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Hoteliers fear brand damage from discounting

23 October 2013 by
Hoteliers fear brand damage from discounting

Hoteliers are becoming concerned over the long-term impact on brand perception caused by an increase in discounting and frequent sales over the last five years.

In survey of European hoteliers, 81% said they discount more than they did when the recession hit in 2008 and consumers started tightening their belts, and 75% said it was having a negative impact on their brand.

"Hoteliers are concerned that if their brand is seen as ‘always on sale', it will be devalued and end up going the way of other companies and industries where consumers are never prepared to pay a premium," said Michelle Rosinsky, senior manager at Hotwire.com, which conducted the research.

"We're not expecting that hoteliers will suddenly give up on discounting, because it is still an effective way to increase occupancy; however, we believe they'll become more selective about the channels they use, the value of discounts and the timing of their offers. Discounting will become more last-minute and increasingly they will utilise opaque sites and mobile."

Mobile sites are increasingly being used to offer exclusive discounts targeted mostly at last-minute customers, with 20% of hoteliers offering mobile-only discounts, the study found. Altogether, 40% of hoteliers said they discount on mobile more than they did a year ago.

Today's customer was found to be less loyal, more price-conscious and savvier at finding a deal, with nearly a third (30%) of travellers saying they never or rarely buy a hotel room that hasn't been discounted.

"In this environment, discounting is a necessity for hoteliers, but as most of them now realise, they need to be careful how it's done, because there are some inherent risks. It's about choosing the right way at the right time for the right type of customer," Rosinsky concluded.

The survey was conducted last month and included 75 hoteliers who manage over 13,000 hotel rooms in 45 countries.

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