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Best Practices for Driving More Profitable Revenue for City Centre Hotels

Objective: City centre properties are in the fortunate position that there is usually higher volumes of transient business than other locations. They are also usually well connected with a variety of transport options from airports to train stations to large public transport networks. The other side of the coin is that cities are hyper competitive destinations due to the volume of Hotel in small geographical areas, i.e. Las Vegas strip has more than 40 thousand hotel rooms! This presents many challenges but also opportunities for city centre properties in driving their direct bookings.

Common challenges for city centre properties are:

  1. Heightened competition from OTAs and third parties
  2. Last minute demand
  3. Shoulder days
  4. Higher cancellation rates

There are lots of features within Allora, Avvio's AI Booking Engine, which can help a City Centre property to drive their direct bookings and ultimately increase their profitability.

1. Closed User Groups (CUG)

OTAs and third parties can play a vital role in driving revenue for city centre hotels – helping travellers discover their accommodation options in a “one stop shop” style website. They quickly help filter through the huge volume of accommodation options that a city destination can offer. The ranking position on these websites can be very important to Hotels but it comes at a very high cost. Often if a Hotel chooses to have a lower price on their direct website, this can negatively impact their ranking.

Avvio's Closed User Group functionality is a tool to help counteract this. It offers an incentive to the Booker if they provide their email address. By providing their email address it generates a code to “unlock” a special rate which cannot be seen by the third party search algorithms and so doesn’t have a negative impact on the Hotel’s ranking.

Another advantage to CUG functionality is that it generates a clean, GDPR compliant database for the Hotel which can be used in email marketing campaigns. City Centre properties can often have high repeat business and having a database that can be accessed for email marketing can really help build loyalty and foster these relationships.

Three reasons to use Closed User Groups
  1. Grow your database with quality and engaged email addresses. 
  2. Negate any parity issues with third parties.
  3. Encourage repeat direct bookings by keeping in touch with your database.

2. Dynamic Room Substitution (DRS)

One of Avvio’s most unique features is Dynamic Room Substitution which allows you to be more creative with your room inventory. Best of all the OTAs cannot do this so it is a fantastic opportunity to channel shift revenue from OTAs to your direct website.

Let’s put it into a hypothetical situation with a phone call to a hotel -

Booker: Good afternoon, I would like to book into a standard room for four nights please?

Reservation Agent: Unfortunately we only have superior rooms available which would be an additional €15 per night.

Booker: Sorry that is out of my budget.

Reservation Agent: Apologies we cannot accommodate your booking on this occasion.

The rate at the Hotel was €150 per night, the value of the booking for a standard room was €600 or €660 for the superior room. Would you lose a direct booking for four night for €60?
If you consider if the superior room booking came through an OTA, the commission at an average of 15% would have been €99. Driving this booking direct by accepting the rate of the standard room still gives the hotel an additional €39  in room revenue.

DRS allows your booking engine to do what the reservations agent would have most likely done in the above scenario - to take the booking! DRS creates rules based on a minimum length of stay. For example for searches of four nights or more please use superior room inventory if available.
DRS is very flexible functionality allowing you to use run of house or total room inventory. To the Booker they do not know that a different room has been allocated to them, they still believe they are booking the standard room which allows you to move inventory as you wish closer to the arrival date. Here are some examples of how Avvio customers have used it:

  1. Hotel’s ALOS (Average Length of Stay) through the brand website is two nights, a 160 bedroom hotel, of these there are 85 standard rooms and 45 superior rooms with a price differential of €30. The standard rooms always sell out first as the lowest price rooms. They have set up their booking engine for searches of three nights or more, their booking engine substitutes in the superior room. This helps grow their average booking value and increase the ALOS on their brand site which ultimately has savings operationally.
  2. The standard rooms at a Hotel have the highest cancellation rate of all room types. They know that typically 10% of their standard rooms will be cancelled in the same month of stay. They have set up their DRS for booking lead in time of 30 days. For searches where arrival is 30 days or more, their standard rooms are substituted by the next highest category as they know they will likely get cancellations for standard rooms and be able to move these Bookers back to the room they have booked.
  3. Sunday – Tuesday has lower occupancy than other days of the week. They used close out functionality on DRS to close out other days of the week. For Bookers searching to stay Sundays/Mondays/Tuesdays, the rule was set up for one night that if there were no standard rooms available, the Hotel sacrificed the additional revenue for a deluxe room to help increase occupancy on these nights.

Even through the three examples above we can see how DRS can counteract three of the challenges for city properties identified earlier.

Three reasons to use DRS:
  1. Competition from OTAs – they can’t do DRS!
  2. Shoulder days
  3.  Higher cancellation – overbook so you have bookings to replace cancellations
DRS in action:

A search for February 4th for one night shows that the standard room is not available. 

When we change the search to 3 nights - February 4th is available as DRS has kicked in and substituted with the executive room. 


3. Using Waitlist to anticipate demand for next year

When searching on the brand site, if a Shopper is returned unavailability, Avvio can enable a Waitlist option to be displayed. This allows a potential guest to leave their details with the property should they be able to facilitate this request going forward.

The Hotel receives a notification for all Waitlist requests. On reviewing your Waitlist a property will generally find requests they can facilitate, potentially via cancellations or returned group inventory and this is a great way of recouping lost revenue via these sources. The system is set so that you can select a pre-defined email template to use to respond. These emails are fully customisable and can include general blurb and imagery with deep links to a Book Now link, hidden offer or any other source.

If the Hotel is not in a position to facilitate the request this can be a great opportunity to open the lines of communication and foster relationships with potential guests for future stays.  

Create a promo code for requests that you cannot accommodate so that if they are looking to return, they have an additional incentive to book. Remember this Booker has expressed interest in your property and was willing to book it – in sales terms this is a “warm lead” for future bookings!

The Waitlist also helps gauge the level of demand and interest in particular dates of stay. A great opportunity to keep this data particularly if it’s a reoccurring event / occasion. If you know you got 20 Waitlist requests for a particular date/event, you may limit the inventory on third parties the next time around as you know you can sell this inventory through your direct channel. 

Three reasons to use Waitlist
  1. Generate good will with potential guests by offering them a promo code for future stays. 
  2. Use the Waitlist for high demand dates to anticipate next years demand if it is a reoccuring date i.e. June Bank Holiday weekend
  3. Helps to replace cancelled bookings. 

4. Event Rates  

Many cities are home to Convention and Conference centres which house events for large numbers of people. Hotels themselves can also play host to these type of events. Multiple rooms are often booked in “blocks” for events in convenient properties and Allora allows you to create Event Rates to accommodate these through your booking engine.

Our Event Rate functionality allows you to allocate a specific number of rooms to a rate that is being offered to delegates/groups. The benefit of this to delegates is that is allows them to make their booking any time of the day rather than depending on the office hours of the reservations team. Online Event Rates also free up time for the reservations team rather than taking these bookings that would have been coming through email or phone.

Event Rates on Avvio can be set up to offer a rate on shoulder nights for those arriving before, or departing after, the event. This allows the Booker to make one booking using both the event/conference rate for the specific dates and BAR on other days. Again another feature that allows you to drive shoulder nights.

Three reasons to use Event Rates
  1. 24/7 access to conference rates for overseas delegates.
  2. Another selling point to add to Conference & Events collateral - the flexibility for bookings. 
  3. Shoulder night functionality avoids duplicate bookings. 

5. Early Check In (ECI) / Late Check Out ( LCO)

As we know cities are often within close proximity of an airport and with that brings a variety of arrival and departure times. This leads to increased demand for early check ins and late check outs from weary travellers. Many hotels can’t guarantee either as it will largely depend on occupancy on day of arrival or departure.

Firstly Avvio's ECI and LCO feature assists a hotelier to monetise this additional revenue stream further and increase ABV. Secondly it gives you the flexibility to offer these on days / dates where it suits. For example, you could allocate 10 late check outs to a Sunday night as you know that you rarely have 100% occupancy on a Monday. This allows you to generate more revenue from rooms that may not have been sold regardless. 

Three reasons to use ECI and LCO
  1. Grow your revenue on the books by upselling to existing guests.
  2. Increase your Hotel’s booking appeal for international guests. 
  3. Helps with shoulder date revenue and not a feature offered on OTAs. 

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