A Hotel Guide for Avoiding OTA Panic and Rate Parity Games

OTAs are a fact of life in our industry. But there are so many negative feelings about them, constantly being stoked by hotel media, that it becomes difficult for hotels to form calm, cohesive OTA and rate-setting strategies.

OTA-bashing articles surface every few months, no matter what cycle the travel business is in. These articles usually involve screenshots of OTA rates being lower than the hotel’s direct rates, leading to complete disgust and a ton of hate reading. Other times, these feelings of fear and loathing towards OTAs are triggered at conferences by speakers going for some cheap applause.

I would like to ask you to put all that aside, and keep an open mind. Please remember that, as a revenue professional, your goal in life is not to teach the OTAs a lesson. It is to make more revenue! You should try to avoid Maslow’s hammer approach when thinking about your relationship with your distribution partners:

If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.

Your revenue strategy cannot be focused on proving that the OTAs are an evil empire, and that only your rate parity games will topple them. The goal of pricing is to make sure that you convert all of your hotel investments into revenue.

Now, if you’re ready, please read on to learn about some OTA and pricing strategies that have delivered millions in revenue for owners and operators that have embraced it.

The Rate Parity Games

Rate parity surfaces a couple of times a year. Usually, it is:

  • Declared dead
  • Something that is killing your direct revenue

I am posting a third option for you to consider: Don’t play games.

People are posting articles filled with “screenshots of proof,” as if they have finally located the Chupacabra or Bigfoot. A lower rate published on an OTA versus a hotel website is highlighted as a “gotcha moment” and a complete failure of your parity-based pricing strategy. The “game over” vibes are pretty doom and gloom (even for me). They make me think of Bill Paxton.

Rate parity should not be misrepresented as loading the same rates on all channels… and then immediately going to bed, zero follow up. Dynamic pricing requires a little bit more work than that. Once your rates are loaded, you have to keep an eye on the OTA channels, like Booking and Expedia, and monitor what they are doing with the rate you gave them.

Here are reasons/examples of how and why they might be showing lower rates:

  • Are they running opaque promos?
  • Are they running mobile promos?
  • Are they running merchant model promos?

If the answer is yes, then please match these offers on your website. Instead of canceling your entire participation with them, do your best to implement competitive rates on your direct channels.

In other words, once the rates are uploaded to the OTA, don’t assume your revenue manager is then handcuffed and cannot make any edits! When you notice parity issues, do something about it right away. Some examples:

  • Run your own private promos.
  • Run your own mobile promos.
  • Offer direct value that OTAs cannot match.

If your current booking engine technology vendor does not permit you to take these actions, then find one who does. The answer is not abandoning parity; it is having the smarts to monitor and enforce it on all channels when possible.

Ah, The Good Ol’ Billboard Effect

A big argument against rate parity in pricing is the idea that there is no billboard effect for an independent hotel that is listed on a global OTA. This study was first published back in 2009 by Cornell University, with another follow up written in 2017.

I am not here to debate the billboard effect. If you feel strongly that this does not have any relevance, then please withdraw from the OTA channels and watch your competition overtake you.

It is very easy for direct revenue fanatics to throw the billboard effect under the bus. Do you know why? Most of them are not personally invested in the asset. And if there is one thing that I have learned from working in revenue optimization for 20+ years, it is this:

It is very easy to be a revolutionary with other people’s money.

I will elaborate more on these revolutionaries below. For now, let’s look at some traffic and revenue stats for the top OTAs in the business:

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If you want to opt out of this exposure and revenue stream because a consultant, marketing agency or software provider thinks you can 100% make up for it using their direct revenue software? Then all I can say is… good for you! Abandon all parity and put your lowest rate on your website. Then give it some time and watch your competitors do circles around you. The effect of this strategy is not sudden death but more like diabetes… a slow decline, which means that by the time you discover it, it’s too late.

There Is No Free Lunch!

It’s not just a saying! An actual mathematical theorem highlights a fact that we have all known for a while: There are no shortcuts to success.

Dealing with OTAs may seem painful when you just think of the commissions. However, do we expect them to give us traffic and revenue for free? Commission, while painful, is the cost of doing business. The Princess Bride probably said it best:

OTAs don’t owe you anything. You can try to undercut them and limit your participation to prove a point. But in the end, that decision is going to cost you revenue and loss of market share as an independent hotel. No amount of creative marketing or software can protect you from this outcome.

Guest Ownership Quandary

We can debate all we want, but hotels don’t “own” the guest. Neither do the OTAs or any other form of travel agent. Your hotel guest today is a little smarter than we like to give them credit for.

Since the pandemic, most hotels have seen their direct revenue share grow. In spite of the “death of rate parity,” the overall market share of every hotel that maintains true rate parity has gone up. How is this happening if the guests are mindless, price-driven sheep? This is happening for a simple reason: they are looking for value and not just a few dollars off the rate.

If you want guests to book direct, you have to showcase value in addition to a good rate. Flexible cancellation policies over the past two years drove a huge volume of bookings for direct channels. Hotels answering their phones and actually helping guests also enabled higher rates, plus more direct bookings and increased market share. Have you ever tried to locate someone at an OTA to quickly resolve your booking issues? There is no substitute for direct contact with someone who you are going to be staying with.

Give your guests a little more credit. Instead of “owning” them, offer them value that only you can give them. And please accept that people who are hooked on OTAs will always book there, no matter what. It could be loyalty, points, or just habit. Don’t wage a war to try to convert these guests on your website. It’s the same as trying to get a Marriott loyalist to stay at your independent hotel. Even if you have a superior product, he will pick the breakfast buffet with watered down scrambled eggs every time to maintain his status with the brand.

Playing Revolutionary With Other People’s Money

Direct revenue is a crucial component of your distribution strategy. You have to work to build and grow it whenever possible. Vendors often present direct revenue as a magical, pain-free solution to all your revenue problems. However, there is a limit to your reach and your budget when it comes to marketing your hotel to a global audience. This is particularly relevant to independent hotels that do not have a brand contributing to their revenue base.

I read something ridiculous last year along the lines of “You should withdraw your hotel from all merchant models and promotions.” Someone selling software and services was calling for hotels to withdraw from all the OTAs and then double down on offering mobile discounts on their direct channels.

I have noticed that most of the direct revenue revolutionaries are playing with other people’s money. If they were paying the mortgage, payroll, insurance and fees on a hotel asset from their own bank account, I guarantee you they would be participating in everything 24-7.

You see, I too fancy myself as a hotel revolutionary. However, I am not going to sabotage the asset owners’ finances to prove a point. That is highly unethical and risky behavior with negative consequences.

Your revenue strategy is not a zero-sum game that you play with your distribution partners. Celebrating lack of visibility on OTAs and assuming everything will magically come in “direct” is deeply flawed logic. An independent hotel today cannot afford this level of carelessness when it comes to their distribution strategy.


I wanted to share my thoughts on how your hotel can stop hating and start focusing on improving your revenue and distribution mix. My strategies have delivered millions in top line revenue for assets I have worked with over the years. So please view this article as more than a think piece. This is real cold hard cash we are talking about! And it might even feel good to let go of some of those negative feelings and start viewing the OTAs as partners. Focus on negotiating the best contracts with them, and make them work to your advantage. And take responsibility for maintaining parity by offering rates or added value that make your direct offers more appealing to guests.

The Post Pandemic Hard Reset

I wrote two articles during the pandemic, one around the beginning and one in the middle. It’s time to complete the trilogy.

Our industry has been given a once-in-a-lifetime chance to fundamentally change itself. How we market, price and operate hotel assets needs to evolve to meet the changing market landscape. Here are my thoughts on how to make real changes in order to embrace the tremendous opportunities that lie ahead.

Embrace the Hard Reset

The hotel and travel industry was ground zero for the impact of global lockdowns: the hard reset button on the entire industry was pressed. A hard reset on an electronic device returns it to blank factory settings. It wipes out all your history but then gives you a chance to start over. A chance to build things the right way. Imagine recovering from this hard reset without making fundamental changes to the way we run our businesses. If we fail to change and decide to embrace the “old status quo,” then we are leaving a legacy of mediocrity. Being of “mediocre talent” is one of the greatest insults, coined by Bill Murray during his SNL days. Can you really imagine coming out of this global pandemic and not changing anything?

Change has to come from the top. Do you want to be known the “Status Quo CEO”? A leader who did not make improvements, even when an unprecedented opportunity for change was handed to you? Swift recovery for leisure travel will protect the laggards…but not for very long. Those choosing not to evolve will encounter more and more problems. What happens to problems in any industry? Simple: your competition solves them and moves ahead. That’s how business evolution has worked time after time after disaster struck.

I can see the dinosaurs in the hotel business currently grazing in the fields of returning leisure travel demand, ignoring the giant meteor that has crashed in their backyard. The pandemic has changed all the rules. Let’s embrace the hard reset and do things that were previously considered impossible.

Please Let My People Book

In the spirit of the Bernie meme: “I am once again asking you to please let your guests book a room on your website.” Many hotels jumped to put up the Covid-19 super mega pop-up banner during the pandemic. Now, even as we move into recovery, many continue to flash Covid-19 warnings on their website. A hotel website is not CNN.com or The New York Times, where your guests are coming for the latest updates on the virus. Your focus needs to be on providing a clean and safe space for guests, and letting them book a room without jumping over usability hurdles.

Flashing a full screen pop-up/promo on the home page was tacky long before the pandemic. Pop-ups are not content. (Wait, didn’t someone write about usability mistakes to avoid back in 2016?) A brave friend of mine who traveled in the middle of the pandemic told me she had to close three Covid-19 pop-ups and warnings in order to see a hotel’s booking link on her phone.

I’m sure that a lot of changes have happened at your hotel since the pandemic began. That’s ok, your guests know that. Please neatly organize your content on a separate page that is easy for guests to find. With demand returning, people are once again looking for experiences, stories and engagement. But the first step to profitability is letting them book a room.

Keep It Clean

Cleaning has become front and center on a lot of hotel websites. However, please try not to sound like you never cleaned your hotel before the pandemic. This is an opportunity to share the fact that you have always always been cleaning to a higher standard than random people renting their condos/homes on the side.

This is a big marketing opportunity that big brands leave on the table. There has never been a better time to celebrate your most important and often ignored hotel department: Housekeeping. Brand or independent, you have always had this huge advantage over casual short-term rentals. A whole department that you hired with the sole purpose of cleaning and keeping your guests healthy.

I > AI

Almost all hotels have been sold on the idea of an AI-powered, supercomputer revenue management system, property management system, etc. A system so powerful that, when it is not calculating the width of newly discovered galaxies, it is keeping a keen eye on your rates, revenue, rooms and profitability. Unfortunately, as a general rule, hotel software companies tend to massively oversell and underdeliver when it comes to real world results.

Why is there so much hype in hotel software marketing? The answer is quite simple: The vendors know that hotels will not leave once they implement something. Remember the “Status Quo CEO” I mentioned earlier? Those guys never want to change anything, no matter how outdated it gets. There are connectivity fees, operations hassles, fears about downtime, and the time it always takes for the staff to learn something new. Most “mediocre talent” will stick with their usual vendors, even when they are fully aware that the product is not working very well. Therefore, all software vendors have to do is generate hype and close the deal. Then they can sit back and collect fees.

The pandemic has highlighted the fact that we still need actual humans to make things happen. Even the best hotel revenue software systems cannot work well without historical data. Remember those “unprecedented times” we just went through? Guess what? Your revenue software will not be solving an equation for a situation that has never come up before. Hey, it was barely keeping up to begin with. Here I would like to give a shout out to the revenue professionals who step in when software fails and boot up their humble Excel spreadsheets to make money for their hotels.

The pandemic is a not-so-gentle reminder that when it comes to long-term profitability and pricing strategy, the right humans (at least for now) are still useful.* When entire markets are restructuring, pre-programmed formulas will not work; the reality of machine learning is not here yet. Everything needs a rethink that goes well beyond a simple algorithm that updates your rates based on occupancy. Loyalty needs to be reimagined, as do business segments. People will have to solve these issues. A balanced investment in software and smart people is crucial to having a successful commercial department at your hotel.

*If the AI machines have taken over and are reading this article in the near future…Please don’t kill me, Hal 9000!

Understand Demand and Pricing

The pandemic gave rise to some enlightened pricing specialists. I wrote about this enlightenment phenomenon in detail in my last article. I respect the power of pricing, but the pandemic reconfirmed a hard fact:

Lower rates do not magically create demand.

Demand exists for a geo location, and you use pricing to capture it. Price alone will never magically create demand out of nothing.

Some folks insisted that a $50/night rate would make someone triple mask up and risk their long-term health to visit an island resort in the middle of the lockdown. In my opinion, people that are lowering rates and then yelling “heads in beds!” on conference calls (like they are pandemic revenue experts) should be referred for mandatory counseling.

Pricing is a powerful tool that can help you capture market share. But it has to work in tandem with your marketing and net operating income goals. There is a cost associated with every distribution channel. Yes, even your most hyped and beloved source (direct revenue) is not giving you free money. Before pricing decisions are made, you must consider the cost of getting every dollar to your bank account.

Short-term thinking makes folks treat pricing like a magical ATM machine that will spit out cash every time you punch a few keys. Using dynamic pricing and just dropping rates are not the same thing. You must protect your asset’s long-term profitability.  I wrote about pricing strategy last year in the middle of the pandemic and am glad to report that most of my predictions and recommendations played out well.

Remote Rules Everything

The pandemic has shattered the myth of mandatory in-house revenue, sales and marketing teams. Outside of Operations, team members don’t need to be on site. Other industries that have embraced remote work and hybrid setups are thriving. Imagine reducing costs, increasing productivity and curtailing employee turnover in a single swoop! The commercial/office space industry is in turmoil as more and more employees and employers realize that commuting for hours to sit in a cubicle is often a huge waste of time and money. Time that can be spent doing actual work instead of commuting. Money that can be going to your bottom line instead of rental space.

Revenue Culture Wars

One terrible excuse used by in-house team advocates is that working from an office helps ‘build a revenue culture.’ I have worked with some of the best people in the hotel revenue and marketing realm for more than two decades. They all have one thing in common: remote location friendliness. They manage or belong to a global team of high performers and deliver stellar results. I have always strongly held this belief:

The revenue culture, my dear Watson, is in the results.

When I hear people tout “revenue culture,” I roll my eyes so hard that they sometimes get stuck in the back of my head. I have personally experienced these pseudo culture types in hotel organizations. It usually starts with the CEO/President reading a Tony Hsieh or Malcom Gladwell book. Next thing you know there is a printed company culture book where employees are required to give yearly quotes next to photos of themselves having the greatest time of their lives at the office. Everyone has to say they love working for the company…surreal. Meanwhile, those same employees usually wouldn’t last long enough to be in the next book because of workplace toxicity, nepotism and misconduct. Seasoned employees jokingly pointed out that those asked to leave quotes in the “culture book” during their first year would be the first to leave. That was often true.

Talent Retirement Centers

Efficiency is higher in remote work, according to experts in every single productivity study. You may be a hotel owner/management company with hotels all over the world. Yet, when it is time to build a world class marketing and revenue team, you relocate them to…Dallas!? (Nothing against Dallas. Some of my best, most talented hotel homies live there.) Why would you limit yourself to “mediocre talent” and build a retirement center for them instead of a growth organization? Mandatory relocation does not build a team …it builds your already inflated ego. Leaders should fight the primal urge to walk around the office as the mighty powerful leader, overlooking the minions in their empire.

How about a hybrid model? Then you still get to do your walk of glory several times a year when the entire team is together. Remember, you’ve still got the corner office, baby! Some of your talent needs an office, while others thrive in their home location. You want to see revenue growth? Spend your relocation budget on performance bonuses and watch your company morale and profits soar.

Industry leaders will have to put their profits ahead of their egos and fish in a larger ocean of brilliant candidates. Why settle for average revenue and profits when (to paraphrase Brando in On the Waterfront):

“You could’ve had class. You could’ve been a contender!”

Don’t be that organization shuffling a team of Grade B and C players in and out of your organization based on whether they are willing to relocate. A happy and motivated team working remotely will run circles around you.

Stop the Entropy

No word captures the despair and hopelessness in an organization like entropy. Defined as a gradual decline into disorder, entropy is easy to spot in both large and small hotel companies. I have done several paid and voluntary audits for hotel companies throughout my career that had one single culprit for their decline: Corporate Entropy!

The pandemic further exposed entropy in many hotel companies and has accelerated their decline. Those who embrace status quo right now are extremely vulnerable. A deep pocket investor can temporarily rescue some of these organizations, but the writing is on the wall.

Ten questions for the CEO of a hotel company:

  1. Have you focused your investment and development efforts on a department other than Operations?
  2. Do you really need that many Vice Presidents?
  3. Are you still running your sales, marketing and revenue departments separately with different leaders?
  4. Are you spending on outdated revenue and marketing software that is not much better than an Excel spreadsheet?
  5. Do you still require your top-performing talent to be based in-house?
  6. Are you still wasting time on mandatory team meetings?
  7. Does your revenue team have to copy several people on an email or hold a meeting in order to make rate updates for your hotels?
  8. Does your marketing team have to copy several people on an email in order to change a website photo, create a promo, or update some content?
  9. Instead of doing actual work, are your departments just managing external vendors and juggling reports?
  10. Are you running a retirement home for corporate employees instead of a growth house for talented individuals?

If you answered yes to these questions, you may be in trouble.

I used to joke that I was the Vice President of Vice Presidents during my time as a corporate employee. I have also worked at organizations where the leadership turned their smartest people into reporting monkeys, focusing on the visual formatting of their reports instead of using their spectacular insights.

Corporate Entropy is like diabetes; it is a silent killer. If you continue to ignore it, you will pay a heavy price. However, if you diagnose it in time and manage it well, it can be reversed. As with diabetes, lifestyle changes are crucial to success. You need to form healthier corporate habits.

Discovery of entropy in your organization is not a death sentence. It’s a wake-up call. An excuse to overhaul stagnant corporate practices has literally fallen in every CEO/President/VP’s lap. Good luck. We are all counting on you.

Stop Working With Jerks

Hotels are a capital-intensive business. With high capital comes a high chance of running into jerks. Hotels are definitely a magnet for inflated egos. Jerks are not always high net worth individuals…but we all run into jerks at some point in our careers.

Workplace jerks hurt your health in so many ways. From raising your blood pressure, to weakening your immune system, to making you more susceptible to an array of maladies both physical and mental. Also, the jerk condition is highly contagious and you might unknowingly bring it back to your personal life! Even more scary: dealing with jerks is harming your career by distracting you from doing what you do best. I’m trying hard not to sound like a life wellness coach here, but there is a heavy price to pay when you work with jerks.

Conversely, the benefits of working with good people go beyond anything yoga, Peloton or SoulCycle can do for your overall health. If you are experiencing a career reset during this time: Why not reset your standards on the kind of people you are willing to work with every day?

The pandemic forced many of us to be away from the office. Taking this time to reevaluate your life and work goals is not a bad exercise. If you return to the workplace, make a valiant effort to avoid joining or rejoining toxic environments. Reminder: We have limited time on this planet.

The past 18 months have solidified my relationships with the nice people in the hotel and travel business. I have already lost my tolerance for jerks in the workplace and refuse to work with them. Life is not a romantic comedy where you can convert a brilliant jerk into a loving hero, who was essentially a good guy all along. Jerks don’t change; they are about that jerk life. Don’t believe me? Trust Reed Hastings on this one. You spent a lot of time on his 250+ billion dollar platform during the pandemic:

“Do not tolerate brilliant jerks. The cost to teamwork is too high.”
– Reed Hastings, CEO Netflix

Last year exposed the fragility of life. Don’t waste your time with jerks who are masquerading as brilliant industry saviors. There are so many good good people out of work right now. There has never been a better time to build your nice-people-dream-team hotel company.

Say Goodbye to TripAdvisor Spending

The pandemic accelerated the inevitable decline of one of the most successful travel review websites in the world. I wrote about this massive change coming to the review business back in April of 2019. Businesses built on Google cannot survive once Google decides to do exactly what you do…only better.

TripAdvisor had a chance to be great but, like most corporations, it went for greed. All that easy ad revenue from hotels was too much to pass up. Their basic hotel listing (a simple link to your hotel website) used to cost small hotels $15,000 to $20,000 per year! And hotels were paying this money because they feared that they would lose their rankings. They could see it happening all around them even though it was always blamed on the magical “algorithm.”

Today, TripAdvisor is offering the very same link to small hotels for $350/month. You don’t want contracts? No problem! Pay as you go. The simple directory link from the before-times was marked up 20X for only one reason: to build their cash reserves. Let’s not forget this fact when this same old directory listing starts to go up in price as travel sector recovery solidifies.

As Google My Business continues its march to become the most relevant review website in the world, you should shift your focus to your business listing. That’s where your guests are leaving and reading reviews. Paying $20,000 for a linkback from a review website will soon be looked back on as a silly thing hotels used to do when they didn’t know any better.

Recently TripAdvisor launched “TripAdvisor Plus,” a travel subscription for guests that will cost $99 a year and get people discounts on hotel rooms. It’s another product created to boost their own revenue that does nothing for hotel owners. Remember kids, these guests were already going to come to your hotel. Now they will just come in at a lower rate. So, we are building loyalty for TripAdvisor using our hotel assets.

Right now TripAdvisor sits on a mountain of cash, thanks to the hotel industry. They will be fine and will not be going away anytime soon. Hotels, on the other hand, need to stop spending their money on outdated platforms.

Communicate Better

Most of the big box hotel brands struggled to effectively communicate with guests during the pandemic. Why are brands finding it so hard to to talk to human beings?

Over the last year, Hilton Hotels has sent me an email every month offering me a $119 rate in Orlando. Now that recovery has begun, the rate has gone up to $249, but it’s still the same email. I wonder how I got on the Orlando email train with Hilton! I am not the lead guy in the Book of Mormon musical.

Meanwhile, Marriott’s Bonvoy has been telling me that I must explore the wanderlust they know is, and I quote:

“eating me inside.”

Coming out of the pandemic, do we really have to talk to people like this? A multimillion-dollar marketing budget, thousands of meetings, and this is the best they can come up with?

No conversation about hotel communications and CRM can be complete without referring to my perennial favorite: Melia Hotels. They inspired my hotel CRM guide and also made it into my first pandemic article by sending me a 45% off promo email the week the whole world was shutting down! Guess what? They read my blog, completely transformed their online strategy, and sent me a thank you basket….just kidding! They sent me one or two emails every month offering me the usual 25% to 45% off every single time. What really caught my attention was this:


Three hits right out of the park:

  1. Embedded autoplay video
  2. Bad grammar, spelling and content breaks
  3. Amateur photoshopped image of lady walking on water

The pandemic (so far) has killed around 3.93 million people worldwide. How does this line pass any marketing meeting, even in the most entropic organization:

“Your house, so happy that you are not there.”
– Melia Hotels

However, not all is morbid on the communication front. One of the best emails I have seen during the pandemic did not come from a hotel brand, but from one of the fastest-growing OTAs in the world: Airbnb. It is possible to talk to people as if they were people.

In this simple email, Airbnb communicates some important points with finesse and empathy. They have non-sarcastically hit it out of the park in three ways:

  1. Empowering Hosts: Without hosts, there is no revenue. Offering them communication options was a great idea. When was the last time a hotel brand asked you what kind of marketing content you wanted to receive, and how you wanted to receive it?
  2. Providing Useful Content: 40% to 50% off discount emails are not communication. They are hotels shouting on a bullhorn to their entire database. This message is nicely targeted and provides information the hosts need.
  3. Using an Effective Layout: Clear calls to action, clear headline, personal and emphatic tone.

Hotels, please embrace sympathetic marketing. You can be edgy and creative, but you don’t have to be insensitive.


A spectacular recovery is in progress. I am extremely happy to have wasted zero hours on recovery speculation or creation of a pandemic recovery guide. We have a massive challenge ahead of us, no question. The one resource that is going to be more crucial than ever is good people. Your success will depend on who you choose to have on your team as demand fully returns to a hotel market near you.

Finally, one last reminder.

Pandemics come and go. WuTang is forever!


Pandemic Pricing Principles for Hotels

Pandemic Pricing For Hotels

This is my second pandemic-themed article, following the last magnum opus on Hotel Marketing and Revenue Management in the Time of Pandemic. I was definitely hoping for things to be better by now. I still have a lot of optimism. However, for now, the hospitality and travel industry must continue to undergo a massive overhaul in how we think about and operate almost every single department. Owners, employees, brands and investors will continue to take a direct hit from an event that we thought was only possible in disaster movies. But there are things we can do to mitigate our losses.

Pricing needs your attention today, almost as much as everything else you are doing to get your hotel asset ready to reopen and operate safely. Although I’ve never seen a situation exactly like this one, I know how to observe market trends and adjust accordingly. I have very clear ideas on how to weather this disruption and be positioned for success in the future.

Inspired by Biggie’s commandments, I have written you a pandemic pricing manual of sorts. You know, ‘a step by step booklet, to get your hotel revenue game on track, not your profits pushed back’. Ok, I will stop trying to rhyme! Let’s dive into some of my pandemic pricing principals.

Avoid the Speculation Olympics

Opinions can be made to look like facts when you add professional looking graphs and charts, plus a healthy dose of PR. I am not talking about information on the virus… I am talking about the new sport many industry experts love to participate in: Travel Recovery Speculation.

The 2020 Tokyo Summer Olympics might have been postponed, but the 2020 Hotel Recovery Speculation Olympics are going strong. I have received and declined my fair share of invites to get on a virtual meeting to speculate about recovery timelines. How can we speculate when everything is so fluid?

Historical data from past disasters does not help much, as we have never experienced anything like this situation before. Companies selling data and software are obviously panicking. Why would a hotel pay for irrelevant historical and/or forecasting data? This pandemic is nothing like 9-11 or the 2008 global financial crisis. You can amuse yourself by overlaying recovery graphs and timelines from past disasters and then trying to make a prediction. Just don’t base your strategy on that. Forcing unrelated data to fit your narrative is about as effective as tasseography.

Can’t fight the urge to speculate? How about we speculate on these issues instead:

  • The pandemic has brutally exposed payroll inefficiencies in revenue management and marketing departments across both independent and brand hotels. How many CROs, SVPs, VPs, Directors and Managers does it really take to pick the right rates for your hotel/portfolio?
  • Is your marketing team actually producing any marketing or are they just juggling vendors? What services are you still paying for, and why?
  • Can your revenue team call rates without usable historical data, purely based on market conditions?
  • Does your revenue team need to be on property anymore?

Get to a white board and start coming up with ideas on how to run your hotel leaner than ever before. Let your imagination run wild! This is a much better use of your time.

Dynamic Pricing or Bust

Seasonal and historical rate charts are now DOA. The same applies to any rates you might have historically quoted for groups and meetings. That piece of business is not coming back for a little while. As one of my good industry friends in NYC said to me the other day, in a strong NY accent of course:

“Groups and Meetings business? In this economy!? Fuggedaboutit!”

Dad jokes aside, the sudden demise of travel demand on a global scale is an opportunity for you to switch to dynamic pricing if you were not already doing so. Here are some things to consider when setting rates in the current market:

  • Survival Needs: How much revenue does your asset need to survive? The keyword here is survive. Don’t forget to account for any  changes in fixed costs, debt, payroll, insurance, interest payments, etc. It’s hard to believe, but there are still owners who do not know the actual cost of an unsold room at their hotel. Setting survival goals is step one in pricing yourself out of this disaster.
  • Competitor Pricing: With the global hotel market in flux, you need a new approach to researching the competition. You can still look at their rates, but you don’t know what your competitors’ survival needs are. If you are seeing strange pricing around you, you don’t have to follow their lead. Love your hotel product, but check yourself before pricing yourself out of the market.
  • Supply and Demand: Most major travel destinations are flooded with supply and have little demand. The development pipeline for new hotels in the US was pretty robust when the year started. Are any new hotels opening in your market soon? If so, they are going to be competing for your market share using a fresher product. Are any hotels temporarily shutting down? You can price adjust to capture demand that is not being met by others.
  • External Factors: These are X factors that can quickly change everything for your asset and location. Examples include state regulations, border closures, airline capacity restrictions, vaccine updates, job market changes, unemployment numbers, etc. In short, they are things outside your control that directly impact your demand and your rates. Pricing dynamically forces you to monitor these factors when setting rates, giving you an edge over your competition. There is no magical AI-powered revenue management software that can calculate X-factor values and help you price. Get ready to put in the hours and grab that extra cup of coffee (or tea), as you are going to need it.

Dynamic pricing is a very old school approach. It is not a new concept or just a marketing tagline that can be used to sell software or services. Until the price tag was invented in the 1870s, pricing for almost everything was completely dynamic. If you don’t know… now you know.

Revenues vs Feelings

Here is a very important lesson I learned while working for the top hotel private equity fund in the world:

You cannot deposit your feelings into a bank account. Banks only accept cash.

The Bank of Feelings is an imaginary entity that exists in our head. Focusing on actual revenue numbers instead of feelings has had a tremendous positive effect on my career. Numbers and reality are your friends when it comes to pricing decisions. Don’t let your ego and self-worth get entangled with your pricing strategy.

Here are two pricing ideologies that the pandemic is rendering obsolete:

1. A lower rate is going to attract a certain type of ‘unsavory’ guest to my establishment.

Reality check: The pandemic has cost the US 20.6 million jobs since mid-March, resulting in an unemployment rate of 14.7%. These are numbers we have not seen since the Great Depression (source: Pew, US.DOL). There is a very good chance that the same people who paid a high rate at your hotel in January 2020 are now under- or unemployed. Are the same people now unsavory because they have fallen off a cliff and are working their way back up? Why would you not reach out to get them back at a lower rate for now? It’s the same people, just with a smaller wallet.

Everyone is looking for a deal right now and being cautious with their money. This is even more relevant for independent/boutique hotels that spent millions ‘building a brand and a following.’ Give people a chance to experience your product for the first time or as a returning guest, and accept some money to help you pay your bills. That’s how global recovery starts…one dollar at a time.

2. If I lower my rates now, it will take years to build up my ADR/rate again.

Reality check: Thanks to the pandemic, this is simply not true anymore. This year, the world economy fell apart. In addition, people are still severely restricted as to where they can travel. Your dynamic pricing adjustments should reflect that reality. When the pent-up demand returns, simply pull up your rates up in tandem. Remember, airlines have never hesitated to heavily fluctuate rates based on market demand. Why can’t hotels do it too? Stop using rate recovery charts from past disasters and chart your own path for recovery.

A notable exception to everything I mentioned above is the type of property I like to call a “trophy asset.” These owners don’t care about reality or numbers. They demand a high ADR number so they can brag about it over a round of golf. For everyone else, please follow my simple rule:

“Catch revenue, not feelings.”
– Vikram Singh, 2020

Make a Call

As a hotel owner/investor/manager, this is the time to ask yourself a very simple question: Is your goal to help your asset recover from this pandemic and make money? If you answered yes, then the key is not to overanalyze to the point of decision paralysis. Please make a call and play the market. It is better to make a mistake than stay paralyzed in fear of the rates not working.

Wandering in the middle of the road (picking a rate “in the middle” of what you’re seeing in your market), assuming that demand will just land in your lap, is a bad idea for pricing and life in general. Mr. Miyagi taught us this very important lesson in the Karate Kid all the way back in 1984. Words to live by when pricing in the pandemic:

“Walk right side, safe. Walk left side, safe. Walk middle … sooner or later you get squish like grape.”

– Mr. Miyagi, Karate Kid (1984)

When historical metrics are no longer applicable, you have to pick a direction based on your product, location and basic survival needs. If you make an incorrect call, don’t panic! It takes just a few clicks to make adjustments and you get right back on your pricing horse. Making a call right or left is better than blindly following the market in the middle. Don’t get squished!

Pricing Enlightenment

What is more annoying than seeing “unprecedented times” and “the new normal” in our daily emails and conversations? For me, it is people pretending to be instant experts in pandemic pricing. Working with hotels during a previous disaster (9-11, Global Financial Crisis, etc.) does not automatically qualify you to solve this one.

This is my first (and hopefully last) Global Pandemic. Even after decades in the revenue/marketing game, I have had to rework and relearn a lot! You simply cannot skip the hard work and jump straight into a clairvoyant state, which I like to call “Pricing Enlightenment.”

Pricing Enlightenment:
When you pick rates based on your feelings, without considering current market conditions.

I’ve talked with many hotel owners who are convinced that their asset can fetch a higher rate than current reality suggests. On the flip side are the low ballers who refuse to yield their rates upward, even when the business picks up. Being dynamic with rates is the right path forward, but it does involve work and commitment.

Don’t Promo the Pandemic

Please resist the temptation to reduce your entire pandemic recovery strategy to a discount code! Promo-ing the pandemic is one of the worst long-term strategic mistakes you can make. Flash sales and massive discounting reads “we have officially run out of ideas” for an asset/brand. This strategy revolves around the magical thinking that a massive rate promo will create new demand in your market.

Demand generation is about aligning your marketing and sales efforts. Instead of a a fire sale promo code, offer a really good reopening-fall-winter rate for your asset. Focus on the value of your product instead of giving 50% off to anyone clicking on an email. Instead of discount/promo codes, offer fair rates. No games. Just full transparency about the fact that you really appreciate their business.

Almost every week since the pandemic started, I have received a “40% to 50% off best available rate” email from a hotel or brand. Not to bring up my friends at Melia Hotels again, but they have been hitting me with a discount deal every two weeks! I received a 50% flash sale email (see below) just as I was writing this post! I heard the opening theme from Curb Your Enthusiasm playing in my head. Reminder: This is after I wrote a massive Hotel CRM Guide inspired by one full year of emails from them.

If discounting your rates by 40-50% created market demand during a pandemic, hotels would all be sitting at 80-90% occupancy right now. Instead, you need to showcase your product value. What are you offering? Is it the right price? How are you better than your competition? Ask these simple questions before clicking Send on your campaigns. In short, market share cannot be captured with lazy marketing anymore. You will have to work harder and smarter than everyone else out there.

Stop OTA Warfare

In my last article, I quoted myself as saying: “Recovery will happen from ALL channels.” It only took about a week for another anti-OTA thought piece to appear, followed by another.

Sometimes it feels like we are living in a simulation. With hotel occupancy worldwide sitting at historic low % points, what does a battle cry against OTAs achieve for hotels at this point? Expedia came out with a $275 million partner recovery program. Around $250 million of that will be in the form of marketing credits, followed by a temporary reduction in commission for lodging partners. Some experts spun this as a bad idea. I saw a slew of articles along the lines of “OMG it’s just like 9-11” being recirculated by industry press.

It baffles me when anyone uses 9-11 to scare you about recovery from the pandemic. Why would you decide not to work with a global hotel distribution powerhouse while your asset is sitting at under 10% or 20% occupancy? Booking and Expedia are suffering too and have been hit with with massive layoffs. Meanwhile, if they are sending you some business…what’s the problem? Nothing is free, including direct revenue everyone loves to talk about.

I have observed that it is very easy to be a hardcore “book direct” revolutionary with other people’s money and investment. The fact remains that owners, employees and investors need revenue from any and all sources right now. I have been extremely fortunate to be working with owners who understand this and are allowing their assets to recover instead of grandstanding about parity and commissions. Other people are leaving money on the table. Which works for me – I take that money and deposit it into my clients’ bank accounts.


Nothing lasts forever, with the notable exception of Wu Tang. You can read 100 articles a day about recovery and about 100 more about the end of the world. But instead of going on an emotional roller coaster, I recommend that you focus on what’s left of 2020 and then start looking at your 2021-22 revenue strategy.

I recommend a 100% back to basics approach for best results. The immediate goal should be staying alive and healthy (for both you and the asset). It is an excellent time to collaborate with all channels to make some revenue. There are no perfect answers, but you have to take action. Using historical pricing or just following others in your market is not an option. It’s okay to make a mistake and then recalibrate. But you have to roll up your sleeves and jump in right away. Whatever you do… don’t throw away your shot!

Hotel Marketing and Revenue Management in the Time of Pandemic

Hotel Revenue Management the time of pandemic

As I write my first article during a global pandemic, my title inspiration comes from the Columbian literary superstar, Gabriel García Márquez. COVID-19 has rapidly decimated the industry I have worked in for over 20 years. There have been hardships before, but this one seems darker and more insidious than anything we have seen before. Nobody knows exactly what lies ahead, but the current reality is that thousands of our hospitality industry colleagues – many in my own personal network – have lost their livelihood or taken huge cutbacks in compensation and benefits.

March was a month filled with bad news that was staggered by geo-location, as my client base lies across varied geographies and asset types. The last of the hotel assets in my portfolio closed down on April 1. As most business comes to a grinding halt with everyone in quarantine, it has become a time for deep reflection and reconnection. I have had the chance to speak with many of my industry friends who are reeling from the effects.

With the world in quarantine, I have been surprised to see many hospitality vendors already posting their “recovery and marketing guides,” as if this is a just another minor hiccup and we are weeks/months away from business as usual. It is simply irresponsible to package a pandemic into a how-to guide. One of my close friends, industry legend Martin Soler, coined a term for this: vendsplaining.*

Vendsplaining (noun): When a hotel marketing/software vendor takes a complex problem – with specific implications for each individual client – and reduces it to a simplified “issue” that their one-size-fits-all proprietary guide or tool can solve. 

That term quickly inspired me to come up with my own term: vendcast.**

Vendcast (noun): A webcast sponsored by one or more hotel marketing vendors that addresses problems faced by hotels by offering regional or generalized strategies and tools.

* I have obtained Martin’s permission to use this word at every given opportunity.

**At the time of writing this, there are about seven vendcasts in progress, in which the vendors are vendsplaining how to beat the pandemic with a perfect plan/guide.

There is a ton of speculation on recovery timelines. I will not be doing that in this article, in case that is what you were looking for. But the one thing everyone can agree on is that a fundamental shift is inevitable in the way we operate hotels, restaurants, and airlines and plan our travel. This article is a summation of my thoughts on how things can and should change. Many of these thoughts arose from time I spent on calls with travel industry friends, ranging from Jedi masters, asset managers, investors, clients, and…vendors who don’t vendsplain (yes, they do exist!). I am focusing on the two areas of the travel business in which I have been professionally engaged for two decades: Revenue Optimization and Marketing.

There Will Be Blood

First things first. Nobody is coming out of this unscathed. From a remote four-room inn to the 650-room big box brand hotel across from the convention center in a major city, every property will be affected. I have seen articles from some so-called experts calling this “a swing of the pendulum.” That’s incorrect, as this is more a swing of the axe. No matter what the recovery timetable ends up being in the end…people and corporations across the globe are recognizing inefficiencies in how they conducted business before the global shutdown.

Here are some of the major travel industry players taking a direct hit:

In summary, there is no AI-powered pricing software, content strategy, or digital marketing ad campaign that can help hotels recover revenue quickly. Acceptance of loss has to be the first step in what looks to be a slow recovery. Anyone offering a swift hack to get everything back to business as usual should be avoided, like the coronavirus itself.

Hotel Revenue Management: What’s Next?

Some revenue optimization basics are always prudent, but all strategies need be tailored to your location, as well as regional and global financial trends. Pricing is crucial but your product still has to deliver corresponding value. Amenities like breakfast, upgrades, etc. will be more relevant than ever. So letʻs not forget the basics: your databases, room types, distribution mix, and most of all your offering all impact your profitability. What I have outlined below are some broader changes that may be coming into play over the next several months and years.

The Ides of March

2019, which now seems like so many years ago, was a good year for most hotels worldwide. To quote Dickens: “It was the best of times, it was the worst of times.” Why? Because the RevPar growth was already slowing down following the recovery from our last financial meltdown in 2008.

The warning signs pointing toward the end of boom cycle for travel were already there. In addition to it being an election year in the US, recession was already on the lips of many finance world soothsayers, warning us of imminent decline at the end of a growth cycle.

Asset managers, owners and operators worldwide were chasing ADR growth for 2019, as it was the only way to increase profits. But that was easier said than done. Why?

  • New demand in the market was nicely met by all the new hotels going online. This made it harder for the established hotels to pull in big ADR numbers.
  • Rate of inflation was higher than the ADR growth, which in simple terms means “it got more expensive to run a hotel.” Rising costs can eat into your profits real quick, and that is where the majority of hotels were losing money. Payroll expenses kept going up.

The general forecast for 2020 from top industry sources like STR and Phocuswright was never super rosy to begin with. A major correction in rates was already under way before the pandemic in markets like Seattle, Houston, Boston, etc. Markets were dealing with their own issues. Case in point: San Francisco was reeling from negative press, interactive street poop maps, and loss of major conventions (Oracle Open World) due to high ADR’s and “poor street conditions.”

We have a tendency to look back at the “good old days.” I want to make sure we stay cognizant of the fact that signs of the slowdown were everywhere…we were at the end of the 10-year growth cycle. But nobody expected 2020 to fall off the cliff like it did.

When people eventually start traveling again, the comeback will be slow and painful for a lot of hotels. As a revenue optimization professional, I foresee some long hours ahead on the road to recovery. As I look into the future, talk with my colleagues and make notes on my trusted whiteboard, here are some things I can see changing for our industry.

Goodbye, Non-Refundable Rates

You read that right. I think it is time to say goodbye to this incredibly tempting rate type, which the industry embraced during the good times. As a guest, nothing is more annoying than realizing after a change of plans (for a variety of valid reasons) that you booked a great deal at a hotel you are not going to visit anymore. Airlines are the kings of non-refundable fares; like everything else in revenue management that trickles down from airlines to hotels, we embraced it and made it a part of our industry. Check out the horrible press that Airbnb received for their complicated and confusing refund policies.

It is time for both independent and brand hotels to step away from this rate type and let people book with confidence. Taking people hostage with terms and conditions seems out of place in the world we are about to inherit. Recovery starts with flexibility and, yes, you can quote me:

“Recovery starts with flexibility.”

– Vikram Singh

We simply cannot take people’s wallets hostage anymore. A crisis like this presents the perfect opportunity to embrace flexibility and use it to build “brand loyalty,” something we all love to talk about but very few know how to transform into revenue.

Ending Direct Revenue Mania

This point will soon be published as its own lengthy article. It was slated to be my next topic before the outbreak. However, here is a very basic TLDR summary:

Over the past few years, there has been a certain fanaticism about Direct Revenue. Software and marketing vendors have made it their tag line. It has been cast as the holiest and purest of all revenue channels. The term “most profitable channel” has been used ad nauseam. I strongly believe that we need to make a slight correction here. Maybe chill out with the direct hyperbole, maybe do some meditation and yoga to relax?

The recovery, when it happens, will be one of the worst times to get picky about distribution costs and wage wars on your distribution partners. We already know that a massive correction is about to happen to hotels and their distribution mixes. Direct channel is and always will be important, nobody is arguing that but it is not free money. There is cost associated with it and it has its limitations when it comes to generating the volume of revenue it takes to make a profit.

Vendors with “I Love Direct” and “Direct or Die” facial tattoos will need to get off their high horses and walk a few miles to cool off. Let’s go back to the 80’s when Frankie say relax. Remember,  direct revenue is not free money. The industry needs to come to terms with the costs that are associated with all channels. We cannot afford to tilt at windmills anymore. (It’s also a great time to read/reread El Ingenioso Hidalgo Don Quixote de la Mancha.) Obsession over an idea, no matter how noble, never ends well. You can quote me on this:

“Recovery will happen from all channels.”

– Vikram Singh

The Distribution Remix

Keeping in mind the unique recovery challenges associated with this pandemic, let’s take a brief look into the future. Groups and accounts associated with large meetings and conventions will likely take the longest time to come back. Corporate travel, which is traditionally the first one to bounce back, will also take more time based on the massive number of furloughs and layoffs. Hiring back always takes longer than taking an axe to the workforce.

Local drive markets will see the first signs of recovery. Eventually, the world will slowly but surely return to air travel, eager to meet family, friends and colleagues, and having forgotten about dirty airplanes, liquid bans, squalid airports, and the joys of TSA screenings. Maybe they will even cram themselves like sardines into basic economy fares to travel the globe. However, for the US market, incentivized in-state traffic will usher in the recovery, followed later by national and then international traffic.

For all your revenue management initiatives, remember that there has never been a more important time to be nice to your neighbors. I want you to read this with the Mister Rogers intro theme playing in your head.

The End of Resort Fees

I don’t think any two words have invoked a more venomous reaction from hotel guests over the last two decades than “Resort Fees” (aka: Urban Fees, Facility Fees, Destination Fees, Resort Charge, etc). A fee by any other name would be equally notorious. Critics of the fee have called it the “most deceptive and unfair pricing practice in the hotel industry.” It allows hotels to advertise a low rate and then ask for more money at check-in, even if the guest is not interested in using the amenities it supposedly covers. Even as a hotel revenue professional, it sounds pretty bad when I type it here. It’s basically drip pricing for hotels.

The resort fees trend started in the US (mid-1990’s) and has generated tremendous hate. How much hate are we talking here? I am glad you asked. So much that, as of this writing, 47 Attorneys General have opened an investigation into it. The most dramatic example was when Marriott Hotels was issued a subpoena by the Washington DC Attorney General for their non-cooperation.

In a most bizarre, almost surreal period in the travel business, the two top OTA’s are doing their part to “tackle resort fees” while major brands stay silent.

Expedia: They offer higher rankings to hotels not charging resort fees. Their official statement reads: “We know hotel-collected mandatory fees can be confusing to consumers, and we expect, among otherwise equivalent hotels, these changes will result in higher visibility on our sites for hotels not charging these fees.” In short, if you charge resort fees, Expedia will lower your rankings on their booking site and show guests a warning that you charge resort fees. Wow!.*

*In Owen Wilson’s voice. Please enjoy a 2-minute, 35-second compilation of him saying “wow”. You’re welcome.

Booking: It’s no surprise that in classic Booking.com fashion, they want a piece of the resort fees pie. They are including resort fees when calculating their commission. Official statement: “Hopefully, this will help continue to push the entire industry toward more transparency and fewer ‘surprises’ for customers.” 911, I would like to report a murderous sweet burn. If you can’t best them, make some money off of them in the name of transparency. Hey, nobody has ever accused Booking of not being great at making money. The fact that they used the word transparency is the ultimate atomic burn on our industry. Do kids still say atomic burn? Probably not, but you guys get the gist of it.

Post-pandemic recovery will be a great time for hotels (both brand and independent) to move away from drip pricing and give the guest confidence when they are booking their next trip. Big hotel brands like Marriott, Hyatt, Hilton and IHG have a tremendous opportunity right now take the lead on this. After all the complaints and articles about “evil OTA’s” stealing their customers, how can major brands let them lead the charge on transparent pricing? Are we awake, or is this a dream inside a dream inside another dream? Can someone please start playing Edith Piaf and give me an inception kick?

Brands need to show that they really care about their customers beyond sending everyone in their database a COVID-19 email, or posting videos of their CEO in tears, or yelling at them to “BOOK DIRECT” via expensive well-paid celebrities. An opportunity to take the lead has landed on the laps of the most powerful decision-makers in the hospitality industry. Please, let’s do the right thing.

Hotel Marketing: What’s Next?

As with revenue management, winds of change have been blowing in the marketing landscape for a while. All hotel websites look the same, everyone has a drone video, hotel ads look the same, all are inviting us to book direct and save, most mobile booking experience sucks, all have a best rate guarantee and, finally, all hotels are offering 20%- 40% off their best available rates in their email blasts.

A complete shutdown of non-essential travel is also the hard-reset button for hotel and travel marketing teams worldwide. This is the right time to start thinking about how you plan to be different when things get back online. Over the years, I have told hotels to:

Build Better Websites
Get Better Booking Engines
Stop Spending on “SEO”
Start Spending on Ads That Work
Stop Wasting Money on TripAdvisor
Send Better Emails
Have Better Hotel Events
Upgrade Their Success Metrics
Start Writing Better Content
Start Owning Digital Assets
Do Not Rent/Lease Websites

That’s enough content to publish a small book. Maybe I will one of these days. Until then, I encourage you to reread some the long-form content I have posted and get yourself mentally prepared for the changes ahead.

Here are a few other items I have been getting a lot of questions about.

You Can’t Growth Hack a Pandemic

The final stage of grief is acceptance. Let’s start there. A wide range of COVID-19 recovery strategy guides have already been published without any concrete “open for business” dates from the world’s governments. Based on the content produced so far, I can see that the mindset is still around how marketing is going to save the day. Example: Discount Gary Vee wannabes are busy posting “growth hacking” content that is completely detached from reality. This mindset might have partially worked after some of the other declines hotels have experienced in the past …but this is going to be different. As I write this, 16 million people in the US have lost their jobs. 

The unemployment rate in the US is predicted to hit 15%, which is the highest number since the Second World War. It is irresponsible to spin a marketing guide sitting here in the month of April. Recovery will be hard and extremely hands-on. There is no road to a quick bounce-back, but there will be an eventual bounce-back. It is more important than ever not to oversimplify recovery. Observe and report. Recovery will start locally and expand out from there.

Right now, it’s better to start with some things that are long overdue for an overhaul.

Move Beyond Vendor Management

For most hotels, this a moment of real change. People with the word ‘marketing’ in their job title will have to start doing actual marketing work. There is simply no money left to pay employees for emailing/harassing vendors and then spending useless hours in marketing meetings. There are some very talented people out of work; your recovery will be based on the caliber of people you choose.

There is hope for those whose entire career has been vendor management…they just have to learn how to do actual work. The shutdown is a great time to expand your skills beyond doing marketing calls and playing email jockey.

Hands-on agencies will survive as they are doing the work for owners who are busy running the property. On the flip side, agencies collecting monthly fees from hotels that were sitting at 20% to 30% occupancy even before the pandemic hit… will simply not make it. The luxury of paying agencies thousands of dollars every month to change a few words and photos on your website and run a few Google Ads are over. Specially when you have “marketing and e-commerce” in your job title these expenses cannot be justified anymore. You either do marketing or get out the way of ownership to work with someone who does.

Stop Spending on “SEO”

I outlined how the Hotel SEO Bubble burst back in 2013. If it is still going to appear in your agency invoices as a line item when you re-open…then Houston, we have a big problem. Google is great, but it is not your friend and owes you nothing. Google is here to sell ads and make money. If you keep your website healthy, lightning fast, and usable on mobile, and keep your Google my business listing current, then you will be fine.

Content, site speed and mobile usability reign supreme. Chasing rankings in 2020 and touting organic search results is the ultimate hipster move. Riding a unicycle in a bike race is cool but you will never win. It’s a great time to ask yourself what you are paying for and how you can migrate that cash over to something useful, like paid ads or content production.

Pause Paid Advertising for Now

When your hotel is closed, it is ok to pause your ads. Yes, this 100% includes brand name campaigns in Google and all metasearch campaigns. Agencies/vendors that are telling you that “cost per click” in the market is low should use use their time in quarantine to learn demand and supply 101. Please email them this list of classes to take.

Nobody is booking travel right now, and therefore the cost is low. This should not be packaged as a great opportunity to capture some future pie in the sky business. If there are no surfers in the ocean, then it is very likely that there are no good waves to be ridden or that a shark alert has been issued. When in doubt, don’t go out. (And just like that, I get to use a reference from my home in Hawaii.)

Don’t panic and fall for the whole engagement sales pitch. Take a deep breath. Is your website still running well? Google Business Listing updated? Good, now wait until we get an open for business date. Please don’t wave ads in people’s faces while they are locked down. It is annoying and in no way an inspiration for them to book travel.

Cash is tight, so please take care of your employees first. They will be crucial when the recovery starts. Google and others will take your money anytime…it’s like their favorite thing to do, every day. Also, if you are still clinging to TripAdvisor ads, it’s ok to let go now and reallocate your budgets.

Relax With Social Media

The road to social media is paved with disaster. It’s ok to tone it down and take a health break from it. There is nothing you need say on Twitter/Facebook/Instagram that is crucial to the recovery. I wrote in detail about influencers in my last post. This is the perfect opportunity to consciously uncouple from influencers and focus on taking care of your employees, neighbors, and communities. (I saw an article that highlighted “charitable acts as great hotel branding opportunities”. I rolled my eyes so far that they were stuck behind my head for a while.)

Please don’t succumb to the hubris that you need to entertain people on your hotel social media accounts while they are getting laid off and face an uncertain future. Leave that to Netflix/Amazon/Hulu, etc. ICYMI Here are some things that already have caused a terrible backlash on social:

In short: Avoid the urge to post at this time. When things open again, you can get back to posting “healing and inspirational photos” in no time. Just because you have a microphone does not mean you have to say something all the time.

Take It Easy With Email & CRM

I think everyone and their brother has already sent out a COVID-19 email. A company I brought a paper clip from in 1999 recently emailed me about their concern for my well-being. Every single hotel brand, including the one I stayed with once in 1995 (25 years ago), sent me an email. Idea: Instead of blasting your entire database you are better off putting your message on your home page and reserving email to communicate with people who have booked a stay with you.

Oh, remember the hotel group that sent me 60+ promo emails in a year? Guess what? They never stopped and were pushing a 45% Relax On Shores Of Cancun vacation to me in Hawaii late into the lockdown in the middle of March. You simply cannot make this stuff up!


Time to Retire Retargeting

I am going to keep this short and sweet. Retargeting was never cool and has always been annoying to your guests. It was nothing more than a violation of privacy that they let slide in the name of convenience. I had been planning to write something more detailed to make my point. But sometimes things just land in your lap and you close the case. A single image can deliver more power than a thousand words. In my case, make it 3000 words (my average article).

Banner ads for hotels and travel companies have been showing up in articles about mass graves and medical supply shortages! One in particular as hit me hard as I was reading about how doctors in Italy had stopped counting dead bodies. Lo and behold, there was an ad for a hotel brand with a BOOK NOW call to action. Again, you cannot make this stuff up:

Let’s take this opportunity to stop paying for retargeting. This is a marketing idea whose time has passed. Say your goodbyes.

Conclusion: Skilled Teams Will Lead the Recovery

If you are still reading this, I saved the best for last, just for you. Let’s start with an excerpt from one of the greatest stories ever told:

“I wish it need not have happened in my time,” said Frodo.
“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”

– J.R.R. Tolkien, The Fellowship of the Ring

The recovery will happen. Speculating on its timeline is a waste of time. I refuse to speculate when there is still so much work to be done in our industry.

We have a massive challenge ahead of us, no question. Recovery efforts will be further complicated by the limited resources we will be left with after the shutdown. One resource that is going to be more crucial than ever is good people. Your success will depend on who you choose work with when we get back to business. The silos of revenue, marketing, and operations need to come tumbling down. From their rubble will rise the superhero recovery teams (minus the capes and spandex of course). The gap between the A-team players and everyone else is going to get bigger. Smaller, smarter and nimbler teams will shine.

Right now, we hold steady, think about the future, and wait for the safe time to start again. And remember: quarantine is temporary, but Wu-Tang is forever!

The End of Hotel Rate Parity: Much Ado About Nothing

Over the past few months, there has been a lot of talk about the imminent “end of hotel rate parity” and what it means for the hotel industry. Rulings in favor of ending rate parity clauses have been handed down by regulatory bodies in France, UK, Sweden and Italy. (Rate parity is the practice of maintaining consistent rates for the same product in all online distribution channels—Expedia, Priceline, etc.—regardless of what commission the OTA makes.)

The reactions to a scenario in which rate parity will not be required or enforced have ranged from “OMG! This is the greatest thing ever!” to “This will destroy the OTA’s!” to the proverbial “Meh.” Some industry veterans have declared it to be a “revolution” or – even worse – have employed one of my least favorite phrases in the English language – “game changer.”

I recommend putting jubilation on hold if you’re anticipating the quick death of OTA’s and the beginning of a new era of tremendous profitability for hotels. Some may believe that that the duopoly of Expedia Inc. and Priceline Inc. were built on the simple and magical hotel rate parity clause, and that they will perish without it. In response, I’d like to offer a gentle reminder:

The market cap of these companies as I wrote this article today:

  • Expedia Inc. – $15.87 billion
  • Priceline Inc. – $66.49 billion

(Source: Yahoo Finance)

The Myth of Hotel Rate Parity as an Obstacle to Profitability

Rate parity agreements put in place by OTA’s were never fully implemented by independent hotels. The complex distribution structure of an independent hotel operating in the real world made it impossible. Brand hotels have probably done a better job at implementing rate parity across their thousands of hotels. Even then, rate parity is just not that easy to implement and control.

Smart asset owners and managers devoted very little time to this clause in their OTA contract. Instead they focused on getting the most out of the OTA’s and building their direct revenue. On the opposite end of the spectrum were people who ran around in circles worrying about maintaining parity like it was life and death. Just recently I had to console a very concerned Director of Sales who would freak out every time he looked at the rate plan, yelling “What about rate parity?”

Rate parity is, and never will be, a “gun to the head” for hotel revenue managers or owners. Rate parity has not prevented independent assets from building direct revenue, nor does its demise automatically supercharge their revenue. I’ve worked on asset turnarounds totaling over $1.5 billion over the last decade; rate parity has never once been a factor that kept us from reaching our revenue goal.

It’s actually pretty simple. Hotel and lodging business managers who have not 100% outsourced their reading, learning and critical thinking are profitable today, and will stay profitable when the rate parity clauses go away. Rate parity, whether it’s in place or not, doesn’t override the many other important decisions that drive profit.

This Changes Everything… Not.

Some people are so excited about this development, they tout it like it’s the beginning of a phenomenal new age in travel and distribution. This is not the launch of the iPod, iPhone or i iPad, and we are not at the Apple developer conference.

Rate parity was not holding you back from taking control of your distribution and profitability. A new channel manager software is born every week. You always had the power to set your distribution priorities, and you will still have that power in the future.

The fact remains that if you still have not convinced your guests that your own website is the best place to book, it’s a failure of your online marketing and distribution strategy. Giving so much power to an OTA, and a clause in their contracts, is the very reason a lot of hotels are struggling today to build direct revenue. That, and the fact that their marketing department does not really do any work but totally excels at “vendor management.”

Controlling and Contributing to the Travel Cycle

The OTA duopoly of Expedia and Priceline has been actively focusing on owning the travel cycle. From planting an idea (inception), to research (content), rate search (metasearch), transportation, things to do, and loyalty points and rewards.

To think of rate parity as the pillar on which the OTA’s have built their revenue and profitability is flawed. The key to their success is their unflagging commitment to investing online, which is where people are researching, dreaming and shopping travel. In complete contrast, a Hotel Brand’s # 1 prime objective is to build the “brand” to collect brand licensing fees. That’s the revenue that impacts their share price.

Controlling and contributing to the travel cycle has never been part of the brand hotel’s master plan. Hiring expensive ad agencies to stay current with the latest marketing fad seems to be the modus operandi for most of them. You see, perception rules everything around them. It’s never online revenue or their guests’ ever-expanding needs, you know, like fast and free WiFi.

Smart hospitality asset owners recognize that their guests’ needs are basic and evolving at the same time. They are creating their own brand loyalty by doing more for their guests and ensuring repeat business via engagement.

Looking Beyond Hotel Rate Parity Games

Instead of worrying about parity, extreme channel management tools, and data overload, how about you shift focus to the guest and their travel cycle? Just like the OTA’s. Here are some things that should be happening in your hospitality business right now:


The guest and their travel cycle needs to be your focus. Diversify your efforts and instead of just thinking of them when they are ready to book a room, think of them in different stages of their travel from their home to your hotel. As the asset owner/manager even with all the online tools available to them – You can still can solve a lot of issues for your guests and build a relationship with them beyond “Book Now” button. This relationship ensures that they take your word for the Best Rate Guarantee and book direct with you irrespective of where they are researching airfare, activities and transportation.

Using a CRM (Customer Relationship Management) Tool

Every hotel today has some sort of a CRM system, but very few actually use it. Nameless, faceless throwing of room keys at your guests at the front desk has to stop. Reaching out to your guests (establishing a relationship) and then staying in touch (relationship management) has to start.

Robots will not build relationships (unless you are watching Terminator 2: Judgment Day). Not staying in touch and not keeping track of your guests drives them to channels that offer a better travel experience and better support. Hotels that truly connect with their guests, and provide what their guests crave (information, support, service, appreciation) are the ones who will continue to build profitability.


Hotel parity is another red herring preventing you from truly building your hotel’s long-term profitability. Even if hotel rate parity were to disappear overnight, thousands of hotel CRM tools would still be collecting dust. Sales Directors would still be outsourcing strategy and marketing to agencies who service hundreds of clients, including their own competitors. Hotel websites would still lack fresh content, and offer guests a substandard booking experience. Your front desk staff would still not recognize loyal guests, and would still fail to encourage them to spend more at your hotel via special dining or activity promotions. Need I go on?

If you are obsessed with rate, you are bound to neglect a lot of important work that needs to be done. You can quote me when I say, “ If you live by the rate, you die by the rate.”

Let’s Keep It Real: The Truth About Hotel Meta Search

Hotel marketing types love trends. Every day there is the same old story about a new thing that changes everything. It’s always a thing that, if the hotels would only start doing it, or hire an agency to do it, or subscribe to a tool that would do it… the heavens would open and it would rain revenue.

I’m sure everyone remembers (if they are not still living in) the Social Media Monetization Era. Now, the new craze is Hotel Meta Search. Unfortunately, over the past few years, its virtues have been overstated, to say the least. Yes, it’s a channel worth trying. But no, it’s not a magical weapon that will transform your online revenue and put the OTAs out of business. (Magical weapons do exist, but only in online role pay games or Peter Jackson trilogies.)

If you want to get in on hotel meta search, first you need to understand it. Don’t get your information from the vendor who’s trying to sell it to you. Here’s the truth about hotel meta search, and how you should use it. I’ll start by debunking some sales-fueled propaganda.

It’s Not Ground-Breaking Hotel Technology

Connecting your booking engine to Google Hotel Finder or TripAdvisor is not, in any way, shape or form, “ground-breaking technology.” OTAs have been doing this for years, and making plenty of money. The new development is this: Some hotel marketing agencies have developed an interface between advertising platforms (Google Hotel Finder, TripAdvisor, etc.) and a hotel’s IBE/CRS (Internet Booking Engine/Central Reservation System); and now they want a nice return on their investment. By making meta search sound like an interstellar technological breakthrough, they hope to get hotels to sign up en masse and pay them a monthly fee.

Remember, Google’s cost per click (CPC) based advertising − AdWords − has been around since the year 2000! Hotel meta search is just another way for providers to collect advertising revenue. Simple.

It Will Not Destroy Online Travel Agents (OTAs)

The agencies who are trying to sell you on hotel meta search generally focus on one of these three themes, each of which is backed by lengthy articles:

  1. Meta search is “shifting share from OTAs.”
  2. Meta search is “leveling the playing field for hotels.”
  3. Meta search is “going to destroy OTAs.”

Reality Check: My long-time friend, partner, and online travel marketing superstar said it best:

“The only thing that will ever destroy an OTA is another OTA.” − Ronnie Soud

Take a minute and let it set in. There you go…easy now. Let’s move on to some facts about hotel meta search and OTAs:

  1. Some of the biggest hotel meta search engines are currently or previously owned by an OTA. TripAdvisor used to be owned by Expedia; Trivago is now owned by Expedia; Kayak is now owned by Priceline. The CPC or CPA revenue odds are ever in their favor.
  2. Hotel meta search is targeting a specific stage of the travel funnel; it does not control the entire travel purchase cycle. OTAs are doing much more than meta search. They are doing a brilliant job of targeting every phase of the cycle. From destination research to final purchase, they cover all the bases.
  3. At the end of the day, it’s still battle of the clicks. When you are running a Google Hotel Price Ad, so are the OTAs. And as always, they are packing some serious firepower (ie, money). Hotel search engine marketing history (circa 2000-2010) clearly shows us how well OTAs can work those click-based advertising platforms.

I’m not saying that hotels have no chance, and should just give up. It’s ok to get in the game. This is a new channel in which to buy advertising, and you should try it. But keep it real: No hotel marketing agency is going to be “defeating” the OTA’s with their magical MetaSearch Gateway… ever.

It’s Not a Return-on-Investment Slot Machine

I have previously written about the disasters of ROI-based marketing. Hotel meta search marks the return of hyper-inflated (and to a real marketing professional, sickening) 800% to 2,500% ROI promises. All you have to do is get a monthly “middleware” connection, allocate a small budget, and then revenue will be pouring in. Yes, hotels marketing agencies are now marketing meta search the same way they did search engine marketing. This kind of hype gives rise to things like the Hotel SEO Bubble.

It’s really dangerous to fall for dazzlingly high ROI gimmicks. Meta search is not a loose slot machine. Exaggerated ROI numbers should always be a red flag and not an enticement. In fact, for every new marketing buzz, I have four words: law of diminishing returns.

As for the Encyclopedia Britannica link above, yes I am that old.

It Should Be Part of Your Bigger Revenue Picture

Make it a point to advertise directly with the hotel meta search engines whenever possible. Avoid retainer-style agency services. And, as a general principle, avoid automated bid management software, just as smart advertisers do with good old search engine marketing.

You need to focus on the bigger revenue picture and make sure your hotel meta search investment is supported by the following essential activities:

  1. Create Content: Update and experiment with your website and booking engine content.
  2. Take New Photos: When was the last time you did a property photo shoot?
  3. Revisit Pay Per Click: Tighten up your pay per click strategy. Are you optimized/spending enough?
  4. Do a Bubble Check: Check to ensure that you are not caught up in the frenzy. Assess how meta search is performing, and put your money where it really matters.
  5. Fix Your Booking Engine: Focus on sharpening your booking engine conversions. All your hotel meta click traffic will go there to convert. If visitors cannot book a room efficiently, at the right rate, then what is the point of all this?


The hotel meta search engines are doing what they do best: helping guests with price shopping and selling click-based ads. They will not make the full value proposition to your guests. You have do that for yourself . So, what are you doing to provide real value to the travel shopper, and ultimately to your guest?

Hotel marketing tools are useful, but they are never going to replace innovation at your hotel. The creation of value should rule everything you do − not only in your marketing efforts, but in your hiring decisions, pricing strategies, front desk policies, etc, etc. Embrace hotel meta search as one more tool you can use to reach potential guests. But then, make sure you are giving them something truly valuable: not just a good price, but the best experience they can get for that price.


Why You Shouldn’t Sell Rooms for $7 on Hotel Tonight


This Thanksgiving holiday in the US was an eventful one for the hospitality industry. What got my attention was the Black Friday offer of $7 rooms on Hotel Tonight (my favorite mobile travel app). Important: Before you read this – No matter who got paid how much in the end or what the real breakup of advertised rate versus actual payment made by Hotel Tonight was was like. The fact is that the guest paid $7 for booking those hotels and that is what he/she will remember.

Hotels all over the US participated in this spectacular deal. Based on my zip code, Hotel Tonight sent me an email informing me that the following hotels in the Midwest were participating:

  • The Godfrey Chicago
  • The Edgewater Madison
  • The Kinzie Chicago
  • The Pfister Hotel Milwaukee
  • The Hotel Minneapolis (a Marriott “Autograph Collection” hotel)

HoteltonightAll were all offering a $7 rooms for a limited time starting at 7 am.

In general, discounting your rooms is not a great idea. But this super-aggressive deep discounting is a whole new dark territory. It’s not a good place for the industry to be, especially at a time when hotels and brands are struggling so hard to define their value thanks to hyper-successful travel startups like Airbnb.  This is scary on many levels. I am talking Wes Craven* and Eli Roth level scary.

*Sam Shank, Founder & CEO of Hotel Tonight, was an assistant to Wes Craven on the film Scream.

No matter how bad the market is, I am not a fan of discounting and never will be. Sure, discounting will fill your hotel…but at what cost? Who is this guest checking into your hotel for $7? What happens to your value perception? The fact is that you are better off giving away a free room instead of attaching a $7 rate to your product. Hotels dropping rates might appear to be winning the occupancy battle, but it pretty much ends there. When it comes to long-term profitability, GoPar and RevPar growth favor hotels who protect the value of their product.

A Great Win for Hotel Tonight

As far as creating buzz, this was an absolute win for Hotel Tonight. Sam went all the way to CNBC with his amazing “Get your $7 hotel room now!” segment. Kudos.

I’m sure Hotel Tonight reached several hundred thousand new people who now know about their wonderful deal-generating, money-saving, last-minute booking app. Are they the “enemy” for promoting themselves? Absolutely not. Likewise, I have always admired OTA’s for focusing their efforts where it truly matters: Online. Besides, anyone who is making travel better and easier for customers is in my good book.

Hotel Tonight has indeed taken mobile usability and distribution to a new level; none of the established hotel brands like Marriott, Hilton, Starwood etc. have even come close. I strongly encourage everyone in the travel business to take note of how well the Hotel Tonight App functions.

Deep Discounting Damages Your Brand and Revenue
Mo’ Discounts, Mo’ Problems (RIP Biggie)

Deep discounting conditions guests to de-value your hotel product. Value, like beauty, is not just in the eye of the beholder…. it’s based on what the beholder paid for it. Here is a chart showing the average rates I found on the participating hotels’ websites (most basic room type, for one-night stay, December 8, 2015):

[table id=4 /]

A severely discounted room rate also has a negative impact on your ongoing marketing and brand building efforts. Once you make public that a room at your fine hotel can be rented for a rock bottom rate of $7, you have created a baseline expectation that is way too low. Boosting your perceived value from $7 all the way up to your regular rate is a mighty task that you did not need to add for yourself. You can quote me on this: It takes years to build your rate, and a moment to destroy it.

To further complicate things, you are not the only hotel in the market. People will associate your competition with higher rates and therefore better overall quality. You will have to deal with this brand erosion long after the excitement of your $7 discount offer wears off.

Healthy Alternatives to Deep Discounting

Got your back against the wall? Low occupancy got you down? Want to create “buzz” for your slow season/dates? Here are some better options for you to consider:

Offer value, not discounts.
There are many ways to make your guest feel all warm and fuzzy. How about offering something extra rather than a rate discount? Adding something extra makes your customers feel they are getting something special instead of attracting bargain-hunters; and it doesn’t cost you your dignity.

Reward loyalty.
How about a special value-added holiday rate plan for your most loyal guests? Create a rate tier for them that they can use during the holidays and lean periods at your hotel. They will feel pampered by receiving extra amenities, and you’ll fill rooms with customers who like you (and vice versa).

Shift your revenue model.
How about a revenue system based on your guests’ overall value? Nobody should ever be sold a $7 room. But a case can be made for offering extras and upgrades to your most profitable guests – the ones who stay with you frequently and/or buy meals, drinks, spa services, etc. Airlines and casinos do this every day. As an elite frequent flier, I love that my total value is considered even on a small flight that I’m taking from point A to point B.

Segment better.
Whom are you selling to? Have you created segments that are priced to trigger bookings? Mass marketing and discounting are so 2001. Every hotel should be working on better segmenting every year based on geographical, corporate, and income-based data from their online and offline analytics.


Discounting is dead. Granted, it’s a zombie that comes back to life every now and then when hotel owners, managers and marketers completely run out of ideas. But you don’t have to be a victim of zombie discounting. There are many other approaches that can help you through a slow season.

I hope that next year on Black Friday we do not see any more $7 hotel rooms. Instead, I would love to see hotels offering great value to their guests for the holiday season, through creative outreach, packaging and upgrades. Going after a sustainable revenue strategy is harder. But, as is often true in life, the harder thing to do is also the right thing to do.