Revenue Strategy: Investing in Your Hotel’s Optimal Channel Mix
The Billboard Effect is Dead,
Rate Parity is Dead,
Last Room Availability is Dead;
Long Live Revenue Strategy
The third-party wars are raging in Europe with rate parity’s demise pending only a few more strokes of the regulatory pen. With pushback on last room availability by many hotel companies, inventory control may soon be back in the hands of the hotels. Also crumbling is the long embraced theory of the billboard effect. Expounded by the OTAs for the last 10 years, the billboard effect claims to provide “free” merchandising, leading to even more bookings direct on a hotel’s own website.
Ultimately, even in this changing environment, hotels in today’s digital landscape have to constantly balance the two options they have to acquire and retain customers: direct initiatives and those deployed through third parties. There are costs associated with every single acquisition technique. While many channels can bring value, none bring unlimited value or have infinite volume. Tradeoffs and decisions have to be made by hotel revenue strategists.