Wotif move bad news for hotels, says agent

Hotels selling at highly discounted rates on Wotif three months in advance have only themselves to blame when later they find themselves without wholesalers, travel agents or other online distributors but Wotif to represent them.

Many hotels are selling rooms on Wotif at much less (some 50% less) than their net wholesale to their wholesalers, but expect their agents to make great efforts to sell them with conditions attached. Who the hell are they kidding?

When hotels are in trouble they contact their land and online wholesalers to help them and their destinations (Wotif certainly will not).

Will they remember then that they are the ones that demanded in their contracts that agents sell at a certain rate, (in some cases asking wholesalers to collude in price fixing), only to go out undercutting those same agents on Wotif by as far as 60% off rack.

Hotels are shamefully breaking their own contracts with wholesalers with the rates they are displaying on Wotif.

I understand last minute discounting 14 days out, because of room allotment release from wholesaler’s inventory, but 28 days out made no sense as 30% to 40 % of travellers were buying their rooms within 28 to 14 days, and the hotel received full net wholesale yield from these sales.

But 90 days out, is NOT last minute any more, its setting a new rack rate for that hotel.

Yes, I hear hotels saying that they only allocate a small part of their inventory at the Wotif rate. Well, we all know that hotels will keep selling at that rate if it fills their property (in other words, it becomes their dominant rate).

Just this week our agency could not obtain a six night booking for two famillies at a hotel because as the hotel res staff informed us: “the rooms are allocated to Wotif”

Crazy? Yes it’s happening. We gladly sold another hotel to the client and now will not suggest the “Wotif hotel”, why should we?

For another booking, it was cheaper for us to buy the room from Wotif (we made more profit) and sell it back to the client, rather than use the rate the hotel had supplied to us. Bizarre!

Hotels on Wotif selling 90 days out are basically advising all their past patrons that they have been ripping them off all these years because they can operate their properties on a half of what they have been charging. Perception is stronger than the truth…

The whole concept is ridiculous, travellers will benefit (but will pay eventually as hotels cannot sustain such discounts for long. When hotels cannot provide the same standards they could previously and start cutting back, the traveller will probably go somewhere else).

There is no loyalty building with this strategy, forget spending any money on branding, because after a few years on Wotif you have lost your brand integrity.

Those hotels are intentionally breeding the last minute culture that Wotif has incubated. It does wonders to the hotels’ bottom line!

Instead of rewarding patrons to buy ahead (and generate advanced cashflow) in order to save with Early Bird offers, hotels are doing the opposite, encouraging the growth of the last minute bargain hunter.

Eventually there will be no forward bookings, hotels will not know what their forward occupancy will be as they will survive from week to week at the mercy of the bargain hunter.

Some travellers are getting even more clever, they are contacting the hotel direct to obtain a better rate than what they have seeing on Wotif…where is it all going to end?

Wotif are making a financial killing out of this and do very little for it, they provide negligible service to the traveller (Ironic, the traveller goes to the very travel agents, land and online, that the hotel has turned their back on), for the information, images, and good old fashion service before going to book on Wotif (again good reason why distributors will drop the hotel, they provide the service and Wotif gets the sale!).

On Wotif, the hotel loads all content, do the rates and maintain the inventory and then has to wait to be paid a month after guest departure for a 28 day out booking. Wonder how long the hotel will wait to be paid for a 90 day booking, 120 days?

The big question is: Why can’t Wotif pay the hotel within days of receiving credit card payment from the traveller? The hotel is doing all this for the privilege of providing massive discounts off their rate to Wotif.

Why not just reduce their net and rack by 30% and be done with it.

It seems that something has been forgotten, last minute discounting is about getting rid of distressed inventory, the last minute when there is very little chance of selling it.

Selling three months out is either panic, naivety, or laziness on behalf of the hotel.

Either way, it is sending out a terrible message to the market about that property.

by John Nicholls