“There is a risk that a hotel’s unique brand can be eroded by using travel portals”, writes Des O’Mahony.
For a hotel, the direct guest is best. Bookings through travel portals or agents incur high charges, while the direct bookings through your own website represents lowest cost of sale. With stiff competition, hotels need to move to direct business more and more and lower their dependence on indirect sales. Utilising proper technology and online marketing expertise can unlock the power of a hotel website to maximize that business.
Direct versus Indirect
Times were when travelers to a destination treated the accommodation as a side issue. These days, the accommodation is just as likely to be the reason for traveling, especially with the growth in spa treatments and luxury hotels. With over 50% of leisure bookings to be made online by 2010 (PhocusWright), direct business is there for the taking. The Marriott group boldly invested millions in their online presence and in 2007 saw over 80% of their business generated directly through their own website. This could be the norm but the majority of hotels have yet to wake up to this potential instead of handing their online business to third party travel portals at a significant cost.
Poor brand imagery and customer care
There is a risk that a hotel’s unique brand can be eroded by using travel portals. A hotel is listed blandly in categories and risks becoming “commoditised” and unable to project its individuality appropriately .Pricing is out of the hotel’s control, causing customer confusion as different rates can be found on the net by potential guests. More importantly, the customer relationship is owned by the portal and it is the portal that they will return to for new bookings. While hotels may get significant business from these channels in the short term, the long term consequences for the hotel business and hotel brand is potentially damaging.
When selling directly on their own website however, the hotel lowers the booking costs, remains in control of their brand image online and ensures the customer is their customer, thereby improving return business potential. Building customer loyalty to your website is crucial and gaining their trust that the best prices are here. Bookassist technology and services are all about empowering individual hotel (or apartment) websites to reach those goals.
Get Geared Up
As the internet rapidly develops, so too does the online customer. Web 2.0 phenomena such as social networking are making their presence felt in the travel sector as it moves to embrace the technologies in so-called Travel 2.0. The recent (November 27, 2007) Sunday Times Top 100 travel sites was dominated by travel review sites and blogs, not the travel portals you might suspect, as online users increasingly want to hear what others have to say and then go direct to book. At Bookassist we continually research internet trends and implement change quickly and we’ve been doing so in the internet arena since as far back as 1994. In our long experience, we’ve seen many trends appear and disappear just as quickly, while others stand the test of time.
The key requirements for a successful direct hotel business today include:
• Good quality, attractive, customer-focused website that provides real information, quality photography and is regularly updated.
• Effective optimization of the website content and structure to ensure high search engine natural listings placement.
• Inclusion of customer generated media or other Travel 2.0 technologies such as customer reviews, blogs, vlogs.
• Newsletters and limited special offers for members to encourage the building of a community of users, plus loyalty programmes to build return business.
• Customer-targeted and constantly-monitored online advertising.
• Leading edge booking system that facilitates quick customer booking with ease and instills confidence and projects security to the customer.
• Ensuring lowest prices are on your own website at all times so that customers can trust your prices and increase their use of hotel’s website.
• Report systems that allow you to plan ahead and adjust as you go along.
It’s what they want, not what you think they want
Your website must be compelling and must capture the user in seconds or they’re gone. It must facilitate instant gratification in the form of fast secure online booking and instant confirmation (Bookassist for example uses SMS confirmation as well as email). Already the internet is fast becoming dominated by “second generation” users for whom even email is an anachronism while social networking, blogging and instant messaging rule. These new users of today are the customers of tomorrow. You need to know their thinking and their online habits. Without proper research or advice on internet trends your business can quickly be left stranded.
Dr Des O’Mahony is co-founder and Managing Director of Bookassist
Blog category: brand
“There is a risk that a hotel’s unique brand can be eroded by using travel portals”, writes Des O’Mahony.
Kieran Fives came across this interesting article by Neil Salerno on perceived “value” on the internet, which underlines much of what Bookassist has been advising its clients on for some time now. The idea that you can easily become commoditised in a simple hotel listing based on cost is a real threat to one’s brand online, which is why direct sales is such an important channel to be driving.
From the article:
“In a public forum, such as the Internet, your rates will either validate the quality of your hotel or diminish it. Most travelers are looking for the best value, not, necessarily, lowest rates. Value management is the process of positioning perceived benefits to meet or exceed posted rates. Your rates contribute to raising or lowering consumer perception of your property.”
See hospitality net
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“Research shows that online, people are 3 times more likely to buy if the website is in their own language”, writes Mark Rodgers of Cipherion Translations.
The Celtic Tiger has brought Irish hotels into the 21st century. Most hotels have a strong online presence in the form of a professionally developed website which is seamlessly connected to a booking engine. However, with the current uncertainty in a number of our main markets, the industry is now at a watershed – how to keep the online momentum going while still focusing on revenues and profitability.
Building online relationships with your customers is essential at any time, but vital in today’s uncertainty. The Internet allows you to be a global player, in control of how your hotel is marketed online. However, sometimes you have ten seconds to build that initial relationship so how do you differentiate yourself from your competition?
I’d recommend translating your website. Research shows that online, people are 3 times more likely to buy if the website is in their own language.
At the recent Bookassist industry seminar, I was delighted to be invited by Bookassist to present hotels with a multi-lingual strategy. It was fascinating to hear Roshan mention that a recent survey of Bookassist’s main hotel clients in Ireland showed on average over 55% of their entire revenue is now generated online.
Wouldn’t it be great to start getting an even greater portion of that revenue directly from your own website?
Here’s how we, at Cipherion Translations approach it. Think of Christophe and Sophie for a moment. They are sitting at home in Lyon, at their white oak kitchen table, drinking a nice Bordeaux while getting excited about their upcoming holiday to Ireland. They know that they’ll visit Dublin, then Waterford and straight over to Galway. They just need to decide where to stay….
However, most of our hotel websites are currently in English. So while most European tourists like Christophe and Sophie have fluent English, think of their delight when they come upon your site in their own language. You’re delighting the customer and exceeding their expectations even before they arrive at your hotel. You’re building that initial relationship.
So how have the overseas visitors been able to find us in the past? This is where the third party operators, Expedia, Travelocity and the like have had a head start. They have been marketing your hotel in multiple languages for years… and likely getting a significant chunk of the online business from the European visitors.
Essentially, they are building that initial relationship, in French or in German. They have had a significant advantage since your website was previously only available in English.
FACT: Online, people are 3 times more likely to buy if the website is in their own language.
We’d love to help you build that initial relationship with your customers. We work closely with Bookassist, who already has a multi-lingual booking engine. We’ll help you translate your website to delight the customers when they come to your website. Bookassist has already done the rest for you by allowing your customers to book in their own language.
Cipherion Translations have teams of marketing specialists in over 40 languages. Because you only need to “hire” our marketing team for a day or two, the costs are not significant… and in conjunction with the multi-lingual booking engine from Bookassist you can start to grab a larger share of the business that used to come to you through third party websites.
So whether you only wish to market based on a translated home page, or feel that you want to tell the visitor more about your hotel, our team can quickly provide you with translations that will engage and hold your visitors attention. We ensure that during those initial 10 seconds the online visitor will get maximum value from the website.
The Internet and Web 2.0 now allows you to easily attract customers from all over Europe. So it’s vital that you market to this audience in their own language – to build that initial relationship with them.
Remember the fact: people are 3 times more likely to buy online if the website is in their own language. Cipherion Translations can provide you with the marketing experts in each language to guarantee that a visitor’s initial 10 seconds are meaningful and thus increase the chances of the customer wanting to book directly from your website. Bookassist, with their multi-lingual booking engine will take care of the rest.
In summary, thinking global means taking action. Translation is a cost-effective way to build your revenues and build relationships with your customers. Now is the time to think about differentiating yourself on the Internet.
Mark Rodgers is Managing Director at Cipherion Translations.
Aleks Grzegorzak in Bookassist’s Dublin office asks: “Have you checked reviews of your hotel at Tripadvisor website yet? “
Whether you like it or not, your previous guests like to share their opinion with friends, and the same applies to the Internet where social media websites allow them to share their experiences publicly with others. The only difference is that this time your guest shares his or her opinion with millions of people all over the world. The most popular website with reviews on hotels and vacations is http://www.tripadvisor.com.
The good news, however, is that this website allows hoteliers to respond to reviews.
There are already over 15 million reviews at Tripadvisor. Over 20,000 people visit the website daily for advice on hotels and vacation. Reviews online are a very important part of your web presence and it is up to the hotel’s general/sales/reservations managers to either monitor reviews and take appropriate action to control their image online or ignore them and allow themselves to be condemned for the image being created by somebody else.
Think: If somebody insults you in front of others, don’t you respond appropriately? If somebody compliments you, don’t you say thank you? The same rules apply to online reviews so take responsibility and act today. And remember to respond to both negative and positive reviews. It can be a great way of customer relationship management, too! You can do this in a few very easy steps.
1. Go to http://www.tripadvisor.com and write a name of your hotel in the search box provided:
2. It can yield more than one result, so find your hotel on the list and click on the link ‘Reviews of Your Hotel’ (highlighted in blue):
3. The link brings you to your hotel’s profile with reviews below:
4. Below the reviews there is a green frame for hotel’s owner with a link to the owner’s page (highlighted in blue):
5. The link brings you to the next screen with further links. Click on the ‘Respond to a review’:
6. The next page has a few drop-down lists where you can choose options of your choice:
And remember you can set a Google Alert for your hotel page also so you can be informed when any new review is added.
Aleks Grzegorzak is Internet Support Coordinator in Bookassist’s Dublin office
Christina Roche in Bookassist’s Dublin office points out some not so obvious truths about competition online
Your hotel website is your cheapest form of distribution, sales and advertising all rolled into one. So it is vital for hoteliers to invest time, money and effort into constantly upgrading and managing it. Of course this is a lot of work, and hoteliers already have enough to do offline, so partnering with online technology and marketing providers can be an ideal solution.
At Bookassist, a key component of our strategy for hotels is to provide strong and continual account management involving constant monitoring of the hotels’ websites, rates and availability, combined with surveying the broader marketplace. In Ireland, the majority of hotel websites with booking engines use Bookassist technology, therefore we have valuable and real statistics on the Irish marketplace that we can provide to all our clients to optimise their business.
However, providing this intelligence is of little benefit if the hotelier does not actually use their Bookassist Admin reports or work closely with their account manager. This is why good account management of a hotel’s online presence must be a partnership – the hotel must be prepared to action the advice of their online partner. All hoteliers are keen on the idea of making more money through their own website, and decreasing commission costs. However achieving that goal must go hand in hand with decreasing the number of third party websites you work with.
Third party dependence
Hoteliers are understandably reluctant to reduce third party partnerships, which have been an excellent source of revenue in the past. But that’s exactly it, they’ve been great in the past! In 2004, 20% of all hotel bookings were online compared to 2% in 2000, and by the end of 2009 50% of all hotel bookings will be online (Phocuswright). Third party sites capitalised on this consumer interest long before hotels, and did so at a cost to the hotels of anywhere between 10 – 30% of each booking. But with hotels increasingly moving online and making their own presence felt in Google search results, the necessity for third party sites is waning and the opportunity for the individual hotel to sell directly is growing. It is now time to invest in your own site and cut the apron strings from the excess third party sites, sticking with your top producers only.
Your Website’s online struggle
In the current online marketplace you as the hotelier must understand that your own website is in an online struggle with not only your competitors but also third party websites. People who search for your hotel name are seeing results from a myriad of different suppliers – third party sites and competitors – not just your website. It is therefore imperative to give your website a chance of competing against the larger websites bidding on or using your trademarks. “Monitor who is bidding on or using your trademarks in pay-per-click (PPC) advertising. Competitors and third party intermediaries could be bidding on your hotel name and stealing part of your market share” (from Ten standards for promoting your hotel online). So although the hotel employs the third party sites for added exposure, your hotel website is actually in competition with them and can be undercut by them at a commission cost to you.
It is time for your website to perform alone. You need to generate traffic and you need to convert it to bookings.
Your online strategy should be a key focus of your business, and your own website should be the focus of your online strategy. But directing traffic to your site may not result in increased bookings if the site isn’t up to standard. Ask yourself, “Have I had essentially the same website for a few years?” If the answer is yes then it is definitely time to change your approach. Look at the options open to you for building a new website complete with Web 2.0 features that customers increasingly want, like Google maps, Blogs, Vlogs, Customer Generated Reviews etc.
Work to ensure that you get the most from your website and in particular from your engine. With proper market intelligence you can devise appropriate dynamic packages for your website to suit your target market. With booking engine technology, you only get out of it what you put in. If you stick with basic packages, with very little variety and your rates are static all year round then your revenue will likely remain static or may even drop. Not every property has a spa or golf course and some don’t have restaurants, so in that case it is imperative to get creative and devise dynamic, interesting packages that are going to tempt online lookers to book your property. Knock on the doors of local restaurants, buy tickets to local tours and concerts, the costs will be absorbed in the packages and you will be adding to the value of the booking and the guest’s experience.
The online business is there for the taking. Either you take it, or someone else will.
Christina Roche is Business Development Advisor at Bookassist’s Dublin Office.
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So I’m a customer. I’m looking to book a hotel online in Galway. Last time I stayed at “The Green Fingers Hotel” so I’d be happy to go back again to the same hotel. Very friendly staff, and a great breakfast if I remember correctly.
I type the hotel name into Google and hit search, and up comes the results page.
There it is, the hotel website – “Book online at the Green Fingers Galway”, greenfingersgalway.com – right at the top of the Google results page. So I click through to the link. Nice hotel website this, I recognise the photos of the nice rooms, the view. I had a pretty good stay there! Prices seem ok too, still reasonable. I wonder if it’s any cheaper on other sites though, like listings sites? Only takes a few seconds to check on other sites. Back to my results page for a quick scan of my options, maybe read a review or two.
Hang on, the second result on the results page looks like the hotel website too – “Green Fingers Hotel Galway Book Now”, greenfingershotel.com. Similar web address too. So I click through on that link. Nice hotel website this, not the same as the last one though! But the same hotel? But this is the official website surely? But then what was the last one? I mean the photos are the same, even the prices are the same, or close enough. Two fairly legit looking but obviously different websites for the same place? What’s going on here? Multiple personalities?
This is like that scene at the end of The Life of Brian – “I’m Brian. No, I’m Brian! I’m Brian and so’s my wife!”
I really don’t like the look of this at all. They can’t both be “official”. I wonder if one of those sites is spoofing and is up to no good? I wonder if the hotel knows about this? Surely they must check their own Google results from time to time!? They must have agreed to this. Cleverly done though, I’ll give them that, because I have no idea which is actually the official site. They’re both pretty good and pretty representative, though I guess anyone could get photos and logos and run up a website that looks official. But why, I’m thinking, would a hotel have two different websites? Surely at best they’d just send a fraction of customers one way and a fraction the other, it can’t generate more customers! Unless of course one is being marketed well to attract a higher fraction of the existing customers at the expense of the other. But if you can do successful marketing with one site, you could equally have just applied your skills to the other and not bothered with the second site. I can’t see the business sense in this at all, for the hotel anyway.
But wait, this is getting even better - there are adverts there too on the results page, for both website addresses! Now that is hilarious because the hotel is just allowing someone else to bid on their name and drive up their own pay-per-click advertising costs in response. They’re bidding against themselves! An auctioneer’s dream. No wonder pay-per-click can make so much money for the search engines if people allow that to happen. Guess this hotel doesn’t know too much about online marketing. They really should be talking to experts about protecting their brand online for the long haul, because this marketplace is just getting more and more competitive all the time and customers are getting much more savvy.
Anyway, that’s their problem. I don’t have time to be trying to figure this out, and there’s no button on Google for “Will the real Green Fingers please stand up!”. (Mental note, I should patent a “Will the real … please stand up” button before Google thinks of it). Whatever’s going on it doesn’t look too healthy to me, no reason I should take a chance.
So I type “Hotels Galway” into Google and go find somewhere else to stay. Shame, I liked the breakfast at that place. Maybe the next place will be just as good if not better anyway.
PDF - Bookassist opinion on multiple websites and their potential problems
Dr Des O’Mahony is CEO and Founder at Bookassist
The importance of the internet as a tool for consumers wishing to book a hotel has been well documented, with estimates as high as 55% of total booking revenue coming from online bookings and up to 70% of that online revenue coming through the individual property website. But what are the underlying patterns of behaviour that result in an online booking being made and how can a hotel tap into that information to increase their revenue?
Let’s look at the approach of the typical online booker.
The amount of information available to an average internet user is staggering, and none more so than in the online travel industry, which was one of the early innovators in maximising the potential of online revenue generation.
By far the most popular method of research used by potential online bookers is the search engine, dominated by Google, Yahoo & MSN/Live. These search engines are also hugely important in driving direct traffic to the property website. Using the data we make available to Bookassist Trafficbuilder clients via Bookassist’s integration with Google Analytics, we have seen that up to 80% of property website visits originate in a search engine (including paid listings), with the majority of the remainder made up of referrals from directories and other sites, as well as email marketing campaigns.
Research presented by Google UK & Comscore (source: http://www.comscore.com/press/release.asp?press=1991) presents an interesting pattern of search usage by UK consumers, and highlights the opportunities available to website owners throughout the research process.
Key findings include:
• Consumers take an average of 29 days from their first search to making a purchase.
• 45% of consumers make a purchase four weeks or more from the initial search.
• On average they visit 22 different websites while researching their choice.
• They visit the purchase site an average of 2.5 times
• 54% of buyers started with a generic search term such as “hotels in Dublin”.
• The keywords used changed throughout the search phase, with 29% of purchasers who started with a generic search term, ending with a brand specific search term.
Path-to-purchase is therefore not about immediate offer and sale but is a far more complex time-driven process.
The Expanding Information Service
A more recent addition to these search engines has been meta search engines specialising in travel, such as Cheapflights and Travelzoo. The main difference between these two versions of search is that the main search engines such as Google, provide results by crawling the web, storing the information they find, indexing it and then presenting the results to the user based on their search parameters, whereas meta search engines gather their results from other search engines and databases, and present an aggregate of these results to the user, often on a direct comparison basis. While awareness of these meta search engines is still relatively low in Ireland, awareness in the US is high, and Ireland will soon follow suit.
Figure 1. Percent indicating prompted awareness of selected meta-search travel supplier. Findings based on survey of US online adults who traveled or looked for travel services in the past 12 months, n=469. Source: Prophis eResearch September 2006.
The main alternative to search is the use of third-party online intermediaries, such as Expedia.com, which create inventory through various models, including from the Global Distribution System (GDS). This inventory is presented to the user with an option to book through the third party site. As an aid to their users, these sites also present large amounts of information on the listed properties, and according to Expedia itself, 40% of users avail of this information to research their choice, and subsequently book direct with the supplier (Source: http://www.hsmai.org/Events/NewsDetail.cfm?id=4032987)
A third option, which is often neglected, is the recent emergence of Web 2.0 sites, which contain user generated content, such as reviews, blogs, photos, videos and travel advice. The most well known of these is Tripadvisor, but there are thousands of other popular sites where users can swap information and make informed choices based on others recommendations. This has led to a new phenomenon, which is the contrast between “official content” as displayed on the property website and on other third party sites, over which the property has full control, and “unofficial content” on reviews and blogs, over which the property has very little control, but is usually given the opportunity to reply. Until this new development, users had little option but to trust the “official content” as provided by the hotel or a travel agent, but this has now changed, with unbiased reports available with ease.
So, how do these main sources compare in actual usage and how important are the results?
Research provided by PhocusWright (The PhoCusWright Consumer Travel Trends Survey, Ninth Edition, 2007) shows the percentage of consumers who consulted the various online options when deciding on a purchase:
• Search Engines: 64%
• User-Generated Reviews: 47%
• Special Deal or Promotional Web Site: 34%
• Travel Search Engines: 25%
(Note: consumers could select more that one option)
Figure 2 shows the importance of these results in making the final decision.
Figure 2: Note that percents reflect those responding with a 4 or 5 on a 5 point importance scale. Findings based on a August 2008 survey of online US adults who travelled or looked for travel services in past 12 months, n=433. Consumers could select more that one option. Source Prophis eResearch.
Armed with this information on how a typical consumer behaves, what actions are required to maximise your online potential?
1. Search Engines: Take advantage of search engine optimisation and marketing services, such as Bookassist Trafficbuilder or other equivalent services in the industry, to increase your presence in the various stages of search. This can be done through a combination of search engine optimisation and search engine marketing using pay per click ads to target consumers during the decision making process. While it is difficult and expensive to appear on the first page of the results for generic search terms, campaigns can be tailored to work to your strengths and ensure that you appear for other relevant terms with a high search volume.
2. Third Party Online Intermediaries: It is important to maintain a presence on a selected number of sites such as Expedia. Your booking engine provider account manager should be able to advise you on the optimum level of exposure on these sites. Bear in mind that these sites are used for comparison shopping as well as for bookings, so it is important to offer the best rates and deals on your own site, and thereby take full advantage of third party sites for exposure, but direct bookers to your own site for the final transaction.
3. Web 2.0 sites: Take ownership of your online profile, by joining the online conversation. Respond to reviews in Tripadvisor, create your own profile on sites such as Facebook and Myspace, add your own photos and videos to Youtube and Flickr, monitor comments about your property in blogs. Remember that although these sites only generate a small percentage of your websites traffic, they are becoming an increasingly large part of the decision making process.
A careful strategic approach to your entire presence online will quickly make a difference to your bottom line and put you, rather than online intermediaries, in charge of your online revenue generation.
Ciarán Rowe is a senior search engine specialist at Bookassist and heads the Bookassist Traffic Builder search engine optimisation and marketing service for Bookassist Ireland.
The big name third party accommodation channels have served an important role in the online travel arena. In the years when search engines were only beginning (Google started in late ‘98) and hotels did not have the knowledge to market themselves properly online, third party channels were the very necessary middle-man between the online booker and the accommodation provider, facilitating indirect booking. Their generally high commission charges were justified by the delivery of business that otherwise was lost to the hotel.
As direct search moved to dominance, as online bookers became more savvy and in particular as hotels embrace online marketing, the need for customers to use third parties is rapidly diminishing and the opportunity for direct booking between customer to hotel is rapidly rising. Not only can this direct booking model providing better value for the online customer, it is also helping hotels strongly reduce their commission charges while allowing them build their own brand allegiance online to capture repeat business.
Bookassist was the first to push this direct booking model for hotels, since its foundation in 1999, constantly highlighting its growth and its importance as the key booking strategy for hotels. An average of 50% of hotel business is now generated online, and the more of this that comes direct, the better for the hotel.
In this changing environment, third party channels are beginning to recognise this shift in consumer habits which will begin to erode their indirect booking income stream. In recent months, two large third party accommodation channel sites have launched booking services of sorts to allow hotels capture bookings directly on their own websites, and others will surely follow. If anything proves the rising dominance of direct bookings on hotel websites versus indirect bookings on third party channels, it is the launch of these services by third parties. Hotels should recognise the reality in this move.
Typically, the third party offering has taken the form of a button or simple form which the hotel can embed on its website. The customer clicks to book and is taken back to the third party channel to complete the booking.
This is bad news for hotels, and here’s why.
A booking button, form or link-off service to a third party channel is not a direct booking facility. It merely cannibalises the business that has already arrived directly at the hotel and which should be serviced by the hotel. The facility seriously devalues the service presented to the customer in the hotel’s name, leaving the customer with a “passed over” feeling that the hotel would rather not deal with them. Usually, there is no way to continue navigating throughout the hotel website or returning to it with a single click. Customers can be re-directed to third party channel website where offers from other providers are displayed. Hotels will likely find it extremely difficult to request upgrades or new features and the technology will be limited, since this does not represent core business for the third party channel.
A booking button, form or link-off service to a third party channel is not a direct booking strategy. Direct booking is about more than a booking facility, it should be a key strategy to drive an increasing percentage of your online business to the hotel website and as such the booking facility chosen is only a small part of that. What a third party channel cannot and (for obvious reasons) will not do is aid the hotel in building a direct online marketing strategy and in reducing their reliance on high commission third party fees. This is where the long term damage can occur for hotels that do not adopt their own direct booking strategies.
We view this move by third party channels as a strategic move to increase control on the hotels as those hotels become more and more aware of the importance of direct distribution strategies and online marketing, and to placate hotels considering a direct strategy into thinking that their third party channel can provide one.
The fact is that while third parties can and do deliver valuable business to hotels, they are none the less in competition with the hotel website online. Using third party “direct” booking facilities can mean allowing those channels to have full information on the hotel’s inventory, pricing strategies and yield strategies, as well as full access to the hotels customer’s database. Such information could allow a third party channel to assess everything happening on a hotel website in comparison with a hotel’s direct competitors.
Our advice for hotels is that they can still work with third parties on channel distribution, but when it comes to their direct distribution they should partner with a true technology company that understands their challenges and requirements, a company that shares the same goals as the hotels themselves: to build the hotel’s own brand, to handle the customer online with the highest level of service and security, to make hotel websites the primary distribution channel with the lowest commission rate possible and the highest margin for the hotel.
Dr Des O’Mahony is co-founder & Managing Director of Bookassist, Yahya Fetchati is Head of Business and Operations at Bookassist.
By making obvious cutbacks you will only damage your reputation with the people who matter most
Customers’ expectation of price may change in a downturn, but their expectations of service levels don’t drop. Lowering rates may be one response to weakening occupancy but the lower income generated may result in lower service levels which in the longer term can damage your brand - according to a recent article on Caterer Search on the pros and cons of lowering rates: “by making obvious cutbacks you will only damage your reputation with the people who matter most”.
While many strongly advocate reducing rates, there are other avenues to explore.
It’s all about value, not price
In discussions with our hotels, Bookassist has advocated the necessity to look at the mix in what you have on offer, showing more value, rather than across-the-board discounting of price which can damage not only an individual hotel brand but an entire sector. Hotels should “look at added-value options to hold price, such as including breakfast free of charge, and focus on increasing the overall revenue they get from clients during their stay”, according to Caterer Search. Bookassist’s advanced add-ons facility, allowing for upsell directly at the time of booking, is an invaluable tool for this approach to value rather than just price.
For a perspective from the British Hotelier of the Year conference, see: http://www.caterersearch.com/
In this economic climate, it is even more important to know exactly where your marketing money is being spent, what return on investment you are getting, and how you can maximise it.
What is clear is that the medium that is most easily analysed and maximised in terms of return on spend is the internet, specifically direct selling on the internet. Moving budgets now from offline to online is not only smart in terms of watching budgets, but it affords an opportunity to tap previously untried markets, lower costs per acquired booking, and even generate income growth through promotion of a mix of offerings.
The good news is that bookings online are continuing to grow. Bookassist figures across all our markets have shown a growth in the number of bookings year on year. Many current studies are continuing to show a growth in direct online bookings at the hotel website, at the expense of offline and indirect channel bookings. This is probably because the economic climate is causing people to look around more: the simplest way to look around is online, not offline, and the best chance a customer perceives of getting value is directly at the hotel. So hotels need to tap into this marketplace.
Here are some pointers.
1. Don’t cut your marketing budget. You need it now more than ever. But redirect your marketing spend to online now.
2. Get rid of your hunches, suppositions, feelings. You need facts. Don’t make sudden changes, for example switching suppliers because of a perceived better deal or trying completely new advertising approaches. Sudden changes are the result of panic - you need to hold your nerve until you have the facts. You may well lose the position you have in such a switch, rather than building on your position. Perception needs to be replaced by fact leading to informed rather than rash decisions.
3. Concentrate on direct booking. Be careful how you are using third party intermediary sites. They can commoditise your hotel in simple lists based on price, start rating etc which eliminates your unique qualities. They may be sending you lots of business, but these online customers can be yours directly if you adopt a proper direct booking online strategy as outlined below. The margins of third party intermediaries compared to direct booking on your own website means that you are losing 20% to 30% revenue per booking for each booking received from them. This makes no sense in today’s climate and some of that business can certainly be diverted directly to you with proper planning. And above all, ensure that the rate on your own website is always the best rate. Otherwise, you might as well close down your website.
4. Analyse. Analyse. Analyse. Ensure that services such as Google Analytics work for you by tracking all website usage. Have a clear picture of usage patterns on your website before you rush into changes. Use Google Analytics to analyse your online user base, in terms of their origin for example. It may surprise you and alter your strategy. Use a booking system that can integrate directly with Google Analytics Ecommerce, like the Bookassist Booking Engine. With Bookassist’s Ecommerce integration, every single booking is transferred to Google Analytics and linked to the customer’s path through the website and through the booking process. Any single booking can be directly linked to a specific cent spent on a specific pay per click campaign or email marketing campaign. This is very powerful data and shows instantly where your money is being spent most effectively in terms of return on investment measured in actual booking value. It eliminates the hunch and shows you the bare facts. Google Analytics for web usage is great, but it lacks the real meat: full Ecommerce integration goes way beyond web usage and is critical for optimising ROI.
Bookassist’s ECommerce integration with Google Analytics gives valuable strategic information and allows for fine-tuning of online advertising spend resulting in much higher conversion rates, 5.24% in this example from a Dublin hotel.
5. Act on information you glean from Google Analytics and Ecommerce integration. The conversion figures for lookers to bookers are your key indicator. All the visitors in the world are useless to you if they are not converting. Using Ecommerce integration you also get a much deeper insight into conversion in your target segments. For example, with a recent Dublin-based hotel of ours, visitor numbers alone in Google Analytics showed that the vast majority of the website visitors were UK based, with other countries being far down the list. The traditionalist would therefore target the marketing budget at the UK. But the Ecommerce integration showed us that conversion rates for German visitors to the website were a factor of 4 higher than the UK visitors. So targeting spend at the German market and using German language package descriptions in the booking engine resulted in higher bookings online. It was a safer bet. Only Ecommerce integration can give you this kind of analysis. Using this type of analysis has allowed Bookassist marketing teams to drive conversions on pay per click adverts to over 4% in many cases, a massive increase over industry norms.
6. Analyse your web presence holistically. Remember there are two users of your website, firstly the search engines who will analyse and position it based on its content, and secondly the customer who will use it. The customer won’t come if the search engine hasn’t been targeted. So be smart, you have two jobs to do. Invest your budget into ensuring that your website is optimised for search engines AND ensure it is easy to navigate and booking-friendly for customers and never loses an opportunity to convert. Do not waste your budget on rushing to build a new site just to give yourself a fresh look - remember, you see your website every day and customers see it once or twice a year, so fresh is relative. Be sensible about your spend, target improvements for measurable return on investment reasons, not aesthetics.
7. Structure your online pay per click advertising campaigns so that they promote key attractors and differentiators for your property. Advertise your name as a keyword so that customers who search for your name will get your advert. Advertise your location as a keyword, but be as specific as possible to avoid catch all phrases that are expensive like “Ireland”, “Dublin”. Promote unique qualities in your Adwords text. Alter them frequently and track their conversion to tweak their effectiveness.
8. Combat competition online. Search for your hotel name and see who is using your name to capture your customers. If third parties are using your name to capture search results position, then tell them not to. If competitors are using your name to leapfrog above you in search results, then trademark your name and take action to stop it. Adopting this approach will ensure that people searching for your name, those who are already your customers, will see your website first and
9. Use email marketing effectively. It takes time to build a proper (legal) opt-in email and phone list of customers, but the best way to do it is not to abuse the channel - always give something genuinely special and new in an email blast and use a booking service such as Bookassist’s which allows you to embed links in emails that bring people directly to the booking page for that special, not just to the website or to the general booking page. Use Twitter services to remind users of new offers via mobile phone. Think strategically - for example, advertise offers for this coming weekend so that a sense of urgency is created for the customer who feel they must act now or miss their chance. “Offer ends at midnight, unique offer available for this weekend only!”. Sounds familiar? Airlines have been doing this with a lot of success for some time now.
10. Listen to your online customers and correct issues quickly. Remember that over 80% of travel planning is now done online. Even if people are not booking, they are looking. This colours their future choices. Make sure that you are on top of social media sites such as TripAdvisor and others - be registered with them and monitor your property. Make use of your own customer comments on your website, for example availing of Bookassist’s automatic review system where customers who have booked online and stayed at your hotel are given a follow-up opportunity to submit their views. Above all, always respond to online reviews, whether positive or negative, so that potential customers see that you care. We all know that correcting a fault graciously often engenders more loyalty and satisfaction in a customer.
Be aware that the habits that customers are now learning could well become the norm for the future. Why? Because the approach is yielding value for the customer. Shopping around online, doing research online, making price comparisons online, reading reviews, going directly to source to book. These are all things that may have been enhanced by economic necessity, but are likely to stay as the norm as we exit recession.
Hotels that have tackled this climate constructively and strategically will likely emerge stronger and will be well positioned to capitalise on the upswing that will invariably come.
Dr Des O’Mahony is CEO and Founder at Bookassist, the leading technology and online marketing supplier to the hospitality industry.
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