Written by: Tracy Dong, Lead Advisor, APAC, IDeaS Revenue Solutions
Personalisation can directly influence guest satisfaction levels and profit improvements when applied correctly by hotels today. While Indonesian hotels that offer high levels of customer service have been practicing ways of personalising a guest stay once they are at the property—be it through suggesting a restaurant booking or outdoor activity to match a return guest’s interests—less is being done to personalise a potential guest experience at the initial booking phase.In the current model, rooms are priced as units and rates are determined by demand and availability. OTAs then display these rooms in a side-by-side, competitive marketplace format where little information is provided about any of the distinguishing qualities each unique room may have to offer.
For instance, if you’re shopping for a king room at a five-star hotel with ocean views in Seminyak and a guest comes across three similar listings, they’ll most likely opt for the lowest-priced option—or maybe the one that allows free cancellation. What the booking channel can’t tell the guest is that there’s an available room with stunning sunset views that would really make their Bali vacation an unforgettable experience.
Many potential guests today book for the lowest price, meaning hotel brands are increasingly becoming commoditised. Finding the optimal price point for a room has been made harder by the power of the OTAs and platforms that encourage rate shopping, but is the lowest price all that matters to guests these days? A more personalised approach to pricing can help hotels to stand out. Hotels which allow customers to personalise their choices and experiences gain brand loyalty, with many hotels’ service values and rewards programs appearing very similar.
As guests demand more tailored accommodation experiences, a ‘customer-choice’ pricing model could help deliver the ideal product to the ideal guest at the ideal price.
Through sophisticated data analytics and a more detail-oriented online booking experience, this next level of dynamic, bespoke pricing can become a tangible reality.
Today’s hotel guests may appear to be fixated on price, but really, they want more than just a place to sleep. In a customer-choice pricing model, each guest would be given more options in the online booking environment. They can select the individual components of a room they want and leave off the ones they don’t, either spending extra or getting a cheaper rate in the process.
By implementing customer-choice pricing, hotels can separate and categorise all their products and services into components of value. Features that are currently invisible during booking could now be brought to the surface as part of the decision-making process. This will help drive differentiation, meaning there will be less emphasis on direct price comparison with competitor products being marketed as the same thing, despite their many differences.
Customer-choice pricing can help Indonesian based hotels secure new bookings in an era where personalisation is no longer just desired but demanded by consumers. Through offering guests, the option to make selections to their stay (adding and removing items based on their preferences) on their own, they will be more appreciative of the value they receive for the money they pay.
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