RateGain software helps businesses to stay competitive and capture business in these challenging times (Photo of Thessaloniki market by H Kakarouhas).
News from travel technology: RateGain
This week we look at the role of travel technology and how it can help organisations to win business and stay competitive in the post covid environment. We talk with Barcelona based Fritz Müller, Vice President of Enterprise Clients at RateGain. Thanks to their extensive data collection software, he is perfectly positioned to review travel trends, and interpret what they mean for travel companies who want to capture business in these challenging times. Are we looking at a future price war or are there alternative strategies…?
NDE: Hi Fritz. Thanks for talking with us today. Can you explain to our readers what RateGain does and what your role in the organisation is?
FM: RateGain offers a range of Distribution, Business Intelligence and Social Media services to the entire Hospitality & Travel industry. It is our aim to connect all sides of the industry, and to provide transparency too, enabling our partners to make well informed and strategic decisions about their presence in the marketplace, what pricing to adopt, and what distribution channels to use. I am personally in charge of maintaining and growing the relationships with the Global Enterprise Clients of RateGain, which comprises the biggest OTAs, Tour Operators and Wholesalers in the world. In my role I combine both Sales and Account Management to offer a holistic service to a pre-defined set of Enterprise clients. It is very exciting to be working with some of the biggest travel names in the world and I am learning a lot each day.
NDE: So RateGain helps hotels and tourism businesses with their distribution and with their pricing. Which of these is the most important right now?
FM: I am of the opinion that pricing is not driving more demand at this moment. Currently, demand is affected by confidence, or fear, and by restrictions that are put in place by governments. Therefore, the answer has to be distribution, as a strong distribution network will enable hotels to attract a wider mix of clients and therefore increases the chance to reach the clients that are still allowed to travel, and have the confidence to travel. I recommend all hoteliers to review their current distribution mix and consider contracting channels that they formerly opted not to work with.
Currently, demand is affected by confidence, or fear, and by restrictions that are put in place by governments.
NDE: Focusing for a moment on pricing, how has it changed over the last year?
FM: Pricing has significantly changed over the past year, but it has been a mixed bag across the board. Firstly, there has been a big drop in pricing and I have seen multiple cases where 4-star hotels are suddenly competing with budget hotels for the same customers. At the same time there are hotels who have not decreased prices at all. During this summer, when travelling was possible again, to some extent, domestically, hotels in leisure regions were charging prices that were higher than last year. The hotels were banking on the fact that clients would crave travel and want to disconnect. There are very few cases where we have seen a market level occupancy increase as a direct result of the market dropping prices. We are being told by partners that people who feel safe travelling are motivated by the desire to travel and rarely due to the price point.
During this summer, the key changes in demand came in a shift from international travel to domestic travel (Photo of Maribor, Slovenia by Tourism Maribor).
NDE: There has obviously been a major change in availability and in booking patterns this Summer, brought on by Covid, and I presume you must have had to adapt very quickly to the changes in the market. What would you say are the key changes in demand and in the market segments right now?
FM: It is fair to say that every company, especially in the travel industry, had to adapt to the impact of Covid-19. With our DHISCO platform we have a deeply integrated distribution platform that connects the biggest chains in the world to the biggest channels in the world, and therefore gives us very interesting insights into the booking patterns globally. Demand is very volatile at this moment and is impacted and driven by the ever-changing restrictions of each country and region, plus influenced by news of vaccine roll out plans. The key changes in demand came in a shift from international travel to domestic travel. We’ve also seen how leisure travel has been driving demand over the past year due to corporate travel declining — and is yet to pick up.
NDE: Competitiveness is key to successful sales, but hotels, travel companies and tourist boards say they don’t want a price war, and want to focus on added value packages. Is this a realistic strategy in the current climate or is the consumer just looking for price over added value?
FM: I do believe that added value offerings can make the difference for most clients. We have seen many hotel partners creating ‘out of the box’ packages with local complementary companies to drive increased awareness. As we are in the midst of not only a health crisis and a financial crisis but also a crisis of confidence it is important to give customers that confidence back. Packages and flexible booking terms are a way to spark more confidence in the mind of the traveller. That said, realistically, a price war is unavoidable as a lot of hoteliers are fighting for their existence. Every occupied room, even slightly above break-even, goes a long way to survival until we have a new normal.
As we are in the midst of not only a health crisis and a financial crisis but also a crisis of confidence it is important to give customers that confidence back. Packages and flexible booking terms are a way to spark more confidence in the mind of the traveller.
NDE: Given this situation, and the current market dynamics, how important is it for a hotel to continue with rate monitoring? Should they continue or is this a thing of the past?
FM: I have called pricing a mixed bag in a previous answer. Rate monitoring becomes even more important in this current climate as we are seeing more dynamic and more extreme price changes than usual. We have also noticed that rate changes are happening more frequently than before, so rate monitoring should no longer be a once a day process but should be done multiple times per day.
Having the right distribution channels activated at the right time is crucial for any travel business. (Photo Facebook Dubrovnik Riviera)
NDE: Many of the hotels and tourist boards, in the Balkan region, which we have spoken to and interviewed have told us that they have survived this year thanks to local markets. Consequently, they are concentrating promotional activity on markets which are within driving distance. Clearly you are seeing this trend too, so how can RateGain support this local v global strategy?
FM: Yes, we do see this trend for domestic travel across the board. It is somewhat encouraging that even in these extreme circumstances people are still travelling. With Government restrictions in place the only chance to travel is within your own region or country unless the customer is willing to quarantine upon return. Naturally, most of travel is therefore domestic. RateGain can help here with our distribution network, by giving easy access to all relevant channels that are driving local demand at this moment. Also, Social Media becomes more and more relevant in this context. With BCV we have a Social Media service for hotels that drives engagement with targeted audiences and ultimately creates demand from set audiences.
Good content, campaigns and community management can create more direct bookings in the future and increase the live time value of each customer.
NDE: This is maybe a good time to talk about the role social media plays in driving demand. Right now, which of the Three C’s — content, campaigns, connectivity– do you believe is the most important in keeping you competitive as a hotel or as a travel company?
FM: There is no one answer to this question. Connectivity is still at the base of extending your reach as a hotel and will be key, especially when the markets are opening up again, but content and campaigns are really important at this point as they whet the appetite of the travellers and get them to dream about their magical next trip. With BCV, we are creating content and campaigns for our clients. One key focus that our hotel clients have is to build the customer base of tomorrow. This should still be a consideration for all hoteliers. Good content, campaigns and community management can create more direct bookings in the future and increase the live time value of each customer.
RateGain has launched MarketDrone to monitor changes in the market as they happen. (Photo VisitSofia Facebook)
NDE: Looking to the future, adaptation and innovation is key to long term success, for any business, but is particularly pertinent in the fast moving world of travel technology. What are the key pressures brought on by the crisis, which you have seen within your field and how has your company adapted and innovated?
FM: There is more pressure on rate monitoring and also on having the right distribution channels activated at the right time for the right hotel. On the rate monitoring side, we have launched MarketDrone which is a mechanism that constantly monitors rate changes in the market and feeds them to the hoteliers as they happen. There is no need to rely on scheduled reports that arrive once a day, or worrying if and when to request a new report, as MarketDrone catches changes at any time. Relating to finding the right distribution channels we have launched SmartDistribution for our channel manager, RezGain. Smart Distribution monitors the productivity of all channels that are producing in a hotel market, and suggests new channels to hoteliers based on the production stats that these channels have with similar hotels in the market. Both launches are aimed to help make hotel decisions faster, easier and better informed.
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Questions by Robert Dee, co-founder of New Deal Europe, the only travel market platform dedicated to generating business to the Greater Balkan region of Europe. Apply to New Deal Europe Marketplace and Forum 2021 at www.newdealeurope.com.
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