Rooms & Rates: The Less, The Better
In Revenue, offering too many options, meaning too many rooms and rates, is the equivalent, in Marketing, of “marketing to everyone to market to no one”.
NB: This is an article from Direct Your Bookings
I visit hotel websites and their booking engines multiple times a day, not only the ones of my clients.
Too often, unfortunately, I run into what I believe is a huge mistake: hotels offering too many rooms and rates.
Especially if the Google Analytics tracking reported this kind of traffic split by device:
Dozens of room/rate combinations are difficult to digest on desktop computers and laptops… can you imagine how difficult it may be on mobiles?
But first thing first.
Why so many rooms and rates?
We tend to believe that the more options we give, the higher the chances to win the deal.
In a nutshell: more rooms and rates, more customers.
This way of thinking, I guess, brings hoteliers to believe that that prospective guests have more opportunities to find the one combination of rooms and rates that matches their desire.
As it turns out, instead, the less, the better.
If you have been following me and my posts, you perfectly know how much obsessed am I with the underlying feelings that hotels’ prospects feel, throughout the different phases of the booking process.
Because, ultimately, this is all that matters.
In fact, too many rooms and rates generate confusion and sense of overwhelm, resulting in the prospects not only leaving the direct-booking process through the booking engine, but looking somewhere else at hotels that could make them feel in control of the situation.
Throughout ca. 500 hotels’ data I have had access to, in the last 5 years, not a single time have I seen hotels having a good conversion rate and a good amount of direct bookings, when offering more than 35-40 rooms and rates…
… and outperform OTA’ sites.
They know that, of course.
This is why I put together a few quick examples to showcase what I just said.
Oh, just FYI, it took me 5 totally random tentatives to find out the following 3 examples.
Meaning, it was not a looking-for-a-needle-in-a-haystack sort of game, this issue keeps happening so often, that I didn’t have to look around much.
Ready? Let’s go.
Remove redundant Rooms and Rates.
First hotel (just hidden the name), random search for 3 nights, 1 adult.
Booking engine: FastBooking.
Even though I can’t showcase how long the booking page is with a screenshot, I counted 32 combinations of rooms and rates.
Which, btw, it’s still quite a decent number of options.
However, let’s have a better look and see whether there are rates that could potentially be removed, because redundant.
Compare, for example, Treat Yourself with Public Rate.
Have you noticed?
They have the exact same rate conditions:
- Breakfast not included;
- Cancellable, modifiable;
- Pay Later.
You might think that if I clicked the rate name I would have seen a long rate description telling me what makes these 2 rates different, right?
But Public Rate, well, is just a Public Rate.
Call it Public Rate, Daily Rate, Best Available Rate.
Nothing special comes along, it is usually what we referred to as the best unrestricted rate.
Eventually, it is Treat Yourself that may include something more. And I don’t even want to dig deeper because, either way, this rate is the cheapest.
In other words, how ever could prospects be interested in Public Rate?
Redundant rates are not only harmless: they get our prospects distracted, confused; they make useless noise.
The noisier, the more difficult for prospects to perceive the value behind the famous question “what’s in it for me?” every human being asks himself when facing a deal.
In a crazy and fast world like ours, you bet that makes quite a difference.
Instead, the OTAs…
Again, 32 combinations of rooms and rates.
What about, for instance, Booking.com?
BO is BO because, in my opinion, they are the ones who invest the highest amount of energy and resources in studying this kind of things.
And honestly, I really admire them.
Even now after so many years dealing with them, I still get excited when looking at their booking pages, trying to do some reverse engineering on their strategies and tactics.
Besides, let’s see how the same hotel, for the same dates, pops up on Booking:
I counted the combinations of rooms and rates: 15.
- Booking engine: 32
- Booking.com: 15
Even though the screenshot above doesn’t showcase it, you barely see rates that have redundant conditions, popping up at the same time.
Different Hotel, Different Booking Engine.
It’s the number of rooms and rates.
This becomes quite serious and a very overwhelming number of options.
Plus, not only are there redundant rates, but also rooms.
- Superior Room Twin Bed City View
- Superior Room Double Bed City View
Exact same room types, simply different bedding.
SBE now has the feature to kind of merge room types that only differ in the bedding:
So many redundant rates.
Some redundant rates. And other meaningless rates.
This page becomes very long now…
In order, top to bottom:
Room Only Restricted Rate.
Bottom rate, this is fine.
Discover a World of Difference.
Likely a chain, group or brand representation company rate that comes from an RFP this hotel may have submitted.
Noise, noise, noise. Super redundant.
Its sister rate, Web-Special Flexible, is placed in position 4. But it’s actually more appealing as the cancellation policy says 48 hours as opposed to 72.
And what I mostly don’t like is that it is being placed on top (before other regular rates that have the same conditions and price).
This way, highly chances that it will get more bookings than its sister rate. Meaning, better production. And we know how many decisions are based upon production.
However, production, per se, is just an absolute number that does not mean a single thing, if not contextualised.
Not a single thing!
I don’t know whether it is a rate created by the hotel or someone else on top, like a brand representation company.
Besides, same price as the previous rate, but more restrictive (deposit required and not cancellable).
So, what’s the deal?
Weird name, but it’s the best unrestricted rate.
It should go in position 2, whilst Discover a World of Difference and Weekend Escapes should disappear.
Breakfast Included Non Refundable.
Same as Web-Special Flexible, just 0.80 EUR more expensive.
What’s the deal again?
I am so freaking lazy (and so are the vast majority of users), don’t let me click on the rate name to see what’s in it.
Delightful Turkey & Senior Citizen Rate.
I put these 2 rates together because they share the same problem.
They are clearly discounted rates whose discount is based on BAR.
But this is one of the most classical example of creating a bunch promotions, packages, special offers, without thinking at what else has already been created.
In other words, no consistency, they seem to be random and stand alone initiatives that are not bundled into a proper rate strategy.
Best Available Rate.
First, why calling Best Available Rate a rate that is clearly not the best one?
Our technical terminology for BAR shouldn’t concern any booking engine user who simply perceives the english meaning of Best Available Rate.
Noise, noise, noise.
How I would do.
In the example I showed you 2 rooms and 8 rates per room.
So, if it was for me, and based on what I said above, I’d go from:
- 2 rooms, 8 rates = 16 combinations.
- 1 room, 2 rates = 2 combinations.
No downsides in terms of value proposition, but a way more compelling, clear, simple and effective UX experience.
This is really too much: 84 combinations of rooms and rates.
No screenshot would ever give you the idea of how long the page is, but look how tiny my scroll-bar indicator is:
And this is desktop. Can you image users facing so many rooms and rates on mobile devices?
This is exaggerated, I admit, and it quite rare to find cases like this, but I can’t help but think of how many lost opportunities, other than money, are being left on the table, to the advantage of either the competition or the OTAs.
How many products?
I’ve seen hotels skyrocket with just a couple of rooms and a couple of rates.
Actually, I’ve seen this many times.
And literally, the rule is as simple as that: the less, the better.
However, my suggestion is to not get over 20 products, meaning 20 combinations rooms/rates.
The very first suggestion is to simply do what I just said in this article: check your redundant rates and clear your rate strategy (eventually also your room structure).
I am aware that this is sounds easy to say, way more complicated to do.
Managing rates, especially when you have hundreds of rates in your CRS, opening or closing depending on whether other rates are available or not, may turn into a huge mess.
In this regard, I suggest you to submit an enhancement request to your system provider, which is also my second suggestion, that looks more or less like this:
It’s just a mockup, and probably it can be improved, but the principle remains: hide certain rates (or rooms) if other rates (or rooms) are visible.
In my previous entrepreneurship experience, together with my business partners we built our own CRS/Booking engine (almost ten years ago) and as a former Revenue Manager, this was one of the first features I put in the pipeline.
It turned out to be very useful because, in essence, hotels could simply determine a sort of hierarchy of rates, and letting the system do the rest, automatically.
As long as you know the structure of your rates, this shouldn’t be too big deal to set up.
Unfortunately, the majority of IBEs I have had the chance to deal with, only let you set up a maximum number of rooms & rates to be displayed (for example, show max 20 products).
Which may sound like an easier solution, but to me it’s not a solution at all, because you can’t control which rates to hide and which ones to show.
My last suggestion is also my favourite.
It’s totally based on performance.
In a nutshell, remove everything that doesn’t perform.
If you have a proper and deep data tracking, via Google Analytics for example, a report like the one above should be a must.
Not only do you get to see how many reservations you got, over a certain period of time, for each and every product you have (product = combinations of rooms and rates), but also and most important it tells you how many times each product has been viewed.
In other words, you can compute the conversion rate for each of your rooms and rates, along with many other useful information.
Check this, for example:
The report says: even though this product (room code PK and rate code B&B) has been viewed many times, users are not interested in it, at all.
Succinctly put: this product is useless.
Thus, either you change its attributes (price, policies, etc.) or you get rid of it.
I wouldn’t suggest to simply delete products that have no reservations: that may be caused by the fact that the product is barely visible, meaning that most times it doesn’t show up.
Thus, you might want to reduce its restrictions, for example the minimum length of stay.
This way, in compliance with the searches your prospects will make through your booking engine, you might see whether that products is actually appealing or not.
Appealing, in this case, is not the one products that generates the highest number of reservations, but rather the one with the highest conversion rate, meaning highest number of reservations in relation to the number of times the product has been viewed.
Remember? Production, a.k.a. number of bookings, per se, is just a number that means nothing.