everything travel-related. For example, the meta-sites find all of the places where a potential guest can obtain information about hotel rates—everywhere from the hotel’s own site to participating online travel agencies like Orbitz and Octopus—and display the results using advanced search technology. Some draw information from dozens of sites for a single request, even going so far as to “watch” itineraries, resulting in repeated requests into your system, “chewing” through information and clogging response times. Most recently Google has entered the game, as the advent of substantially increasing levels of mobile booking has further complicated the shopping environment.
The Hotel Business Review articles are free to read on a weekly basis, but you must purchase a subscription to access
our library archives. We have more than 5000 best practice articles on hotel management and operations, so our
knowledge bank is an excellent investment! Subscribe today and access the articles in our archives.