142 C H A P T E R 5 ■ S Y S T E M W I D E R E S E R VAT I O N S

1.Define your strategy and long-term objective. Is your goal to communicate to or with your prospective guests? Are you seeking fleeting fans or building longterm, lasting relationships with your customers? Is the goal to enhance the credibility and reputation of your brand or promotion of the week?

2.Make sure there is a commitment to Social Media Marketing (SMM). Social media marketing is a process that involves participation, interaction, resources, commitment, follow-through, and time. Someone has to be there to monitor and be the resource for the guest.

3.Social media should not be the anchor to your marketing plan.

4.Make it a team effort with the unique applications of social media. Get your property GM and company leadership on the SMM bandwagon.

5.Seek out the experts and observe those having success with SMM. Be on the lookout for educational webinars and SMM “boot camps.”13

Financial Effects of Third-Party Reservations

The financial effects of this consumer response should be evaluated. The chapter on revenue management considers the job of the revenue manager, which includes evaluating channels of room reservations. For example, a reservation completed via a travel agent may incur a 10 percent commission, while a third-party reservation may incur a commission as high as 18 percent. If you do the math on a room that sells for $100, the commission equals $10 for the 10 percent and $18 for the 18 percent. If you extend that $8 difference to just 10 rooms per night for 365 nights per year, the result is $29,200 ($8 3 10 3 365 5 $29,200). However, there is another side to that argument. What if you didn’t place those extra rooms for sale on the third-party reservation website? Would they have remained unsold? Would you have lost all income, let alone the differential of $29,200? It is indeed a struggle of wits and experience to compete in the revenue management venue.

Types of Reservation Systems

Franchisee

A franchisee is a hotel owner who has access to a national reservation system and receives the benefits of the corporation’s management expertise, financial backing, national advertising, and group purchasing. A franchise member of a reservation system or a member of a referral system gains significant advantages from interhotel property referrals, a system in which one member-property recommends another member-property to a guest, and national advertising.