What Is Rate Parity?

Everyone is asking this very question. What is rate parity and why is it affecting my online presence and diluting my brand. Well, here it is –

Disparity is the difference between quoted prices on hotel/guest houses/bed and breakfasts own website and those shown by online travel agents (OTAs) and other third-party channels. Disparity dents your profits by reducing the incentive for users to book direct, damages your reputation, causes customer confusion, and can create tension with your distribution partners.

Disparity can damage your hotel’s brand reputation by presenting a confusing, inconsistent message to potential guests, which undermines their confidence that they’re getting good value for money. Being undercut by OTAs discourages direct bookings on your own website, by sending customers through channels to which you have to pay a cut.

The parity world has evolved into a complex web of relationships between the main players: hotels; wholesalers; OTAs contracted with hotels; non-contracted OTAs; and metasearch engines. The main offenders are your bigger sites like GDS’s, HotelBeds, Agoda and most recently a local site which has changed its platform and is buying 3rd party rates – SafariNOW, which has turned into a metasearch site which crawls the internet to find the lowest possible rate.

All the bigger OTA sites are also now jumping on this wagon and buying these 3rd party rates to keep the consumers on their sites by offering lower rates. Some sites are cutting into their own commission profits in order to get that ‘sale’, they add ‘coupons’ and ‘early payment benefits’ to make sure they are offering the lowest guaranteed rate online.

 

Below there are a few examples on how these look –

Booking.com -

 

 

Expedia

 

This is how Agoda displays their coupons -

This is an example of Booking.com purchasing 3rd rates – 

The bigger sites like Booking.com and Expedia help you find your parities in order for you (Or us the OTA Team at Proactive) to sort or pinpoint them. Examples are below, they even add the screenshot and link so that you can see where the disparity is.

 

So, the question still remains, how do we combat this?

Research shows that this margin cutting and 3rd parties selling rates are not going to be stopping any time soon, our advice is –

-       Have strong legal binding contracts with your Online Sites, read all fine print and all T’s and C’s, these are lengthy and take up a lot of time, however, it will benefit you in the long run.

-       Always monitor and check on Booking.com, Expedia and TripAdvisor to see which site is causing the disparity and contact them urgently.

-       Make sure that you are offering the exact same price as well as specials on all sites.

-       Be aware of what sites sell and push out reduced and lower rates.

We have a qualified and passionate OTA team who deals with these issues on a daily basis, should you feel ‘depressed’ by disparity, give them a call or drop them a mail – this all-woman team IS your solution.

Ending off, read your contracts and know your rights.

 


Written By The Proactive Team 2019


The Dummies Guide to Hospitality Abbreviations!

Let us be frank here, we all think we know all the abbreviations in the hospitality industry but be honest now, there is some new or not so new ones that pop out of nowhere (well feels like nowhere) and take us by surprise. Thankfully, we have compiled what we call a “dummies guide to hospitality abbreviations” to make you feel all so powerful again – don’t worry we won’t tell anyone your secret 😉

Some of the abbreviations we have included you may have heard or seen before, but with our “guide” we would like to think we are enlightening someone out there, far far away in the world of hospitality.

We would like to start off with including a bit more of a description on your standard or well-known abbreviations. The goal thereof to better equip you with the knowledge of how to utilise these abbreviations and their purpose in your future endeavours.

Further to our detail on some of the abbreviations, we have also included a list below of your self-descriptive abbreviations which is worth a browse through, not too long I promise! We do believe with such a list in hand, one can go and conquer – it is like your typical term “street smart” but specifically in the hospitality abbreviation realm.

It is amazing to see once you get started, on how many abbreviations and unique terms exist and can be used in the hospitality industry. Going forward, we see abbreviations as an interesting subject to be delved into, discussed and shared.

 

ADR = Average Daily Rate

This is your actual daily room revenue and can be calculated by dividing revenue generated from income from hotel rooms sold by the total number of rooms sold.

ARR = Average Room Rate

For those wanting to go “out the norm” and be unique, here’s an alternative term you can use to Average Daily Rate.

BAR = Best Available Rate

The most dreaded rate structure by some……just joking! This is your “best available” rate at the time of booking for guests. It can be amended several times a day or week depending on the establishment’s occupancy or revenue strategy.

RN = Room Nights

This can sometimes be confused with Bed Nights (give me a minute, I’ll get to it) and is rather calculated by the rooms blocked or occupied multiplied by the number of nights each room is reserved or occupied. Bed Nights, on the other hand, is the number of guests in the rooms occupied – this is more useful in establishing how many sales opportunities there are in terms of a number of breakfasts, dinners or other extras.

LOS = Length of Stay

The number of nights that a guest stays at an establishment – something which we ultimately want to be a big number, the bigger the better. This value is the difference between the departure date and the arrival date.

OCC = Occupancy

I’m sure you all know this term, but did you know how to calculate it?

Here’s me throwing a spanner in the works now 😉

Occupancy = total number of rooms occupied / total number of rooms available x 100 (e.g. 75% occupancy).

Neat hey?

 

STO = Sell to Operator

I bet you thought it meant something else?

This is your typical term used in the hospitality and travel industry whereby you provide a discounted rate or a suggested selling price to travel agents or tour operators. The difference being their gross profit or commission.

ROI = Return on Investment

A proper description thereof is to measure the gain or loss generated on an expense or investment strategy relative to the amount of time or money invested. A typical example hereof would include a promotion or special with a decreased rate in an attempt to maximise the number of room nights or extend the length of stay.

OTA = Online Travel Agent/Agency

A third party, examples of such include sites such as Booking.com and Expedia, which sells your room inventory on your behalf and who is then paid a commission from any bookings received from this channel. For those of you that know us OTA Consultants at Proactive, and for those of you that don’t……well, let me tell you something we wonder workers manage, assist and maximise your potential in the online world.   

And finally, ladies and gentlemen introducing you to our complete guide of abbreviations and terms. Some of which we have included a mini-me description, whereas others we see as pretty self-explanatory.

ARI = Availability, Rates and Inventory

B2B = Business to Business

B2C = Business to Customer

B.COM = Booking.com

BNB = Bed and Breakfast

CMS = Channel/Content Management System

A very useful system used by establishments to manage and control the allocation of hotel inventory and rates across the countless distribution channels, including websites, third part sites, local sites and GDS.

 

Constrained Demand

The quantity of rooms that are expected to be sold for a date.

Considers limitations such as a hotel’s capacity or restrictions on bookings. 

COMM = Commission 

COS = Cost of Sale 

COW = Cost of Walk

The cost of turning away a guest when the hotel is unable to provide the promised accommodation, which may include the cost of a hotel room, complimentary gifts, and probable lost future business.

 

CR = Conversion Rate

CRM = Customer Relationship Management

CTA = Call to Action

CXL = Cancelled/Cancellation

Days to Arrival

The number of days prior to an Arrival Date used to measure information such as a booking pace, hotel performance and forecast performance.

 

ECO = Environmentally Friendly

ETA = Estimated Time of Arrival

FB = Full Board

FIT = Free Independent Traveller

Free Sell

Function-Only business restrictions or event-only business restrictions are guidelines put in place at the establishment to ensure space is available for groups within their typical booking window.

 

GDS = Global Distribution System

Comprehensive travel shopping and reservation platforms that travel agents use to book airline, car, hotel and other travel arrangements for their customers.

HTI = Hospitality and Tourism Index

KPI = Key Performance Indicator

A key performance indicator has become more popular term to use and is defined as a measurable factor that indicates how effectively an establishment is achieving key business objectives. Key performance indicators examples include: Average Daily Rate (ADR), Revenue per Available Room (RevPAR), Occupancy Rate, Profits per Available Space-Time (ProPAST), Profits per Occupied Space-Time (ProPOST) and Function Space Utilization Percentage.

 

LRV = Last Room Value

The maximum amount of room revenue that a hotel can expect to make from the last room available for sale. The system uses the Last Room Value as a restriction control for low-value rates during busy periods and opens all rates during slow times.

 

MTD = Month to Date

NB = NightsBridge

NEG = Negotiable

No-Show

The case where some customers with a reservation do not show up to use the room(s) reserved for them, without explicit cancellation.

 

ORM = Online Reputation Management

OTP = One Time Password

Overbooking

The practice of selling more rooms that are physically present in the hotel to account for cancellations and no-shows. The goal of overbooking is to maximize revenue by achieving as close to 100% occupancy as possible on any given day.

 

PAR = Per Available Room

PAX = Person(s)

PMS = Property Management System

POS = Point of Sale

PPS = Per Person Sharing

PREF = Preferred

 

ROAR = Right of Admission Reserved

Room Block

A group of rooms that may be created to organize rooms to aid in planning, sales or other management tasks. Examples include associating rooms with a single fixed price, a single guest, a channel, a group or a single team of staff members that manage or maintain the rooms in the block.

 

SC = Self-Catering

SEO = Search Engine Optimization

Shoulder Nights

Nights of less occupancy on either side of peak nights.

 

SLA = Service Level Agreement

SOP = Standard Operating Procedure

SMM = Social Media Marketing  

T&C’s = Terms and Conditions Apply

 

TGCSA = Tourism Grading Council of South Africa

 

Total Revenue Performance

The intelligent calibration of demand across all hotel functions to meet overall business objectives. It is the ability to instantly and systematically decide which business to accept across multiple revenue streams at all times, based on the greatest overall value to the asset.

YTD = Year to Date

ZAR = South African Rand

Phew…..ok maybe I lied about the list not being too long!

We doubt we have covered every single term or abbreviation out there, but you got to make a start somewhere, right?

 

Looking at the list above, we feel as proud as a peacock to be in the hospitality industry and know there is an endless list of useful terms.

We hope we haven’t blown your mind, well actually we do 😉


Written By The Proactive Team 2019


The Future of Hotels Lies Within Their Systems

The Future of Hotels Lies Within Their Systems

 

From manual spreadsheets to an everchanging platform that extends well beyond the front desk…starting from the bottom now we’re here!

Originally, a property management system, known as a hotel PMS, was defined as a platform on which hotels could manage their reservations and front office duties. The hotel PMS replaced the manual, time-consuming processes of entering reservations on either paper or excel sheets. We live in a world where all products and services are online, including hotel services. Hotel PMS transformed into a critical business operations system which offers hotels a vast selection of services such as live availability, integrations across multiple channels, including accounting systems, point of sales, food and beverage operations, revenue management, housekeeping and maintenance management, database capturing which is just the tip of the iceberg.

With an abundance of options out there, how does one select the right hotel PMS for your property? The answer lies in that inquisitive mind of yours: “What features do I need from a PMS?”, “Does my channel manager integrate with the PMS?” and lastly, “What are the costs involved?”

Most hotel PMS developers have implemented cloud-based property management systems. With the advancement of cloud-based property management systems, it offers the option to log in and manage reservations from various locations, especially if you have an offsite reservations team or company. It also expands the hotel’s functionality towards guest-facing features like in-room controls, guest-staff communications, virtual concierge and much more.

A decent PMS should provide accurate and up-to-date information on the key performance indicators of a hotel such as average daily rate, occupancy, live availability and revenue growth.

What are the main principles of a hotel PMS? It gives you the technology to efficiently manage bookings and increase revenue and, in our book, is the quintessential solution to gain a clear overview of the activities in your hotel.


By Verena Van Rooyen 2018 – Reservations Manager


What is SEO and why is it important?

What is SEO and why is it important?

 

SEO stands for Search Engine Optimisation

SEO stands for Search Engine Optimisation. It is the practice of increasing the quantity and quality of traffic to your website through organic search engine results. In other words it is the activity that a search engine (SE) like Google, Yahoo or Bing uses to crawl the internet for content (words and phrases) on your web pages, then indexes the pages it finds and lastly ranks your pages according to how well it matches the words and phrases that someone is searching for.

Optimisation is the marketing activity that focusses on growing your visibility in organic search. It encompasses the technical and creative elements like images and words that are required to improve your rankings and drive organic traffic to your site.

In search results, Google™ and other engines display links to pages it considers relevant and authoritative. For example, if someone is looking for “Accommodation in Noordhoek” then the content on your website must match those keywords and phrases.

If you have accommodation in Noordhoek but the words “Place to stay in Noordhoek” is on your homepage, your page will not be ranked as high as another page that has the exact phrase on their homepage as the search engine only matched “in Noordhoek” on your page.

Search engines crawl through every word on your site. The more you have content relevant to what people are searching for the better your ranking. If you have very little copy on your site the SE finds it more difficult to find the right information. Images need to be alt-tagged with the same keywords and phrases to strengthen the ability to be found. You also need to link certain pages within your site.

Authority is greatly enhanced when other pages and sites refer back to your site, for example, a review about your property on Facebook or a 3rd party blog can link back to your site, strengthening your credibility. Social media and whether your site is mobile responsive are also integral tools to drive traffic to your website, in fact, Google™ crawls mobile responsive sites first.

In a nutshell: If you want to get better Search results then write words & phrases on your website that is relevant and useful to people who search for products and services like yours. Secondly, make it easy for people to share and link to your website especially on a mobile device.

 

References:
https://www.redevolution.com/what-is-seo
https://moz.com/blog/beginners-guide-to-seo-chapter-2


By Liezel van der Merwe 2018 – Digital Manager


How to choose the best Social Media platforms for your business

How to choose the best Social Media platforms for your business

 

Social Media is an essential factor when growing your business. Ultimately, your chosen Social Media platforms should reflect who your brand is and support the achievement of your business objectives.

Let’s take a look at the 3 key factors to keep in mind when choosing platforms for your business

 

1. Who is your target audience?

Firstly, it is important to be 100% sure of who your target audience is. You need to know where your target audience spends most of their time online, what their interests are and what they use different Social Media channels for. It is essential that you know what their online interactions are like within each of these platforms.

When choosing which Social Media platforms are most suitable for your business, it’s best to make your decision based on your target audiences’ demographics rather than merely basing this on what is currently trending. Don’t waste time by choosing a trending platform that it is least likely to bring about conversions.

 

2. What type of content would you like to produce?

Which content will you be able to produce? Do you have the resources to produce this type of content and are you willing to commit to producing this content in a timely manner? These are just a few of the questions you need to ask yourself in order to choose the best possible Social channels for your business.

For example, if you know that video content is your preferred content type, then you will shift your focus to video-based platforms such as YouTube, SnapChat, IGTV etc.  

 

3. Which platforms are your competitors currently using?

By now, you should have a pretty good idea who your competitors are. Take some time to have a look at which Social Media platforms they are currently using and how they are successfully making use of each of these platforms. This will give you an idea of how you can utilize each platform to make it work specifically for your business.

 

CONCLUSION:

It is essential that you take ample time to think about the time commitment that you’ll be willing to make to your Social Media accounts. Formulate your Social Media Strategy before making your final decision and then choose the platforms that make the most sense to your business.

 


By Genevieve Viljoen 2018 – Social Media Assistant