Exploiting the Path-To-Purchase Online to Grow your Revenue Stream
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.