A hotel aggregator is a business model within the hospitality sector where a company leases a hotel and assumes responsibility for its operations and marketing. This model is particularly beneficial for budget hotels that require additional support to boost their visibility and performance. Aggregators may lease a specific number of rooms or the entire hotel, offering flexibility tailored to the hotel’s needs.
When an aggregator approaches a hotel, it typically proposes a range of strategies aimed at enhancing the hotel’s operations and overall attractiveness. Depending on the hotel’s unique requirements, these strategies may involve streamlining processes, adopting new technologies, training staff, or renovating the property. This article delves into the workings of hotel aggregators, their role in hotel bookings, their advantages, and key considerations for hoteliers contemplating this model.
How Do Hotel Aggregators Operate?
The hotel aggregator model can be complex, but its primary objective is to enhance the hotel’s business while enabling the aggregator to earn revenue by achieving specific performance targets. The process begins with the aggregator selecting a group of hotels and analyzing their financial performance and marketing strategies. Following this analysis and discussions with the hotel owner, the aggregator presents recommendations aimed at boosting revenue.
Aggregators may focus on several key areas, including:
• Technology Implementation: Introducing property management systems or hotel booking engines to facilitate direct bookings.
• Operational Enhancements: Improving the hotel’s physical appearance or providing staff training to elevate service quality.
• Marketing Strategies: Leveraging various marketing channels to attract customers, including online travel agencies (OTAs) and their platforms.
Once the hotel owner agrees to the proposed plan, both parties agree, allowing the aggregator to manage the hotel’s operations and marketing. This partnership is designed to create a mutually beneficial scenario where both the hotel and the aggregator experience increased bookings and revenue.
Advantages of Hotel Aggregators
The aggregator model has gained traction due to several benefits, especially for budget hotels:
• Marketing Management: One of the most significant advantages is that hotel owners can offload marketing and brand management responsibilities. Aggregators take charge of these aspects, often listing the hotel on OTAs or their platforms to drive bookings.
• Enhanced Staff Experience: A more structured corporate environment can positively impact hotel staff. Aggregators ensure that employees receive adequate training and have opportunities for professional development, leading to improved job satisfaction and service quality.
• Standardised Service Levels: Aggregators strive to standardize service across their properties, ensuring a consistent guest experience that can enhance customer satisfaction and loyalty.
• Predictable Revenue: Although the initial fixed fee paid to the aggregator may be lower, it typically increases over time, providing hotel owners with a reliable income stream regardless of occupancy rates. This financial predictability can be particularly attractive for budget hotels.
Considerations When Adopting the Aggregator Model
While the advantages of hotel aggregators are appealing, there are important factors to consider:
• Loss of Control: Partnering with an aggregator may result in hotel owners relinquishing some control over operational decisions. This can pose challenges if the aggregator’s standardized procedures conflict with the hotel’s established practices.
• Potential Price Reductions: To stimulate bookings, aggregators may lower room rates, affecting the hotel’s long-term pricing strategy and brand perception.
• Standardisation vs. Uniqueness: While standardization can enhance service consistency, it may also diminish an independent hotel’s unique character and charm. This loss of individuality can be a significant concern for some hoteliers.
• Reputation Risks: If a hotel chooses to exit the aggregation model, it may encounter difficulties rebuilding its reputation, particularly if the aggregator’s practices have altered its brand identity.
Conclusion
Hotel aggregators, such as hotelin.com, present an intriguing business model within the hospitality industry. They offer numerous benefits for budget hotels looking to improve their operations and market presence. While this model can provide financial stability and alleviate marketing burdens, it also carries potential drawbacks, such as loss of control and the risk of over-standardization.
Ultimately, the decision to engage with a hotel aggregator should be made after thorough consideration of the hotel’s specific needs and objectives. When executed effectively, the aggregation model can serve as a strategic choice that drives bookings and enhances profitability, making it a viable option for many in the hospitality sector.
