Hotel Revenue Management

Expert Tips on Inventory Control to Maximise Revenue - By Joe Ellingham

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Expert Tips on Inventory Control to Maximise Revenue

STAAH

Taking control of inventory is critical to your hotel’s success, and hoteliers are on a mission to reclaim their financial position, by mastering this art to see benefits to the bottom line. Revenue Management expert Joe Ellingham founder of Revenue Team shares his tips to help you plan ahead.


Have you ever asked yourself;

  • Why do we provide B2B wholesalers a guaranteed inventory allocation which only tends to be used in busier months?
  • Have we filled too early and feel we could have achieved higher yields through higher ADR channels like direct or Online Travel Agents (OTAs)?
  • Do travel agents still only book through B2B wholesaler allocations or do they use through channels too?

If so, you are asking the right questions and a few tweaks to your third-party inventory strategy can have a very positive impact on your property’s performance and consequently profit. Today we’ll get a clear understanding of the differences between Travel Agents and B2B Wholesalers before next week moving onto some key tips and tricks on managing the inventory you contract to third parties.

Travel Agents

  • An individual who works in a bricks and mortar travel agency, often located in the high street or the local mall. A recent trend now has many working from home.
  • Travel Agents make a living from commission received for booking travel on behalf of their clients (flights, hotels, transfers, activities, etc).
  • Branded travel agencies often work with specific B2B wholesalers. An example of this is a travel agent working in a Flight Centre branded shop that is incentivised to book travel through The Infinity Group, the B2B wholesale arm of Flight Centre Travel Group Ltd.

Travel Agents are an important booking channel and do a great job at promoting travel and ultimately demand for your hotel.

B2B Wholesalers

  • B2B wholesalers do not sell travel to the general public.
  • Their main function is to contract net rates and inventory allocations from suppliers. This includes rooms in hotels, seats on airlines, and other tourist attractions.
  • Net rates and availability are used to create packages or the building of bespoke itineraries for travel agent’s clients.
  • B2B wholesalers have a booking system or booking portal which is used by travel agents to book their clients travel.
  • To supplement the hotels that they have direct contracts with, B2B wholesalers often pull rates and availability from other B2B wholesalers like HotelBeds/GTA, and also from Expedia via Expedia Affiliate Network (EAN), or Travel Agent Affiliate Program (TAAP).

As we have all experienced, the last 15 years have seen big shift in the way travel is booked, namely travellers booking their own travel and hotels online. A trend, accelerated by millennials and younger generations, as detailed in this report by Adara Travel Intelligence. For hotels, this trend has manifested itself in the meteoric rise in bookings through OTAs, and reduced bookings via B2B wholesalers. This change in consumer booking habits has contributed to the closures of a number of B2B wholesalers including Creative Holidays in 2015, Venture Holidays (2018), Si Holidays (2018), and in the last month UK based SuperBreak.

While the closure of wholesalers is something to be aware of, wholesale is good business when included in a well-balanced distribution strategy, especially for resorts and leisure destinations.

Stay tuned for our next article, where we will focus on allotment and contracting strategies. These will allow you to optimize your wholesale segment whilst maintaining the ability to dial up higher yielding segment mix in periods of increased demand.

This article has been supplied by guest writer Joe Ellingham.

About Joe Ellingham

Joe Ellingham is the founder of Revenue Team. Based in Auckland, New Zealand, Revenue Team offers Revenue Management Consulting services for independent hotels, resorts, and tourism operators. Providing potential to develop effective revenue management and distribution strategies to complement existing sales and marketing strategy.

This article was originally published by STAAH. For more hotelier tips, trends, and news please click here.



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