Tomorrow February 15th, the Barcelona Convention Bureau will release rooms for the Mobile World Congress. You will sell them at a great price, we have no doubts about it. However, will you sell them with the minimum distribution cost? We provide a few ideas
According to Booking.com, today Feb-14th Barcelona is almost fully booked (93%) for the top days of the event (Feb 22-23). Only 35 hotels are available (we have removed both youth hostels and apartments from the list).
At Mirai, we confirm the lack of rooms for these days. Our data reports an important peak of demand for the event. Unfortunately, 71% of this demand is lost as hotels are fully booked. A missed opportunity to sell, not only expensive rooms, but also through the most efficient channel, which is the direct one (official website).
You still have X rooms available. What to do with them?
You probably know our philosophy. If you can sell your rooms by yourself, do it! (and do not use intermediation whatsoever)
- If you can sell these rooms by phone or email, do not think about putting them on OTA nor even your own website. The MWC is an important and a very international event so it sounds a little complicated to sell everything by phone but we leave it up to you.
- If you feel like adding these rooms only on your website, make sure your clients get to it (otherwise you’ll have the risk of not selling them!). Connect your web to metasearch sites such as Trivago, Tripadvisor, Kayak and Google hotel price ads (HPA). Your costs will rise, although they will keep below those of OTA.
- Consider adding restrictions: minimum stay, enforce checkin or checkout dates, etc.
- Always non-refundable cancellation policy. MWC is the best date for this strategy.
- If you still need more visibility or you have too much inventory left, you should gradually open OTA, always from those most profitable (higher net ADR) to the least one. Two comments if you do so.
- Demand will be very high. Forget the rate parity mentality and go for a NET rate parity thinking. Let’s set 200€ net price. Your website (assuming 6% cost) would have 212€ price. Booking.com would go to 243€ (assuming 18% commission) and Expedia 263€ (assuming 24% commission). No matter what channel you will get the reservation, you will always get 200€ net price.
- Additionally, you can also add more restrictions to OTA compared to your direct channel.
A case study
Let’s say you have 10 available rooms, at 200 € ADR, the average OTA commission is 20% and your direct channel cost is 6%.
We can see how GOP (gross operating profit) improves as we sell more rooms through your own website. This improvement can get up to 13% increase in the case of all rooms sold through your web.
MWC is not the only hot date in the calendar. There are many events and congresses in Barcelona in 2016. You should play a more aggressive distribution strategy in order to maximize GOP.
