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.

Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.