Urban legends, popular culture … are expressions that should be excluded from our vocabulary and from something as vital as our hotel marketing and revenue management. Pedro Carmona from the Innwise Revenue Management team warns us about strategies, dubious to put it mildly, to position ourselves in OTA’s, but include more than we can see.
Earlier this year, a news alerted the hotel industry: Booking.com would penalize hotels that did not provide the “promised” beds. The penalty to shut the OTA sales is the drop in their ranking positions lowering their customer visibility.
To avoid being penalized for Booking, according to Preferente.com, most hoteliers always choose to leave one or two bedrooms for sale but at a very high price, and this is because hotels contracted are obliged to have a quota basis or guarantee with the subsidiary Priceline preventing them to close sales. OK – understood…….
However, some decide to use less “legal” options: open dates that have all been sold in ‘early booking’ room rates. Wrong, wrong, wrong … Now regarding revenue experts this solution is not a regulation because in practice there is “no availability” for that hotel. Hunted and sunk in the positioning of Booking.com!
This is just one example of bad practice that some hotels make according to Pedro Carmona Innwise Revenue Management specialist as they mistakenly believe that they will not be hunted by their intermediaries. The specialist also exposes a list of wrongly exposed pratices according to his hotel experience.
1. False closures. Carmona explains that websites such as Booking.com as they use algorithms to position a hotel over another based on availability for the longest period possible, as many room types and rates possible. This means, a greater availability of the above factors, better positioning. That is why, today, there are hotels that use the so-called “false availability”, which is to maintain availability at exorbitant prices but really do not have rooms, they have full occupancy. The reasons for these practices are:
1. Keep visible availability on the website (although not real) to achieve the awarding algorithm and improves positioning.
In the case of a reservation, being at a much higher rate than the usual price, the hotel may be allowed to divert customer to another hotel, and in many cases, obtain profit from the reservation.
- 2.Fictitious reservations with a refundable fee (so that the reservation is not charged), and is immediately cancelled, is another common practice. This procedure does not assure the visibility in most cases, because it must be taken into account that the number of cancellations also form part of the algorithm used to determine the positioning of each hotel.
3. Other positioning factors are that the hotel has lots of customer comments. Many booking sites give the possibility to add such comments without having made a reservation, others don’t. Where the reservation is compulsory, they use dummy reservations to insert these reviews before cancelling the reservations. Anyway, these comments are very easy to spot by the way they are written. They are usually not very long, and use “hotel” language, always positive or very general.
4. Upload an excess of available rooms at one time and even, in some cases, complete availability, although rooms are occupied. Obviously, doing this helps the hotel’s positioning algorithm above the rest for obvious reasons: if all hotels upload their true availability and others the total, the second will always be better placed. Again, “the OTA police” may be on our track and take substantial retaliation, at least, in declining numbers.