Don’t let rates crumble, says Wotif’s Cooke

By Yeoh Siew Hoon

You could call the current soft market conditions a bit of nirvana for online sites such as wotif.com.

After all, with online’s ability to move distressed inventory cheaply and effectively, suppliers are more willing to offer good rates and deals which then leads to more customers migrating online to search for the best deals.

But Robbie Cooke, CEO of The Wotif Group, has a concern – he does not want to see rates crumble in the region. That, he says, will benefit no one.

“Our revenues are a percentage of sales price and it doesn’t benefit us if rates crumble, unless volume doubles. That’s why we are working with hotel customers to get more customer traffic to their hotels.”

He is also concerned with moves by some hotel companies which have done direct discounting online.

For example, during the Accor Super Sale, the hotel company put one million rooms across its Asia Pacific network at one common rate for sale through its website. Rydges in Australia did a similar promotion shortly after.

The move upset partners such as Expedia which reportedly pulled Accor and Rydges inventory from its website for a while, according to a report in Travel Trends Australia.

“There have been three hotel companies in Australia which has done that and while we have not pulled inventory, we’d rather they do their promotions with us because we could have driven more revenues to them,” said Cooke.

“My bigger worry is this kind of discounting will lead to panic and people will drop their rates deeply and we all know it’s hard to get rates back once consumers get used to paying lower rate.

“There are smarter ways of getting the sales outcome.”

For example, he said hotels would be better off doing deep discounting through third party sites which are more opaque. “Don’t damage your existing customer base.”

He said that a survey done of Wotif’s customers in Australia comparing their behaviour from July-December 2008 to July-December 2007 yielded some surprises.

“We had expected that as things got tougher, people would trade down or go to motels and serviced residences but instead our findings proved the opposite.

“There were more people booking five star accommodation in July-December 2008.”

Cooke also sees opportunities for Asia in the Australian outbound market.

“Even though there was a cutback in overseas travel by Australians between October and December, due to cost of flights and the exchange rate, Asia as a destination still held up.

“And now with airlines doing deep discounting in Australia, starting February and March, Asia could benefit.”

Robbie Cooke, CEO of Wotif, will be a guest presenter at this year’s Web in Travel conference. h

WIT 2009 will once again be held in partnership with ITB Asia, Asia’s biggest travel trade fair. Its hospitality partner is HSMAI Asia Pacific.

WIT 2009 will be held from Oct 20-23 at Suntec City, Singapore. This year’s WIT will comprise The WIT Conference (Oct 20-21) and The WIT Ideas Lab (9-11am, Oct 22 & Oct 23)