Today's Revenue Management thought:-
The true cost of acquisition…..
The cost of acquisition for hotels using Global Distribution Systems (GDS) and Online Travel Agencies (OTA) is a crucial factor that affects a hotel's overall profitability and revenue management.
Cost of Acquisition through GDS (Global Distribution Systems):
Commissions: When hotels use GDS to distribute their rooms, they typically pay commissions to the GDS providers. These commissions can range from 10% to 25% or more of the booking amount. The exact rate may vary depending on the negotiated contract with the GDS provider.
Setup and Maintenance Costs: There are setup and maintenance costs associated with connecting to GDS. Hotels need to invest in technology and systems to interface with GDS providers and ensure their room inventory, rates, and availability are accurately and efficiently displayed on these systems.
Marketing and Promotions: Hotels may also spend on marketing and promotional efforts to increase their visibility and rankings within GDS platforms. This can involve additional costs to improve their position and visibility to travel agents and corporate clients.
Training and Support: Hotels might need to train their staff to effectively manage GDS systems and ensure that reservations are properly handled.
Have a profitable week !
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