A popular lodging company, with several thousand locations around the world, needed to improve the conversion rate for booking rooms on its own Web site vs. on online travel agency sites. Web-savvy customers, searching for the best deals, were finding and booking lower rates on the online travel agency sites. That resulted in the lodging company needing to pay substantial fees to those sites. Over time, customers became educated to book on the third-party intermediary sites, not on the company’s site.
This situation also created negative movement with the company’s Internet-wide billboard effect. The less often guests booked through the property’s own website, the greater the chain’s drop in search ratings.
While the lodging company did employ an electronic price gathering system, it could only monitor the information visible through the global distribution systems travel agents use. That system did not provide visibility into the highly dynamic, consumer-facing prices and products that global online platforms offer. In fact, managers at the company needed to consistently monitor pricing and rate changes manually throughout the Internet to stay up to date and ensure they had the same visibility into rates consumers had. This ability to “see what the consumer sees” would allow corporate revenue managers to better manage their pricing strategies, ultimately leading to improved revenue and a stronger brand presence.
This was first published in May 2011