travel industry and barter

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

WHO WILL YOU BILL FOR

YOUR UNSOLD SPACE, EMPTY

HOTEL ROOMS OR SEATS?

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

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

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

DISCOUNTINGIS NOT THE ONLY ANSWER

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

Competitors with bigger pockets could ‘out-discount’ (and out-last) you

FACT #2

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

USING YOUR UNSOLD SPACE TO BUY ADVERTISING

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

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

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

ORMITA IS INDIRECT BARTER

Retail Shop

Radio Station

Hotel

Manufacturer

Hospital

Accounting Firm

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

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.

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

OTHERBENEFITS

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

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.

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

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)

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)

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

WHO WILL YOU BILL FOR LAST NIGHTS EMPTY HOTEL ROOMS?

TYPICAL CONCERNS ABOUT BARTERING

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

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

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

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)

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

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

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

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