A reluctance to offer discounts that upset rate parity or dilute brand image are some of the reasons that lead to the vacant rooms in Australia.
SYDNEY – Australian hotels are foregoing hundreds of millions of dollars in potential revenue every year because of empty rooms, according to new hotel haggling website, GraysEscape.com, with potential losses in Sydney alone at more than $250 million a year.
A reluctance to offer discounts that upset rate parity or dilute brand image contribute to the vacant rooms and have made the hotel industry less competitive than it was a decade ago, according to Gary Berman, the General Manager of GraysEscape.com, which allows hotels and consumers to privately haggle for rates lower than on other booking websites.
Mr Berman said hotel occupancy in Sydney was around 85 per cent but this still left almost 4000 hotel rooms in the Greater Sydney region empty every night, or over 1.4 million vacant rooms per year which equated to more than $250 million in potential lost revenue per year. Across Australia, the average occupancy was 65 per cent, he said, which left around 100,000 rooms with beds unused every night.
“It is unlikely a hotel will achieve 100 per cent occupancy every night of the year but even if the Sydney market alone sold only three per cent more rooms, they could pocket an extra $50 million per year and most of that would go straight to the bottom line,” Mr Berman said.
“Many sections of the accommodation industry are opposed to discounting because of perceived impacts on brand image, supplier contracts and rate parity issues and this had made the industry much less competitive than it was 10 years ago. Therefore, instead of offering a prospective customer a rate slightly lower than available publicly, some properties will let the rooms go empty, despite the fact the extra guests would spend money in the hotel and the minimal effect on costs.
“To help hotels maximize their revenue and fill their rooms – and help save consumers save money – we launched GraysEscape.com in September, 2012, so savvy consumers and hotels keen for more business could negotiate one-on-one via our website, with users of the unique site scoring one off confidential deals up to 20 per cent off the already discounted rate advertised on other booking sites. It’s a win-win for hoteliers and consumers,” Mr Berman said.
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