Saturday 26 February 2011

Realtime Confirmation VS Request to Sell

AXSES pioneered the idea of an open booking engine that does not require inventory management and captures all lookers in a marketing database. It gives travelers a quote for the dates of their holiday and allows them to save it or request a booking. It is an easy system to work with and very popular with hotels and tourism operators, especially those who follow up and send out direct mail to all those lookers who get quotes and show interest. The arcRes system includes a database marketing system that can be integrated with commercial marketing systems like iContact.

Travelers check out approx. 20 sites before they book, so capturing them in a database to follow up gives a hotel a definite advantage.

Issues with capturing lookers
Getting emails for lookers has some disadvantages, in particular, we do get interest that is not genuine. We discard invalid formatted emails and emails that do not have a valid TLD. Some well-formed email that are not valid do get through.

We also know that asking a looker to enter their email address can turn them off. These travelers can be good prospects who just don't want to share their personal details with a hotel they have not decided to travel to. Asking for an email address before we get them interested is a real turn off and many go elsewhere. In some cases we have seen 60% drop out.

Trade off
The approach used by many shopping sites is to give quotes to all without trying to capture emails. This means less drop outs (bump rate down) but a huge drop in the marketing database.

Its a trade off; we know that hotels can close the interest/quotes at the rate of about 2.5% on those who just get to interest and 2.5% on those who get a quote and drop out. By capturing emails with a bump rate of 50% we loose 2.5% of potential bookers.

Look at this from another angle: if we are dropping 50% of our prospects by capturing emails, 50% less travelers become booking candidates.

On average 23% of all our registered lookers get to success. If we did not require an email address, we may have 50% more lookers getting a quote and going to success. 23% X 50% is 11.50% more success.

Hotels are closing 30% of what we call success requests. 30% of 11.5% success is 3.45% more bookers.

As you can see from this crude analysis, we are better off by NOT requiring travelers to enter their email address. We gain 3.45% more bookings by letting more get to success (no bump) vs loosing 1.5% potential bookings from the lookers we can close.

That assumes that the 50% bump rate is because of the email requirement, and that those who drop out are as valid as all those that do enter their email address.

We expect that travelers will favor more interactive system and more immediate response; as such the bump rate might grow, which will mean we loose more. Spam is a huge issue now on the internet and some travelers just don't want to enter their email address online at an interest stage.

The request system has some other issues. Some travelers can get confused, thinking that they have a booking when they get to success. Having guest arrive when you have no rooms is a liability. It does not happen a lot, but if we are taking credit cards on a request system, chances are that a good number of travelers will think the reservation is confirmed. Also, as the request cannot be confirmed reservation on request, it's more work for reservation staff. Staff still has to enter into dialogue to close the business.

The solution is a compromise.
Give travelers immediate information, without having them enter anything. No Name, no email address, not even a date. We use a default date based on the average forward booking time and allow travelers to change dates easily. We display all units that are available and allow them the OPTION to enter an email address in exchange for entering the hotel club for special rates, etc.

To move away from request systems we suggest that hotels, who hate having to manage allocation, go to a FREESELL model, where everything is confirmed if it is not blocked. As an option, we offer a service to update the allocation and block dates for our clients. Hotels send out a stop sell and we do the updates for them.

Availability Calendars
The solution is implemented with a streamlined system that displays all units on a single page. Travelers can change dates, see units, total costs and availability. Many travelers have some flexibility on dates. Displaying availability in a calendar can help them select alternatives.

The solution is implemented in arcRes V5 Upgrade.

We are tweaking this system based on feedback and requests from our clients and travelers. We appreciate all feedback and strive to make arcRes the very best marketing technology for direct travel shopping and hotel & amp; tourism bookings. We also note that some hotels are very effectively using the request system, converting 15% of these leads and closing 505 of successes. These hotel prefer to maintain the existing request system using Block sell, to close bookings when full. Request to sell is unbeatable in this case. These hotel do use our email optional solutions.

Bump Rate  |   Interest/Quotes Convert  | Bookings Lost |
50%             |     5%                                   |    2.5%              |

No Bump Rate  |   Lookers to success        | Success Added |  Succces Book Rate | Bookings

50%   More        |     23 %                               |    11.5 %           |      30%                         |  4.5%

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