It’s hard to get consumer attention these days.
The current consumer travel market is dominated by Online Travel Agents (OTAs) who are outspending hotels in the United States by more than 2-to-1 in TV advertising and almost 4-to-1 in online paid search advertising.
The hotel distribution landscape is best described as ‘dynamic and volatile,’ with major new players – Google, Facebook and Apple looking to get a slice of ‘travel shopping.’
These third parties will charge fees for referrals to hotels and, while there is no firm evidence pointing to an exact number, it is plausible that upwards of half of the hotel business could ultimately pass through third parties before being delivered to a hotel or brand. Also possible is that costs may run as much as 10% to 20% of hotel revenue for this emerging new network.
Hotels are already facing this loss of revenue to OTAs and by all reports the industry trend/predicament will accelerate with new categories – meta-search (e.g Google, hotel Finder, Room Key), social (e.g. Facebook, Trip Advisor) and mobile (e.g all OTAs, all hotel brands and new mobile-only players.)
Even when these new third parties send a hotel its business directly, they will charge referral or media fees and these bookings will still require a technology infrastructure to support the inquiries and transaction delivery, all adding to the cost.
The reliance on OTAs for bookings is not only having an impact on revenue, it is also diminishing hotel brand value:
- the prominence and transparency of rates on the internet and emerging mobile applications, and the concern for “rate parity” to keep the same rates in all channels, may result in a “one- rate-fits-all” pricing structure for many hotels.
- a ‘lowest price’ mentality is causing consumers to believe that there is little difference between hotel brands (there is a growing commoditisation of hotels as a product)
- the issue arises as to who “owns” the guest by making the reservation portal the “place to go” for hotel buyers and, in so doing, potentially degrading the value of the hotel brand.
Invest in and develop low-cost promotional channels with as much control over rates, inventory and branding as possible.
- Integrated Targeted Campaigns to drive traffic to Online Booking.
- PPC or Database marketing
- Email – contact, auto-responders, newsletter, special offers
- Landing Pages
- Social Media
- Landing Pages to target specific segments
We have to divide our potential hotel customers into niche market segments and communicate with them in a targeted way.
To attract travellers, we have to start asking ourselves who our hotel guests are and why they stay with us.
What is it they like about our hotels or the destination?
Once we understand our hotel customers and their personal need and requirements we can create niche target markets.
Once the niche target markets have been defined for each hotel we would create dedicated landing pages for them.
You need to focus on the parts of the hotel marketing mix that appeal to each particular segment.
The landing page would be optimised for SEO and Social Sharing and would need to be a Responsive Design so that they work effectively on mobile and tablet screens.
The Landing Pages would promote email sign up and also directly link to the booking engine.
Email to engage visitors
The landing pages will be an opportunity to establish interactive relationships with your customers, and to capture client email profiles for future promotion.
Hospitality email marketing can be used successfully as a direct response vehicle (short-term, results-oriented) or as a branding tool (long- term and strategic goals).
Getting found online has become even more difficult with OTAs actively hijacking hotel brands via paid search and banner advertising.
Changes in Google’s algorithm have been designed to stop people ‘gaming’ search and place an emphasis on popular content – which means social media is having a dramatic impact on organic search.
Google’s official blog summary says: “social search results will now be mixed throughout your results based on their relevance (in the past they only appeared at the bottom). This means you’ll start seeing more from people like co-workers and friends, with annotations below the results they’ve shared or created. So, if you’re thinking about climbing Mt. Kilimanjaro and your colleague Matt has written a blog post about his own experience, then we’ll bump up that post with a note and a picture.”
People are actively sharing their travel ideas and interests on social media and when it comes to deciding where to go they are influenced by user-generated content such as reviews, photography and videos.
That said, whilst social media can generate bookings, social media is not a distribution channel in hospitality.
Social media is a customer engagement channel and a customer service channel and also plays a key role in reputation management.
Social media is an important component of any hotel’s marketing mix and part of the comprehensive direct online channel strategy for any hotel company.
Needless to say that in today’s hyper-competitive environment, hoteliers have no choice but to create strategies that link the customer experience with the technologies and systems required to deliver engaging content to sell the property and inspire prospects or support their decision to make bookings.
How much do you know about your audience ?
If we are are going to ‘redirect’ bookings from OTAs in this price sensitive market, it stands to reason that we need to understand what consumers are looking for and what is going to influence their decision.
Accessible research indicates that the search for meaningful experiences will govern consumer shopping habits in 2013, particularly when it comes to their travel choices.
In our region the ‘family experience’ is also joined by a growing interest in travel for health and wellness. So too does interest in sustainability and consumers are also looking for new and innovative travel experiences.
Much of the search for meaningful experiences will be driven by baby boomers entering retirement who seek new opportunities for fulfillment. But that’s mostly true of older boomers; younger boomers have less time and far fewer travel dollars to spend.
And no matter what choices consumers make, it’s increasingly likely that consumers will be looking to mobile technology to guide them.
What are the triggers that will get a response for your destination or hotel?
What can your current data tell you?
- current databases
- current Google Analytic reports
Is there a clearly defined brand strategy ?
- review key propositions for each property in a competitive context
- each property needs ‘a story worth telling’
- what are your competitors doing?
Review current promotional activities and distribution processes
- what has worked and what hasn’t ?
- what are the current OTA distribution arrangements
- Local Destination Marketing Companies – Tourist Bureau’s
food for thought…