An online travel booking platform developed to solve low to no occupancy during off-season periods
We use your absolutely dead stock to recover costs for you using factors which we know to be present, i.e. we help you to utilise stock which we (and you) KNOW will not usually be sold. You have nothing to lose
Introduction
The toughest hurdle facing the accommodation industry globally is its ability to solve low to no occupancy during off-season periods.
South Africa’s hospitality market is no exception, particularly for leisure properties, from holiday homes to resorts, hotels, lodges and B&B’s. It is within this environment that so many properties find themselves making good profit during the holiday season and then having to forfeit this profit to pay for fixed costs and overheads in periods with little to no occupation.
Beds cost money, whether somebody sleeps there or not, hence if a bed which was empty becomes occupied, then any income from the bed would reflect pure income. Empty beds equals burned stock only to be paid for by in-season occupation periods.
The Challenge
Potential problem periods where occupation percentage is low are as follows:
Destinations and leisure resorts/hotels/holiday apartments
Problem areas
- Out of school holiday periods.
- Mid-week periods if there are no booked functions in this period.
- Last minute cancellation/ burned stock.
- Resorts/Hotels/apartments in Urban areas that focus on Business travel
Problem areas
- Lack of occupancy in school holiday periods.
- Lack of occupancy over long weekends and public holidays.
- Last minute stock cancellations.
Our program gives you the opportunity to fully utilise your unused stock.
Your occupation % for the year has also moved from 26% to 85% with 312 nights of the year where you now have people in your resort
Fixed costs remain the same
- Security costs.
- Basic Electricity and water.
- Rates, Taxes and Sewer fees.
- Property Management System (PMS) contracts.
- Monthly contracts such as Wi-Fi, cable TV and other services.
- Restaurant and other entertainment facility cost wastage.
- Facility costs as all still have to be retained in perfect condition – there is no “break”!
Property owners have no option but to discount their rates. This can give rise to the following:
Price war between properties which all are trying to go cheaper to get the guests to book with them and boost rankings with the online travel Agencies (OTAs). Downward trend in achieved room rate.
Marketing cost percentage increase against revenue
- Exposure must be increased to find the potential guests for property.
- Most properties compete through the same marketing channels.
- For social media marketing, reach needs to be expanded, raising budget requirements for views and clicks.
- To find a renter/ buyer, the cost of acquisition increases exponentially.
- As the competition of the rankings in Google increase, so does the cost per click of the valuable key words in the Search engine algorithms.
- For the OTA channels, the commission rate is a major driver of page position. When the commission rate increases, the position of the property rises on the page and exposure is significantly increased.
- Events to improve off-season destination attractiveness in off season periods is frequently time-consuming and expensive to promote and produce.
This is a double-edged sword:
While an increase in marketing expenditure expands the exposure of any property, the discounted rates devalue the property, making it more difficult to improve the ADR in future.
An online travel booking platform developed to solve low to no occupancy during off-season periods
We use your absolutely dead stock to recover costs for you using factors which we know to be present, i.e. we help you to utilise stock which we (and you) KNOW will not usually be sold. You have nothing to lose
Introduction
The toughest hurdle facing the accommodation industry globally is its ability to solve low to no occupancy during off-season periods.
South Africa’s hospitality market is no exception, particularly for leisure properties, from holiday homes to resorts, hotels, lodges and B&B’s. It is within this environment that so many properties find themselves making good profit during the holiday season and then having to forfeit this profit to pay for fixed costs and overheads in periods with little to no occupation.
Beds cost money, whether somebody sleeps there or not, hence if a bed which was empty becomes occupied, then any income from the bed would reflect pure income. Empty beds equals burned stock only to be paid for by in-season occupation periods.
The Challenge
Potential problem periods where occupation percentage is low are as follows:
Destinations and leisure resorts/hotels/holiday apartments
Problem areas
- Out of school holiday periods.
- Mid-week periods if there are no booked functions in this period.
- Last minute cancellation/ burned stock.
- Resorts/Hotels/apartments in Urban areas that focus on Business travel
Problem areas
- Lack of occupancy in school holiday periods.
- Lack of occupancy over long weekends and public holidays.
- Last minute stock cancellations.
Our program gives you the opportunity to fully utilise your unused stock.
Your occupation % for the year has also moved from 26% to 85% with 312 nights of the year where you now have people in your resort
Fixed costs remain the same
- Security costs.
- Basic Electricity and water.
- Rates, Taxes and Sewer fees.
- Property Management System (PMS) contracts.
- Monthly contracts such as Wi-Fi, cable TV and other services.
- Restaurant and other entertainment facility cost wastage.
- Facility costs as all still have to be retained in perfect condition – there is no “break”!
Property owners have no option but to discount their rates. This can give rise to the following:
Price war between properties which all are trying to go cheaper to get the guests to book with them and boost rankings with the online travel Agencies (OTAs). Downward trend in achieved room rate.
Marketing cost percentage increase against revenue
- Exposure must be increased to find the potential guests for property.
- Most properties compete through the same marketing channels.
- For social media marketing, reach needs to be expanded, raising budget requirements for views and clicks.
- To find a renter/ buyer, the cost of acquisition increases exponentially.
- As the competition of the rankings in Google increase, so does the cost per click of the valuable key words in the Search engine algorithms.
- For the OTA channels, the commission rate is a major driver of page position. When the commission rate increases, the position of the property rises on the page and exposure is significantly increased.
- Events to improve off-season destination attractiveness in off season periods is frequently time-consuming and expensive to promote and produce.
This is a double-edged sword:
While an increase in marketing expenditure expands the exposure of any property, the discounted rates devalue the property, making it more difficult to improve the ADR in future.