hotel discount strategies Archives - eZee Absolute Online Hotel Management System Mon, 02 Jan 2023 09:25:47 +0000 en-US hourly 1 https://wordpress.org/?v=6.0.7 https://www.ezeeabsolute.com/blog/wp-content/uploads/2019/11/cropped-ezee-logo-32x32.png hotel discount strategies Archives - eZee Absolute 32 32 How to Build a Profitable Hotel Distribution Strategy? https://www.ezeeabsolute.com/blog/hotel-distribution-strategy/ https://www.ezeeabsolute.com/blog/hotel-distribution-strategy/#respond Mon, 26 Jul 2021 08:16:16 +0000 https://www.ezeeabsolute.com/blog/?p=10150 There’s more to hotel distribution strategy than connecting with a bunch of OTA. Get strategy tips on where and how to sell rooms.

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How did hotels sell rooms before the internet? Pretend for a second you manage a hotel before the internet arrived. Your hotel distribution strategy probably centres around a phone and a travel agent who acts as a middleman between travellers and your hotel. 

Basically, it was way more complicated to reach guests.

Fast forward to today, guests can browse between hundreds of websites and travel agencies that feature property details and hotel availability. Despite the internet making hoteliers’ lives easier – it’s easy to get lost as hotel distribution strategy grows more complex. 

What’s the best way to decide which channel to use? Should your hotel work with all of them, or is one enough? 

This article will help you find answers to these questions as we cover the essential elements that go into building a profitable hotel distribution strategy.

What is a Hotel Distribution Strategy?

Hotel distribution strategy refers to the mix of channels through which you sell hotel rooms. Often, this strategy will be based on the acquisition cost per customer of the various channels through which you can reach your guests.

These channels include:

  • Online Travel Agencies (OTAs), like Booking, Expedia, or Agoda;
  • Hotel direct channels: website, phone, emails, social media;
  • GDS – Global Distribution Systems;
  • Wholesalers;
  • Metasearch engines like Google, Tripadvisor or Trivago;
  • Destination Marketing Organizations (DMO);
  • Offline bookings, like walk-ins.

Ultimately, an effective distribution strategy should aim to increase hotel visibility and target the right customer segments for your property. 

Why is building a distribution strategy for hotels is essential?

Simply put, more visibility, more bookings, and better reviews mean more chances for success. 

Creating the right strategy is vital to:

  • Increase revenues
  • Attract the right customers
  • Improve reviews

What are the Types of Hotel Distribution Channels?

The distribution landscape consists of both online and offline channels. Below we’ve described some of the most popular distribution channels in the hotel industry.

Online travel agencies

OTA’s are websites where potential guests can search for accommodations, check prices, and book rooms. There are hundreds of OTAs, from the major ones like Booking.com or Expedia to the niche websites like BringFido (designed for guests seeking pet-friendly accommodations).

To list on OTA’s, hotels pay commissions ranging between 15%-25%, from each booking. The bright side of selling on OTA is the ability to enter markets that would otherwise be harder to reach. 

For example, hoteliers can attract travellers from South America via Despegar or South Korea on Ctrip. 

Despite their reach and convenience, there’s a love and hate relationship between OTA and hotels. This is mainly due to the fact that OTA’s take high commissions for listing and selling hotel inventory. On the other hand, OTA’s give properties more exposure and make them easier to find. 

Plus, have you heard about the billboard effect?

Must Read: Who’s Really Winning The Battle Between OTA and Direct Booking?

The billboard effect

Did you know that up to 35% of direct hotel bookings result from travellers finding the property on a third-party website? 

A significant number of customers will first find a hotel on a website like Expedia and then book directly through the hotel website. That’s the billboard effect – without which you would potentially need to spend more money on advertising and search engine optimization tactics to improve your page ranking on Google.

Direct channel

Direct channels include hotel websites, social media, emails, walk-ins, and phone bookings. You don’t need to pay any commission for direct bookings, but you do need to add the costs of maintaining a website and booking engine.

GDS

A Global Distribution System is a network used by travel agencies for researching and booking flights, hotels, and cars for clients. Examples of GDS’s are Amadeus or Sabre. Any hotel using a GDS will be connected to multiple travel agencies which will then refer guests.

Wholesalers

A wholesaler is essentially a middleman between a hotel and an OTA or travel agency. They purchase rooms for specific dates in bulk at discounted rates, wrap them in a package, and sell them to the OTAs, travel agents, or tour operators.

Metasearch engines

In recent years metasearch engines like Google have become more critical to the hotel distribution landscape. A metasearch scans through OTAs and hotel websites and shows travellers hotel rates on different channels for their chosen dates.

As Google is one of the first places where travellers will hit the search button, it’s no wonder that the search giant now plays a key role in hotel bookings. What’s more, with the ability to list hotel booking links on Google for free, hotels can be more competitive versus OTAs and can increase their direct bookings.

Embracing this growing metasearch trend could play a key role in your property’s distribution strategy. 

DMOs

Destination Marketing Organizations are the organizations in charge of promoting a given city or country. Partnering with them usually includes the ability to feature hotel info on their website and social media as a preferred accommodation partner. 

How to Build a Profitable Hotel Distribution Strategy?

A successful strategy will include a mix of channels. To choose the proper channels for selling  your inventory, you’ll need to take these next points into consideration:

1. Get to know your best guests

When we talk about choosing the right distribution channel in the hotel industry, we mean choosing the one through which your target guests are looking to book. 

But to make sure you get those bookings, you need to know who your guests are first. 

To do that, you can use your Property Management System (PMS), channel manager, and booking engine data. 

For example, if your guests are budget travellers you can include OTAs like Hostelworld in your strategy. But if a large number of your guests are from South Korea, then their most popular channels are Agoda, Ctrip, or Booking.

If you have different types of guests, you can create a range of different value propositions. A family with kids won’t look for the same features in your hotel as a business traveller. Knowing that you need to choose the channels where those different guest types book and offer them what they are looking for.

2. Set business objectives

It’s always a good practice to set clear business goals in order to identify your most profitable channels and include them in the distribution mix. So, what are your objectives?

Is it to fill in the rooms during the low season? To reach more international markets? To diversify your distribution and stop relying on one channel? Or,  do you want to be able to fill last-minute vacancies quickly?

Your property may want to create a specific atmosphere, and not all channels might bring the type of client you want.

Setting clear business goals can be a great help in deciding which channels to include in your strategy.

3. Track customer acquisition costs 

What’s the point of selling rooms on a specific channel if the costs are higher than the profit it brings? 

Sometimes the price for hotels to acquire a guest is more than double the room rate. It’s important to quickly identify and eliminate ineffective channels from your distribution strategy. 

So can you know which are effective and which are not? 

To evaluate channel effectiveness, you will need to understand the costs of guest acquisition. The hotel industry uses the NetRevPAR metric to monitor it. 

If you’re scratching your head right now and wondering what that is, here’s a quick explanation:

NetRevPAR is the revenue per available room after deducting the costs incurred to acquire a guest.

Calculating this metric will tell you how much net revenue you’re receiving from each booking.

The formula for it is as follows:

NetRevPAR= room revenue – distribution costs (e.g.,cost-per-click + marketing + third-party commissions) / available rooms

4. Invest in a direct channel

There’s no doubt that the direct hotel channel should be a priority in any hotel’s online distribution strategy. Neglecting it will undoubtedly result in lost (commission-free) revenue opportunities. Direct channels include hotel websites, booking engines, and social media strategies.

You need an easy-to-navigate and attractive website 

Your website will be a guest’s first contact with your hotel, so make sure it’s aligned with your brand and objectives. 

Importantly, around 70% of travellers did travel research on mobiles

Conclusion? Make sure to optimize your website for mobile phones.

Google research has also shown that over 25% of consumers across a  range of markets and industries mention pain points like availability, payment issues, and customer support when they shop online. It’s good to keep this information in mind and facilitate the booking process on your website in order to make it as simple as possible for guests to book a room.

In addition to a great website, you’ll also need a good booking engine, which allows guests to check availability and make reservations with instant confirmation. Want another good idea? Adding a chat function to your website can help potential guests quickly resolve any doubts or questions that arise on their booking journey. 

Don’t forget about socials

Investing in direct channels includes an aligned social media strategy. In fact, digital content inspires 65% of next-gen (millennials and gen Z) travellers to plan a trip. So many travellers these days reference Instagram or Facebook to check out a hotel and decide if it’s the right choice. Don’t neglect social media as you risk losing potential guests who rely on it to inform their decision-making.

5. Review strategy

Once you increase online visibility, reviews are inevitable – and can be extremely valuable. The review strategy you put in place should go hand-in-hand with your hotel’s online distribution strategy and revenue strategy. 

Online reviews can help increase your rankings and popularity and will influence the value of your offer in the eyes of potential customers. Of course, it would be a dream to always receive positive feedback, but you understand the reality as a hotelier. 

There will be some negative reviews, and so you should be prepared for them. Respond to and address every negative opinion, as these can hurt your hotel’s reputation. 

Download FREE Hotel Review Response Templates

6. Use dynamic rates across all channels

Implementing dynamic pricing across all your channels will significantly increase your competitiveness. 

Dynamic pricing means adapting prices on each booking channel based on availability and demand. When demand and occupancy are high, instead of closing availability on a specific channel out of fear of overbooking, increase your prices. In times of low, reduce your rates to drive more bookings.

7. Maintaining price integrity

When using dynamic pricing in your hotel’s online distribution strategy, remember to maintain price integrity. Avoid colossal price drops to fill your empty rooms. Some customers can see be put off by seeing rock-bottom prices: it makes them wonder if it’s too good to be true. 

What’s more, keeping the price integrity can help you in protecting the customer base. Avoiding unwanted types of guests results in a better hotel atmosphere and happier clients.

Additionally, when you drastically lower rates, you may not turn a profit despite filling your rooms. The cost of attracting a guest and maintaining the room may end up being higher than what the guest actually paid. For that reason, make sure you factor in those other costs to determine if the decision will be profitable or not. 

Hotel Distribution Strategy and Technology

To implement an effective hotel distribution strategy need the right set of tools. These tools can include a channel manager, booking engine, PMS, revenue management system, rate shoppers, and a reputation manager. Of course, it’s not obligatory to have all the tools for hotel distribution management. You might consider starting with the first three mentioned and adding the rest along the way.

Channel manager

A channel manager connects your property to all your chosen distribution channels. It will help you effectively manage your inventory and avoid overbookings. You can adjust room prices from the channel manager, set stay restrictions, and build pricing strategies.

Booking engine

A booking engine connects to your website and channel manager. It allows website visitors to check room availability and make reservations directly with you. What’s more, when the booking engine connects to payment getaways, customers can be charged immediately upon making a reservation.

Property management system (PMS)

A PMS is a system used to manage your property as a whole. You can say it’s like the heart of a hotel– it includes a listing of all rooms and reservations, guest details, as well as housekeeping schedules and property details. It gives hotel managers valuable insights in the form of a range of reports: bookings, occupancy rate, revenues, and availability. Nowadays, most PMS’s are cloud-based, meaning there’s no need to install any system directly on your computers. 

When combined, a PMS, channel manager, and booking engine can greatly improve hotel operations as they work together. 

Revenue management system (RMS)

Hotel distribution strategy should also align with revenue management strategy. In the current competitive environment, it’s essential to use real-time market data to inform your prices across all selling channels. 

Setting your prices manually takes valuable time and can be extremely frustrating. In an environment where demand changes so quickly, you need to react just as fast in order to capture the maximum amount of revenue. Fortunately, technology can be a great help here as well: RMS’s like Pricepoint connect to your channel manager, scan hotel and market data 24/7, and automatically send optimized prices to all your channels in real-time. 

There’s no question that using an RMS can give you and your property a competitive edge. It is without a doubt a must-have hotel distribution management tool. 

An RMS reacts instantly to changes in demand and pushes optimized prices to your OTA’s. Meanwhile, competitors setting prices manually will be left behind – and they’ll leave potential extra revenue behind as well.

Reputation management systems

Reputation management systems help you create an overview of your online reviews across all booking channels. It generates a summary of your overall reputation and enables you to easily identify areas where there is room for improvement.

Conclusion

Was running a successful hotel easier before the Internet? Or is it easier now? The answer to this question lies in your hands and in how you leverage the new tools that have appeared in the industry. 

The magic of the Internet has incredible selling power to the hotel industry. But in order to use it to build an effective and profitable distribution strategy, you should get to know who your clients are, where they book, and which tools will be the best fit for your property. 

Remember to emphasize your direct booking channel, choose the OTAs where your best guests book, and work with the appropriate tech tools. As the hotel industry continues to evolve, harnessing the right technology is one of the most effective ways to generate long-term profitability and success for your property.


Try a hotel channel manager

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A Definitive Guide to Discount Strategies in Hotels [Examples Inside] https://www.ezeeabsolute.com/blog/discount-strategies-in-hotels/ https://www.ezeeabsolute.com/blog/discount-strategies-in-hotels/#comments Fri, 12 Jun 2020 05:31:30 +0000 https://www.ezeeabsolute.com/blog/?p=5547 Discounts, free, best deal – Your guests simply LOVE these and so do you. But as a hotelier, you need to consider a wide range of parameters, before uncovering the best deal for your property. Here’s an A-Z guide on hotel discount strategies.

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DISCOUNTS, FREE, BEST DEALS – Your guests simply LOVE these. (Even you do!)

So, as a hotelier, you should delight them with what they really like.

BUT, you cannot offer discounts in a single blow.

You have to be thoughtful and consider a wide range of parameters, before uncovering the best deal for your property.

In this blog, I’ll guide you with the what, why, and how of discount strategies in hotels. In addition, I’ll suggest the best times to run those deals, how to apply them, and everything else around it.

To begin with, let me tell you:

Why do hotels need to run discount offers?

Well, hotels need to offer discounts and run promotions for the following reasons:

  1. To promote their brand.
  2. To increase repeat guests and attract new ones.
  3. To boost room sales in weak seasons.
  4. To ensure the highest value bookings in peak seasons.

Though, most hoteliers have the following concerns for their discount strategies: Will it cost them higher or hamper their sales, will they get enough bookings, and much more.

(Don’t worry! I’ll cover all of that in this blog.)

In addition, offering a discount is a quick way to draw your guests’ attention. 

There are various types of discounts that you can run. Let’s understand them ahead.

Which types of discounts can a hotel offer?

You’ll mainly see two types of discount strategies in hotels: 

a. Promotional discounts:

Promotional discounts are those which are offered on hotel rooms or any other services. Its main purpose is to attract your potential guests for purchasing something additional at your hotel. These discounts are usually offered through PROMO CODES.

Few examples:
1. Get 10% off on one more night stay
2. Pay for 1 night and get 1 night free 
3. Enter promo code “FLAT10” and get 10% off on the 2nd night.

b. Package discounts:

Package discount means a discount offered when a guest purchases room accommodation plus any extra service, activity, or a meal plan at your property.

Few examples:
1. Stay for 3 nights, 4 days + breakfast @ 250$
2. Stay for 1 night, 2 days + Couple Spa @ 200$
3. Stay for 2 nights, 3 days @ 300$ + all meals at absolutely no cost

I’m sure this will help you decide on which type of discount you want to offer at your property.
Just remember: Better the deals, higher would be your occupancy.

How can a hotel apply discounts?

I know that in this tight competition, you want to outrank your competitors by having the best discount strategies at your hotel.

But, you shouldn’t forget an important factor while doing that – HAVE PROFITABLE DEALS (for you as well as for your guests).

Let’s find out how to apply discounts and when is the best time to offer them at your hotel:

a. How to apply promotional discounts at your property?

I’ve listed below the various ways in which you can run promotional discount strategies in hotels and make your guests happy.

1. Night based discount:

Many times, you might host guests that prefer to stay for a short period of time. They can be business travellers, localites and millennials. In such cases, you can offer a discount either on the first night or the last night of your guest’s stay. 

For example, if a guest books a room with you for 2 nights, 3 days; then give them a discount of 10$ on either the first or the last night. 

Best time to offer: You can apply such discounts when there is a long weekend OR any festival coming up.

2. Discount on all nights:

Some guests prefer to stay for a long period of time, either to relax or to take a break from their routine life. Here, you can delight such guests by offering a discount on their entire stay.

For example, if you receive a booking for 7 nights, 8 days; then give either a flat amount of discount (15$) or % discount (10%) on their entire stay amount.

Best time to offer: Run such discounts when you have either charged a higher amount on your room or when the guest stays at your property for a longer duration.

3. Frequency based discounts: 

This means, how often you want to offer discounts to your guests i.e. the frequency of the discount. You can offer such frequency-based discounts when you want your guests to stay for a longer duration (increase LOS).  

For example, offer 10$ off every alternate day, or after every 3 days or on a particular set date.

Best time to offer: This hotel discount strategy can be applied during a mass gathering or any event at your property.

b. How to apply package discounts at your property?

Hotels can offer several packages to their guests. However, the below mentioned ones are the best ways to offer a package to them:

1. Basic package:

These are deals where your potential guest makes a booking at your property and gets a discount on the entire stay package.

For example, stay for 3 nights, 2 days + avail continental meal, and get 10% off on the entire package.

Best time to offer: You can run such deals when the guest is about to make a reservation or when your competitor’s rates are higher than you.

2. Booking window package: 

A booking window is a particular time period when the guest has to make a reservation for a future date. Here, they can avail the discount (package) ONLY IF they have made the booking in the given time frame.

For example, book for 3 nights, 4 days at 100$ before 30 June 2020, and visit us anytime till June 2021. Here, the booking window is till “30 June 2020.”

Best time to offer: If we consider the current situation of the pandemic, then now is the best time to run this deal. Other than that, you can apply such offers when you’re having a low occupancy at your hotel.

3. Last minute deals

The name says it all. Last-minute travel is usually a journey taking place within 7-14 days of your guest’s booking date. These discounts are provided to push last-minute bookings

For example, a guest or consider business travelers booking for a quick stay; makes a booking on 15th June 2020 for 28th-30th June 2020. Then, here you can offer them a 15% discount on the booking amount.

Best time to offer: Such deals can be best applied within 14 days of the guest arrival date.

4. Advanced booking deals

Advance booking allows your guest to book a hotel room at a discounted rate. Basically, it is a booking that is made atleast 3 months prior to their arrival date.

For example, consider someone booking for Diwali; stay for 3 nights, 4 days and get a discount of 10%.

Best time to offer: Such discount strategies in hotels are most beneficial for festivals or vacations.

5. Pay and stay deal: 

In pay and stay deals, you offer your guests an additional stay of the same nights they’ve paid for. 

For example, pay for 1 night and get an additional 1 night free, or stay for 2 nights and pay for only one.

Best time to offer: You can offer such deals either when your hotel rooms aren’t completely occupied during long weekends or holidays.

6. Minimum and maximum stay package:

Minimum and maximum stay packages mean any guest arriving on a particular date range needs to stay a minimum or a maximum number of nights at your property.

For example, a guest booking between 1-10 June 2020 has to stay a minimum for 3 days at a discounted rate. Similarly, for a separate time range, you can set the maximum night limit and offer a discount on that. 

Best time to offer: Minimum night deals can be applied best when there is a concert or any event at or around your property. (So, if the concert is for 3 days, then here you can offer a minimum stay package for 3 nights). And, if you have upcoming gatherings, you can apply the maximum night deals when your guests book a few days prior to those gatherings. 

c. How to apply discount on promotions and packages at your property?

In a very few cases, hoteliers offer this type of discount which is a combination of promotions and packages. 

For example, book for 3 nights, 4 days + get spa service, and an additional 10% discount on your booking.

Best time to offer: This can be considered only when you are extremely low on bookings or are experiencing a downturn in your hotel’s occupancy.

So, these are the various types of discounts that you can offer to your guests. Each of them has its own benefits and would vary depending upon your property type and requirements. 

Thus, before applying them make sure you analyze each of these in detail and figure out which works the best for your property.

Where can you offer discounts for your hotel?

Offering discounts is an unfailing way to boost your occupancy and revenue. However, below are the best possible locations to run discounts.

a. Discounts on OTAs

OTAs or better known as online travel agents have become an impactful source of marketing for hoteliers. They allow hotel rooms to be sold to a larger audience, helping hoteliers to gain higher revenue. 

Often these OTAs run deals, offers, promotions, and loyalty or reward programs to acquire more bookings. Participating in them will help you to showcase the best deals to your guests.

Here, on the OTAs, you can promote the various discounts that I mentioned above. Doing so will make your property preferable over your competitors.

b. Discounts on direct bookings

Even though OTAs are better accessible to guests, direct bookings take the cake when it comes to hotel revenue. Mainly because they help you save up on your hefty OTA commissions. 

So, encourage your guests to book with you directly by highlighting a good deal on your website. 

c. Travel agent discounts

Travel agents are a source of acquiring bookings apart from the OTAs, metasearch engines, and hotel websites.

Getting connected with them will not only help in showcasing your presence to guests but also reap you more reservations. I’m sure you might have tied up with several travel agents already.

Thus, do offer them something better apart from the discounts available on online channels. This will in turn get you more guests and help you upsell extra services at your property.

When should a hotel offer discounts?

Offering discounts is the best way to sell your property to a larger target audience. Below are the different times when you should do so:

a. Low season discounts

Without a doubt, the peak season is the best for hoteliers as you enjoy high demand and an influx of guests. Of course, it’s not that tough to achieve full occupancy during the peak season. 

For that reason, low seasons are what discounts are made for. Here, the first step you should take is determining when exactly your off-season starts and run the discount offers accordingly.

A GOOD DEAL will definitely help your hotel increase bookings during such times. Moreover, you should encourage your guests to stay longer with a discount reminder, when they add their stay dates. 

Increase Low Season Hotel Occupancy

b. Event-based discounts:

Events are the best time to apply discount strategies in hotels and attract more guests. These events may be festival celebrations, parties, conferences, seminars, concerts, or some fun workshops. 

Showcase some great deals when you have such events coming up in or around your property. And, DO make sure to keep the most attractive offers in the market; such that your guests choose you and no other property. 

Start by offering early bird discounts, and then move to provide group discounts to attract more guests. Show off your discounts like a “FLASH SALE” to make your guests aware.

c. Guest-based discounts:

Hotels tend to provide discounts based on the guest type. You must also have various types of guests visiting your property. Set up discounts for all such types of guests viz. business travelers, leisure travelers, VIP guests, repeated guests, and so on. 

These guests might turn out to be great at word-of-mouth recommendations and improve your hotel’s reputation. 

For the most part, you can consider offering weekday discounts for business travelers, and weekend discounts for other guest types. 

Moreover, you can offer them free or nominal costing recreational activities to improve engagement and guest experience. 

d. Referral discounts:

A referral discount is for bookings made because of a recommendation or through a secondary business source such as cab drivers, shop owners, and vendors. 

Such collaborations are always beneficial and work in a win-win strategy, benefiting you with bookings, the opposite party with a commission, and the guest with a discounted stay. 

This would help you build better relationships with your guests as well as your business sources; thus enhancing bookings.

e. For desktop and mobile users

This is a newly added discount type where you can offer your guests to either do a booking through the desktop/tablet/mobile and get a particular amount of discount on it.

For example, often Amazon, Flipkart, or such delivery giants provide app-only deals or discounts. You too can offer similar deals for your property.

Moreover, you can also collaborate with some well-known brands and accordingly apply discount strategies that benefit them as well as your hotel.

I am sure, you must be pretty clear by now, as to when you can offer a discount. So, let’s move forward and understand the factors you need to look into before running any promotion at your property.

Which factors to consider while running discount strategies in hotels?

Promotions work great when they are targeted to the right audience, in the right way, at the right time. However, before running any discount offers for your hotel, there are several factors you need to keep in mind. 

Let’s understand each of these in detail here. 

a. Target audience

Primarily, identify the target audience you want to cater to. Is it business travelers, honeymooners, vacationers, or millennials? Do keep an eye on your competitors’ target audience as well. 

Sure, I know, not every customer is a good fit for any hotel discount strategy that you offer. Not all might need discounts to book with you, whereas some might request for a tad bit higher discount. So, don’t push the same offer to all. 

Rather, choose your target audience wisely and set your discount offers on the OTAs, website, and metasearch engines in accord.

b. Overall goal

Discounts are terrific, but offering them without any goal or purpose is just meaningless. Thus, before you implement or offer any discount make sure you are clear about why you want to do so. Is it to:

  • Gain more guests?
  • Achieve full occupancy?
  • Enhance sales?
  • Win over your competitors?

Well, once you know the reason, we are sure, offering discounts and making the most of them would be pretty much easy to achieve.

c. Terms and conditions

Determining and mentioning your hotel’s terms and conditions while availing any discount offer should be clearly stated when a guest makes a booking. These can be like:

  • Discount valid upto {Date}
  • Avail {10%} discount via {SBI} card only
  • Free WiFi access
  • Early check-in option available
  • Pool access

Having transparency about such things will instill faith in the booker for your hotel to make the booking.

d. Cancellation policies

Proper and fool-proof cancellation policy is MUST before rolling out the discount offers on your website as well as other connected channels. Be careful while forming your cancellation policies and don’t miss out on anything important.

Try not to be over flexible as well as ultra-strict with it. This will help you to get more confirmed bookings as well as reduce your cancellation ratio.

Must read: Tactics to reduce your last-minute cancellations 

d. ROI on discount offers

This will help you to analyze the expense or loss incurred in discounts against the bookings and revenue you earned. 

You need to focus on this aspect because you are lowering your room rates while offering discounts. The more you lower them, the higher maybe your cost incurred. 

And, it is done with the aim that the guest would make use of the extra services at your hotel thus balancing the cost of your room.

So, once you offer discounts, make sure to analyze their ROI against the bookings that you earn.

Here’s a formula to calculate the ROI:

ROI of the bookings = Cost incurred to acquire those bookings / The revenue earned from the bookings.

Once you analyze the above factors, the next step that you need to focus on is, the different ways to promote your discounts and make your guests aware of it. 

How to promote discount offers?

No matter how appealing your discount offer is, it won’t be weighty enough unless you promote it properly. And so, try these below-tested techniques to make sure your target audience is aware of the discounts that you are running:

a. Email marketing

Emails are an evergreen way to promote your hotel’s discount offers to your audience. Moreover, you can use email marketing to keep your existing and potential guests up-to-date with the offers. 

Send them emails that include an offer, a coupon code, a discount on the booking itself, a recreational service, or a meal in your hotel’s restaurant.

Further, make sure these emails are attractive, short, and influential to make your recipient finish the booking. 

Read: A Complete Guide to Hotel Email Marketing

b. Social media

Social media marketing is one of the best ways to connect with and attract a larger amount of audience. Not only this, but it also helps you to keep your guests informed about any discount or offers that you are running.

For this, make sure you are active on all social media platforms and regularly post about your offers, combo packages, and deals.

Must Read: Simple Steps to do Social Media Marketing for your Hotel

We also have some ready-to-use social media templates for such and many other occasions.

Download FREE Social Media Post Templates

c. WhatsApp and SMS marketing

Be where your guests are, ALWAYS. Apart from the social platforms, you should be active on WhatsApp, Viber and other communication channels. 

With the growing number of smartphone users, your guests can be available on any channel and may want to communicate on their preferred channels.

Just don’t miss out on any of it. 

This is where SMS marketing comes into the picture.

Firstly, have a fully-fledged list of data of your guests; let that be inquiries from existing or potential guests. Next up, start engaging them with your discount offers or promotions via a broadcast list and SMS. 

d. Highlight on website and OTAs

Your guest’s first step while making any booking is to check your availability either on the OTAs or your hotel’s website. This is the most convenient way for them to know about your hotel’s rates and any offers that you are running. So, make sure you’re displaying them properly on your website and OTAs. 

This way, they’ll be informed and reminded about the deals that you are offering; in turn, making your property preferable over your competitors.  

e. Run ads

Advertising is an important yet cost-effective aspect to promoting your hotel’s discount offers. You need to set a dedicated budget aside for this and find the best ways to run ad campaigns.

Running ads can not only help you to promote your discount offers but also your amenities, packages, ambiance, location, and much more.

Initially, you can start with Google Ads, remarketing Ads, and then move ahead with advertising your offers on Facebook or Instagram; completely depending upon your budget.

Here are some ready-to-use ad templates that you can take advantage of.

Download FREE Google Ad Templates
Download FREE Facebook Ad Templates

That’s all I have to share about discount strategies and package ideas in hotels. I am sure this will help you run your promotions even more wisely than before.

Frequently asked questions

This blog might lead you to a few unanswered questions in mind. So here are the below FAQs that hoteliers like you may ask.

How effective can discounts be?

Discounts act as a dominant technique to attract new as well as repeat customers at your hotel. And, the higher your occupancy; the better upsell of your services.

How do discounts attract guests?

In discounts, guests gain valuable services and stay at a reasonable cost. This stands true for every industry out there. So, if you offer a good deal that saves up on their budget, then naturally it would attract them to book with your property.

Can I offer multiple discounts to my guests?

Yes, you can definitely run multiple promotions. In the event where you have multiple active promotions and a guest is eligible for more than one of them, then the promotion with the highest discount will be offered. This would not only benefit your business but also deliver great customer experience.

Can my guests apply promo codes twice?

No, your guests can avail an offer through a promo code only once i.e. while booking. However, there are some promo codes that come with the exception of applying it multiple times. Additionally, this depends on the application you’re using to run and manage your promotions. 

Conclusion

We know, the hotel business is a vast one to look into. But, if you work with the right approaches, then you can surely prosper in no time.

Hence, amongst the various strategies mentioned here, all you got to do is select the MOST SUITABLE ones for your property and BE CONSISTENT in applying them.

I hope these strategies make your business more fruitful. Do let me know how this works out for you (via comments), and if you need any guidance to implement it.

Complete guide to hotel revenue management

The post A Definitive Guide to Discount Strategies in Hotels [Examples Inside] appeared first on eZee Absolute.

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