About this Episode
Opaque bidding mechanisms are particularly attractive to value-seeking, non-brand loyal consumers who want 4 and 4 ½ star accommodations but don’t want to pay retail rates. Sites like Priceline and Hotwire that have opaque mechanisms offer hoteliers an opportunity to price into this segment while maintaining higher rates at retail outlets. Leveraging these sites typically results in improved RevPAR.
Tips on getting started with opaque sites:
- Start using them as soon as possible
- Give higher rates with restricted inventory
- Use them day-of or day-before
Click for Video Details
- Episode #20
- Posted on January 25, 2010
- Duration: 11:45
- Captions:
the role of opaque sites in the travel planning process
how can hotels use opaque sites in their eBusiness efforts?
what role do opaque sites play in the travel planning process?
examples: Hotwire’s opaque mechanism, Priceline’s name your own price mechanism
part of the service experience is disguised until post-confirmation
attractive to value-seeking, non-brand loyal consumers
interested in a level of experience, 4 star, 4 ½ star
Priceline = 50% discount to retail rates, Hotwire = 35-40%
consumer gets a great deal but with uncertainty about service provider
opaques naturally segment customers into value-seeking, brand-switcher
price into that segment while maintaining higher rates at retail outlets
can have multiple prices in the market without diluting demand
give a good idea of demand by providing data on bids and looks through mechanism
opaque mechanisms decrease ADR but improve REVPAR
start to use these sites as soon as possible
give higher rates with restricted inventory
use these channels day of or day before
will see bottom line REVPAR effects pretty quickly
these mechanisms require a fair level of competition in the market
opaque site users are hardcore loyal
consumers preach the use of opaques to each other
opaque site users are mechanism loyal vs. brand loyal
alternative method to sell to this segment at a more profitable and higher price - Embed Link:
4 Comments
What can a hotel that is a very nice comfortable 2 -3 star hotel do to be more attractive on these opaque sites?
Thanks Mary
I am surprised more people are not drifting toward this type of purchases in this economy. The rates I find on hotwire beat employees’ rates I receive thru any brand!
We are training our customers to wait until the last minute to book a room at a lower rate.
As always, keep your finger on the pulse of your revenue stream. Never “set it and forget it”.
Great clip. Thank you to Chris and VFM for offering this service!!!
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