Wednesday, November 16, 2011

Does an hotel generate enough roomnights to justify discounts in pricing?

There was once a time where it made sense for hoteliers to strategically lower their rates because competitors would be slow to catch on. But in today's world, hoteliers see the movements of their competitors instantly and adjust their practices to follow suit.
Because third party wholesalers such as Expedia.com are biting into an already thin margin, can hoteliers afford the net rate they generate? I have discussed on my past article about the dependecy hotels have on online travel sites. Bottom line is if we did not have online travel sites, the industry’s occupancy would be slightly lower and room rates would be considerably higher. Would it even out?

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