Protravel Warns of Hotel Marketing Gimmicks and Effect on AgentsApril 12, 2010 By: Staff
|Priscilla Alexander, president of Protravel International|
Protravel Interational President Priscilla Alexander and Senior Vice President Andy Pesky recently co-signed a letter to the industry regarding hotels they feel are ignoring some basic tenets of luxury selling. We got a copy, and are sharing it below:
We have been increasingly disturbed to see the recent level of participation by those in the hotel industry promoting sales through the online “members only” discount auction sites for luxury travel. There are many misconceptions about this that should be clarified. Perhaps that way you can make a more thoughtful decision about whether this is a wise marketing strategy or just an immediate knee jerk reaction to challenging times. It might be worth recalling the damage hotels did to themselves and pricing following 9/11. For most it took years to get the market straightened out.
1. Membership: That is really a joke. Both of us applied separately to be “members” of Jet Setter and Ruelala. It took less than five minutes to receive an e-mail “accepting” us. What a data base these marketers are building for future businesses.
Conclusion: This is a clever marketing tactic around a false sense of exclusivity.
2. Limited Sale: The time to book is limited to a two day period. However there is nothing limited with the window of availability anywhere from 90 days to even astoundingly up to 10 months with some modest black outs.
Conclusion: This is another clever marketing gimmick to create a sense of urgency.
3. Controlled Inventory: This is also a misconception. Most hotels are offering these extraordinary discounts not limited to minimum level rooms but for most any room category including suites.
Conclusion: Hotels are now commoditizing their whole property ignoring some basic tenets of luxury selling. Our targeted focus is with Virtuoso properties and others who market to Protravel as a luxury product.
Let us consider the unexamined impact participation in sites like Jet Setter and Ruelala have on the travel agency community and your loyal core guests. Obviously these discounts up to 50 percent bypass the traditional agency distribution network. Yes, there is the potential loss of income for agencies but the financial impact is less significant than the long term consequences. We can not book our customers into hotels that have guests arriving at the same time at half the price we have confirmed. Nor can we know if our own customers are avoiding us to take advantage of these deep discounts.We have also been confronted with customers asking us to get the discounted rates for them; customers asking us to just cancel existing reservations; and even some, not happy with the answer, simply telling us to choose another property.
Over the years we have learned a few things. Studies have proven that deep discounts one time do not drive business for the future at full price. Conversely, loyal customers prepared to pay full price are deeply offended to learn from other guests that they paid considerably less. It makes people feel foolish.
Price is one of the criteria for determining the concept of luxury. You can not sell luxury on the cheap. It is one of the reasons we have fought to have you maintain price levels and use value adds as an incentive.
We are not insensitive to the challenges you are facing these days. We are willing to support efforts to more aggressively sell soft periods with added incentives. No doubt, many agency consortia would welcome the chance to join a sales initiative that generates upfront money for the hotels through a valid network of sellers.
In the meantime, it is foolish to support your properties during the periods that were valid for the deep discounts. We see it as best, lost revenues but at worst, jeopardizing our credibility with loyal customers.
Priscilla Alexander, President
Andy Pesky, Sr. Vice President
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