Unlock Efficiency & Maximize Revenue with Accurate Room Mapping | Helping Product Managers Save Time & CFOs Save Money

Are your booking systems bogged down with cluttered, inconsistent room data? For product managers, it’s a time-consuming nightmare to manually organize endless variations of room listings. For CFOs, these errors mean lost revenue, higher refund rates, and unhappy customers.

When rooms are incorrectly mapped, duplicate listings can cause missed opportunities, confusion, and even worse—profit loss. Accurate room mapping isn't just about organizing data; it's about maximizing revenue and ensuring operational efficiency. I wanted to give you an idea of some of the costs involved in incorrect room mapping so let's dive in:

Theoretical Example of Incorrect Room Mapping:

Scenario:

An Online Travel Agency (OTA) partners with multiple suppliers to offer hotel rooms. Two suppliers provide different descriptions for what is actually the same room:

1. Supplier A: "Deluxe Ocean View Room with King Bed"
2. Supplier B: "Premium Seaview King with Balcony"

Due to improper Room Mapping, the OTA's system treats these as two separate room listings instead of recognizing them as the same room.

Cost to the OTA and Bed Bank:

1. Duplicate Listings Confusion:

• Impact: The same room is listed twice under different names at different prices.
• Cost: Customers are confused by the apparent options, leading some to abandon their bookings or choose the cheaper option without realizing it's the same room, impacting profit margins.

2. Loss of Revenue Due to Price Discrepancy:

• Impact: The room from Supplier A is listed at $300/night, while Supplier B lists it at $250/night. Since the OTA doesn't recognize the listings as the same room, it offers both. Customers naturally choose the cheaper option from Supplier B.
• Cost: The OTA loses $50 per booking (the price difference), potentially affecting hundreds of bookings over time, leading to significant revenue loss. For 100 bookings, the loss would be $5,000.

3. Customer Dissatisfaction and Refunds:

• Impact: A customer books "Deluxe Ocean View Room with King Bed" (Supplier A's listing) at a higher price but finds that they could have booked the same room at a cheaper price through the "Premium Seaview King with Balcony" listing. They complain to customer service and demand a refund or price adjustment.
• Cost: The OTA may need to refund the customer the $50 price difference and offer additional compensation (e.g., a $100 voucher for future bookings), leading to a total potential loss of $150 per complaint. If 10 such incidents occur, the cost could amount to $1,500 in refunds and lost goodwill.

4. Overbooking and Operational Issues:

• Impact: Because the room is incorrectly mapped as two different rooms, both listings are booked by different customers for the same night. The hotel has only one room available, leading to overbooking.
• Cost: The OTA must either arrange alternative accommodations for one of the guests or offer compensation (e.g., a free night at another hotel or an upgrade). This might cost the OTA an additional $300 or more for each overbooking incident. If this happens once a week over a year, the cost could exceed $15,600 annually.

5. Increased Resource Costs:

• Impact: Incorrect mapping results in more frequent customer complaints and requests for refunds or price adjustments, increasing the workload for the OTA's customer service team.
• Cost: Handling each complaint might take 30 minutes of an agent's time. With 100 such cases annually, this could amount to 50 hours of extra work. At a rate of $20/hour, the OTA incurs $1,000 in additional customer service costs.

Summary of Costs:

1. Loss from Price Discrepancy: $5,000 (100 bookings)
2. Refunds and Compensation: $1,500 (10 customer complaints)
3. Overbooking Compensation: $15,600 (52 incidents/year)
4. Increased Resource Costs: $1,000 (extra customer service)

Total Estimated Annual Cost: $23,100

This highlights how inaccurate Room Mapping can have a ripple effect, impacting revenue, customer satisfaction, and operational costs for OTAs and bed banks. Proper Room Mapping can prevent these issues, driving higher profitability and efficiency.

And this is just the start. In the next series I hope to explain how including MULTI LINGUAL support for Room descriptions and Room Prices can be optimized as well. If this was helpful give it a "like" and feel free to ping me if you would like to take a deep dive into how I can help your business become more efficient and more profitable.