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Why should I barter?
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| To gain new business and incremental revenue.
Any time you use available inventory and receive full value towards services for which you would normally pay cash, barter is an advantage. Barter affords the opportunity NOT to discount, or lose a sale, while increasing profit. Some key reasons to barter with ITM:
- Receive the full value of bartered rooms
- Increase occupancy and average rate
- Obtain corporate end users to bring incremental dollars with repeat potential as a cash paying customer
- Hotel expertise and high level of service
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What are the advantages of barter? |
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Using unsold rooms as equity to increase marketing dollars.
The lost revenue resulting from an unoccupied room night, airline seat or cabin can never be recovered. Barter permits clients to expand their advertising budget by using unsold inventory in exchange for media placements or other services. This transaction allows clients to achieve higher occupancy rates with the prospect of repeat business. Bartering also results in increased profit from cash flow savings, incremental revenue and reduced marketing expenses. |
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How do I incorporate barter into my budget and marketing plan? |
| Include a barter line in your budget and estimate revenue that can be traded from a percentage of unsold rooms. |
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How do I determine my barter budget? |
ITM suggests that clients entering into barter agreements for the first time use 5-10% of the hotels available rooms.
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 a $400,000 trade credit for media, merchandise and other promotional services without displacing cash business. By trading just one room on an annual basis, the same hotel could achieve $73,000 worth of valuable marketing services.
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When is the best time to barter? |
Whenever you have unsold inventory, you can optimize that equity through barter. Entering into a barter agreement with ITM enables you to:
- Support the sales effort with a cohesive advertising campaign
- Impact low season business and gap periods with a tactical campaign
- Launch new products
- Test new markets
- Test new media
- Handle an unexpected dip in occupancy
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How will I receive the media or services requested? |
| ITM will provide a media schedule tailored to hotel and/or ad agency specifications. All schedules must be approved prior to booking. ITM's Media Department will traffic schedules and provide proof of performance for all media placed. Direct mail, printing and merchandise orders must also be approved prior to fulfillment and will be shipped in a timely manner. All media requests must be submitted in writing and processed through ITM's Media Department. |
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What is the benefit of bartering if I have to charge my cash advertising budget dollar for dollar? |
| Your budget is an internal document. When a barter line is added to the budget, the barter transaction enhances occupancy and average rates when posted on a dollar for dollar basis, as rooms are used at full value. The bartered revenue from the end users of the barter, as well as increased sales generated by the media campaign, offset room cost and increase profit. |
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Who will use the hotel credit? |
| ITM's corporate and media clients will use your available inventory, including rooms, food and beverage venues and recreation facilities, based on availability. These clients represent new business and future cash revenue. |
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How are hotel credits booked? |
| All hotel, travel and merchandise requests go through ITM's Client Services Department. ITM's staff is experienced in handling individual and group meetings and special events; they will forward each request to you in writing. |
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