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For most consumers, finding a hotel comes down to searching a destination for the best priced room that passes the brand preference or loyalty filter. This activity is done via a search engine like Google, an OTA, or, if loyalty is involved, a brand site. Yes, there are many other sites and resources for consumers to choose from, but they all come down to the same experience: a list of room types ordered by price.
We are so used to it that it may surprise younger people that this is not the only way hotels have been sold, or “merchandised.” Hotels got here through the evolution and power of the Internet – but it hasn’t necessarily been the best method for either guests or hoteliers. Why? Because current hotel inventory merchandising commoditizes the hotel product, leaves money on the table for hotels and de-prioritizes guest experience preferences. The industry is ripe for a new way to merchandise hotel inventory.
Hotel room bookings pre-internet: A conversational approach
Before the internet – which wasn’t so long ago – booking travel was an analog experience and required more than one person to make it happen. Hotel rates, room photos, and special offers were scarcely found in newspapers, magazines and TV commercials, if they were available at all. There was no real way of finding out what other people thought of a hotel as there weren’t any reviews available – unless of course you had recommendations exclusively from friends and family. The only marketing brochures available, whether it was the hotel’s own, or an industry staple such Fodor’s, Framers or AAA travel guides, were all pre-printed with set prices and limited descriptions.
Most hotel bookings happened over the phone via a travel agent or hotel reservations call center. In the 80’s and 90’s, the travel agent was a lynchpin of the travel experience and anyone who was serious about booking a vacation used one. A travel agent could provide reputable and expert advice about hotels, not to mention take care of the legwork necessary to make reservations and bookings.
For example, it is 1978. You have three kids under the age of 8 and you have heard from friends that Walt Disney World is great. You walk into travel agent’s office downtown and sit down with them to explain that you’d like a place for 5 that had a pool that you could also see from the room. And you had an idea of a budget. The travel agent’s job was to find not only the hotel, but also the room that fits your preferences. They might come back with a couple of options that you narrowed down, and that was it. Your preferences, personalization in action. And room types hardly came into it.
The anatomy of hotel room types – and the confusion they create.
The Internet changed everything. Self-service became king and traditional travel agents became largely redundant for most consumers.
At first, it was amazing. Consumers now could see what the agents saw and relished the novel ability to search and view multiple hotels at any one time. All those options, though, had to be organized and sorted somehow. The OTAs successfully presented themselves as the way to get hotel prices on the cheap (whether true of not). Naturally, they started by ordering the hotels in order of cheapest to most expensive (later they sold placement in the order to the highest bidder), and then once in a hotel, they ordered the rooms from cheapest to most expensive. So, price became a key factor for consumers and the specific room features that might align with guest wishes, needs and desires were secondary.
When price rules above all else, you get commoditization. Why is this bad? First, one room appears to be nearly the same as any other room that is the same price. It undermines differentiation of product. A room with a pool view is different than a room with a parking lot view but that difference is so buried in the description that your consumer can’t get past the price. By the way, nobody is reading that dense paragraph room description for each room type anyway.
Secondly, and even worse, that potential guest WILL pay more for your hotel room IF it matches their specific needs. Hoteliers talk about selling personalized experiences, but they are swimming against the “Price is King” paradigm.
What is needed is a way to combine the efficiencies of the self-service model with a merchandising method that personalizes the room buying experience. Enter Attribute-based Selling.
The future of hotel inventory merchandising: ABS
It is clear that many hotels have a lot of room variance available to sell but in equal measure are limited in their opportunities by how they are currently selling them. Hotels need to break out of the commodity spiral – and instead of offering a limited room product set ordered by price, rooms should be presented as an array of features and attributes from which to choose.
Attribute-based Selling (ABS) re-imagines hotel inventory merchandising in order to improve guest satisfaction and generate greater hotel revenue. ABS presents features that more closely match personal interests and give them a greater sense of control over their stay experience.
For the hotelier, ABS offers the promise of improved conversion AND improved cart value. Yes, like any other e-commerce model, hoteliers want to increase the value of the consumer cart. ABS provides an ability to reap more revenue for features that were otherwise “bundled” under a room type name.
You may ask, why would people pay more for the same product just because it’s presented in a different way? Consumers do not view goods as economical rational beings but rather as symbols of personal attributes, goals, social patterns, and aspirations (Levy, 1959). With ABS, guests have the opportunity to build their stay based on their preferences – to find the perfect room product, for themselves. Ultimately ABS provides a feature-driven experience where individual guest preferences are the starting point and the hotel stay is framed in terms of personalization vs price.
In recent years, ABS has been talked about much in the industry but never realized due to technological challenges. But, the time is right for ABS. And now the code has been cracked. ABS is not just a new UI for your website. It’s a revolution in hotel inventory merchandising that will change consumer culture just as the OTAs did with self-booking 20+ years ago.
If we say and believe that booking travel is a personal voyage that belongs to the individual, without ABS, how can we truly deliver on that promise?
About ROOMDEX, INC
ROOMDEX’s hotel upsell software, “Upgrade Optimizer,” automates, monetizes, and ultimately simplifies the hotel room upgrade process by putting the power of choice in the hotel guest’s hands. Automation is the cornerstone of our pioneering hotel optimization platform. ROOMDEX uses hotel reservation, guest data and its proprietary persona and price algorithms to deliver personalized digital offers, greatly enhancing the guest experience. The hotel upsell tool relieves hoteliers of the labor time required by other upselling solutions while delivering high margin revenue and a substantial ROI.
The company was founded by Jos Schaap, Pierre Boettner and Denis Bajet, three industry veterans (Ex. MICROS-OPERA (now Oracle Hospitality), StayNTouch, Shiji and Nor1). ROOMDEX leverages over 90 years of hotel software innovation experience in PMS, integrations, revenue management, BI, mobile, self-service and upgrade optimization software. Since founding in spring of 2020, ROOMDEX has signed on more than 100 hotels with 9,500 rooms across the U.S., U.K. and Europe.
Website https://www.roomdex.io
Twitter: @ROOMDEX
Facebook: facebook.com/roomdexinc
LinkedIn: linkedin.com/company/roomdex
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