In the world of commercial strategy there are topics that often remain taboo. Yet it’s precisely these subjects that can spark healthy debate and lead to better ways of doing business if approached thoughtfully.
NB: This is an article from LodgIQ, one of our Expert Partners
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Here’s a closer look at seven subjects you’re not supposed to talk about in commercial strategy.
1. The Real Cost of Discounting
Discounting is often seen as a quick fix to drive bookings, but it can undermine long-term profitability. Revenue leaders need to decide whether short-term gains negatively impact brand perception and pricing integrity. They also need to analyze whether the client is experiencing any real world benefits of discounting and if it’s having a positive impact on guest experience. A great promotion depends on positive perception, so make sure it is aligned.
Insight: Implement a value-based pricing strategy that emphasizes the unique features and experiences your property offers, rather than relying solely on discounts. This shift can help maintain pricing integrity and build brand loyalty.
2. Bundled Offers, or Bumbled Offers?
While bundled offers, like including parking with a room rate, can be attractive to guests, the actual value must be clear. If customers don’t perceive the savings as significant, the promotion can fall flat. It’s essential to evaluate whether bundling truly enhances perceived value or simply adds complexity without benefit.
Insight: Test different bundling strategies and gather feedback from guests to understand their perceptions of value. Use this data to refine your offerings and ensure they resonate with your target audience.
3. The OTA Love-Hate
Is “OTA” a dirty word?! If you’re feeling fed up with OTAs, consider this: is it a bad relationship or are you simply not doing enough on your end to maintain a healthy channel mix? It’s commercial leaders who should be safeguarding direct bookings and avoiding over reliance on OTAs, not blaming them for all their troubles.
Insight: Consider how you are balancing OTAs and direct bookings. If over reliance is an issue, first look inwards for the answer. Not planning ahead? Not investing into book direct? There is more in your control than you think.
4. The Organization-Wide Dangers of Communication Silos
Silos within an organization can lead to inconsistent messaging and missed opportunities. Revenue management must engage with sales, marketing, and operations to create a cohesive strategy. Confusing buyer experience is what we want to avoid at all cost, and this can only be done by interdisciplinary teams collaborating.
Insight: Regular interdepartmental meetings and collaborative projects can promote a shared understanding of revenue goals. Consider utilizing technology that allows real-time data sharing to enhance transparency across teams.
