HOSPITALITY CADENCE NEWS

"Maximize Your Exposure and Boost Bookings with GDS Advertising in the Hotel Industry"

The hotel industry is a highly competitive market, and hoteliers must use all available tools to maximize their exposure and generate incremental bookings. One critical channel to reach travel agents, who are seen as trusted advisors by their clients, is through Global Distribution Systems (GDS). GDSs are the leading booking channels for travel agents, and hoteliers that sell available rooms on these platforms can take additional actions to better showcase their offerings across platforms.

One of the most effective ways for hoteliers to remain top-of-mind among travel agents is by carrying out GDS advertising. GDS advertising refers to advertising carried out on GDSs such as Amadeus, and it generally takes the form of an image banner or text advertisement that includes the hotel's description, features, facilities, location, and rates, among other items. These ads are visually displayed on the GDS, and they help hoteliers to drive more traffic by driving awareness of their property among travel agents actively shopping on behalf of their clients.

GDS advertising is an essential marketing tactic that hoteliers must prioritize. Travel agents rely on GDS platforms to search for hotel details, star ratings, rates, and photos, making it a critical channel that hoteliers must keep up to date, especially now as the industry recovers. Moreover, 88% of agents have reported that GDS ads have a level of influence on their buying behavior. Therefore, hoteliers must vary banner formats across different stages of the booking flow, leverage keywords that relate to rates and pricing, use distinct icons to capture further attention, and portray a high-quality and appealing offer for travel agents that includes commission and other benefits.

GDS advertising fits into the overall traveler journey as travelers contact travel agents when they are dreaming and planning for a trip first, before proceeding to book with their assistance. A hotel with a successful marketing strategy will be present during an agent's initial search to reach this highly qualified audience with a strong intent to travel, which can eventually lead to an increase in sales.

To get started with advertising on GDS, hoteliers can get in touch with a supplier of GDS advertising such as Amadeus. Amadeus is the only supplier of multi-GDS advertising, where hoteliers can advertise across all major GDS providers. The Amadeus Media Solutions team offers best-in-class advertising during the shopping and booking process, ensuring properties remain relevant throughout. Thanks to their targeting capabilities, campaigns can be scheduled around specific promotions or sales periods, backed by strategies that consider booking lead times.

In conclusion, GDS advertising is an essential tool for hoteliers to remain competitive and drive incremental bookings. By leveraging GDSs, hoteliers can connect with travel agents, reach a highly qualified audience, and maximize their exposure. Hoteliers should prioritize this marketing tactic, and they can get started by getting in touch with a supplier of GDS advertising such as Amadeus.

While GDS advertising can be a valuable marketing tactic for hotels to reach travel agents and drive more bookings, it is not the only way for hotels to market themselves. Hotels can also focus on other channels such as direct bookings, social media, email marketing, and search engine optimization to attract customers. However, if hotels want to remain competitive and visible on the GDS platform, GDS advertising can certainly give them an advantage.

The cost of GDS advertising can vary depending on several factors, including the type of ad placement, the length of the advertising campaign, and the level of competition for that placement. For example, a hotel can choose to purchase a top placement on GDS hotel search screens, or preferred placement products, similar to paid search on traditional search engines. These placements can be more expensive than other types of ads on the GDS platform. On the other hand, there are also less expensive options such as sign-in ads, search availability ads, lock screen ads, and sell-time ads. These options can still provide good visibility for the hotel while being more cost-effective.

Additionally, hotels can work with GDS advertising suppliers such as Amadeus to create custom advertising campaigns based on their specific needs and budget.

Therefore, the cost of GDS advertising can vary depending on the hotel's specific marketing goals and budget, but there are options available to suit a range of budgets.

GDS EXPLAINED IN A NUTSHELL

So, imagine you're planning a trip and you go to a travel agent for help. Travel agents use a special computer system called a Global Distribution System (GDS) to find hotels for their clients. Hotels can advertise on the GDS to make sure they show up when travel agents are searching. This is called GDS advertising. It helps hotels get noticed by travel agents, who can then recommend them to their clients. GDS advertising can be expensive, but there are different options available to fit different budgets. It's an important tool for hotels to attract more customers and stay competitive in the hotel industry.

“Maximizing Your Hotel's Profitability: Understanding Incentive Management Fees”

Attention hotel owners and investors! As the hospitality industry recovers from the unprecedented challenges of 2020, there is good news on the horizon. Incentive management fees are making a comeback, and this is great news for those who want to boost their profits.

Most management contracts include an incentive management fee in addition to the base management fee. This fee is designed to motivate the operator to focus on the bottom line, since owners achieve their returns and pay their debts from profits, not revenue. Incentive management fees are earned by the operator once a designated profit threshold is achieved.

According to CBRE’s annual Trends? in the Hotel Industry survey, in 2022, the research sample averaged 170 rooms in size, and achieved an average occupancy level of 65.9% along with an average daily rate (ADR) of $198.68. While the decline from 2019 to 2020 was significant, in 2021 and 2022, things have begun to pick up.

Among the six property types tracked by CBRE, resort operators have been the most frequent recipients of incentive fee payments. In 2022, 52.9% of resort hotels reported the payment of an incentive management fee, which is greater than the 34.4% ratio observed in 2019. On the other hand, none of the convention hotel operators in the sample earned an incentive management fee in 2020, 2021, or 2022, as group demand has been slow to recover.

It appears that ownership is generously rewarding those managers who were able to achieve profit growth during an extremely difficult operating environment. During 2022, incentive fee payments averaged 13.8% of total management fee payments, and 1.8% of EBITDA.

While changes in the economy will continue to play a part in the relationship between owner and operator, it's important to note that negotiating a management agreement in the current environment requires owners and investors to carefully review how the management fees are paid and the thresholds from which the incentive management fees are based. Factors such as the near- and longer-term economic outlook for the market and for the subject property, the stage at which the subject property is in its “life-cycle”, the personality of management company leadership, and experience with the subject property type and chain-scale are all important considerations.

It's also worth noting that capital expenditures due to the COVID-19 pandemic are impacting the financial performance of hotels, as some components of hotels may be “out of order”, thus negatively impacting performance. Termination provisions are becoming more favorable for owners and are, in some cases, tied to financial performance. Therefore, if performance thresholds are not met, then incentive management fees will not be paid.

In conclusion, it's clear that incentive management fees are making a comeback and can help boost profits for hotel owners and investors. As you negotiate your management agreements, make sure to carefully consider the factors that will impact your financial performance and align yourself with a management company whose values and financial objectives align with your own.

"Revolutionizing Travel Retail: Insights from New Travelport Study"

In a recent study commissioned by Travelport, it was found that customers prefer shopping in every other retailing sector over travel. The study, titled "What Consumers Want," highlighted several gaps in the travel industry, including the lack of simplified and intuitive experiences, easy support, and transparency, which have resulted in a lack of trust from customers. However, the study also revealed valuable opportunities for travel brands to generate more sales and customer loyalty by investing in their customer experiences.

According to the study, consumers prioritize time and transparency over price when it comes to travel. The majority of consumers (69%) research a purchase online daily or weekly, and 93% believe that the best modern retailers make it easy for them to find exactly what they want. Travel retailers must offer various options for every aspect of a trip to cater to their customers' preferences. Additionally, full transparency is crucial, with 90% of consumers desiring it the most. Travel retailers should share full product information upfront to help consumers save time and gain confidence in their purchases. The study also revealed that 59% of respondents said that getting exactly what they want is more important than how much they pay for it.

Despite the widespread use of chatbots, the study found that most consumers (77%) have interacted with one, but only a quarter of digital natives, ages 18-41, use them frequently. Three-quarters of all respondents prefer to speak with a human (via chat or phone) when something goes wrong, and surprisingly, even more (83%) of younger consumers ages 18-41 want more human support than their elders, age 42 and above. Easy returns and exchanges (43%), filtered options (40%), and personalized offers (29%) were also factors that indicated a need for more personal support at every stage of the retail journey, from research to purchase and post-purchase experiences.

Finally, sustainability was a top priority for consumers, with nearly half of consumers (49%) willing to spend more and even more (60%) willing to take longer, indirect transport routes to their destination to save on carbon (CO2) emissions when traveling. The study showed that 33% of consumers ages 18-41 would travel 2-3 hours longer to save on CO2 emissions, compared to only 19% of consumers age 42 and older. This suggests that travel retailers can attract more customers by promoting sustainable travel options.

In conclusion, the study by Travelport highlights the importance of modernizing the travel industry to provide customers with the simple, easy, and supportive experience they expect. Travel retailers must prioritize time and transparency, offer personalized support, and promote sustainable travel options to attract more customers and generate loyalty. By addressing the gaps identified in the study, the travel industry can improve customer experiences, increase revenue, and build trust with customers.