Are you selling rooms or accommodation experiences?
Updated: Nov 26, 2022
Why transforming your own point of sales is a great idea!
If you look at how rooms are being sold today, especially through online travel agents, you will notice that room products are highly commoditized and made comparable with slight differentiation of price points and guest reviews are used to show value to the traveler.
It comes as no surprise that differentiation and driving direct bookings for hotel operators is so much harder. It’s a matter of scale and takes deep pockets to get noticed.
Why is that? The industry is trapped in legacy systems and old inventory management practices. Often hotel companies are just looking at Airlines and take learnings from there, like trying to copy attribute-based selling (breaking the core product into smaller components and upselling those components).
We should make a distinction so between selling room attributes when making a booking or when used as a post-purchase upsell tactic. Some hotel companies allow guests to pick their own room from a floor plan after selecting a room category. It’s certainly a nice gimmick that can yield some additional revenue, but what does the floor plan of the hotel tell a guest about the room experience? Does it help me if I like a quiet room with a certain view, a Queen-sized bed and a walk-in shower? What kind of emotion does it trigger during the purchase experience when the buying process is comparing to buying airline tickets or cinema seats?
It seems to me that hospitality is confused about what type of product they are actually selling. Has hospitality ever thought about redefining how it can sell a room experience? It means so much more than a good night sleep.
We suggest looking further afield than Airlines. Let’s turn to retail and brand building masters. After all, a room experience has functional and emotional appeal which can be leveraged and its characteristics differ in importance depending on purpose of trip, trip companions, length of stay and budget.
Looking at labelling tactics from fast moving consumer goods
The packaging and labelling of a product gives us clues about the product experience. It sets customer expectations and carries an important symbolic meaning. A discipline, by the way, completely ignored in the hospitality sector. The following example shows how the exact same product, with the same quality, just with different packaging and labelling yields different returns.
Example: Dom-Perignon Vintage
The exact same product is being sold with a fancier label which illuminates in the dark for exactly EURO 29.79 more. So, 30 bucks just to show-off! You can be sure that the more expensive bottle sells a lot better in party locations and this does not even include the sales mark-up.
The commodity spiral – limitations to sell room experiences
So why would hospitality not build on labelling tactics when it comes to selling room experiences? The answer is because distribution technology limits how you can sell it today.
Current property management systems operate with a static room inventory management practice, suggesting one physical room unit = 1 specific room category. In addition, Online Retailers dictate how you can call your room categories subject to their own standards. This makes distinctive and differentiated selling nearly impossible.
Disruptive inventory management to break out
So, to fundamentally break out of this commodity spiral, room inventory logics must be changed to take advantage of new selling & distribution strategies. At GauVendi, a novel Sales System and concept is introduced breaking away from static room type inventory management introducing dynamic inventory management. This allows for new sales, marketing, revenue management and automation possibilities
GauVendi advocates a mixture between bringing functional elements like high floor, quietly located, bedding type etc. to the point of sales in form of a suggestive configurator adapting to actual people travelling and allowing for individual selling experiences. In addition, the system works with labelling tactics when presenting room products to leverage on latest advertising and story-telling practices.
Introducing new labelling tactics to communicate room experiences:
The results selling like this speak for itself. According to GauVendi’s 20 initial Pilot properties, website conversion ratios were tripled and average rates were increased by 14% for direct channels.
Besides the immediate measurable impact, we believe that the long-term brand building opportunity is even larger. While third party retailers can give you more reach, they are not building your brand for you. It only makes sense to transform your own point of sales to something distinct and ensure you benefit from reach and differentiation at the same time.
If you want to know more about GauVendi and its Sales System, contact us at firstname.lastname@example.org.