I have been reading all the revelations about Lastminute.com with considerable interest.
We were recently talking to one of our good hoteliers in the UK who told us Lastminute.com had approached him, offering to sell late deals to his hotel.
It would help market his property for 72hrs before the client’s arrival, on the condition that he paid 55% commission. And we thought Lunn Poly was bad!
Luckily, this is a man of some sense. He rang us up to say he could not deal with this vulture type of organisation at such a commission rate, especially when he paid companies like us, who send him good quality, high-spending clients, only 25%.
Furthermore, he realised that a customer paying so little would be a customer who would rather go out to the local fast-food outlet than eat in the hotel’s restaurant and drink in the bar.
He then went on to say that he would rather the room stayed empty.
He felt once the public caught on to the fact they could wait until the last moment before booking, so as to secure a good deal, then they would increasingly leave booking until the last minute. This would mean that more and more reservations would come within 72hrs of the client’s arrival, making it virtually impossible for him to make a living.
This is a man after my own heart. This hotelier knows his business and won’t be conned into destroying his livelihood.
Like Teletext, all these Internet sites that are springing up advertise the opportunity to sell ‘distressed’ stock!
Too much capacity on Teletext or the Internet and sooner or later problems will start creeping in.
The 30-somethings that think they know how to run our industry have been let loose and are rapidly ‘commoditising’ what we sell.
Not content with their retail chains, they have now switched their attention to the Web, realising that they cannot pay their retail agency staff less than they do already.
They hope the Internet will further reduce their overheads and help increase their market share.
This is all well and good provided we do not allow the Lastminute.coms of this world to dictate the manner in which we sell.
We cannot allow prices to be forced down to a level at which we cannot afford to give the service the client demands.
We are training the public to book in a manner that just does not suit us.
In more than 25 years in this industry, I have seen the same mistakes made again and again.
Believe me when I say that the marketing whiz kids of today are making the same errors that were made 15 years ago.
The trouble is that these people move on before the results of their policies affect the companies they work for. Perhaps that’s considered being clever.
Then, of course, it is the rest of us, those of us who hold the industry together, that then have to pick up the pieces.
There is no solution to excess capacity apart from cutting it back.
Look at this year so far. So much discounting, so many new selling tools (including the Internet), so much hype, so much hot air and we are still 2% down so far.