travel industry and barter
DESCRIPTION
www.ormita.comBarter and the Travel IndustryTRANSCRIPT
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
WHO WILL YOU BILL FOR
YOUR UNSOLD SPACE, EMPTY
HOTEL ROOMS OR SEATS?
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
• Shrinking market• Competitors discounting rooms• Price-sensitive customers shopping around• Constant upgrade costs• Competing destinations• Maintenance• Seasonality • Natural disasters
ISSUES FACING THE TRAVEL INDUSTRY
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
YOUR CHALLENGE
• Find new customers • Maximize occupancy• Grow income• Increase profitability• Enhance brand image / value• Remain competitive
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
UNSOLD TIME = LOST REVENUE
• Every unsold hour represents an opportunity to earn revenue that you will never recover
• Your occupancy rate is limited by the number of people who see you or hear about you
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
DISCOUNTINGIS NOT THE ONLY ANSWER
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
If everyone discounts then the overall perception of the market
price will go down
FACT #1
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
Competitors with bigger pockets could ‘out-discount’ (and out-last) you
FACT #2
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
Once you become known for discounting it is very difficult to
increase your price
FACT #3
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
USING YOUR UNSOLD SPACE TO BUY ADVERTISING
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
WHAT IF YOU COULD SWAP YOUR EMPTY ROOMS FOR
ADVERTISING IN …
• Billboards & Indoor • Internet Websites• Magazines • Newspapers• Public Relations • Radio
• Expos and Events • Television
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
BARTERING …
• Conserves your cash
• Allows you to maintain advertising budget regardless of cash sales
• Lets you test new markets where putting cash on the line may be a risk
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
You want them but they do not want you
You want a lot of what they have, they only want a little of what you have
You want to buy now, they want to buy later
Unfortunately direct barter can be extremely difficult to organise by yourself
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
ORMITA IS INDIRECT BARTER
Retail Shop
Radio Station
Hotel
Manufacturer
Hospital
Accounting Firm
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
ORMITA CAN PROVIDE YOU WITH A GLOBAL ADVERTISING
CAMPAIGN WITHOUT YOU NEEDING TO SPEND CASH
• Canada• China• Hong Kong• India• Jordan
• Mexico• Poland• Thailand• Turkey• USA
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
GET NEW CASH PAYING CUSTOMERS!
• By bartering your unsold hotel rooms, event tickets, entertainment or space for advertising you can position your brand to reach desirable corporate, group and leisure accounts.
• You pay for your advertising using your own unsold capacity – not cash.
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
OTHERBENEFITS
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
BARTER REPRESENTS A GUARANTEED SALE
• When you make a purchase using cash you have no guarantee that you will get a new customer to buy from you
• When you buy using barter credit then there is a guarantee that someone else in the network will buy from you
• When you buy using cash you may not get any cash customers back
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
YOU KEEP THE DIFFERENCE
• The difference between the voucher and the room cost is called “breakage” – E.g. You barter a $100 gift voucher but a one night stay may be
worth $90. – No refund is given on an unused portion of a voucher
• Customers will often pay you extra cash if the voucher is slightly less than the total bill– E.g. You barter a $100 gift voucher but a one night stay may be
worth $110.
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PROVIDES MORE REFERRALS
• Creates more credibility than advertising alone
• Travellers often view referral information before making online bookings
• Builds consumer trust• May lead to additional cash business (and
often - repeat business)
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
INTEREST FREE FINANCE
• Bartering offers finance without interest – (buy now – repay with barter)
• Banks offer finance with interest – (buy now – repay with cash)
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
ORMITA : • Finds you media on barter and negotiates
on your behalf
• Lets you buy media now and repay using your hotel rooms later
• Records the value of each transaction when it takes place
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
TYPICAL CONCERNS ABOUT BARTERING
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
DO I HAVE TO SELL FIRST?
No :
• You can buy media first and sell later
• Our line of credit is interest-free
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
WILL I LOOSE CASH CUSTOMERS?
• Contractual provisions to only send guests during certain times of year (e.g. when you are less busy)
• If one of our customers has stayed with you in the past 12 months then you have the right to decline them on barter
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
WHAT TYPE OF GUESTS WILL YOU SEND ME?
• Ormita operates a “business to business” barter exchange network so guests will typically be corporate business travellers and/or company owners & managers who are on vacation
• Contractual provisions can be put into place regarding quality of the guests
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
WHAT HAPPENS TO THE EXTRA THINGS THESE PEOPLE WANT?
• Extra expenses on a customers bill are settled directly by the customer with cash or credit (room service, phone calls, gift shop purchases etc)
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
IS IT DIFFICULT FOR MY STAFF TO MANAGE?
No :
• You can send end-users electronic or printed gift vouchers to present at your reception
• Typically: a minimum 7 days advance notice is given to you for guest bookings
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
IS RECORD KEEPING EASY?
Yes:
• You receive a monthly statement which shows all purchases and expenses
• Works just like a bank account!– You set up a “barter” bank account– Expenses paid using barter dollars are debited from this account– Sales made on barter are credited to this account
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
ARE THERE TAX ISSUES?
No more than there would be for cash:
• Income tax is paid on profit– If you spend all the barter income that you earn you
have no barter profit (and therefore no income tax)
• Sales tax / GST / VAT must be paid according to your government regulations
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WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?
THANK YOU!
Australia +61 7 3149 3152Canada +1 514 700 0180Cina +86 755 3301 1789Egitto +20 16 777 1 222Germania +49 931 3069 99280Grecia +30 211 198 2720Hong Kong +852 5808 2688Indonesia +62 817 345 516Iran +98 218 850 2193Italia +39 015 952 6193Messico +52 55 5293 8500
Nuova Zelanda +64 9 974 9159Pakistan +92 300 845 2403Polonia +48 32 444 9155Sud Africa +27 10 500 9060Svezia +46 8 4083 9907Turchia +90 542 786 5969UK +44 203 355 1381USA +1 412 346 6142Zambia +260 97 789 5034
• Present in 21 countries and growing• Customers from 54 countries• More than $2.6 billion USD in barter deals
Visit our website at: www.ormita.com