Barter of America Works With ... The Travel & Hospitality Industry
Have you ever think that When today ends, the revenue from an unsold room, rental car, airline seat, cruise cabin and more is gone forever?. The hospitality industry trades in some of the most perishable inventories in any industry. An unused room, cabin, car or airline seat loses its revenue potential immediately. But what if you could take a 75% occupancy rate and boost it to 90% or even 95%? You can.
You can never make up the revenue of a lost room night, airline seat or berth. However, you can use barter to expand your cash budget by using available inventory as currency in exchange for media services or merchandise that you would buy for cash if you have the budget. What’s more, other Barter of America clients can utilize those services as part of their transactions.
Barter affords the opportunity NOT to discount your inventory, or lose a sale, while increasing revenue. The transaction allows your company to achieve higher occupancy and average rates with the prospect of repeat business. Barter also results in increased profit from cash flow savings, incremental revenue and reduced marketing expenses.
By trading available rooms, cabin or seat inventory for the same media, capital expenditures and business services they are prepared to buy for cash, hospitality providers can maximize revenue potential. Since virtually all costs are being charged against current capacity, what’s being added is almost pure profit.
Clients acquiring travel inventory as part of corporate trading transactions can use their under performing assets to pay a portion of the cost of sales meetings, conventions and a host of other business travel products.
Travel & Hospitality Case
A manufacturer regularly holds an annual sales meeting for 500 employees. For its 2001 meeting, the company has decided to gather at the Crown Plaza Puerto Vallarta. The budget for the meeting, including airfare, hotel accommodations, transfers, food and beverage and meeting space requirements is $1 million.
We Provide Solutions
As a result of working with Barter of America to set up the meeting, the client was able to pay for a significant part of the meeting with Barter of America Tdlls, received when they had traded excess inventory to Barter of America.
The cash savings in this case is significant. The client is able to use underperforming assets to fund the 1999 sales meeting. Without being able to use their trade credits, the client would have either needed to change the location of the meeting or absorbed the cost of the event on an all cash basis.
The barter process is relatively simple. For a 300-room property running an 80% annual occupancy with a $200 average daily rate, $4,380,000 of potential revenue is not being realized. By bartering 10% of the available inventory, the property can gain more than $400,000 worth of advertising services without displacing cash business. This results in a significant increase in profit that will impact the hotel’s bottom line.
If your company is not achieving full capacity, you have the opportunity to use available inventory and receive full value towar
Travel & Hospitality Trading Strategies
Today’s travel suppliers often find themselves in a competitive environment which can force them to drastically discount their products. Slashing both business and leisure travel prices has contributed to the industry losing the value of its own services. That value can be realized when the industry fully employs effective methods of maintaining price integrity while stimulating and satisfying demand.
By implementing programs, which utilize long established corporate trading techniques, travel providers have an alternative to distressed cash transactions. Through the use of barter credits, airlines, hotels, car rentals and cruise lines can recover the full value of their excess inventory.
Corporate barter transactions effectively eliminate the need to discount a seat, room, cabin or car. By viewing slow selling travel inventory as excess inventory, companies can benefit from effective corporate barter trading programs.
BoA Serving The Travel & Hospitality Industry
Barter of America Travel Services provides a host of worldwide travel products to clients. By using excess inventory to reduce the cash portion of the expenditure, clients have worked with Barter of America to plan conventions, sales meetings, incentive programs (check our partner www.mycityponts.com) and business travel.
Travel trade availability’s include worldwide hotels and resorts, car rentals, cruises and airlines. Many clients achieve significant cash savings in their business, promotional and personal travel throughout the world through Barter of America Travel Services.
Entering into a barter agreement with Barter of America enables you to:
- Support the sales effort with a targeted media campaign
- Bring new business that does not conflict with your cash customer base
- Impact low season and gap periods with tactical advertising campaigns and barter customers
- Increase rate and awareness with a consumer campaign to drive business
- Finance capital improvement and other FFE costs
- Handle an unexpected dip in occupancy