Throughout my ten-year tenure as the co-founder and managing director of SuitePad, I’ve gained invaluable insights into the significance of keen perception in our relationships with hotel partners. The key takeaway from my experience is the powerful impact of being attentive to the needs and feedback of your customers. This practice is fundamental in forming lasting business partnerships that prove mutually beneficial in the long run.
In the face of the challenges for the hospitality industry in 2024, it’s time for a paradigm shift in pricing philosophies. We urge the industry to break free from conventional norms and embrace innovative approaches to better accommodate the changing world. It’s about more than just transactions; it’s about becoming genuine partners to hotels navigating through turbulent times.
Among the innovative strategies available, performance-based deals stand out as a game-changing option. By embracing this approach, not only do you showcase your confidence in your product, but you also start a powerful conversation about its benefits.
What are performance-based deals?
Performance-based deals are collaborative agreements between parties, often between a service provider (such as a hotel tech provider) and a customer (such as a hotel). These deals are structured in a way that the payments depend on the actual performance or outcomes achieved rather than relying on fixed or upfront payments.
In the context of hotel technology, a performance-based deal might involve a pricing model where the hotel tech provider receives payment based on the measurable success or benefits of their technology solutions. This could include metrics such as enhanced guest satisfaction, improved operational efficiency, or increased revenue.
To better illustrate, here is an example: for a hotel to get started with its digital guest directory solution via in-room tablets, it would have to initially invest in hefty hardware fees that can be thousands of euros. If the hotel is bigger and has more rooms, this amount would likely be even higher. A performance-based deal, in this case, will allow the hotel to skip initial investment and only pay the provider when they see a tangible operational profit.
Apart from making your product more accessible to a wider range of hotels, these agreements also align the interests of both parties, encouraging the service provider to deliver high-quality and effective solutions, while the client benefits from a results-driven partnership.
The result is a transformative approach that not only makes it easier for hoteliers to adopt digital solutions but also integrates the Return on Investment (ROI) directly into the collaboration, ensuring positive returns for customers from the get-go.
What makes performance-based deals unique?
What is unique about performance-based deals is that no one actually does it. Even app providers or websites refrain from these types of deals despite requiring little to no hardware or installment fees. If companies were to embrace performance-based deals, it could usher in a new era of collaboration in the industry. Offering solutions on a performance basis could become the norm. Our commitment to this model shows a deep conviction in our product and, more importantly, a profound alignment with our customers. It signifies a low-risk, high-reward model where the success of the hotel and the digital solution meet – a true partnership where success is mutual. If your hotel is successful, you are successful.
Why should companies consider performance-based deals?
Imagine if more companies adopted this approach. Many partners would be more inclined to try these digital solutions and witness their benefits firsthand. Some might be initially skeptical, questioning if the solutions would be used as often as promised. By offering performance-based deals, companies would demonstrate their confidence in their products, putting their money where their mouth is. It’s about aligning successes, making the customer’s success a direct reflection of their own.
For us at SuitePad, this approach has already shown its impact. Hotel chains, in particular, have been quick to embrace digital solutions. The absence of an initial investment has made the integration process much faster, making it easier for hoteliers to start with these platforms. The promise of a positive ROI from day one has become a compelling incentive, making digital solutions an integral part of the guest experience right from the start.
In this pivotal moment, let’s reevaluate pricing strategies and move beyond the ordinary to shape a future where collaboration and shared success take center stage. The landscape has evolved, and so must our methods. Let’s forge a new path, challenging the status quo and demonstrating a commitment to being true allies to hotels in their journey through navigating challenges. It’s not merely a transactional change; it’s a transformative partnership that paves the way for resilience and prosperity in the challenging world of 2024 and beyond.
About Suitepad
SuitePad has been helping hotels engage their guests in a digital world for ten years. Their award-winning in-room tablets replace traditional guest directories, serve as a central upselling tool, and combine TV remote control and telephone in one device – effectively decluttering the hotel room and providing guests with a modern and hygienic experience. The company’s portfolio also includes a BYOD solution (for guest-owned devices).
In January 2023, SuitePad was awarded the HotelTechAward “Best Guest Room Tablet” for the fourth time in a row. More than 1,000 customers worldwide, from renowned hotel chains to independent boutique properties, use the digital guest engagement platform in over 70,000 rooms to improve guest communication, generate higher sales revenue, and streamline processes.
Susanne Krebs
Marketing Manager Content/PR/Branding
SuitePad GmbH