As Hotel Negotiation Powers Grow, Revenue Management is Key


What’s new in the hotel industry this week? Fitch Ratings released a promising study indicating that hotels’ negotiation powers are growing, and might be gaining an edge in their struggles to find favorable relationships with OTAs. The Hotel Data Conference came with a lively debate on OTAs, distribution costs, and Expedia’s new move to offer hotel loyalty rates on their own site. Conclusions from the conference: it’s a race-to-the-bottom type of bad idea.

Meanwhile, we released our second Hotelier Cheatsheet, and it’s all about why revenue management is such a key part of the industry struggle to increase direct bookings. Check it out below for a quick and easy guide. Meanwhile, for those with more time, SiteMinder released a revenue management guide for those looking to build a revenue strategy from the ground up.

Pick your favorites and get reading!

Fitch: U.S. Hotels Gain Incremental Negotiating Strength Over OTAs

The balance of power has shifted in favor of U.S. hospitality companies in their tenuous relationship with online travel agencies (OTAs), according to Fitch Ratings. Solid industry fundamentals have allowed many lodging brand owners to negotiate more favorable commission rates and contract terms, and hotel brand consolidation will perpetuate this trend.

However, OTAs have several avenues available to offset the latest round of the long-standing trend of commission rate pressure.

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Hoteliers, OTAs battle in distribution debate / Hotel brands pay 18% in customer acquisition on average 

Bharat Patel, chairman and CEO of Sun Development & Management Corporation and Doug Browne, president of Peabody Hotels & Resorts squared up in a mock debate in the Hotel Data Conference yesterday.

They discussed distribution costs, the book direct push, Airbnb and the new tactic of brands displaying discounted loyalty rates on OTA sites. Check out the debate below:

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5 Reasons Revenue Management is Essential to Direct Bookings

It’s important to stop and take a quick glance at your revenue management strategy regularly. Make sure you’re focusing on what’s really important.What’s important to your hotel in the short term? How can you make sure short term success isn’t at the expense of your long term gains? These are difficult questions, and they require regular check-ins to keep on track.

To help you do that quickly, this week’s Hotelier Cheatsheet is all about revenue management. Specifically, we’re looking at 5 reasons revenue management is essential to building direct booking

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The Fundamentals of Revenue Management: 26 important elements to make your hotel’s strategy a success

Revenue management is the cornerstone of running a profitable hotel. Without revenue management disciplines, you’re operating your hotel business blindly. The most successful hoteliers are savvy operators constantly on the lookout for smarter, more efficient ways of managing their hotel business, driving it to succeed.

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