More and more hotels and hotel chains are trying to reduce their distribution costs in the meeting and event sector.
ALLOCABO is taking a completely new approach to the online distribution of venue hotels. With an innovative pay per lead method the venues can save up to 90% compared to the usual commission of 10% of the event turnover. Moreover they are always in direct contact with the customer. With ALLOCABO, no portal or agency stands between the customer and the venue hotels.
With ALLOCABO, the venues decide whether to accept a lead at the specified lead price or reject it without further costs for each individual inquiry.
The following transparent quality characteristics help to make the decision:
- Detailed configuration of the event
- Possible alternative dates
- Company name of the customer
- Country of origin of the customer
- Industrie of the customer
- Number of competitors
- Status of lead acceptance of competitors
With this information, the venues can accurately estimate whether they want to accept a lead or not.
At ALLOCABO, the lead price is always dynamic and is measured according to many different factors, like the following:
- Number of participants
- Number of event days
- Number of hotel rooms
- Scope of catering (F&B)
- Scope of infrastructure
How does the pay per lead method save up to 90% compared to commission?
Calculation example
In order to compare the two compensation models "commission" and "pay per lead", we have created the following calculation example:
We assume an average turnover (basket of goods) of € 5,000. This corresponds to a representative two-day event with 20 participants, corresponding catering and one overnight stay. For this exemplary inquiry, ALLOCABO would charge a dynamic lead price of 8€.
In addition, we base this calculation example on a very conservative average success rate (conversion rate) of 15%.
Notice:
Our understandind of the success rate (conversion rate) is the percentage ratio between the number of leads (inquiries) received and the resulting bookings actually realized. This success rate varies from hotel to hotel. The usual, conservative market average is around 15%. This means that approx. 6.6 leads (inquiries) must be accepted in order to achieve a one booking. You can influence yourself. whether your hotel is above this average and the savings in distribution costs are even higher compared to the commission, because with ALLOCABO you are able to accept a lead on the basis of transparent quality characteristics and assess your chances of success in the best possible way.
Distribution costs of this example with ALLOCABO based on pay per lead:
8.00 € dynamic lead price x 15% conversion rate (corresponds to 6.6 assumed leads to achieve one booking) = 53 € distribution costs for one booking (6.6 x 8€).
Distribution costs of this example based on commission:
5,000 € turnover x 10% commission = 500 € distribution costs for one booking.
Your savings on distribution costs for one booking in this specific example: 89.4% (500€ commission compared to 53€ total costs based on pay per lead).