Over the last 2 weeks of the blog series Effective Ways to Measure & Generate Demand, we discussed the first steps in creating an efficient, effective and long-term demand generation strategy as well as demand generation within the OTA segment.
In part III of this series, we will discuss demand generation within the Online discount Segment; Flash Sales/Private Sales.
One great way to generate more demand and gain occupancy, especially during the low season is through Flash Sales or Private Sales. These agencies work by selling distressed inventory with deep discounts. Some of the more popular sites for these types of sales are:
There are also several of these sites specific to each country/region, so do your research to find out which ones could help generate business for your destination, based on your top feeder markets (which we discussed in last week’s blog).
The first step in working with Private Sale sites is to understand how these types of partners work. Some first questions to ask when you get in contact with the potential partner are as follows: (my generic answers are also next to each question).
What is the stay window I must provide? Is that limited to days of week? Most require 90 days but can be up to 6 months or more. Because these sites are focused more towards leisure travellers they require availability for weekend stays (Friday, Saturday/Sunday); however, if you have needs dates that fall on weekdays as well you can certainly include those days.
How long does the sale last? This depends upon each individual partner but it can be as short as 7 days and as long as 30 days.
What is the commission % that you charge for each booking? Again this depends on each partner. The commission can be as low as 15% and up to 25%. My experience that the average is around 20-22%. It is highly advisable that you try and negotiate the best commission from each partner.
Is there a minimum discount required? Again this depends on each partner however the minimum discount is usually 30% and that applies to the room rate and F&B included in your offer.
What is the Daily allotment required? This depends on each partner and obviously this would vary depending on the size of your hotel and specific needs. Often, this can be determined on a daily basis. Be sure that you do not overcommit yourself to allotments that can displace other business. You often have the opportunity to add more allotments during the sale.
What value adds are suggested? Typical value adds that can make your offer more attractive are: breakfast included, upgrade included, late check out/early check in, welcome drink included, free parking, discounts on F&B or Spa.
Do I need to offer a fixed price for this offer or can I offer daily pricing? This depends on the partner. Most prefer fixed pricing; however if you ask, daily pricing is an option if you would like.
Can I include blackout dates? Yes, most partners allow for blackout dates, you will be limited to the number that you can offer but you do have the ability to protect your high demand dates.
Once you have the above information, you can start to draft your offer. A few things to keep in mind when creating the offer. Determine your stay window. For example if you would like to impact the summer season, start your sale in May/June and offer weekends only and once your slower season starts (from July 1 for example) you can start to offer all days of week through the typical summer months. Also remember if you would like to work with 2-3 different partners, you must plan each sale so that they do not overlap each other. I suggest creating a planning calendar on a yearly basis so you know in advance exactly when you want to launch your sale(s) throughout the year.
The next step is to determine the offer. This step requires careful consideration. Keep in mind that typically the discount must be based off the room value and F&B value. The other value adds are meant to be enhancements to make the offer more attractive. Also keep in mind that you need to price the offer off your lowest available offer that can be found online. You must also determine the minimum room revenue that you will accept, minus commission and other costs, and make sure you work within this number.
Remember, sales like this are meant to sell distressed inventory and add occupancy during your need periods. You many want to consider offering a two-nights offer that gives a bit further discount but would attract customers to stay longer. Finally, make sure that your staff is aware of the offers that are out there in the market and if a guest calls the hotel to book direct, make this offer available. You could save on commission and create direct contact with the guest.