Top 5 Revenue Management Tips and Distribution Ideas for 2024- Xotels

Adapt and evolve: forget about practice

In his book Outliers, author Malcolm Gladwell popularized what became known as the 10,000-hour rule, by documenting the lives of successful people such as Bill Gates, Mozart and the Beatles. “Ten thousand hours is the magic number of greatness”, he wrote, inspired by the work of Daniel Levitin, the neurologist who scientifically proved that “10,000 hours of practice are required to achieve the level of mastery associated with being a world-class expert in anything”.

The theory is fascinating, though, not always reliable, especially in our field of hotel revenue management and distribution, where adjectives such as disruptive are frequently (over)used and success is measured more on innovation rather than consolidation. A defining factor here is the ability to adapt and evolve!

As Marty McFly (from Back to The Future, a movie the more seasoned hoteliers amongst use watched in their younger years) once wisely said, “I guess you guys aren’t ready for that yet. But your kids are gonna love it”. So, what exactly are our kids going to love when it comes to hotel distribution and revenue management? Here are my Fab Four tips for 2024. No buzzwords, no hype. Just pragmatism.

1. GET MORE RIGID WITH CANCELLATION POLICIES AND FOCUS ON PACKAGES

As revenue managers know way too well, high cancellation rates mean worse forecasting and, ultimately, less profit. According to several studies, Booking.com has over 100% more cancellations than hotel’s official website, so hoteliers should limit the phenomenon by creating more rigid cancellation policies or preferring Not Refundable Rates over BARs. Make sure to have a solid rate strategy in place and avoid last-minute-panic prices (often the main reason for last-minute cancellations).

According to a recent Expedia survey, “package travelers typically book further in advance, stay longer and are less likely to cancel due to the non-refundable flight element, which helps revenue managers to take more balanced and far-sighted decisions and forecast with higher accuracy. On average, customers who purchase vacation packages book more than 2 times longer than customers who purchase hotel only, they stay on average 2 times longer and cancel at 1/3 the rate as a standalone booker”. So make sure to integrate package rates in your revenue strategy. But better make d.mn sure to price them well, so you don’t erode you revenue potential …

2. IF YOU CAN NOT PROTECT FROM BRANDJACKING, MAKE SURE TO HAVE A STRONG GOOGLE HOTEL ADS PRESENCE

You may have heard about the recent Google ads trademarks policy update. Up until last October, hotels could file a complaint with Google for trademark infringement, as I explained in this article. Unfortunately, Google now allows virtually any advertiser to bid on your hotel name. At this link, in fact, you can read that “Advertisers may use a trademark term in ad text if they are a reseller of, offer compatible components or parts for, or provide information about the goods and services related to the trademarked term”. How to fight back? You can, of course, invest in brand protection on the main search engines, but a more effective strategy may be to strengthen your presence on the Google metasearch engine. By connecting your booking engine directly on the Google Hotel Ads program, you will be able to sell your rooms directly, undercutting intermediaries. Google offers different price models: commission, ROI, or bid, so it is a virtually risk-free investment. Moreover, Google uses machine learning to maximize ROI, so the human factor involved is very limited. Make sure that your IBE supports GHA at this link and get some direct revenue back!

3. FACILITATED IS THE NEW DIRECT

You’re very likely familiar with TripAdvisor’ Instant Booking, but what about BoG? BoG (short for Book on Google) allows internet users to book a hotel without leaving the SERP. The concept of facilitated booking is nothing new, but when the booking is facilitated by Google, there are good chances that it will be an Industry game-changer. Until last year, BoG was only available in a few markets (US, UK, Australia and New Zealand), but it has now rolled out in over a dozen European Countries as well. Reducing the friction during the booking process is a problem that our Industry has been trying to solve for over a decade, with little to no success. It’s indicative that Google decided to integrate Hotel Ads directly in the Google Ad (former Adwords), and in a future not so far away (summer?), you would be able to cross-advertise between the two channels, improving ROI and ad pertinency. For the time being, Google doesn’t always show Book on Google in their Google Hotel Ads snippet. Below, find an example on how to view BoG:

Example of BoG Reservation

Step 1: Hotel Selection