Have you ever considered the true impact of traditional booking systems on your business's ability to meet the sophisticated demands of today's travelers? 

As you well know, the hotel industry has been undergoing a profound transformation, driven by shifts in consumer behavior, advancements in technology, and a significant uptick in competition. Modern travelers seek more than a mere place to sleep; they demand memorable, personalized experiences that align precisely with their individual preferences.

Yet, the conventional hotel booking process—with its reliance on pre-defined room types and rigid rate plans—often falls short of delivering such tailored experiences.

This innovative strategy offers unprecedented personalization and flexibility, potentially revolutionizing the guest experience while empowering hoteliers to better meet and exceed guest expectations.

Why, then, do so many continue to cling to the old ways of doing business? Let's delve deeper into the benefits of embracing attribute-based selling, a method that not only enhances guest satisfaction but also positions your property at the forefront of the competitive hospitality market.

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The Limitations of Predefined Room Types and Rate Plans

The conventional method of hotel booking has relied heavily on static room types and rate plans, which are essentially broad categories capturing the basic variations in hotel accommodations. Whether it's a choice between a King or Twin room, or considerations like floor level and view, these options are predefined and often limit personalization.

• Room types are based on general features that may not reflect the nuanced preferences of today's travelers. For instance, while one guest might prioritize a quiet room far from the elevators, another might value a room with a stunning city view, preferences that are not always adequately addressed through standard room categorizations.
• Rate plans are meant to offer guests options like advance payment for a lower rate or free cancellation for added flexibility. However, this approach can still feel restrictive as it bundles features that may not align with every guest's needs, leading to a one-size-fits-all solution where bespoke service should be.
• Both room types and rate plans are subject to availability and demand, which can create frustration and dissatisfaction for guests who cannot find or book their desired accommodation. This can also result in lost revenue and occupancy for hotels, as potential guests may choose to go to another property or platform that can better meet their expectations.

As the practice of Revenue Management has evolved, revenue managers have increasingly focused on optimizing hotel inventory to maximize revenues. This strategic focus often leads to a proliferation of room types designed to capture every conceivable guest preference and market segment.

While this can theoretically maximize earnings by offering highly tailored choices, it also complicates the booking process. Guests are frequently presented with an overwhelming array of options on booking engines, making it challenging to quickly understand and make a decision. This complexity can inadvertently impede the booking process, as potential guests may feel paralyzed by too many choices, hindering rather than facilitating the decision-making process

The Concept of Attribute-Based Selling

Attribute-based selling is a new approach to hotel booking that allows guests to customize their stay based on their preferences. Instead of choosing from predefined room types and rate plans, guests can select from a range of attributes, such as bed type, view, amenities, services, and policies, and create their own personalized package. 

This way, guests can pay for what they value and avoid what they don't, while hotels can optimize their inventory and pricing based on demand and guest behavior.

• Attribute-based selling offers more personalization and flexibility to guests, as they can design their own experience and get exactly what they want. For example, a guest who wants a river view but does not care about bed type can book a room with that attribute, without being constrained by the availability of a specific room type. Similarly, a guest who values free cancellation but does not need breakfast can choose a rate plan that suits their needs, without paying for unwanted features.
• Attribute-based selling also offers more opportunities and benefits to hotels, as they can better utilize their inventory and increase their revenue. For example, a hotel that has three rooms with a river view and different bed types can sell them based on the attribute of the view, rather than the room type, and avoid losing potential guests who have specific preferences. Similarly, a hotel that has different policies and services can offer them as attributes, rather than as rate plans, and charge accordingly, rather than offering discounts or bundling.
• Attribute-based selling can also enhance guest satisfaction and loyalty, as guests can feel more valued and recognized by the hotel. By allowing guests to express their preferences and tailor their stay, hotels can create a more memorable and differentiated experience, and build stronger relationships with their guests. Attribute-based selling can also enable hotels to collect more data and insights on guest behavior and preferences, and use them to improve their offerings and marketing strategies.

Complexity of ABS pricing and revenue management

One challenge of ABS is how to price and manage the revenue of the attributes, rather than the room types or rate plans. 

This requires a debundling of the traditional pricing strategy and a more granular and dynamic approach that considers the demand and value of each attribute. 

It also requires a sophisticated segmentation and personalization of the offers based on the guest profile and preferences. 

While this can create more opportunities and benefits for the hotels, it also poses significant difficulties and risks, especially in terms of forecasting, reporting, and competitiveness.

Challenges of ABS distribution and the role of the CRS

Another challenge of ABS is how to distribute and display the attributes across different channels and platforms, and provide a consistent and seamless booking experience for the guests. 

This requires a strong and reliable central reservation system (CRS) that can support the complexity and flexibility of ABS, and integrate with other systems and partners, such as property management systems (PMS), global distribution systems (GDS), online travel agencies (OTA), and metasearch engines. 

A robust CRS can also help hotels to manage their inventory and availability more efficiently, and avoid overbooking or underutilization of their attributes. 

Moreover, a powerful CRS can enable hotels to create a competitive advantage for their direct sales and a strong value proposition for their brand.com website, by offering exclusive or preferential access to certain attributes, or bundling them with other services or benefits. 

Hotels can increase their direct bookings and loyalty, and reduce their dependence and costs on third-party intermediaries.

Therefore, hotels need to carefully evaluate their inventory and attributes, and design a smart and flexible pricing and revenue management strategy that can adapt to the changing market conditions and guest behavior.

Conclusion and final thoughts

The traditional hotel booking process, which relies on predefined room types and rate plans, has several limitations that can affect both guest satisfaction and hotel performance.

Attribute-based selling is a new approach that allows guests to customize their stay based on their preferences, and hotels to optimize their inventory and pricing based on demand and guest behavior.

Attribute-based selling can offer more personalization and flexibility to guests, more opportunities and benefits to hotels, and more satisfaction and loyalty to both parties. 

Attribute-based selling is a promising and innovative way to transform the hotel booking process and create a more dynamic and engaging experience for both guests and hotels.

Great opportunities but still many challenges. Is the industry ready? Share your comments!

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Until next time, keep exploring the endless possibilities of hospitality.

Fernando Vives

About Fernando Vives

Fernando Vives stands at the forefront of hospitality expertise, guiding NH Hotel Group as the Chief Commercial Officer. His dynamic leadership oversees a vast portfolio, including sales, revenue management and digital growth, steering a team of over 2,000 across 30 countries and managing a turnover of over $3 billion USD. Awarded as one of the Top 20 Extraordinary Minds in the industry for Commercial & Revenue Optimization Leadership, Fernando's extensive background includes senior roles at renowned hotel chains and ventures into entrepreneurship. He is an academic pioneer, and an esteemed speaker and a passionate industry advocate, Fernando's educational prowess is matched by his commitment to shaping the future of hospitality as an Ambassador for Hospitality Labs.

The views and opinions expressed in this newsletter are solely those of Fernando Vives and do not necessarily reflect those of any company or organization I work for or I am affiliated with, nor those of their partners or suppliers. The data sources used are mostly public, ChatGPT may have been used for research assistance, copywriting or editing. If you find any discrepancies or errors in the data or insights shared, please reach out to me via LinkedIn for necessary adjustments. Thank you for following and being a part of this community.