Will Consumer centric sites drive 100% non refundable Hotel Reservations?

Back in January, USA Today featured an article on  BackBid the site that encourages hotels to bid for a customer’s business. In brief as a hotel guest you create a profile in Backbid and email them details of an existing reservation which is then offered out to participating hotels to bid on. Backbid then email you back with offers from competing hotels.

In March,  Smarter Travel Media, a subsidiary of TripAdvisor launched Tingo, a site that promises to automatically rebook your room if the price drops between date of booking and date of arrival. Tingo promises to refund the difference to your credit card post stay.

The success of both sites relies on revenue strategies that haven’t met expectations resulting in the need to reduce rate closer to arrival – in contrast to best practice which advocates a strategy that focuses on achieving rate gains where possible closer in to date of arrival. Both also rely on working within the cancellation policy of the hotel – even when the rate is prepaid.

How to manage it

Keep a track of  rates available for sale right from the date you make them available through to date of arrival, (use an availability control sheet to monitor changes to rates – what you did, and why and when you did it) particularly when offering pre-paids, and try to ensure that cancellation policies  on pre-paids are as relevant as possible. For example if its a pre pay for booking 21 days out, then adjust cancel policies to reflect the 21 day booking window. Always offer a meaningful advantage to guests when you are asking them to prepay – i.e. you’re asking the guest to do something for you – and in return you offer a reward. Try not to let the future unrestricted rates drop below any pre-paids,  and don’t conflict with your BAR rates.

Both sites are focused on the US right now, but definitely one’s to watch…

One thought on “Will Consumer centric sites drive 100% non refundable Hotel Reservations?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s