Categories of hotel supply: It’s all about perception. Japan can be a place full of Jasmine Tea, quick naps, # block, #nuo street names. Japanese couples sleep in separate beds and don’t negotiate. They expect more on price. Their culture is strict and polite and bow with 2 hands when they give a business card. Know your audience.
TYPE of Beds & Bedding/Room Type:
- Single-1; Price/person based on room types
- Double-2
- TRL-3
- Quad-4
- Rollaway-Fold Away
- ADR-Total $/Total Room-Nights
- Occupancy %-Total # of occupied rooms/total # of rooms
- Room/Night-One occupied room during one night stay
- Family Plan-Family plan, children don’t pay for stay; Kids pay for nothing below 12 years old
- Extra Person
- ADR=Total$/Total Room-Nights
- Cancellation Rate-# of canceled bookings/total bookings % (the UK is 14%, about a third, higher for countries like 55%); People like to have multiple choices
- Average Transaction Size=Total Sales ($)/#of consumed bookings
- Average Stay=# of Room-nights/# of bookings
- Lead Time (LT)=The Time Between the date of reservation and date of service
- Sold Out-The hotels has no more rooms available for a certain night; Can you think of increasing ADR
- Over Booking=The hotel took a risk and confirmed more than available
*Look at cars parked outside of motel and number of lights on. Orlando has a standard of 2 double beds. Bed based on family relations in the hotel. Room types are how many people are allowed for the money you have made and defined by local relations (usually). The fire department in the New York District.
AMENITIES
- Markup from Top is 100/1-10
- Markup from Bottom is 100/10
- Net + MU (%)=Selling Price
Turnkey, margins, and groups; Tizv; Offer economies of scale: Rights individual vs. FLAG BRAND CHAIN (Rate Parity); 12% TR
- Franchise-Renting Brand
Owner/Individual 20%
Lease (Acord) 8%
Brand Contribution: Call Center, National Sales
FLAGGED HOTELS
- Pros: CRS, Loyalty, Brand Recognition, Corporate Level Experience, Purchases Power, and Regional Sales, Marketing, and Revenue Management
- Cons: Brand Fees (7-15%), Brand Standard Requirement, Brand Vulnerability, and Distribution Restrictions (BRG, LNF)
INDEPENDENT HOTELS
- Pros: No Brand Fees, No Distribution Restrictions, and No Brand Vulnerability
- Cons: No CRS, No Corporate Level Experience, Limited Purchasing Power, and No regional team
- Motel-Accommodation/No service
- Motor Inn-Parking lot
- Inn-No parking lot
- Hotel-Motel 6; are franchises
- Resort-Activities; go and not have to pay; must have a pool
- AirBNB
- Hospitals
- Hostels
- Timeshare
- Capsule Hotel
- Campsites
- Home away from-unit by the door; one family staying, and most numbers
- Bed and Breakfast-More than 1 room with a breakfast
- Business Hotel-conference facilities with at least 50 people and Hotel Definition
- Mega Resort-More than 1,000 resorts; The largest hotel with rooms is the Venetian and MGM Grand in Vegas
- Brand-Group of Hotels under chain that carries the same name and follows least quality assurance and follows list; owned by chai
- Hotel Chains see below
INDUSTRY LEVEL OVERVIEW ACCOMMODATION
- Central Purchasing/Economies of Scale
- Need to meet brand standards
- Growth only through additional Franchise purchase
- Pay-up from a fee to join the franchise
- Pay ongoing royalty as % or revenue
- Property run by owner/manager based and brand standards
- Buy Brand Recognition
Dependent on Brand Strength for sales and reputation
GDS-Founded by American Airlines
- Sabre
- Apollo
- Worldspan
Hotel Chains
Chains always make money; the owner does not always; Decrease in Franchisees and Increase in Independent Hotels
Close to 30% of Hotel Owners are Indian
Marriott (Ritz-Carlton, Farfield, Mariott), Hyatt, La Quinta (4 seasons), Motel 6, Starwood (Upscale choice is the lowest in Starwood Hotels) 9 Brands), Bestwestern, 4 seasons, Choice (Sleep Inn, Clarion), Wyndham (largest chain with 6,000 Hotels), Fairmont, Wnydham (Window, Days Inn, Howard, Travelodge, Super 8 Motels; Is an organization that manages distribution, and support more than one hotel brand
Service Facility: Laundry, Restaurant, Business Room, Wi-Fi, and Room Service
Not Service/Amenities: CTV, Shampoo, Housekeeping, and Pool
IHG 4,7000 only own 9 and the largest
- Market capitalization: # of shares available to purchase x $ price; also known as the base company on how much money you make
- 54 Billion on Priceline; $10.5 on Expedia
SPLIT
- Hilton International/Hilton Corporation; Blackstone Brought
- Sell Assets and be more liquid and get cash for global expansion
# OF HOTELS OWNED
- Hilton – 25 Billion
- Marriott – 21 Billion
- Starwood – 12 Billion
- IHG – 10 Billion
- Hyatt – 8.6 Billion
- NY WOLDOFF 1.95 Billion = 1.3 Million key
Types of Locations
- Hotel-building with units
- Vacation Homes-Has have only been around in (500,000 units/world) 10 years
- Air BNB-Living Family
What you see in a Contract:
Giata-Provides content/image descriptions
Occupancy-0
No Show and Cancellation policy are shown
Twin-per room type
Per unit-Homes, same rates
Click see in extranet
Board base-anything extra; breakfast
Supplements-additional charges to the hotel; mandatory/optional
The lower the Cutoff, the more we can sell up until Date of arrival
Shoulder/Low Season;
CONTRACTING: The product needs to challenge Competitors by using a harvesting strategy/steal and focusing on own hotels. They different types of contracting options are
- PRB A nightly PRB is the best rate with the best price. There is a political debate in the company. Challenge is to not loose 1 night. Cushion/Option (Allotment of Room nights for a PRB + Extra nights or no cut-off). You never get a cushion bigger than a PRB. GPE policies longer than lead time is better; red means sold out and then there is also stop the sale. Exclusive Deals- PRB’s are 1 and PRB-yellow
- Guaranteed Revenue Aggregator
- Ensures top exposure
- Priority within sales and marketing
- PPA-PPA-Preferred Partner Agreement
- Ensures prominent exposure
- Flexibility in allocation and pricing
- Market Share Driver
- Guaranteed rate differentiated 10%
- POP: Override base on performance +/or relationships. Can level out competitors’ deals and fix GPE.
- IDC:
- Exclusive rate for Airlines/Points Redemption Programs
- Top Exposure for that clientele
- Incremental Business for the Hotel
- Global Distribution Partner
PPA, PBP-Won’t Last Forever
Winning Through Differentiation
- Early Booking and Travel Window
- Length of stay and promotions
- VIP Check-In
- Upgraded Room Types
- Rates + Availability on Higher rating categories
- Waived Occupancy Settlement
- Report Fee Waived
- Sunday Night Special
- Product Distribution of exclusive rates for big clients like AA and Emirates
- Sales has diver product line, pr, band prepaid $ up front
MULTIPLE:
- Rate War
- Limited Time Communication
- $ Goes to set # of hotels
- Convincing hotels to change
Cutoff/Release
SMALL: Connecting with something else
April, May, and June rates for FIT
9 Months to renew the contract; why sits on the list; they think we can renew easily; this a CRM problem
Take out outlier: Cache’s or not
Extranet-allows supplier to come in and make changes
Isynergy is the QA system for contract data entry
QC-loss on both sides
Low permissions means they can only go down and benefit Tourico; more rooms
High permission they can go up and down on the allotment
Channel managers; hoteliers website pages; Rate Tiger, SiteMinder, TravelClick is a Channel Manager, etc.
Gross Cancellation Module
Ghost Card-Paying chains with credit card
SWITCHES AND DIRECT CONNECT IN TRAVEL
- HSBI
- DERBY
- Openjaw-Ireland
- Travelbox
- Juniper
- Softvoyage
- Switchfly AeroMexico=Trend is decreased in PRB for Switchfly
- Nemo
- Kangaroo
- Hilton Adaptor->Direct Connect
- HiltonM2Provider->DC/Switch
- Siteminder-Channel Manager
- Synaxis-CRS
- Trendprovier
- Wyndham-Derby 5
- HPI-Las Vegas
- Juniper-Switch over and Gammot of trends down; Technology
CRS-Central Reservations; multiple touchpoints
PMS-Property Management System; Run Building
Hotelbeds=select destinations/price; we can give an override to them
Switch-do they have it mapped
Client uses them or sign into existing XML feed; 60% of business in South America is a switch; priorities are different and best $ wins for feed; you can filter business and have an incentive
Canadian Switch
- Hotel
- Vacation Homes
- Ancillary
- XMR Feed=Car
Contract Management, Research, and New Existing/Client Data
External Providers
- HSBI-Switch; Vegas (Hoboo); dynamic
- Switchfly
- Derby Soft-Hyatt, Wyndham
- Choice
- Accor
- Hilton
- Marriott: DC, Margins
Hotel Organization:
Sales, Customer Service, HR Manager, Front Office Management, Banquet Captain, Banquet Manager, Food and Beverage Director, and Director of Revenue Management
IDS=Internet Distribution Systems
RMS-Revenue Management System
CRM-Colener
Channel Manager, Ezyield Siteminder; Push rates in too system
Single Image Inventory-This is what I see
Legacy system is old
Metasearch-rates are transparent.
Unconstrained Demand- Whether it’s canceled or not
No Switch
GDS: Sabre, Amadeus, Worldspan, and Galileo
IDS: Easyres.com, plentyrooms.com, Hoteltravel.com, conferencehotel.com, reservetravel.com
CHANNEL CONNECTS: Booking Last, Kayak, Agoda, Expedia
BOOKING ENGINE: Hotel Web Site, Mobile Web Site, Facebook, and Google Analytics
VOICE: Hotel, Central, and Reservations