Friday, 10 August 2018

10 Cons How Branding Chains Disrupted Hotel Business

The following are the disadvantages of get contracted with branding chains:

1. Google Business Listing 

They change the name of Google Business Pages and make it “Branding Chain Name”  "Hotel ID”, "Location Name" not only this they replace your contact number with their customer care number.

2. Switching Business

Since they do contracting with hotel on 50% occupancy, they route the business of one property (Say Hotel X) to another if the occupancy rate of Hotel X is achieved. It becomes very convenient because they have their own number updated.

3. Average Revenue per Room

You will soon realize that you are getting a low room rates from OTA because they slash the prices up to 40%. If rooms of worth INR 2500 get booked on INR 1500 then automatically you will get business. Business is increased by decreasing the room rates.

4. Local Travel Agent Relation and Offline Business

Since the property is show cased at a very lower price in OTA so will start losing your offline business. Have you received any mailers from Travel Agent saying book “Branding Chain Name” Room Hotel X with us for best rates??

5. OTA Ranking Degradation 

Hotel A is paying 25% and Hotel B is paying you 17.5% for same category of hotel to OTA. The OTA would promote the property which is paying higher commission.

6. Offline Clients

This is the pure business of the hotel and here also hotel needs to pay a commission to these chains.

7. Partnership

Hoteliers are already associated with OTA and have a fair offline business. Hotelier need to pay commission on the amount which they are already earning.

The above points indicates the revenue loss and moving up to branding loss these are some points

8. Brand Name 

The guest ultimately knows the name of branding chains not your hotel. If he wants to rebook your hotel he will call those chains not you. If your property is not listed with them at that point there caller are smart enough to mold your client to their new contracted property.

9. Separation Time

Once you start realizing that you need to discontinue the contract due to general issues like nonpayment of bookings, low occupancy levels, loss of business, or other reasons you would require at least 3 months time to self brand your property, changing name in portals, change of bank account, also you need to invest in SEO services to change the Google Business Name, Removal of Branding Chain Name etc.

10. Legal Contracting

Most of the hoteliers are not satisfied by these branding chains but they do not have any options. They have a legal obligation term of 1 year at least or hotelier has to pay off them with a handsome amount.

1 comment: