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Charlestowne’s Clients Enjoy Lower Cost of Reservations

Charleston, SC – Through a combination of strategies, properties managed by Charlestowne Hotels enjoyed a cost of reservations far lower than that experienced by most other hotels. These strategies include a combination of cultural shifts through leadership that injects a diligent approach to booking channel management from the revenue manager to the front desk staff. This is accomplished with implementation of compelling, fully optimized websites complemented with smart online campaigns, and negotiations with key online travel agents to obtain lower rates for hotels managed by Charlestowne. The results of these efforts in 2015 are in and the contrast between Charlestowne and the US averages is stark. In October, 2015, Hotel News Now reported that source of reservations for chain affiliated hotels were a ratio of 64% non-OTA to 36% OTA. Chain affiliated hotels managed by Charlestowne Hotels averaged a ratio of 77% non-OTA to 23% OTA. While franchisors offer franchisees great tools and programs for managing their sources of reservations, this data indicates that their needs to be a good operator implementing and managing those tools.

The HotelNewsNow article further claims that the US average source of reservations ratio is 25% non-OTA to 75% OTA for independent hotels. Amazingly, Charlestowne’s is virtually the inverse of the US average. When Charlestowne surveyed their managed hotels to aggregate and average the ratios of non-OTA to OTA, they segregated independent from chain affiliated and were surprised to discover that the ratios were nearly identical. Charlestowne’s independent hotels had a source of reservations ratio of 76% non-OTA to 24% OTA. Conventional wisdom is that independent hotels have an over reliance on OTAs compared to chain affiliated hotels, and while this is apparently true for most independent hotels, when Charlestowne implements its strategies for revenue management, digital marketing, and ecommerce, conventional wisdom no longer applies.

Further reducing the cost of reservations for client properties, Charlestowne has leveraged the buying power that comes with having forty client properties and succeeded in negotiating favorable pricing for channel management tools, distribution infrastructure tools (e.g. PMS interfaces with booking channels and internet booking engines), reputation management technology, and lower margins for many booking channels. These negotiated prices will continue to benefit Charlestowne’s clients in 2016 and beyond.

A hotel that is experiencing high OTA dependence and high reservation costs should contact Charlestowne to discuss an analysis of its situation. In many cases, clients of Charlestowne Hotels have offset most or even all of the cost of management fees as a result of improved revenue retention through better channel management and better pricing combined with many operational and financial advantages (e.g., consolidated purchasing, credit card processing rates, property & casualty insurance program, etc.) derived from Charlestowne’s management.

Click here for the Winter/Spring 2016 Charlestowne Hotels Newsletter.

Posted on February 15, 2016

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