A lot has been written and talked about hotel brand and price erosion in the past few months and years. Hotels have vocally expressed their disgruntlement about the commoditization caused by online travel agencies. Indeed the increase of online distribution in the hotel and travel industry has created a high level of price transparency and rate parity strategies contribute to the commoditization of the hotel product and services
For hotel industry, brand is an important means of attracting customers and expanding the fierce competition but recently this is not the only way to get more business
Other like travels websites educate consumers that the only difference between hotels and their competition is the price or rate. So the only thing they can compete on in the end will be price.
So More consumers will be conditioned to wait as long as possible before booking. As a result hotels have to sell more rooms as discounted rates.
Price levels erode and thus margins decline. As a result service levels and standards will need to be adjusted. Expectations of hotels repeated and new clients will not be met . They will not come back.
Complaints on travel websides with public reviews will lower the amount of bookings
As we can see, by long term and heavy price discounting hotels will end in a vicious circle that will only drive down prices even more. I think it very complicated strategy and it will really lead hotels to lose their history and their hotel brand rename
It is true that nowadays, especially with the financial crisis, making business is becoming difficult for hotels. Because of the development of competition and online travel agencies that tend to decrease prices to attract more and more customers, hotels do not have actually many other choices than to follow that trend. As a consequence, the struggle for cutting down prices and getting more market shares has replaced marketing policies to identify hotels as specific brandnames and not only as financial resources.
RépondreSupprimerHowever, I still believe that hotels will mainly distinguish themselves from their competitors by keeping on developing different marketing strategies and establishing themselves as brandnames in their own right. I consider that hotels which base their reputation on low prices and not on quality services or specific identity only have a short-term view on their business. By decreasing their prices, hotels try to gather as many customers as possible but they forget that customers' loyalty also depends on services that competitors will not offer. To my mind, instead of attracting clients who will not come back anymore because they will be able to find exactly the same type of prices and services in other hotels, the main way to keep high occupancy rates and revenues is to keep on improving customers' loyalty. Unfortunately, many hotels give up such marketing strategies because it is an exacting job and results are usually long to come.