Transcript Document

“The New Normal for
Distribution Channel
Management”
Our expert panel
• Carrie Campbell, Director of Lodging, D.K.
Shifflet & Associates
• Richard Chambers, President,
TravelCLICKinteractive
• Bill Peters, Vice President of Reservations,
Outrigger Hotels & Resorts
• Jim Young, Senior Vice President, Global
Distribution, InterContinental Hotels &
Resorts
Today’s agenda
• Quick overview of the new landscape
• Recent findings of consumers trends in
online arena
• Expert panel to comment on those trends
• Summary of recommendations for channel
management
• Q&A from you
Background
• Continuing Internet growth and influence
• Economy recovering
• Intermediaries consolidating/evolving
• Chains taking action
. . . challenges remain!
Internet Hotel – U.S.
Growth
&
Share Mix
Hotel Revenue
’03
‘04
13%
20%
The Internet – U.S.
Growth
&
Consolidation
Consumer Use of the Internet
Half of online travelers
look online
but book offline.
Source: PhoCusWright,2003 Online Traveler Survey
The Economy
An improving economy is a
necessary condition for hospitality
financial improvement:
• Improves occupancy
• Provides negotiation leverage
• Sets the stage for raising ADR
Hospitality Forecast
Total US Occupancy Percent
65
63.4
62.9
63.3
60.8
59.7
60
59.1
59.3
2002
2003
55
1998
1999
2000
Source: Smith Travel Research
2001
2004P
Declining Travel Agent Role
35,000
30,000
25,000
Agency
Revenue 20,000
($b)
15,000
10,000
5,000
0
1993
1995
1997
1999
2001
2003E
GDS Changing Roles
Conglomerate Component vs. Distribution Core
Mega Players in the Game
InterActiveCorp
Expedia
HRN (Hotels.com)
WizCom
Rezoultions/Anasazi
Travelscape
Trust
Thisco
Hotwire
Galileo
Utell
TripAdvisor
Cheap Tickets.com
ASP-PMS
Ticketmaster
Trip.com
TravelWEb.com
Vacation spot.com
RCI
Interval
International
Hotels
Lending Tree
Match.com
Avis/Budget
Biggest Player you may have never heard of
Liberty Media Corporation
•
•
•
•
•
•
•
•
•
•
•
20% of InterActiveCorp
4% AOL Time Warner
3% Cendant Corporation
55% On Command
100% Starz
42% QVC
50% Discovery Communications (Travel Channel included
here)
29% Sky Sports 1,2,3
56% DMX Music
30% the Wireless Group
89% True Position, Inc
The Major Sites
Hotel Companies
Name
Price
Mkt Cap
Choice
$ 45.85
1.54B
Starwood $ 41.46
8.47B
Wyndham $ 1.00
160M
Marriott
$ 44.25 10.12B
3 Hotel Companies
Top 3 “3rd Parties”
3rd Party Web Sites
Name
Price
Mkt Cap
IAC
$ 34.01 23.65B
Travelocity $ 25.12
3.52B
Priceline
$ 27.00
1.04B
20.13 B
28.21 B
Prices as of noon April 2, 2004
Chain Response
• Chain distribution focus:
• Web site
• Direct connect
• Best rate guarantee
• Portal strategy
• Intermediary negotiations
• Property level support:
• Strategy – Pricing & Distribution
• Systems
Key Issues
Intense competition for . . .
• Guest eye share
• Guest allegiance & market share
• Price and inventory control
Creates opportunities for resorts!
“The New Normal for
Distribution Channel
Management”
Carrie Campbell
Lodging Group Director
D.K. Shifflet & Associates, Ltd.
The New Normal:
(Overview)
I.
II.
III.
IV.
We all know distribution has changed
Room Night/Revenue Share
Who Using the Internet?
How Do We Rate?
We All Know Distribution Has Changed:
Hotels
Resorts
Other Website
Chain Website
Trav. Agt.
800#
Direct
Corp Trav.
No Res.
Other
1993
2003
(Total Room Nights)
1993
2003
D.K. Shifflet & Assoc. Ltd.
Share of Nights ≠ Share of Revenue
Hotels
Room Night Share
Direct
800#
Corp Trav.
Chain
Website
Revenue Share
Other
No Res.
Trav. Agt.
Other
Website
D.K. Shifflet & Assoc. Ltd.
Share of Nights ≠ Share of Revenue
Resorts
Room Night Share
Direct
800#
Corp Trav.
Chain
Website
Revenue Share
Other
No Res.
Trav. Agt.
Other
Website
D.K. Shifflet & Assoc. Ltd.
Bargain Hunting #1 Use of Internet
Information
Hotels.com
Orbitz
Expedia
Travelocity
Booking
Priceline
Hotwire
Marriott
Holiday Inn
D.K. Shifflet & Assoc. Ltd.
Who Are These People?
Resort
Other
All Other Res.
Website
Website
Channels
Male
56%
46%
53%
Female
44%
54%
48%
Married
68%
67%
71%
Mean Age
43.5 years 41.7 years
48.0 years
Mean HHI
$90,700
$78,200
$80,200
Att./Grad. College
70%
77%
69%
Emp. Full Time
76%
80%
70%
Prof./Mgr
47%
44%
38%
D.K. Shifflet & Assoc. Ltd.
And Why Should I Care About Them?
Resort
Website
Other
Website
All Other
Res. Channels
Avg. # of Trips
4.3
3.3
3.9
Ave LOS
3.1
3.0
2.8
ADR
$125
$113
$120
Avg. Total Bill
$379
$344
$314
D.K. Shifflet & Assoc. Ltd.
Guests Are Getting What They Pay For…
Total
%9-10 Satisfaction
Resort Website
%9-10 Service
Other Website
%9-10 Value
D.K. Shifflet & Assoc. Ltd.
Summary
• Most Internet room nights at expense of
higher ADR channels
• Guests Through Your Website
– Travel More
– Stay Longer
– Spend More
• Not all guest experiences are equal
– In the long run, that will hurt you
D.K. Shifflet & Assoc. Ltd.
Our expert panel
• Carrie Campbell, Director of Lodging, D.K.
Shifflet & Associates
• Richard Chambers, President,
TravelCLICKinteractive
• Bill Peters, Vice President of Reservations,
Outrigger Hotels & Resorts
• Jim Young, Senior Vice President, Global
Distribution, InterContinental Hotels &
Resorts
Wrap up:
Best Practices for Local
Internet Marketing
Topics
• Functional Website Design
• Search Marketing
• Reservations Processing
Place the booking engine on
the home page
• Conversion rates increase dramatically
with less ‘click-throughs’.
Email Capture on Home Page
• Like the booking engine, acquiring email addresses for future re-marketing
is easier with less clicks
Instill Confidence on the Site
• Best Value or Best rate clear in the
copy
– Keep the online consumer at your site
rather than clicking to another site
Search Marketing
• Bringing customers to your site
– Need to have both organic and pay per
click to optimize marketing plans
Search Marketing
• Market your resort by business unit
– Horizontal Marketing Approach
Horizontal Strategy
www.hotel.com
Accommodations
www.rest.com
Restaurants
www.meetings.com www.golf.com
Meetings
Golf
www.spa.com
Spa
Reservations Processing
• Conversion rates are higher with less
clicks
Traditional Booking Engine
Summary
• Build Best Practices on the site
– Less clicks means more business
• Best Marketing Practices
– Search Engines
– Market by business unit