This latest summit meeting for hoteliers follows a very successful Bookassist-Google Summit held at Google HQ in Dublin in mid-November last that highlighted best practice in online strategy for hotels in what is a very fast-moving space.
Bookassist’s overall aim is not just to improve direct online business for hotels, but to allow hotels to benchmark themselves against their peers so that routes to improvement become more clear. To this end, we launched our Direct Booking Clinics in March to allow for assessment of a raft of online and offline metrics for hotels resulting in a personalised Direct Booking Health Score .
To date, almost 200 hotels have been benchmarked in our clinics and have taken positive action based on the findings that give measurable improvements to their online business.
It’s the Journey
So what does excellence in hotels look like? What are the critical factors in achieving success? Is it actually worth striving for excellence? These are the concepts being teased out in the Direct Booking Health Score and in the Bookassist-Google summits.
Let’s start with the result. Achieving excellence online is for sure worth it. Understanding online strategy, to the point where you can control and leverage distribution and develop strong direct business, pays in real hard cash in terms of reduced cost of acquisition and higher margins. It also insulates you against an overly-dependent exposure on online travel agents who can change their fees or terms of business at any time, to your detriment.
However, achieving excellence is not a one-off event. It is a continual journey that requires strong effort and ongoing nurturing. What separates excellent hotels from the others is not just how they leverage knowledge and technology for their own advantage, but how they continue to re-educate themselves to stay ahead of the pack to protect and nurture their direct business.
What Does Excellence Look Like?
Let’s run through a few of the key factors that separate the excellent from the ordinary.
1. Excellent hotels know their numbers inside out
They understand them. It is critical that all decision makers in every part of the business know what the breakdown between online and offline business is, what the breakdown between GDS, OTA, travel agent and direct to web is, what the real cost of acquisition per channel is, regardless of the revenue. Without this knowledge shared in your organisation, there is no urgency created to reduce distribution costs and focus on margin improvement. In our experience, a majority of hotel staff have misconceptions about their own distribution figures and costs, and this needs to be fixed.
2. Excellent hotels share information with their online partner
Be that Bookassist or any other online strategy partner, your marketing agency and online technology provider can only operate to the optimum with full information on your overall marketing plans, online and offline promotion plans, advertising campaigns, distribution strategy and, of course, your numbers. This requires coordination at the marketing strategy level that, in our experience, is often missing in hotels. It is a lost opportunity at best and at worst leads to conflicts of approach that affect performance both online and offline. Hotels and their online partners should also challenge each other to strive for improvement and ensure that expected outcomes are reached on both sides.
3. Excellent hotels leverage the best technology
They recognise the need for investment in staff upskilling. Distribution strategies need micro-management that can only be achieved with technology. Rates and availabilities have become dynamic variables that need 24 hour attention. The battle for customer interaction requires relationship management technology to stay on par with or ahead of OTAs. The increasing need to control long-tail business and exposure requires 12-24 month forward planning and management. The plethora of online sales channels means that your web and booking engine must be highly optimised at all times to ensure you can convert, not just optimised once every two years. All of these issues require interconnected technology, and staff who understand how to operate it.
4. Excellent hotels are never complacent
They are continually working to improve on processes and remain on top of the changes in the marketplace and in technology. It is not good enough to get the best technology and implement workplace change as a once-off. This sows the seed for excellence, but to flourish there must be ongoing nurturing, constant feeding with a continual watchful eye on your natural predators.
5. Excellent hotels demonstrate excellence throughout the organisation
Every staff member has their part to play, this is not just a senior management game. For example, the cleaning staff are more responsible for your TripAdvisor ranking than anyone else in most cases. The breakfast chef, or the doorman, is often the last impression left on the guest of what your brand stands for. And the reception staff are those who can encourage every arriving non-direct customer to consider the direct booking path next time by cheerfully explaining the advantages given to direct customers (do you/they actually know what they are?). In excellent hotels, front-line staff understand their influence on the customer and are trained to ensure that influence is a positive one. This is about management and an empowerment culture, sharing the organization goals with the entire team.
6. Excellent hotels know their data and use their data
They use good CRM technology to capture data and good segmentation principles to organise their data. From targeted email marketing to segmentation and personas driving search engine marketing, hotel data usage is invaluable in ensuring differentiation for hotels and helping hotels balance the power of OTAs.
What does excellence bring?
Excellence comes with a cost. Technology, strategy, education, training, marketing spend, continual improvement – none of this is cheap. What’s interesting is that when all these elements work in unison, like a tuned orchestra in flow, they help each other to produce better overall brand recognition, better customer satisfaction and more direct bookings, resulting in a reduction in cost per acquisition and improved profit. However, when done half-heartedly, like randomly-played musical instruments, they fail to compound each other and simply cost money without clear return.
If efforts to improve direct booking are not working for you, the solution is not to reduce budgets and limit your exposure, which will only guarantee failure. The solution is to redouble your efforts, seek help to improve your strategy, and increase your targeted spending to ensure results. Success breeds success and rewards concerted effort, so identifying areas for potential improvement in your strategy is something you should embrace. This is what the Direct Booking Health Score is designed to do.
But more than anything else, excellence brings independence. It reduces reliance on external distributors who view you only as a supplier, not a partner. It ensures that you can take decisions that are in the long term interest of your business.
It’s clear that there are no absolute benchmarks when it comes to online measurement. Each hotel is genuinely unique in terms of its location, feature set and appeal. However in almost any category you care to mention, there are best performers and worst performers that you can gauge your hotel against, and in doing so implement change that puts you on the track towards the best performer position where you can reap the benefits.
Dr Des O’Mahony is CEO and Founder at Bookassist (http://www.bookassist.com), the multi-award-winning technology and digital strategy partner for hotels worldwide, and is a HSMAI “Top 20 Extraordinary Minds” recipient.