Boost Revenue by Selling the Time Between Reservations

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Joshua Meehan
Joshua Meehan
February 13, 2015
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For most hotels, cutting all ties with the OTAs isn’t feasible. Their reservations make up a sizable portion of a hotel’s business mix and without them many properties wouldn’t stay open. Coming off the heels of their Travelocity acquisition in January, Expedia has purchased Orbitz for an estimated $1.3 Billion. This essentially leaves two major players in the OTA field, Expedia and Priceline/Booking.com. In the last two months Expedia has gone from controlling around 30% of the market to over 70%. With only two major OTAs players left in the game, far too much power is taken away from the hotelier and put in the hands of others. Reducing the hotel’s dependence on these OTA channels is crucial and once the hotel’s marketing efforts  are focused on driving direct bookings, it is time to get creative and take full control over their inventory.

For most hotels, the typical reservation guarantees a room from around 4pm to 10am, so the ADR is based on 16 hours of occupancy. With a 30 minute turn time in between reservations, hotels are potentially missing out on 7+ hours of revenue. Taking into account that many guests check in later than the guaranteed reservation time and leave early, these gaps of empty and profitless rooms can be even greater. A revenue manager looking to fully yield needs to develop a strategy that will capitalize by selling the time between reservations. Day use rooms aren’t a new idea, but it’s one that is being underutilized. There are many potential guests who would be willing to book these in between hours. The obvious guest for this kind of reservation is the traveler with a long layover, but this only helps hotels near airports. But hotels near museums, shopping malls, beaches or anywhere people might be looking for a break in the activity can sell the time in between reservations.

To reach these potential guests is where things can become difficult. One effective method would be placing advertisements inside airport terminals or in malls. Adding a QR code to these will give guests easy access to the hotel’s web page and easy access to a direct booking. Or for those looking for more assistance attracting these guests a new start up is stepping in to help fill these rooms during the day. HotelsByDay has built a platform for guests to book intra-day reservations instantly. With the success of home and ride sharing services, this segment is quickly growing and hotels needs to capitalize on the “daycation” trend early. Opening up a hotel’s inventory to these reservations has the potential to boost revenue, increase exposure to the property and build more relationships with its guests.

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