As the quarter close, its with mixed emotions, one thing is for certain in that business is challenging in most parts of sunny SA and certainly down on SMPLY. But only if you are outside of KZN or EC which are having a good run. Water in WC, short lead times increased, no movement 8-30 days but more again 31+ days compared to previous years. Special events yes have demand, but as in our earlier posts: guests will no longer pay exorbitant amounts for a bed, they want a discount and they want it without excessive booking conditions. Looking ahead: March have traction but last minute and will fall short of last year, April and May have less than 50% of the forward book of what we held SMPLY. Increased online business, less corporate and STO.
Since info re 15% VAT have been flooding our inboxes we collated some info from major OTA’s as to what we as hotels have to do:
Booking.com
We are adding the VAT changes effective from 1 April for all South African properties.
Should you need assistance with any existing reservations, please reach out to our Customer Service team who will happily assist.
Booking.com recently offered a ‘risk free reservations deal‘ where their clients will see free CXD vs NRF CXD. When we asked more info about it they said: ‘it was a test setup which is now on hold as they were testing the response, we will revert when it can be activated’
Expedia
From our side, Our teams have already updated the tax to 15% as of 1 April. For bookings made already for stay dates post April, there are 2 options for properties, either absorb the 1% cost, or collect the additional 1% directly from the guests. If properties are amending their rates, this would then be done from their system/channel manager that they use to push through rates & availability to Expedia.
Hotelbeds
What our properties are doing is absorbing the 1% due to the decrease in the markets and keep in mind that some properties are brochure so the rates have been quoted already .Best advice is to absorb in order to prevent cancellations.
GTA
We will add 1% onto any static rates, but for the BAR rates you might be feeding through to us, please include this in the gross rate going forward.
Agoda
The VAT will automatically be changed to 15% on our side on the 1 April 2018, there is no action required from your side.
Not sure if you know but Agoda added a voucher deal and causing us at least a great deal of work to be done on the parity front: This statement from Agoda: ‘the marketing team has implemented a new tool where the guest is offered an instant discount when making a booking, it’s to help convert more bookings. This instant discount is at no cost to the property and the property will still receive the correct net amount.’ It can removed if requested
Until next time.
Jaco
Need help? contact us now on jaco@hotel-revenue-manager.com or myself directly on 074 490 7711
