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Executives at HSMAI Hotel Internet Marketing Strategy Conference Urge Partnerships Between Hoteliers
and Third Party Intermediaries, Search Engines;
Support Best Price Guarantees on Brand Web Sites
.
MCLEAN, VA (April 29, 2004) – Strategic alliances and partnerships between hoteliers and third party intermediaries and search engines were suggested by hotel industry executives during The Hospitality Sales & Marketing Association International’s (HSMAI) second Hotel Internet Marketing Strategy Conference.

At the same time, conference participants agreed that hotels should protect themselves by offering “Best Price Guarantees” through their brand Web sites.

Adding fuel to this hot-button subject, HSMAI and Smith Travel Research released results of the first-ever Internet marketing metrics survey, revealing that hotel brand Web sites drive the majority of Internet business for the 34 hotel chains that participated in the study.

The event, titled “Balancing Defensive and Offensive Online Marketing Strategies,” took place in New York City last week, leaving hospitality professionals with valuable insight into top executive strategies and a more defined direction of the future of Internet marketing in this exciting industry. In each of the interactive sessions during the event, an impressive, versatile line-up of panelists held discussions highlighting some of today’s hottest industry topics.

The conference’s opening keynote featured some of the most prominent executives in the hospitality industry. The moderator of the CEO panel discussion was Henry H. Harteveldt, vice president, Travel Research, Forrester Research, and the panelists were: Jay Witzel, president and CEO, Carlson Hotels Worldwide; Thomas J. Corcoran, Jr., president and CEO, FelCor Lodging Trust; and Thomas W. LaTour, Chairman & CEO, Kimpton Hotels & Restaurants Group Incorporated. The topic of the discussion was one of the biggest concerns of the industry right now – an insight into the hoteliers’ view and relationship with intermediaries. Some of the key viewpoints that were aired include:
 

Although the Internet has helped all of the brands represented in the panel gain visibility, the CEOs agreed that the relationship between intermediaries and hoteliers is currently confusing to customers, who often think that third party organization Web sites represent the hotel brands. Going forward, they all agreed, that the two sides will have to form enterprise level relationships or strategic alliances, forming partnerships that will equally impact both parties in a positive way. 
LaTour clearly recognized intermediaries for bringing awareness to the Kimpton brand. “I would like to thank third party organizations for introducing our brand to new customers,” LaTour expressed. “Once they experience what our brand has to offer, I am certain that these customers will stay with us in each of their future travels,” he concluded. Cash rebates, Web site optimization and developing an “above brand status” with guests are some of the ways LaTour is keeping the customers initially provided to Kimpton by intermediaries.
When asked if the CEOs are planning to evaluate third party organizations in the same capacity as they evaluate wholesalers and tour operators in the future, the panelists disagreed. “We are looking at all intermediaries equally,” claimed Witzel. “The end result will be a more interrelated industry, and a benefit to all [parties],” he added. Corcoran disagreed, claiming that they view the Internet as a “direct retail competitor,” and that it will not be looked at in the same capacity as tour operators will.

The second group of panelists featured a mixture of brand, intermediary and search engine industry leaders discussing how current online marketing techniques can be leveraged to add value to the consumer and promote the brand to increase revenue. With Harteveldt continuing as the moderator, the panelists included: Sarah Jellen, Expedia; Jane Butler, Google; Jens Thraenhart, Fairmont Hotels & Resorts; and Brian Barth, SideStep. This session featured the following highlights:
 

Jellen explained how Web sites like Expedia focus on providing consumers with a number of choices for them to feel confident in their decision.
Barth urged hoteliers to provide enough content through the Internet in order to clearly define the value of the brand and property. “This way, the consumer’s decision is not only based on price, but on the experience they will have at your property,” he explained. 
Jens Thraenhart revealed that the consumer’s choice of property begins on the destination level. It is very important to have a complex search engine marketing strategy because there is a general assumption that if you are not represented in these Web sites, then you might not be in the consideration set. 

The next session featured defensive strategies for protecting hotel company brands. Bill Carroll, Ph.D., visiting assistant professor, School of Hotel Administration, Cornell University was the moderator, and the panelists consisted of the following industry professionals: Gino Giovannelli, Carlson Companies; Euan Mitchell, Thistle Hotels; Jim Zito, Affinia Hospitality; and DJ Vallauri, Prime Hospitality. Highlights of this session included:
 

According to Giovannelli, the best defense that his company took was in hiring an outside agency to clearly define the company’s vulnerabilities as they pertain to the Internet, and advise them how each can and should be attacked.
Vallauri revealed that Prime Hospitality has taken a corporate position – they will only go after the sites that present a clear threat for them. They monitor their trademark through reporting and start the process by sending out “cease and desist” letters. In other words “make them aware that you are aware.”
Panelists agreed that hoteliers should be in a position to offer a “best price guarantee” through their branded Web site.
A discussion was also held regarding independent hotels that don’t have the means to hire outside agencies to defend their brand. Panelists agreed that independent hotels need to join associations that will pull their resources together in order for them not to feel threatened.

Henry Harteveldt presented the trends in Search Marketing and Online Trademark Protection, reminding the audience that hotels used to be operations-focused, while today marketing and distribution is leading the business. “Hoteliers must find a way of promoting the value of the experience as it relates to your property,” Harteveldt advised. “Your prices should be the lowest available, but should also be present on third party Web sites,” he concluded.

During the conference’s final panel discussion, offensive strategies of brand protection were featured. Susan Black, partner, Black & Wright Group, led the discussions of the following panelists: Mara Hannula, Marriott International; Michael Hayward, Four Seasons Hotels & Resorts; Ashwin Kamlani, Sol Melia Hotels & Resorts; and Emily Schubert, Travelocity.
 

Hayward suggested search engine optimization as their most successful strategy. “As the Internet is ever-changing, it is important that this strategy is more short term rather than long-term,” Hayward exclaimed. “We are looking at a one-year rather than a five-year plan.”
Schubert considered day-to-day analysis on Internet searches as an important tool in order to have a clear understanding of what key words and phrases work best for different properties.
All panelists agreed that pop-ups could be considered annoying to consumers and could cause them to abandon the brand Web site completely. Banner ads, it also was concluded, are not effective unless your brand only targets a customer based on a low price point.
Kamlani advised how having an information-rich Web site has been very effective in enticing customers. “You have to be careful, however, in making sure that you provide Web site visitors with information that pertains only to the destination they are interested in,” Kamlani suggests. “If someone is interested in a Caribbean getaway, for example, trying to entice them with promotions in properties located in South Africa might have a negative effect on the brand,” he added. 

To end the day’s presentations, the first-ever hotel Internet marketing metrics survey, by HSMAI and Smith Travel Research was presented by Robert A. Gilbert, CHME, CHA, president and & CEO of HSMAI. A total of 34 branded hotel chains, representing nearly 1.2 million rooms, participated in the survey, which reviewed 2002 data against 2003 results of all online reservations by brands, third party sites and GDS sites. Highlights of the preliminary findings are as follows:

  • Brand.com (hotel branded Web sites) drives Internet business with 75% of the volume
  • Brand.com reservations increased 32.5% in 2003 over 2002 to 14.8 million
  • InterActive Corp, with Expedia, Hotels.com and Hotwire, combined market-share makes up 11% of the total reservation volume
  • Total third party share of online reservations shifted from 23% to 25% from 2002 to 2003. This two-point shift represents 4.9 million reservations
  • Amadeus had the largest gain among the GDS, but Sabre still rules with 50+ % of GDS volume
  • Brand.com sites produce the highest ADR, but was flat year over year
  • Third party sites’ ADRs increased slightly from 2002 to 2003
The second HSMAI Hotel Internet Marketing Strategy Conference, timed to coincide with the Travel Commerce Conference & Expo, proved to be yet another valuable industry event, with an interactive series of intensive sessions and networking receptions that clearly addressed today’s trends and issues in internet marketing in hospitality.

Development of the Hotel Internet Marketing Strategy Conference and the metrics survey were overseen by the Hotel Internet Marketing Committee, which was organized in 2003 by HSMAI. The committee is now expanding to other industry segments, including cruise Internet marketing, with a committee chaired by Gino Giovannelli, vice president, e-Business Solutions, Carlson Companies.

These and other committees to be developed have oversight from a new HSMAI Travel Internet Marketing Advisory Board, which is chaired by Jens Thraenhart, director of Internet strategy, Fairmont Hotels & Resorts. Thraenhart is also founder and co-chair of the Hotel Internet Marketing Committee.

The advisory board will include the chairs of each committee plus leading industry consultants and thought leaders on Internet marketing.

The mission of the advisory board is to increase awareness of issues, opportunities and trends as it relates to Internet marketing and distribution in the travel and hospitality industry and to develop and recommend standards and ethical guidelines for the Internet as a travel and hospitality marketing medium.

For more information, please visit www.hotelinternetmarketing.org.

HSMAI is an international organization of sales and marketing professionals representing all segments of the hospitality industry.  With a strong focus on education, HSMAI has become the industry champion in identifying and communicating trends in the hospitality industry, while operating as a leading voice for both hospitality and sales and marketing management disciplines.  Founded in 1927, HSMAI is an individual membership organization comprising nearly 7,000 members from 35 countries and 60 chapters worldwide.

 

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Contact:
HSMAI
8201 Greensboro Drive, Suite 300
McLean, VA 22102
phone (703) 610-9024
www.hsmai.org
Also See Hotel Branded Web Sites Capture 75% of Internet Reservations, Third Party and GDS Sites Share the Remaining 25% / HSMAI and Smith Travel Research Survey / April 2004
HSMAI Internet Marketing Committee Formed; Hotel Company Internet Executives Unite to Increase Awareness of Issues and Practices Relating to Internet Marketing / Aug 2003


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