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.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.