Your External Digital Business Partner
Hotels are not technology companies. Unfortunately it is a reality of today’s world that technology has encroached upon most business sectors and disrupted their business models. Few industries have undergone such rapid change as the hotel industry. Technology companies such as Booking.com and Expedia have emerged in the last 20 years and in that relatively short timeframe have grown exponentially to the point where they now dominate the online hotel landscape.
In the face of such huge change, where a hotel has no option but to be online, hoteliers have difficult choices to make:
- Ignore the online market and slowly die.
- Submit to the OTAs and live with the high commission fees.
- Recruit in-house staff to manage their digital presence and the OTAs.
- Align with a digital partner to grow their Net Revenues.
Once the options have been clearly identified it comes down to the particular circumstances of the hotel in question. For example, NetRev is aware of one city centre hotel that has agreed to hand over its entire inventory to an OTA and just live with the 21% commission it has to pay. It suits this hotel as it is a rooms only hotel with no event space. The owner does not have the appetite for the technological effort required to compete with the OTAs and has decided to just go with the flow.
Other hotels have built up a team of skilled staff to manage their OTA channels and PPC Campaigns. These technical staff are in demand and if a hotel wishes to recruit all the different specialities in-house i.e. Web Developers, PPC and SEO specialists and Channel Managers, it will find this quite an expensive approach. It would seem that only the bigger hotels and chains can afford this level of staffing.
NetRev is a digital partner with a difference. We are from the hotel industry and know the challenge hoteliers face. We have built a team of specialists across the various digital disciplines. NetRev wishes to partner with its clients for the long term and has developed a fee structure that ensures the objectives of the hotel and NetRev are one and the same.
SHARING THE WORKLOAD
As the importance of the internet as a revenue source for hotels has grown, and the complexity of the digital landscape has increased, the amount of time and resources hoteliers have to spend on their online activities has also increased.
The additional head space and time required by these online activities can distract from the hoteliers main responsibility which is their on-site guests. In other words service is affected and in turn customers reviews can suffer when management are spending a disproportionate amount of their time on the online sales effort.
By partnering with NetRev as your digital marketing specialist there are two main benefits. First there is the benefit of increased Net Revenues. Having a fee structure in place that aligns the objectives of both the hotel and NetRev with a single common goal of increasing the hotel’s Net Revenue means that it is in NetRev’s interest to look after the interests of the hotel. This in turn means that NetRev will treat advertising budgets and platform returns as if it were its own money. This gives peace of mind and comfort to the hotel that NetRev has the hotel’s interests at heart.
The second main benefit for the hotel in partnering with NetRev is the freeing up of management time and resources to focus on other parts of the business like on-site guests and their enjoyment of the hotel. This second benefit should not be underestimated as the hotelier will have found a solution to the complex challenge of their digital offering that reduces his/her workload and frees up head space to allow for more focus on the operation of the hotel.
To give added comfort, NetRev has a suite of communication tools that it uses to keep hotel management up to speed on the performance and cost of the hotel’s digital activity.
THE NETREV APPROACH TO FEES
We have developed a fee structure that aligns our interests with the hotel’s interests. The fees are based on the hotel’s Net Revenue position which is calculated after taking account of OTA fees and online advertising costs etc.
While there is a minimum monthly fee required to make it feasible for us to work with a hotel, the overall fee structure ensures that when the hotel’s Net Revenues increase we both benefit and vice versa.
We want to develop long term relationships with our clients where we can grow together. We realise of course that we will live or die by our results and to reassure our clients further on this topic, our clients can cancel our agreement at any point after the first six months. A six month commitment is required as there is a lot of upfront cost incurred by us in the initial setup phase.
We would be very happy to discuss the details of our fee structure and partnership approach with you. If you would like to hear more or arrange to meet please contact us.
TWO WAY COMMUNICATION
To be a successful partnership there has to be clear communication between the parties. NetRev is very much aware that it has a responsibility to keep the hotel’s management informed of the results of the digital activities. The main KPIs that the hotel wishes to track are agreed and NetRev will provide updates on these KPIs on a weekly, monthly and year to date basis as required.
The responsibilities of both parties are agreed at the outset of our partnership and it is hoped that our hotel clients will see us a part of their team and that all of our efforts are to the benefit of the hotel.