ehotelier – Discounting vs Value Add offers.
It seems shoppers say they like to get extra value when shopping. However given the choice between getting a discount and an added value on a purchase, most choose e discount not the value add. Perhaps they just don’t want to do the maths and a discount is easier to compute.
In this study “When only a Value Added option is offered, sales were 73% higher compared to what would have been expected with a discount.” The study also claried by explaining that “The savings between 30% off room nights and a stay 2- get one free are essentially the same. On a 3 night stay at $100 a night, a 30% discount will net the hotel $210. The stay 2 get offer will net $200, so at $10 less how does this benefit the hotel?”
Importantly it noted that “presenting a guest with multiple options can lead to them taking the offer that seems to have the biggest savings even when it doesn’t.” http://ehotelier.com/insights/2014/12/08/discounting-vs-value-add-offers
Discounting can help increase occupancy, but there are other consideration. It typically results in higher turnover, higher operating costs and lower revenue. It can also effect the hotel’s reputation and impact standards and client value!.
Value Added and Discount Combined – Example
In a recent campaign Settlers Beach Villa Hotel has offered both a Discount and a Value Added tour. In this offer the marketers take great care to show the value add buy the discount and the tours. see the video below.
Hoteliers and tourism companies do not often specify the value of the offer with this amount of detail (as in this video). This is a mistake as shoppers need to have proof that it is, in fact, the best value. Just saying “BEST rate Guaranteed” is not enough for shop weary travelers
Travelers shop around a lot (see #travelshopping). They will look at 20 to 30 different sites and have difficulty comparing between options. The video also helps by showing them other villa holidays options. See details at https://www.youtube.com/watch?v=2GiLSIpNtMk