Deploying a share shift strategy to grow hotel revenue

Client

World’s leading business partner for managed travel with presence over 140+ countries and operating with 17,000+ travel professionals.

Overview

A global TMC was losing out on opportunities to maximise its revenue from partnerships with specific hotel chains. Large TMCs typically negotiate direct contracts with large hotel chains for better deals and incentives on hotel reservations. For instance, a TMC could negotiate a deal that would guarantee a doubling of its incentive or base commission on achieving a booking of 10,000 room nights for the TMC’s customers over one year. Since the volume of travel bookings managed every day is high, such deals can easily help TMCs increase their revenue from hotel bookings. There’s a catch, though – booking hotels that are a part of the chain and earning additional incentives from it is not as straightforward. When TMC agents book through different channels, they get different rates and commissions from each. For instance, bookings made from Online Travel Agencies (OTAs) won’t earn commissions for a TMC – the OTA gets the commission.
The existing system at the TMC was not equipped to efficiently monitor bookings across multiple clients and platforms for the same chain of hotels. This made it difficult for agents to monitor and promote bookings that would earn greater revenue.

Key icon

Key Challenges

Lack of standardised booking

Lost revenue from hotel chains

Promote select preferred hotel chains

The problem

Since multiple bookings were made from different channels that had no single point of integration that could monitor or capture all the data, it was nearly impossible for the TMC to leverage negotiated rates, deals and incentives offered by partner hotel chains for maximum revenue. The existing system was also unable to:

The existing system was also unable to

  1. Promote selective preferred hotel chains to relevant corporates.
  2. Recommend high-value booking platforms for the hotel chains.
  3. Monitor the bookings made on the hotel chain accurately, to enable the calculation of commissions or incentives due.
  4. Difficulty in leveraging negotiated rates, deals and incentives offered by partner hotel chains

The need: build, consolidate, redirect

Hotel bookings are made through both, GDS and non-GDS channels. Since the existing system didn’t allow for easy data management across the platforms, an agent would book a hotel based on their limited knowledge of the best platform for a specific client/hotel/employee profile. Booking through a GDS meant that most data – not all of it – would get captured; using an OTA meant that the OTA would receive the commission; and booking directly through the hotel meant that the booking data wouldn’t be captured directly into the negotiated deal information. Whichever way the TMC looked at it, the lack of a unified system was resulting in revenue losses.

HotelHub’s solution

HotelHub built a solution that allowed TMCs and their agents to focus on hotels with higher commission returns.

  1. It provided a common platform which captured all hotel information across multiple booking channels and made it available to the agents
  2. Additionally, it allowed promotion of specific, high-value booking platforms for particular hotel chains, pushing other platforms to a lower spot on the list of preferred booking channels. For example, a 5-star hotel would be blacklisted for booking through an OTA and promoted to be booked on a GDS
  3. The hotel chain itself can be promoted and brought up in the search in order to improve bookings on that chain
  4. The HotelHub platform can also account for ‘On Request’ bookings (bookings made directly with the hotel whenever hotel rates are not available on the GDS), so that direct bookings are also accounted for, in the total number of bookings for the hotel chain

The result

With HotelHub’s strategic solution, the TMC was able to develop a clear strategy and shift the volume of bookings from low-revenue to high-revenue opportunities. The share of bookings with the partner hotel chains increased by 20% over 2 months. The TMC was able to achieve their target for the year from the chain, resulting in additional revenue of USD 500,000.

Key Result

Key Results

Enhanced traceability of hotel bookings across clients and channels
Increased leverage for better rate negotiations with hotel chains
20% increase in bookings of preffered hotels within 2 months of implementation