Hotel Orphans and Clusters – Some New Lingo

Those bright boys and girls at TRX Travel Analytics (TTA) are breaking new ground in the hotel sourcing arena.  More on that topic after NBTA, for sure.

Innovative ideas require new ways of describing things, right?   Here are some ways that TTA describes the hotels that are – or could be – part of a buyer’s hotel travel program. They make sense to me, but hey, I helped make some of  ’em up…

Hotel Footprint: the set of hotels at which the buyer’s travelers stayed; the historic stay pattern. Hotel footprints are obviously different between buyers.  Stay with me…this gets better.

High-stay Hotel: a hotel where the buyer’s program produced a reasonably high number of room nights in the last year.  For small programs, the number may be 20 or 30 nights a year; for larger programs it might be anywhere from 50 to 500 nights a year.  The point is that within each buyer’s hotel footprint, you can identify the hotels that are more popular than most. High-stay hotels can be preferred, but don’t have to be.

Cluster: a neighborhood-sized circle containing one or more high-stay hotels.  Clusters typically have diameters of one to three miles, but can be smaller or larger than this.  Think Greenwich Village, or the Magnificent Mile in Chicago, or Union Square  – much smaller and more meaningful markets than simply  New York City, Chicago or San Francisco.  Because clusters are built around high-stay hotels, you can now get down to the truly competitive markets that are relevant for negotiations.

Low-stay Hotel: any hotel within a cluster where the buyer produced at least one room night, but less than the cut-off number of room nights to qualify as a high-stay hotel (so between 1 and 49 room nights, for example). These hotels are relevant because they received some volume near a high-stay hotel, and so could be considered a potential competitor to the high-stay hotels within the cluster.

No-stay Hotel:  Any hotel within a cluster that got no room nights.  These hotels are relevant to negotiations, as they are near a high-stay hotel.  They just won’t show up in the buyer’s booking or credit card data, because apparently none of the buyer’s travelers stayed there.  You need a great big hotel database to know which no-stay hotels are relevant to your hotel footprint – and of course, the good folks at TTA have that.

Orphan Hotels: these are all the left-over hotels that received a low level of room nights (not enough to qualify as a high-stay hotel), and are outside of any cluster‘s diameter.  These are the cats and dogs, or rats and mice, of a buyer’s hotel spend…the heart and soul of the 80% of hotels that make up 20% (or less) of the buyer’s room nights.   These hotels, which make up a great big chunk of every buyer’s hotel spend, are in most cases simply not relevant to negotiations. Why? Because they not close enough to be viable competitors to the high-stay hotels.

I’ll post more on this topic of hotel clusters in a couple of weeks.

1 thought on “Hotel Orphans and Clusters – Some New Lingo

  1. Pingback: Clusters and Hotel Sourcing Innovation « Gillespie's Guide to Travel Procurement

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