Hoteliers concerned about the long-term impact of discounting on brand
LONDON, Oct. 23, 2013
- 81% of hoteliers discount more than five years ago
LONDON, Oct. 23,2013 /PRNewswire/ --Hoteliers are becoming wary of
discounting and frequent sales as they evaluate the long-term effects on brand
perception, a survey of European hoteliers carried out by Hotwire.com®
reveals. Seventy-five per cent of hoteliers indicated that discounting is
having a negative impact on their brand.*
Five years ago, as the recession hit and consumers began tightening their
purse string, hotels have responded with discounts and sales. Consumers have
quickly become addicted as shown by the Hotwire® 'Britain on Sale' report
released earlier this year: more than half of today's consumers never or
rarely pay full price when they shop, 57 per cent use discounts and buy items
on sale, and 90 per cent say they will continue to look for discounts and
sales in the same way even if their economic situation improves.**
Consumers have become hooked on sales causing some hotels to worry that maybe
they've gone too far. "Hoteliers are concerned that if their brand is seen as
'always on sale', it will be devalued and end up going the way of other
companies and industries where consumers are never prepared to pay a premium,"
Michelle Rosinsky, senior manager at Hotwire.com commented. She added: "We're
not expecting that hoteliers will suddenly give up on discounting, because it
is still an effective way to increase occupancy; however, we believe they'll
become more selective about the channels they use, the value of discounts and
the timing of their offers. Discounting will become more last-minute and
increasingly they will utilise opaque sites and mobile."
Mobile Whilst most hoteliers offer the same deals via mobile as through other
channels, mobile is becoming a popular way to offer exclusive discounts
targeted mostly at last-minute customers. Twenty-one per cent of hoteliers are
offering mobile-only discounts. Altogether, 40 per cent of hoteliers discount
on mobile more than they did a year ago.
Last minute Over the years, hoteliers have become increasingly more
sophisticated in the way they manage discounting, responding fast to changing
occupancy levels. Most recently some introduced super last minute discounts
for those booking on the same day. Whilst this is still a new tactic, one in
20 hotels offers the deepest discounts in the last 24 hours. Twenty-eight per
cent offer the biggest discounts within seven days. It seems that as the
actual date of stay becomes closer hotels feel more comfortable discounting
since there is a lower change of any long-term damage due to the fact that
they likely wouldn't have sold that room elsewhere.
Opaque As discounting has become more popular, so has 'opaque', a model known
among consumers as 'secret hotels'. The leading opaque provider, Hotwire.com,
is seeing a strong demand among European hoteliers and consumers. It has
doubled its revenue in the past twelve months. "Hoteliers see opaque as one of
the safest methods for discounting, because the name of the hotel is not
disclosed until the customer has paid. It helps hoteliers to reach the desired
occupancy without making any of its premium customers aware that the hotel is
available on Hotwire. Seventy-five per cent of hoteliers told us that brand
protection is one of the reasons they use opaque," said Rosinsky.
The new consumer Hoteliers are dealing with a new type of customer: one that's
less loyal, more price-conscious and more savvy in finding a deal. It's a
consumer that rarely pays a full price – nearly a third (30%) of travellers
say they never or rarely buy a hotel room that hasn't been discounted. "In
this environment, discounting is a necessity for hoteliers, but as most of
them now realise, they need to be careful how it's done, because there are
some inherent risks. It's about choosing the right way at the right time for
the right type of customer," Rosinsky concluded.
*The survey included 75 hoteliers who manage over 13,000 hotel rooms in 45
countries and 2,000 British consumers and was conducted in September 2013.
**The consumer research was carried out by Vision Critical on behalf of
Hotwire.com in December 2012. Vision Critical conducted an online survey among
2,008 randomly selected British adults who are Springboard UK panellists. The
margin of error—which measures sampling variability—is +/- 2.2%. The results
have been statistically weighted according to the most current education, age,
gender and regional data to ensure samples representative of the entire adult
population of United Kingdom. Discrepancies in or between totals are due to
About Hotwire Hotwire.com is a leading discount travel site that helps
holidaymakers book hotel rooms at significant savings you can't find on many
other travel sites. Launched in the U.S. in 2000 and in the U.K. and Ireland
in 2011, Hotwire's partnerships with hotels worldwide offers holidaymakers
deeply discounted hotel rooms that would typically go unsold. J.D. Power and
Associates in its most recent (2012) Independent Travel Web Site Satisfaction
Study(SM) recognised Hotwire as "Among the Best" in Overall Customer
Satisfaction, Competitiveness of Sales and Promotions, and Competitiveness of
Pricing among Independent Travel Web Sites. Hotwire, Inc. is an operating
company within the Expedia, Inc. Group CST: 2053390-40. NST: 20003-0209.
For more information, visit http://www.hotwire.com/ . Hotwire, Inc. operates
sites in 8 countries worldwide: www.hotwire.com , www.hotwire.com/uk ,
www.hotwire.com/ie , www.hotwire.com/au , www.hotwire.com/nz ,
www.hotwire.com/se , www.hotwire.com/no and www.hotwire.com/dk .
Hotwire, Hotwire.com and the Hotwire logo are either registered trademarks or
trademarks of Hotwire, Inc. in the U.S. and/or other countries. All other
trademarks are the property of their respective owners. © 2013 Hotwire, Inc.
All rights reserved. CST# 2053390-40.
Media contact Vojtech HornaAtomic PR on behalf of Hotwire.com+44-207-025-7551
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