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Set Packages for the Whole Tourism Year (like the big guys)

For many decades to be accepted into travel agent and wholesaler programs a supplier had to set rates and availability for the whole tourism year.

Traditionally the Tourism Year runs from 1 April to the following 31 March.

Suppliers usually had to have everything contracted by December the year before to allow enough time for the printing of brochures, catalogs, and the like by their travel trade partners.

While the growth of online travel agents has changed this a little it’s still great practice to set your packages, rates, and availability for at least a year ahead.

Why is it Good to Set Packages for a Year, or More

1. Maximize your reach and time in the market

  • Travel Agents usually have a lot larger reach to prospective customers than you have in your own right.  Being agent friendly can dramatically increase your reach into different markets and networks
  • Having something for customers to buy in the market increases your chances of forward bookings
  • Many agents will take down your listings if there is nothing able to be bought, which in turn stops marketing of your property

2. Reduce monthly overheads and effort

  • Updating your availability and prices each month can be a real chore, for you and your team
  • Simplifying this to key times of the year cuts down on your workloads

3. Avoid missing future bookings

  • If you don’t have active packages or availability in the market its all too easy for clients to book someone else
  • Increase your chances of long dated bookings

4. Avoid additional fees for stopping and starting

  • Changing, stopping, and restarting your packages can bring extra administration fees with it as agents have to adjust their own offerings for your changes

5. Great suppliers get offered better deals

  • Agents like dependable suppliers and tend to offer special opportunities to their favorite partners and suppliers ahead of others.
  • Being agent-friendly

Working in the Always Online World

In the past few years, the growth in new last-minute vacation travel bookings combined with increasing numbers of part time accommodation providers leveraging Airbnb and other home-share platforms, and rate optimization algorithms in the leisure travel sector has created a segment of the travel industry where price changes and availability are more common.

Today OTA’s are responsible for a little under 25% of accommodation bookings globally, with short term apartment rentals being a little under 10% globally.

While these new platforms and technologies have made it easier for part-time accommodation suppliers to become listed and find customers the vast majority of bookings are still flowing to the larger, more professional operators, who operate their listings like a hotel chain.

The bigger guys tend to set competitive rates and long availability set a long way ahead to lock in early bookings.  They spend a lot of time getting their product and pricing mix right for the niches they are best suited for.  As time gets closer, they tweak their pricing to either earn a premium when they have higher-then-normal demand, or drop prices to attract more price sensitive markets.

And empty room is the what the big guys try their best to avoid.  The operate on the principal that some money is usually better than no money.

What Can We Learn From Big Operators

Yield and occupancy are the biggest drivers for big operators.

Yield being the net income they’re earning from their properties after considering commissions paid.  Occupancy is one of the biggest contributors to yield.  A few extra nights discounted at the last minute can bring some much-needed income that pays for the overheads of operating an accommodation business.

Yield and Occupancy are often tracked on a Monthly or Seasonal basis in order to eliminate short term effects out of your control (holiday weekends, bad weather, large infrequent conferences, or events etc.)

The good news for your digital nomad business is that as digital nomads stay longer than most leisure or business guests a single digital nomad booking can have a big impact on a small operator’s own business and financial results.

How Nomad Stays Helps You Maximize Yield

We’ve designed our platform for both long lead-time bookings, as well as last-minute changes.

We do this using fully customizable ‘Packages’ which is a common ‘business travel’ technique.

With Nomad Stays you can set packages for years ahead of time, plus you can instantly change the price of your current packages at the same time.

So, if you find that bookings a little slow in coming months you can reduce prices and have an instant effect on your short-term attractiveness.  Or if demand is great, you can try increasing your prices knowing that there are good numbers of people looking in your region.

These last-minute price changes won’t affect your future packages though.  Price changes are applied on a Package-by-Package basis.

Recommendation: Set 18 months of Availability

All of this background suggests that setting prices and availability for at least 18 months ahead of time is a great way to improve your chances of earning good money from your accommodation business.

Scenario Comparison

Consider these 2 scenarios.  Both Stays have 4 rooms each, in the same tourism area, with similar facilities and amenities.

  1. Stay A believes their product is superior and is worth paying a premium for.  Their weekend leisure guests suggest this as a valid strategy.
  2. Stay B believes consistent money flow & longer-term occupancy is a more important factor for their business.  Their lower price ensures they are available to a wider market.
Stay AStay B
Nightly Price (after commissions)€79€39
Nights booked in April for each room10 (typically weekenders)22 (typically digital nomads)
Average Occupancy for Month33%73%
Yield calculation for month of April per room10 nights * €7922 nights at €39
Gross Yield for Month per room€790€858
Stay Yield for the Month (4 rooms)€3,160€ 3,432
Housekeeping events5 per room1 per room
Bookings Processed20 (5 pax * 4 rooms)4 (1 pax * 4 rooms)
Guests per month40 (20 bookings of couples)4 (4 individual nomads)
  • The EU reports that 33% is the average annual occupancy in Europe outside of major cities.

In this scenario Stay B uses lower rates to achieve higher Yield

Maybe it’s time to think about a strategy refresh as well as setting longer Packages

Mark is the Founder of Nomad Stays. He is an Australian entrepreneur and traveller who has explored over 100 countries. A keen adventure motorcyclist he rode the Silk Road for his 50th birthday, has backpacked throughout Africa a number of times and visited many Pacific Islands.Trained as a Chartered Accountant and having worked in the tech industry for giants including Apple and Microsoft, he has a unique insight into the impacts of technology and business. His first travel company, MudMaps, enjoyed numerous industry awards and taking thousands of clients from around the world into the Australian outback.Mark has lived as a digital nomad for over 8 years and is currently in Europe.

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