Targeting high yielding clients by analyzing market segment production is one of the strategies that hotels use these days. But which segment can be used as fillers throughout any period? Or which segment should they be focusing on during lean, off-peak, or even distressed seasons?
During an audit, I asked the hotel for which I was doing the audit, why they did not load a "travel industry rate". This rate is applicable to all employees working in the industry, for example, travel agencies, airlines, hotels, etc. They responded that they did not need to cater to this segment since they did fine with their existing ones.
I queried back to find out if they did achieve 100% occupancy on a daily basis. To which they replied that they rarely achieved 100% occupancy, only during peak dates and sometimes during high seasons. Unfortunately, they were hindering their own occupancy rate, with this strategy. Let me tell you why.
Travel industry rates can help a hotel on a regular basis and especially during low times. Of course, hotels should never lose their focus in making sure that they exert all effort to sell the inventory to their most valuable clients. But after all has been done, you can sell your remaining rooms to filler segments, such as your travel industry rate.
I strongly encourage hotels to load this rate and specifically promote to travel agents particularly during low periods. These can be low yielding, but since it is an off peak period, it would be better to sell them on this rate rather than getting zero revenue.
Besides, think of the opportunity when you sell to this market. By giving travel agents a chance to get to know your hotel, you are increasing the prospect of getting more bookings. Do not forget that they are your extended sales team online. This can be a strategy to improve your visibility on the GDS, as the best way for them to remember your hotel is through personal experience.
To avoid diluting your average room rate, you can set up rates by applying inventory parameters. For example, you can make a rate available only during your lowest producing days in a week or sell only one or two rooms per day.
During distressed times, you can use this rate to promote your hotel to travel agents by making it more appealing by offering automatic room upgrades, breakfast, F&B discounts, etc., for example. Of course, make sure that upon check-in, they show their identification cards to prove that they do belong to the travel industry segment. This is to avoid agencies who might take advantage of selling this rate to their clients instead of using them personally.
Rochelle Castillejos is the Managing Director & Founder Hotel Revenue Plus. She has over 15 years of industry experience in the fields of Sales and Marketing, Revenue Management, RFPs (Request for Proposals), IBEs (Internet Booking Engines), CRSs (Central Reservations Systems), PMSs (Property Management Systems), RMSs (Revenue Management Systems), OTAs (Online Travel Agencies), and GDSs (Global Distribution System). She oversaw around 55 hotels in the regions of Americas, Europe, Mediterranean, Asia Pacific and Middle East throughout her career.
