2007 has been a year of continuing growth in the online hospitality industry. Ongoing technological advances (including mobile technology, analytics and convergence technologies), Web 2.0 initiatives, customer loyalty, website design, consumer generated media, web analytics, and the power of customer reviews in the travel planning process, are just some of the topics that have dominated articles and discussions in online marketing in hospitality.
Hoteliers are quickly entering the 2008 budget planning season. What hot topics do you, the hotelier, need to take into account when constructing a competitive online marketing budget and strategy?
The Role of eCRM in Online Marketing
How do you nurture, grow and retain your customer base when the competition is just a click away? How do you prepare for the future in this very dynamic and transparent online environment? How do you beat the competition for the most lucrative customer segments? By building a comprehensive eCRM strategy and creating interactive mutually beneficial relationships with your customer, any hotel company can ensure its survival in this new environment.
On average approximately 2% of hotel website visitors will make a booking while the other 98% will read, scan, and then leave your site. Without a comprehensive CRM strategy in place hoteliers will never know much about their website visitors, bookers or lookers. Even if Internet users book on the hotel website and hoteliers draw some information out of them, the blending of business and leisure customers makes it hard for hotels to differentiate who they are and follow up with appropriate marketing messages. Many hoteliers know next to nothing about their customers and their travel planning and purchasing behavior.
A Customer Relationship Management strategy and the rise of low cost eCRM tools to help support this strategy have helped many hoteliers address the question “Know your customer.” Many of these low cost tools can interface with the PMS, and when done right they allow for high quality data gathering either online or at check in. Do not underestimate the value that a CRM strategy can provide. Have your strategy in place and then find a technology that will fit this strategy.
Consumer Generated Media Strategy in Hospitality
Consumer generated media (CGM): blogs, discussion boards, review sites, social network sites, etc., has remained a prevalent subject in hotel marketing discussions in the past year. How can hotel and travel marketers use this new medium to their advantage? Should CGM be considered an opportunity to promote the hotel product and be part of the marketing strategy, or is it a threat that needs to be contained? Can a CGM initiative help hoteliers differentiate their services and de-commoditize their product?
There are three approaches to building the Consumer Generated Media (CGM) strategy. Which approach to use depends on your situation and needs. If the goal is to protect and monitor the ‘chatter’ on the web about your hotel for whatever reason, then a Brand Defensive Strategy should be entertained first. If the goal is to leverage the expert knowledge that currently exists at your property out there on the web, then consider a corporate sponsored CGM initiative. Lastly, if the goal is to simply communicate to readers on high traffic CGM sites, then you can advertise on them.
Best Practices for Managing the Indirect Online Channel
What are the most important trends in the indirect online channel in 2007? The direct online channel will continue to be the main focus for hoteliers. The industry as a whole has realized that not only has the Internet become the preferred channel for travel consumers to plan and book lodging, but the direct online channel is the cheapest form of distribution. The shift from indirect to direct online distribution will continue to be a major trend in the next several years.
Overall for the industry, this year over 60% of online hotel bookings in the U.S. will be direct to consumers (65% by 2010) vs. 40% via third-party online intermediaries/OTAs (35% by 2010) (Merrill Lynch, HeBS).
So what are the most important trends in the indirect online channel? To begin with, now is the time to start working with fewer third party intermediaries (TPI’s), and at drastically lower margins (e.g. 15%-18%). Smart hoteliers deal only with TPI’s that can access the hotel inventory electronically (through the hotel PMS, brand CRS, Pegasus or the GDS), and not via manual extranets. These hoteliers work in strict rate parity, use dynamic TPI margins (higher when you need the TPI’s, lower when you don’t), and prohibit TPI’s from using trademarked property names for their PPC and search engine marketing campaigns.
Best Practices in Website Design: Balance the Visual Appeal with the Search Engines
The hotel website has become the first, often the only and in many cases – the last point of contact with hotel customers. High-Speed Internet access is already part of daily life and has enabled consumers to experience the Internet like never before. 75% of active Internet users in the US use broadband at home and almost 100% of Internet users access broadband at work. This means faster download times, faster searches, more sites and pages viewed, and more rich media and applications possible.
Hotel websites can now offer better imagery, higher display resolutions, rich media and visual experiences like never before. 80% of Internet users have 1024x768 or higher displays.
In the first half of 2007 we have noticed that more hotel websites are becoming hijacked by design shops ignorant of online user behavior and key search engine traits. The sites or whole sections and pages are completely in Flash without any HTML copy, the navigation map has poor usability, and the contents on the site are not search-engine friendly. It is true that in many cases web designers feel the need to compromise on these best practices in order to have a beautiful website. The goal in website design in hospitality is to build sites that incorporate these factors and a) are not expensive websites to start with and b) do not have to be re-designed every year or two because the site was not built properly.
Measuring Results from Hotel Internet Marketing Campaigns
Marketing is all about results. Unlike offline marketing, state-of-the-art website analytical and campaign tracking technology can track and analyze ROIs from the hotel online marketing campaigns quickly and accurately over the Internet.
Web analytics and conversion tracking has become a necessity rather than a luxury. All major hotel brands and TPIs/OTAs utilize cutting edge analytical tools. Such tools allow client access to full website analytics: visitor sessions and unique visitors, entry/exit pages, page views, referrers, conversions, keyword analysis, etc. The tool allows for tracking of banner campaigns along with the tracking of post-click activity (what happened after the user clicked on your PPC listing and did not book right then –did they book 2 days later or 2 weeks later?) and most of all, measuring the ROI on every dollar you spend on marketing the website.
Guidance on 2008 Internet Marketing Budget Planning
By 2008, as much as 37%-38% of all hotel bookings will be transacted over the web, which represents 15%-16% growth over 2007. Use this as a benchmark to increase your overall marketing budget. Now more than ever, billboards along the highway, hotel print brochures, and other traditional means of advertising hotels have shifted toward the web.
Hoteliers need to take these topics and trends in online hospitality marketing into account when constructing a competitive online marketing budget and strategy. As you prepare for the year ahead, keep in mind that the hotel website is your most cost-effective revenue channel.