Hotel pricing in a post-parity world - Duetto webinar slides
Transcript of Hotel pricing in a post-parity world - Duetto webinar slides
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Hotel pricing in a post-parity world
Webinar12 November 2015
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Your hosts
Sean O’NeillEditor-in-Chief & ModeratorTnooz
Kevin MaySenior Editor & ProducerTnooz
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Your presenters
Michael McCartanManaging Director, EMEADuetto
Etienne FaisandierVP, Rev. Management& Business IntelligenceMövenpick
Ted TengCEOLeading HotelsOf the World
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Poll no. 1Where are you located?
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Poll no. 2Which industry segment do you represent?
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Michael McCartanManaging Director, EMEA
Duetto delivers cloud-based revenue strategy to hotels, allowing them to maximize profits through actionable data to better manage pricing, revenue and business mix decisions.
Past Experience:
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What We’ll Cover
▍ Current state of rate parity
▍ Effects of parity on distribution
▍ Distribution of tomorrow
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Short History
1990s 2000s 2010s
1990sHotelchainsrequirehotelstomatchanyrateofferedbyanyotherparty
2002-2003Hotelchainsimposerateparityclausestopreventmerchantsundersellingthem
December 2013HRSorderedbyBudeskartellamt toremoveMFNclauses
April 2015Booking.com“voluntarily”dropstheMFNrequirementfromitscontracts
July 2015MacronlawpassedinFrance
2015
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Most Favoured Nation
▍ Clause designed by OTAs
▍ Obligate the hotel to give OTA the best price
▍ Example: Under a MFN, the seller promises Buyer A that it will not offer Buyer B better terms unless it first offers those, or better terms, to Buyer A.
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Rate Parity
▍ Practice introduced by hotel chains or brands
▍ Prevent any third party selling the room at less than the company-established rate.
$149PERNIGHT $149PER
NIGHT $149PERNIGHT
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Poll no. 3For hoteliers, what percentage of your
inventory is sold through OTA channels?
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Distribution Landscape
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Historically Travelers Booked Directly with Stay Brands
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Consumer Stay Brands
Courtesy
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Booking Brands Dominate Consumer Point of Entry
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Consumer Stay Brands
Booking Brands Courtesy
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Multi-Dimensional Purchase Path
6.5DigitalTouchPoints
Visitupto38Websites
Over6DayPeriod
Including10HotelWebsites
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Consumer Loyalty is Changing80 million people – the largest generation in US history64% of Millennials are more or as brand-loyal as their parents
What they want from a brand▍ Authenticity (humanize your hotel)▍ Engaged on social networks
What they want from a loyalty program▍ Easy to join and easy to understand▍ Unique, relevant and unexpected rewards
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What is Required to Thrive?
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How to Thrive
Start Practicing Revenue Judo
1. Redefine revenue strategies
2. Create a culture of collaboration
3. Connect with customers in booking process
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Redefine Pricing Strategy
▍ Dynamic free-float pricing for all segments
▍ Independently price every single segment, channel, room type and offer
▍ Leverage price elasticity regardless of market segment
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Open Pricing Versus Rate Hurdles
▍Create a dynamic floating discount
▍Don’t close channels, instead reduce discounts
▍Maximize Billboard Effect and drive revenue
▍Combine rates like the OTAs to ensure your IBE has at least the same deal
OpenPricing
Hurdle Rates
Mon
Mon
Tue
Tue
Wed
Wed
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RegionalOffice
Owner Hotel Brand
PropertyManagement
Collaborate Across the Hotel
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Operations
Sales &Marketing Distribution
RevenueManagement
GM
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Poll no. 4Whatmethodsareyouusingtodriveguest
loyalty?
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WELCOME TO THE
INTERNET OF GUESTS
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Today’s Undifferentiated Loyalty Isn’t Working
| Points| WIFI
| Points| Food| WIFI
| Points
| WIFI| Parking | WIFI
| Parking
| Points| WIFI
| Points| Parking| WIFI
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The New Loyalty: Personalized Open PricingYour most profitable guests become direct customers for life
€195 €1811-1 rate
€199€1751-1 rate 1-1 rate Public rate
€0 €190Non-room spend
€240Non-room spendNon-room spend
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Ted TengPresident and CEO
The Leading Hotels of the WorldLuxury hotel collection with morethan 400 hotels in 80 countries
HQ in New York City
Past Experience:PrimeOpusPartners,LP
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Rate Rarity
▍ Selling at the same price not fair
▍ 25% margins vs. 10% commissions –who has more resources?
▍ High margin = High rate?
$149PERNIGHT $149PER
NIGHT $149PERNIGHT
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What is the product?
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Rate Integrity
▍ Key players: Consumers and suppliers▍ What does the consumer get?▍ More choices for consumers▍ Suppliers match inventory
to demand curve
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Acquisition costs37%
20%
2009 2010 2011 2012
Commissionincrease
Revenueincrease
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Control your destiny▍Lose control of distribution =
Lose control of pricing▍Hoteliers: Your inventory. Control it.
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LoyaltyHow a loyalty program fits into your distribution strategy
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Looking ahead…
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Etienne FaisandierVP Revenue Management & Business Intelligence
Mövenpick Hotels & Resorts Upscale hotel brand and management company founded in 1973 HQ in Baar, Switzerland82 hotels, resorts and Nile cruisers
Past Experience:
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Channel Overload
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Regional pricing
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LoyaltyHow a loyalty program fits into your distribution strategy
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Revenue touchpoints
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RevenueManagement
Sales &Marketing
RegionalOffice
Operations
GM
Owner
Distribution
Hotel Brand
PropertyManagement
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Rate ParityHave recent rulings changed your approach?
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Looking ahead…
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Poll no. 5What is the future of rate parity?
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Q & A
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Thank you!
Send your questions and comments to [email protected]
Replay and presentation will be available on www.tnooz.com