When a resort gets SO popular that it can keep a full book all the time, it has outgrown the need for various sales channels and can handle things in-house I suppose. The thing is, almost NO resorts are able to thrive without keeping a high census consistently (or at least enough to cover the off season). If you're full ALL the time you either have something no other property has (but everyone wants) or you are likely leaving money on the table by offering rates that are below market value. By booking guests through a variety of avenues they also expand their advertising and exposure. Pretty much every resort I've ever known is on every place you can click on the net. This includes popular destinations such as Atlantis Resort, Caesars Palace, Hard Rock or pick just about any other you can think of. This list of hotels that are not on every click is a helluva lot shorter. This is a hotel that just expanded. I'm going in mid July and I've been watching the amount of traffic on the roll call. It's obvious that July far from a peak month. During that time there the hotel will have booked a percentage of the guests themselves, but a HUGE portion of my fellow travelers will have booked through someone other than Premier. It still looks like half the place will be empty, so what would it look like if they weren't using every travel site available to man? Scary, is the answer. There will be a percentage of people for whom money is not an object that will pay rack rate with no argument. This percentage is going to be VERY small. There are some that see any old shingle hung out that says "SALE!", and jump on it if it's only 10% off. This isn't going to be a large number I wouldn't think, but like PT Barnum said.... But how do MOST people shop for their vacation these days??? They do it on the internet. Get away from booking the hotel for a sec and say you are looking for a rack to store stuff in your garage. Google "storage racks" and EVERY site that pops up on the list will have the terms discount, best value, lowest price guaranteed, or some other hook to give you the feeling that you are getting the VERY BEST DEAL on that damn rack you can get. It's our nature to look for a bargain, especially after our buddy Ignacious has been an absolute ass telling you how much of a sucker you are after what he paid for HIS rack. So the hotels gets a percentage of big dollar spenders. Some pretty good spenders. It'll mostly be packed with people trying to have the best time they can for the least dollars they can spend. Take that majority out, insist everyone pays above market rates and the place will soon be for sale. The hotel will, in the mexican way, haggle for every buck in can muster, and be more profitable with some deals than with others. In my humble (and in no way warranted to be accurate) opinion, whoever made the quote that the only way to book will be through Premier is untrustworthy, unintelligent or incredibly naïve.
So they told us before the closing in a premier presentation that there would be no more discount sites for the reopening but there were. Then they told us in November again when we did the presentation that the discounts were going away (in the presentations I always pull up my price on those sites and tell them to beat it, they never can so this is their answer) and that we would never see prices below $400 for dates in 2018 again for any type of room. A few weeks later came the Black Friday sale that actually lasted for over a month where you could get rooms below 300 a night on average. Note the Black Friday deal was applied to discount sites also. We booked via a discount site and got that $500 master suite deal for peak April. Anyway the point is they need the discount sites to fill rooms. They tell everyone that will listen that they are going away as it makes it easier for them to sell premier and convince people that they need to lock in their rates as they are going up. The reality is the supply demand equation will move in the consumers favor as they have added more rooms at TTR and if true, have plans to open additional resorts (Dominican republic and Mexico). And while we all don’t believe Breathless is an alternative, I am sure some choose it over TTR when trying to decide if TTR may be too much for them. The risk with all of above that I think still needs to play out is will the new/adjusted ttr attract a new clientele that decreases the supply further. So far I haven’t seen that come to reality but has been something that ttr and premier have been trying to sell us all on every chance they get. Hey, I would do the same thing if I was them.
Thanks for your feedback. I believe your analysis is spot on. Hence my questions and discussion. When I get home I will ask my wife if she recalls who told us about eliminating the travel site contracts. Maybe they just plan on modifying the contracts with fewer rooms or for slower months, etc? Only time will tell.
Thanks Kyle. I knew I could count on your response. So it is true what we were told since you heard the same thing...twice. Sales tactics! And I am with you, if I was the owner I would have my ssles staff play that card over and iver until there was nothing left...like kicking a dead horse. I am sure there is some return. Also agree on the pricing as we have paid much less even through Premier. Keep up the great work! I may have to hire you as my personal representative!
I just wanted to chime in that we searched for TTR rates for July 14-17. Expedia/Orbitz/Travelocity had rates of $630US/night Hotelscombined and Trivago (my favorite search engine) showed 3rd party sites that had rates as low as $232US/night. Some of the 3rd party discount sites were Elvoline, Cancelon, Hotels for Everyone, HotelClick, Amoma, LOL Travel (yes, that's what it was called), and Agoda. I've personally have had great results with Amoma. And reviews for Hotels for Everyone were very good. If they ever get rid of these 3rd party discount affiliations, I will be a very sad panda.
I think what needs to be kept in mind is that the hotel and Premier are two different companies. They share many of the same goals but not 100% of them. Premier want new members and the hotel not necessarily so. Premier sales staff have been saying for as long as I have known that third party sites will soon no longer be able to sell at the cheap rates they do. And still it continues. It's just a sales tactic. Just guessing the figure but if 25% of guests at any one time are members or Referrals where are the other 75% of guests coming from if not Expedia, Orbitz and the dozens of smaller discount companies?
There are companies called "bedbanks" notable ones are hotelbeds and gta. They are like wholesalers. What they do is they buy up huge amounts of rooms with a massive bulk discount and then resell the nights they bought to smaller agencies in smaller portions. Purely made up figures from a mythical hotel to demonstrate how bedbanks work. - A hotel has 400 rooms multiplied by 365 nights = 146,000 nights inventory per year - Bedbank buys say 25% of the inventory at $100 per night = the hotel gets a cash influx of $3.65 Million. Bedbank gets 36,500 nights. - Bedbank then sells the nights on to a discount site, let's say 36.5 discount sites buy 1000 nights each at $150 per night. The bedbank makes 50% or $1.825 Million profit - Each of those discount sites sells to the consumer @ $200 per night. The discount site makes $50 per night on their 1000 nights for $50K profit. The bedbanks repeat this with other 'products' i.e other hotels, and the discount sites repeat it too. Reality is, of course, much more convoluted. But the theory is no different as to why eggs are cheaper at Walmart than they are from the farmer or a Mom and Pop shop.
@Steve Thanks for the description. Makes alot of sense and they all make money based on the cash outlays and isk taken. I also do not know how the hotel could do away with a rather standard practice. Well unless they had enough members and those booking directly with the hotel to fill all the rooms/nights (doubtful this can/could happen) but this may be the long term goal...??? Questions though...since you are in the business area and seem to know much about tactics and how things work... You mention that the hotel (in this case TTR) and Premier have a bunch of the same goals but not all. In fact you mention membership is Premier and not TTR and Premier wants new members but the hotel not necessarily so. Why do you think that the hotel does not? And what do you believe are the same goals and other different goals?
Wait....What??? I never knew this. So Premier is just an organization about like one that would sell you a Discount Pharmecutical Card here in the states. They don't run the pharmacy, they've just made a deal with the major pharmacies to allow their customers some discount in exchange for them bringing their business. Interesting. I thought Premier was an extension of the owner of the place. I was never on a list of people considering membership and I've dodged the presentations on all three of my previous trips. I'm not saying I wouldn't listen sooner or later, but they have to buy my time, and I'm telling them up front that I'm unlikely to buy. If they want to upgrade me to the tower, maybe I check it out. I haven't lost a thing if I walk on to the party that's waiting for me at the sexy pool. I WILL do what Kyle does and whip out rates readily available on the internet. I'll bet a dollar to a donut that more than likely they'll be ready to get me out of their office. That was my point. How many people call Caesar's or Bellagio directly? The majority of vacation travelers are shopping on the internet these days. That's why all the travel agencies are shutting their doors. You don't need to pay someone to type in Expedia, Travelocity, Orbitz or some other site. The hotel, in my lifetime, will NEVER cease operations with low cost providers.
@FakeNewsTeam Sorry, going to have to leave further input for another time. We're off to check in the Boobs Cruise shortly and then will be at the hotel until late Wednesday. I'll be largely 'off grid'.
