Transcript Hotel E-Commerce & Internet Marketing

Hotel E-Commerce
2011 Asset
Manager Update
Garrett P. Ross
2011 Student Competition
Presentation Outline
1. The Internet: a “growth channel” for
hoteliers
2. Direct: branded/stand-alone websites
1.
2.
3.
What’s new with Google?
Website Design
Social Media
3. Indirect
1.
2.
Online Travel Agencies (OTAs)
We-Commerce
4. What does this mean in terms of ROI?
The Internet: A Growth Channel for Hoteliers
The Internet: A “Growth Channel”
GDS = Global Distribution System
Source: HVS
The Internet: A “Growth Channel”
Source: HVS
The Internet: A “Growth Channel”
Source: HVS
The Internet: A “Growth Channel”
Where do we go from here?... Focus on:
• ROI-centric online marketing campaigns
• Solidifying brand presence on the web
• Establishing social media marketing with a
plan of action
• Remember, the customer begins to plan
their trip with Google…
Direct Marketing
Direct Online Channel
Direct = branded or stand-alone property website
Why is this segment so important?...
“In 2009, 71.4% of the online bookings came from
the direct online channel (i.e. the major hotel
brands own websites), while 28.6% come from
the indirect online channel (the Online Travel
Agencies-OTAs).” (HVS)
Search Engine Optimization
What should we do?... Remember Google!
1.
Search Engine Optimization (SEO)
– Before discussing website ROI, proper SEO must be in place to
ensure the website is high-ranking in search results.
Produced for the HAMA 2011 Student Competition by Garrett Ross (Michigan State University)
What’s New with Google?
“According to Google, search replaced OTAs as
the #1 typically used resource for travel
planning in the spring of 2009 and continues to
increase in importance. 64% of personal leisure
travelers and 65% of business travelers use
search engines to begin their travel planning.”
(HVS)
In response, Google has recently enhanced their
hotel search function within Google Maps…
Google Maps Hotel Search
Pay-Per-Click strategy ($.50 - $2.00)
Additional fee if booked, based on amount paid
In the future…
Rates from direct sites to be included
Pay-Per-Action: fee only upon booking
Website Design
Tips:
1. Download speed is crucial...
make sure your site is performing
efficiently.
2. Focus on conversion…
prioritize information to make your site userfriendly.
3. Include a wide variety of high quality photos…
promote the strong points without creating false
expectations.
Social Media
What is it?
Ans: Internet and mobile technologies that turn
communication into interactive dialogue.
FIRST STEP= Create a Strategy…
Having no social media presence is better than
leaving
your content unmanaged.
Strategy Examples:
- Increase ratings
- Engage guests
- Community awareness
- Drive sales
Mobile Compatibility
4. Optimize your site for mobile devices…
Website traffic from
smart phones and
other devices is rapidly
increasing, and
hoteliers MUST adapt
to capture this new
source of business.
Offer mobile-specific
discounts and connect
with location based
services such as
Foursquare or
Facebook Places.
Social Media: Where do I start?
Facebook is known as the most effective and versatile platform.
- Create a Facebook Business Fan Page
- using a normal profile page may violate Facebook rules
- Assign an existing employee as the media manager
- Must have excellent interpersonal skills
- Ensure that they can convey your message appropriately
- Monitor their time spent vs. outcomes
Social Media: Facebook
Hotel Page Example…. Mix social dialogue with sales
initiatives.
Social
Business $$
Facebook Tips
1. Treat your Facebook “Likers” like an artist treats their fans. That is, realize they make
you important and therefore you need to make them important. Special treatments
etc. when they arrive at the hotel is a minimum.
2. Keep your Facebook page as personal as you can. This is an information
communication channel to friends. Try to involve them as much as you can.
3. Find out what people want to know about the hotel and give them more of that. It’s
not about what you “think” is important; you may be totally off the mark. Listen to
them and your page will be a success.
4. Use all the media of Facebook, write articles, post photo albums etc.
5. Treat every post like a “news story;” don’t give it all at once. Give it to them bit by bit
and maximize the yield from your stories.
Tips from Martin Soler - Vice President, World Independent Hotel
Promotion
Opened Paris’ Seven Hotel using a Facebook–only PR strategy
YouTube
- Mix professional videos with homemade footage.
- Website and Facebook Page should link to YouTube.
- Show viewers the “personality” of your hotel… showcase your best
assets.
What Are People Saying?
Google.com/RealTime
Search real-time status updates, including Twitter, to see what people
are saying about your hotel.
Web Presence Re-Vamp: HVS Case Study
In-Direct Marketing
Online Travel Agencies (OTA’s)
JupiterResearch estimates that $128 billion in travel
will be sold online in the United States in 2011
Site
Expedia
Hotels.com
Travelocity
Priceline
Orbitz
CheapTickets
Hotwire
Market Share
30%
28
16
11
6
6
3
Source: PhocusWright-2010
Online Travel Agencies (OTA’s)
“Hotel Cocaine”
#1 Rule: Focus on driving bookings to your own site…
- Decrease commission costs and increase your negotiating power.
- Promote your “guaranteed rate” and cancellation policies if they are better
than OTA’s.
Set a goal…
aim to achieve no more than 10% of occupancy from
OTA’s.
Online Travel Agencies (OTA’s)
Forecast, Forecast, Forecast…
- Don’t follow a strict distribution structure.
- Reduce reliance on OTA’s when high demand is expected.
- When occupancy is expected to dip, allow OTA’s to package
rooms to conceal the reduced rate.
Practice rate and content parity across channels…
- Avoid OTA discounting wars.
- Ensure the customer that they are getting the best rate.
http://madiganpratt.com/Calculator/
Online Travel Agencies (OTA’s)
Presence on OTA’s is still important…
 After studying 2,000 IHG.com bookings,
Cornell University’s Chris Anderson found:
• Approximately 10% of consumers went to IHG.com directly. The other 90% first
conducted a search on an engine such as Google, a travel site or an OTA.
• Roughly 75% shopped on an OTA site before booking on IHG.com.
• The average person who booked at IHG.com spent about an hour on an OTA site.
• Of all OTA site visits prior to booking at IHG.com, approximately 75% of traffic was
conducted on Expedia.com or an affiliate website (e.g. Hotels.com, Hotwire.com).
 This also demonstrates the importance of the branded/independent
website booking experience.
“We- Commerce”
• Offer flash sales for luxury hotels, typically 50-70% discount to
“members-only” consumer base… however anyone can
become a member.
• Bring in new customers and control a relatively small amount
of inventory.
• Unfortunately, this may create a negative signaling effect.
Consumers will always think there is a cheaper rate to be
found which deteriorates luxury ADR and diminishes
consumer impression of direct hotel website rates.
“We- Commerce”
“We- Commerce”
Why are these sites so successful?
• 1. Value – Provide an incredible value and consumers
will line up around the block.
• 2. Scarcity – Nothing gets people talking like
something they can’t get their hands on.
• 3. Exclusivity – Exclusivity is the velvet rope of social
media: everyone wants to be special enough to be on
the right side of it.
• 4. Status – Nobody wants to be anonymous. Our
personal value is derived from status, and the more
public it is the better. The key to status is everyone
wants to share it, especially if you make it easy to
highlight what they know or have accomplished.
Source: Brian Cavoli – BzzAgent Blog
Conclusion
Conclusion
“RACK” Rate
“WEB” Rate
“BEST” Rate
Offline Operations
DotCom Era
Electronic Distribution
Offline Channels
-Property
-CRO
-T/A
-Wholesalers
Online Channels
-IDS (OTA)
-GDS
-CRS
-Web-direct
Strategy:
- Hold to Rates
- Infrequent
Discounting
Strategy:
- Variable Rates
- Frequent
Discounting
Online Channels
-Web-direct
-CRS
-GDS
-IDS (OTA)
-DSP
-Extranet (alt DSP)
Strategy:
- Stabilized Rates
- Revenue
Management
Offline Operations
Online Operations
Integrated Operations
Conclusion
Mode(s)
1985
1995
2005
2015
PMS/CRO
95%
70%
10%
5%
CRS
0
10
15
10
GDS
5
20
15
15
IDS
0
0
15
15
P/Website
0
0
45
55
Source: John Cahill, Affinia Hotels NYC, Emeritus
Bookings
2006
2007
2008
2009
2010
Hotel
Websites:
56%
54%
54%
54%
60%
OTA
Agencies:
44%
46%
46%
46%
40%
Conclusion
Key Points:
All evidence indicates branded/independent website
bookings are becoming more popular…
- Focus on solidifying your online presence.
- Embrace SEO… make your page appear on the front
page of search listings.
- Ensure that you are well connected with Google Maps
hotel
search function.
- Increase your investment in website design with focus
on
conversion.
- Execute a social media campaign with a clear strategy.
- Reduce reliance on OTA’s… excessive fees cut into your ROI
Thank You!
Acknowledgments:
Dr. AJ Singh
The School of Hospitality Business
Associate Professor: International Lodging, Finance, and Real Estate
Dr. Michael Kasavana
The School of Hospitality Business
NAMA Endowed Professor, CHTP