In #happyTalk03, we talk to Max Toth from Abasto Hotels about strategic pricing when demand is very high, the influence of the European soccer championship on prices in Munich and Max's relationship with OTA's as a former OTA employee.
Max Toth is an absolute power user of happyhotel. He is Director of Sales and Marketing at Abasto Hoteli and has already worked in the Munich hotel industry for 15 years. Starting with classic training as a hotel manager, through various positions, for example at an OTA and a booking engine, to becoming a general manager, he has got to know all sides of the hotel and tourism industry. At Abasto Hotels, he is now the link between the owner family and the three hotels in and around Munich. The fourth hotel is already in the starting blocks. Among other things, he takes care of revenue management there. Here at HappyTalk03, you can find out everything about his pricing strategy.
Sebastian: Which systems do you use? How far are you in the process of digitization and what are your further goals there?
Max: I'm an absolute fan of digitization because it optimizes processes and makes them more user-friendly. In the hotel industry in particular, this makes sense because it allows me to concentrate on what we all stand for; providing guest service and creating great guest experiences.
That is why we work with the agency point planning together, which also brought us to Happyhotel. The other programs are Ibelsa as PMS, Dirs21 as channel manager, Code2Order (now straight) as a guest service management tool and Häfele as a key card system.
We are currently evaluating which processes can be further digitized. Abasto Feldmoching is our first house where we have planned all digitization steps. This is our test house from there we roll out the systems to the other hotels.
The nice thing about happyhotel is that from there I can automatically maintain and update the rates for all houses from one system.
Max Toth from Abasto Hotels
sebastian: What is your pricing strategy? What is your experience with regard to volatility, i.e. the extent of your price fluctuations? Are you achieving increases in demand through price reductions?
Max: My installment strategy is based on the surrounding market and the CompSet. Neither the most expensive nor the cheapest price is best. Instead, you need a good midfield range. It is particularly important that you can represent the prices yourself and agree them with your own conscience. This applies to both the lower and upper price limits. With dynamic prices, I can simply get more out of the market than with static ones.
I can certainly increase our demand through lower prices. However, this must not result in price dumping, which has certainly happened in between due to corona. As a result, there has been downright cannibalization on the market in Munich. That is a shame. That is why we all, in the hotel industry as a whole, must maintain our prices.
In contrast, we must also not become cocky and try to make up for what we have lost. That won't work. Good mediocrity is important and decisive. Everyone involved then also appreciates this.
sebastian: What are the maximum prices for certain events?
Max: You have to be careful about that. Yes, I can theoretically charge 500 or 600 euros at certain trade fairs. But the question is whether the customer and the companies will go along with it. Otherwise, in the end, the flight is cheaper than the hotel. Of course, you want to achieve maximum prices when demand is high. But I live by the philosophy of staying fair and not exceeding the price that I can reconcile with my conscience. After all, the overall package should fit and, in the best case, the guests should become fans of ours and come back again.
sebastian: You are among the top ten users who log in to happyhotel. Of course, I won't miss the opportunity to ask you exactly how you work with Happyhotel.
Max: I work very hard with Happyhotel and wear the PickUp and the forecasts, as well as the booking window. By the way, this has changed a lot due to the easing compared to the lockdown times. I look at your price suggestions every day and sometimes go through them day by day and check whether they comply with our pricing strategy.
sebastian: Your input is very valuable to us.
Max: It is very pleasant to work with you. The support is impeccable and the tool is very easy to use.
sebastian: What is your assessment of the recovery of the Corona situation?
Max: I think it will be with us for some time. You should have certain strategies up your sleeve. During the summer months, we are trying to take over business and build up reserves for any difficult times that may return.
There is hope that it will be over by the end of the year. But I think the various virus variants will continue to accompany us and it will never be the same as before the crisis. But still, you shouldn't bury your head in the sand and look ahead with optimism.
Max Toth from Abasto Hotels
sebastian: You are within easy reach of the Allianz Arena as the venue for the European championship. This was limited due to the current time. However, there was still increased demand. How has it been for you so far?
Max: We were in the fortunate position of being able to benefit from the games. Although not as expected, we are very satisfied with 60% and have made the best of it.
sebastian: You also worked for an OTA provider once. OTAs and direct sales are an exciting topic. How do you feel about that?
Max: For me, OTAs are partners, otherwise I would not have worked for an OTA. Without OTAs, hotels would never be bookable worldwide. Every hotel must be aware of this.
Max Toth from Abasto Hotels
Max: For me, OTAs are partners, otherwise I would not have worked for an OTA. Without OTAs, hotels would never be bookable worldwide. Every hotel must be aware of this. Direct sales are also very important. However, you can also burn a lot of money there without getting the return on investment. So I'll just let the OTAs do it. Nevertheless, I am of course trying to strengthen direct sales with every possible means, such as through my own website, social media channels and, of course, traditional sales.
It must be a good mix. Thank goodness we have 60-70% direct bookings. Nevertheless, OTAs are not opponents for me, I see it as a very cooperative and I get the best out of every portal.
sebastian: What are your three tips that a hotelier should currently focus on?
Max: Being open to new things, rethinking and looking to the future — this starts with training and ends with the guest. You have to be brave and focus on brand awareness. Even though we're not that big, I want to create a brand that guests will remember. My idea is that at some point you'll associate a cool brand with the hashtag #abastohotels, with the motto Smart Luxury and Find Your Perfect Stay.
