Blog 58 of 90

Lodging Update July 31st, 2016

By Wm. May
Published: 07/31/16 Topics: Comments: 0

We are thankful for the hot weather, sometimes for cooler weather and for all the guests who have chosen our properties over every one else this summer.

We are thankful for the amazing staff who work day and night, weekdays and weekends to keep the summer bookings chugging along, selling reservations, cleaning homes, maintaining advertising and websites, answering guest and owner questions and dealing with pesky issues. Some homes require a bit more love than others.

We are thankful to all our property owner clients who allow us to offer their homes to the public and who understand the intricacy of doing what appears to be a seemingly simple industry. Walk a mile in our shoes as they say.

This month the update speaks about the continued encroachment of "Online Travel Agencies' (OTA's) and how this industry continues to morph, expand and become even more intricate. They are a pesky lot, they are powerful but we are pushing back to help every property do well.

Thanks for working with us.

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Have you noticed the hundreds of TV commercials for Expedia, Hotels.com, HomeAway, Booking.com, Trivago, AirBnB and others?

Online Travel Agencies, and listing websites (OTA's) have become one of the biggest advertisers on TV and Google too. More of these are charging commissions to property owners, managers, and even guests directly.

Their goal is to become the Yellow Pages of the Internet (for those old enough to remember yellow pages), but with a twist. Having a wide selection of lodging in one place sounds good, but their methods are nefarious.

It is their publicly stated goal to "Take" a bigger and bigger chunk of lodging income away from property owners. Take is such an ugly word, when they should be justifying their existence with what they provide to properties. Worse yet, every one of the OTA's wants an ever higher commission percentage.

Is it any surprise that the hotel industry hates OTA's and is fighting back with a passion? Hate is not too strong a word. Luckily, we saw this problem coming long ago and in our own way are fighting back too.

When asked why he robbed banks, the infamous bank robber Willie Sutton replied "Because that's where the money is." Avoiding or failing to solicit guests through OTA's would decrease property income because that is where (much) of the money is.

To offset some of those costs we advertise on other (usually smaller) websites, publish dozens of our own websites, support travel associations, email and mail repeat visitors, make outbound phone calls and even cooperate with other lodging managers. Sometimes we can mark-up rates distributed to OTA's and limit their access to popular dates.

The goal for each property must be to increase the net income to the owner. So when you see agency costs increasing on statements, please understand that we are taking inventive steps to improve performance for owners. Strangely, Agency costs may actually be making you more money by gaining higher occupancy at larger rates.

No one knows where the industry will go. It seems unlikely the Online Travel agencies will ever go away. The Hotel industry will continue to battle them.

And, in our own small way, we are finding ways to help every owner by increasing rents and controlling costs.

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PROFILE: High on the slopes of Mt. Rainier lives the wonderfully cheerful Jan Covey, lodging manager of Crystal Cabins. In winter, when the snow is big, wet and heavy she and her staff trudge from house to house without complaint. In summer, when temperatures soar she never complains that our ace marketing and reservation team send her wave after wave of vacationers. We are lucky to have her.

Author: Wm. May, Vortex Managers
Blog #: 0537 – 07/31/16
Sponsor: Vortex Organization – We train quality people to help run unique Inns, Resorts and Vacation Rental Management companies, in an industry that has been a webby net of technology combined with good old fashioned property, guest and owner services. – VortexManagers.com

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