"The worlds of OTAs and wholesale have almost fully collided" - Westgate Resorts on managing rogue rates

We recently caught up with Colette Labis, Director of Partnerships & Distribution at Westgate Resorts about how hotels can gain back control of their rate distribution - and not lose partnerships in the process. Colette will be taking the stage at the upcoming Direct Booking Summit: Miami to share her own experience of working with wholesalers alongside advice for hotels looking to emulate her no-holds-barred approach!

Make sure you join us at Loews Miami Beach Hotel on October 22-23 for her session Three strikes and you’re out: How to take control of rogue wholesale rates. Find out more about her talk and check out the full agenda here - or read on for a sneak preview.

Colette Labis | Director of Partnerships & Distribution | Westgate Resorts

What characteristics should hotels be looking for in a distribution partner?

First and foremost, before we will even consider working with a new distribution partner, we ensure that they can provide connectivity for our ARI (availability, rates and inventory). Rate distribution goes awry when there is no connectivity for ARI updates, so this is now an absolute must-have for us to be able to carry out our revenue strategy.

Beyond that, we look for partners that are easy to work with. For us, that means being flexible in contract terms while also agreeing to our hard stop clauses and providing one main point of contact for our account instead of forcing us to work with multiple market or product managers. They should also be flexible in their ARI and property content display capabilities. We run a rather small operation for the volume that we produce, so we don’t have the luxury of time for difficult or high-maintenance partners.

How much does the size of a hotel or hotel group affect its relationship with distributors?

Significantly. This is mainly because independents cannot command the same distribution channels and production expectations as big hotel groups.

Independent hotels often struggle to negotiate fair terms using the little leverage they have, which might make it seem like they're at a disadvantage compared to big hotel chains. On the other hand, they tend to have more flexibility in their distribution strategy than hotel chains. This results in independents working with a larger number of distribution partners, and in more unique ways, than the bigger organizations.

What has the biggest impact on hotel-distributor relationships?

Just three years ago, you could pick up the phone and call your market manager when something was wrong with your hotel’s listing, when your bookings weren’t converting well, or your placement in the market search results was down. They had the autonomy to service their hotel partners. That’s definitely not the case today.

Technology advancements and company acquisitions and mergers have impacted the nature of partnerships. Every technology advancement in the industry removes a human element from the relationship. And with every company merger, it removes yet another 'human' partnership from a hotel's distribution pool. We are moving into an environment of self-service, where hoteliers are expected to live in the extranet if they want to respond to guests, load promotions, or boost their performance scores. You have to suit a distributor's algorithm if you want to improve your booking conversion and guest retention.

How have you used partnerships to achieve Westgate's direct booking goals?

Getting our partnership and distribution strategy more in-line over this past year has helped to increase our direct booking productivity significantly. If customers can’t find lower rates than our direct rates online, they are more willing to book direct. The key to our direct booking success as an industry is educating the guest on why it’s always better to book direct!

You haven't been afraid to use legal action as a means to bring partners in line. What advice do you have for hotels who can't afford their own in-house legal team?

There is always power in numbers. Teaming up with other hotels can lessen the cost of litigation - and it carries more clout for the notice or lawsuit! You can share the cost and the expected outcome among multiple plaintiffs.

At Westgate, we start with a C&D (Cease and Desist) notice that clearly defines our expectations and what our next steps will be should that not be met by the Defendant. This has proven to be more than sufficient at initiating the conversation with the random.com that’s wreaking havoc with rogue rate distribution and contract violations as affiliates of third parties.

We move to an official lawsuit when we don’t receive a response to the C&D notice, or they continue to stall on removing our hotels from their system altogether. Because this issue is more impactful to our business model than most other hotels, we are very passionate about holding these 'random.com's accountable for their rate and contract violations.

I believe that all hoteliers should be passionate about standing up for themselves. Otherwise, hotels are going to lose control over our distribution. I encourage every hotelier to contact me to join forces in this movement to take back the rightful ownership of our rate distribution!

What is your top tip for switching to a fully dynamic rate structure?

I find that distribution partners hear the word "dynamic" and immediately go into panic mode. Both hotels and the distributors need to understand the true meaning of “a fully dynamic rate structure” - it doesn't mean a “set it and forget it” approach or a strategy where it should just float to Best Available Rate.

Treating OTA package rates and wholesale net rates equally is essential to a fully dynamic rate structure. It’s no secret that these two worlds have almost fully collided. That's why it's time for hoteliers to start treating them as one in the same!

What can we expect to learn from you at the Direct Booking Summit in Miami?

There is a lot of generalized advice being provided for hoteliers in articles from experts, but they don’t always go into great detail. I’m going to walk them through how to actually deal with partners and how to guide their legal teams in the process.

At the Direct Booking Summit, I will touch on:

  • How to correctly choose your partners
  • How to tighten distribution clauses in your partner agreements
  • The importance of connectivity
  • Steps to moving to a fully dynamic rate structure
  • How to take control of rogue rate distribution when it occurs

I’m especially hopeful that independents that suffer from rogue rate distribution will walk away feeling more confident that they can gain back control without having to end their partnerships.

Join us on 22-23 October at the Direct Booking Summit in Miami to learn more from Google Travel, Hilton, AccorHotels, Wyndham Hotels & Resorts, MGM, Hard Rock International and other key industry players. See you there!

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About The Author

Alisa is Triptease's brand guardian. She speaks four languages and uses them to interview thought leaders and write articles for the industry.

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