A good deal: but for whom?
WHEN does a special offer intended to generate custom become a liability rather than a marketing asset? If the letters pages of this magazine are anything to go by, that appears to be the burning question occupying the minds of thousands of hoteliers throughout the British Isles.
The reason for the debate is an attempt by the English Tourist Board to woo up to 500 hoteliers to join a "two-for-one" promotion to be offered by a national newspaper later this year. Readers of the newspaper (as yet unnamed) will be able to get two nights in any participating hotel for half the minimum rack rate. The offer will be open from 1 September 1994 to 31 May 1995, although hotels can refuse bookings after occupancy levels pass 80%.
Mike Cox, head of sales promotion at the ETB, argues that such promotions help build business and that, had the approach from the newspaper been rejected, it would probably have turned to hotels overseas to get its cut-price offer fulfilled.
He might well be right, and there is nothing unusual about cut-price promotions. Only last week yet another was launched, this time in the Daily Express London supplement. Sixteen hotels, including Nutfield Priory in Surrey and the Coppid Beech at Bracknell in Berkshire, are offering breaks for £19.99 per person per night, bed & breakfast.
The rack rate at the Coppid Beech is £120 for a double room including breakfast, so the £19.99 offer is arguably better value than the ETB's "two-for-one" from the customer's point of view. But there are important differences. The Daily Express offer is limited to July and August, the quietest period of the year for the Coppid Beech and many of the other participating hotels, which tend to rely on business customers.
By contrast, the ETB offer is planned to run for an extended period. So long, in fact, that many customers will not need to book again at the full rate because the next time they want a break the scheme will still be running.
Far from encouraging extra, profitable custom, this offer could accelerate the trend for rack rates to bear no relation to what anyone pays and increase the scepticism about published rates among the general public. Hoteliers have fought hard to wean customers away from a bartering mentality.
Such a marketing venture could be a retrograde step and is likely to do more for the profits of the newspaper than it is for the long-term interests of any hotel, whether or not it chooses to take part. o
