Middle East & Africa Hotels Uncover Impact of Pricing Strategy

CASE STUDY HIGHLIGHTS

CLIENT

Regional group of hotels in Middle East/Africa

NEED

Determine reason for reduced performance

SOLUTION

Private Markets

Challenge

Performance for a group of chain hotels in the Middle East and Africa was trending down over time. While traffic remained steady, conversion rate and ROI were decreasing and this hotel group did not have a firm understanding as to why this was occurring. The Koddi team wanted to help identify the problem, quantify the issue, and provide strategic solutions.

Approach

The hotels in this group use Koddi Private Markets to manage their metasearch channel spend. The Koddi team was able to take that hotel-level performance data trended over time along with other data sources to work through a list of potential reasons for the performance decline which included: potential new competition, seasonality, website tracking, and pricing.

Results

The data investigation found that the hotels in the MEA group had recently begun losing on price at a growing rate which was causing the decrease in website conversion rate. The brand strength allowed for traffic (click-through rate) to remain strong during this time frame, but shoppers were abandoning the brand site in order to book at a lower rate elsewhere, causing direct revenue to shift. After additional analysis, it was determined that this hotel group should target at least a 50% rate of meeting/beating the price in the market. If the hotel group was meeting or beating on price at least 50% of the time, web conversion rate increased by 32%, leading to a 42% return on the metasearch channel investment.

0%

Target for meeting or beating on price to ‘win’ in MEA region

0%

Increase in web conversion rate when meeting or beating on price

0%

Increase in ROI when meeting or beating on price

Get started with Koddi today

Request a live demo with our sales team to see our products in action.