|MCLEAN, VA (Oct. 20, 2005) – The results are in on the first-ever,
comprehensive study of “Best Practices on Internet Marketing and Distribution
for Resorts,” initiated by the Hospitality Sales & Marketing Association
International’s (HSMAI) Resort Marketing Special Interest Group.
According to the findings, many resorts are still at an early stage
of adoption of Internet marketing; only about one-half of the participating
resorts actively practice search engine optimization and many do not participate
actively in third party online travel agency programs due to a perception
that these sites specialize in rates well below their targets. There
is a corresponding lack of connection between most resort’s distribution
strategy and their revenue management practices.
“It is clear after investigating this topic that when a resort moves
its business from offline to online channels of distribution there is far
more involved than just changing channels of distribution,” states Cindy
Estis Green, director of the study and managing partner of The Estis Group.
“Working with online channels entails operational issues including customer
service and reservations, direct sales, awareness and image campaigns,
direct mail, special promotions, lead generation, and customer relationship
management,” she adds.
The report benchmarked participating resorts in key Internet marketing
metrics such as: total marketing spend as a percentage of total revenue;
marketing efficiency; percentage of electronic channel revenue as a percentage
of total revenue; percentage of e-marketing spend to total revenue; and
direct web revenue per web marketing dollar spent. Based upon these
metrics, participants were categorized based upon their efficiency in marketing
spend and Internet revenue volume. The resulting categories were:
experimenters, champions, novices, and “gotta get out of this box.”
Emerging from the study is a series of eight building blocks that establish
a sound strategy for the 2005 online world. The full report details
each of the topics.
Among the findings are:
Website Planning: setting goals, planning, and designing a website.
Establishing Infrastructure: building the systems to support a website’s
Building Traffic: search engine optimization, pay-per-click advertising,
link strategies, email campaigns and stimulating group opportunities.
Dovetailing with Offline: websites (internal and external) and how
they function without the interaction of sales and rooms operational teams
such as reservation call centers, customer service, revenue management,
and offline marketing.
Third Party Influence: considering third party intermediaries including
wholesalers, search engines, meta-search engines, GDS vendors and affiliate
Closing the Loop with Customers: incorporating customer feedback
regarding service, travel patterns and product preferences in an Internet
Keeping Score: a series of metrics to measure success and failure,
tracking cost/benefit analyses, post-campaign analyses, etc.
Keeping Up with the Joneses: knowing what may be applicable in the
2-5 year time horizon in the areas of new technology, new communication
methods and new distribution channels.
The Internet is a high intensity medium, unlike traditional advertising
undertaken by many resorts. The consumer receives a resort’s message
because they choose to, so they have the potential to be 100% engaged when
they are exposed to an online message. There is a fundamental shift
in the online space from “push” techniques where messages are pushed to
consumers to a “pull” technique in which messages are selected by the consumers.
This change is crucial to understand as a marketer in order to take advantage
of the new opportunities in a marketplace that is consumer-driven, not-supplier
driven. As mobile devices such as MP3 players, PDAs, and cell phones
proliferate, this message is even clearer.
Upon launching a website, each resort effectively enters the global arena.
Some of the global implications include addressing international issues
such as language, relationships with international carriers, the role of
third party intermediaries to penetrate emerging markets, and sourcing
cost-effective means to raise resort awareness in markets with a high level
of online travel research and booking. Portfolio diversity applies
to the customer base for opportunities to smooth seasonal patterns, to
fill group holes and to compensate for markets during periods of economic
Leveling the playing field between chains and independents. There
is a resort’s customer base and then there is the universe of potential
customers who have not yet been exposed to a resort’s name, no matter how
well known the resort may be in its region or even in the United States.
Prior to the Internet’s usage by the consumer market, it was not practical
to consider marketing to the wide audience of those unaware of a single
brand name resort. It is now, not only practical, but would be irresponsible
for a marketing team to miss the opportunity to address this wider market.
The report also generated a number of issues and misconceptions.
Among them are:
This game is not won by getting more bookings through your website, but
by getting more bookings. Online distribution creates tremendously
exciting opportunities to facilitate more revenue. How this new revenue
comes will vary by resort. Each resort can use online utilities to
support its business plan in different ways. Some will gain more
through retention, some will gain more through improved dispersal of information,
some will create a machine that channels bookings through existing call
centers, and some will rely on third parties for incremental business during
need periods. Some will win by higher yields through reductions in
sales and advertising costs. The possibilities and the combinations
for success are extensive.
Optimizing a website when built and then waiting a year to do it again,
not updating keywords regularly and having sites designed by one vendor
and asking another to optimize. Knowing how to program and design
web pages is a totally different expertise than making those web pages
generate high SE rankings. While some do, not all advertising agencies,
friends and/or relatives who may have tremendous graphics and/or computer
skills also have the specialized skills needed for search marketing.
This skill is a core requirement of anyone hired to build a site.
Search engine optimization (SEO) needs to be done daily, weekly and monthly.
Search engine algorithms change frequently and SEO is a specialty that
requires constant research to stay current.
On Building Traffic, many say “most people coming to our site use our resort
name to find it” and “those savvy enough to use the Internet will find
us.” There is $70 billion spent online by Americans for travel-related
products. The use of search engines to do Internet research for hotels
by location only has been cited as being close to 100 times the number
of searches done to find a hotel website directly. The resort industry
should be at the front of the line for this flow of traffic, especially
since it is dominantly consumers looking for leisure travel options.
There are more and more cases of savvy independent hotels that have shifted
their business to 50% through their website and much of it is new customers
who never would have found them except through search engines. It
is not just old customers coming through a new channel, although this will
certainly be a small part of it.
The study was derived from interviews with 13 participating resort companies,
representing a wide range of resort formats, including international hotel
groups, independent mixed use/condo developments, and independent three-
to five-star properties.
On Distribution Channel Management, many resorts have not realized they
can control every channel that delivers business to them. There are
times when a lower rate is still better than no rate and times when it
isn’t. Each channel needs to be tracked accurately so its costs and
its benefits can be weighed and a well thought out revenue management decision
made. Many resorts totally avoid online travel agencies because they
think the rates have to be very low to be sold, and others never restrict
their inventory in them. These agencies have a place. They also do
not only sell lowest rates. Online travel agencies are expanding their
packaging and want a wide variety of properties. Many online wholesalers
also offer retail programs that are no different than the familiar retail
travel agencies well known to resorts. Avoiding them is like avoiding
a category of travel agents. Every resort can have dedicated 800
numbers that only appear online so their reservation office can accurately
track inquiries that come via the web and book via the telephone.
Systems will need to be implemented to link the call to the booking.
The Resort Best Practices Initiative current participants are: The
Broadmoor, The Breakers, The Greenbrier, Hershey Resorts, Hotel El Cid
Mazatlan, Hyatt Hill Country, Outrigger OHANA Hotels and Resorts, Oglebay
Resorts, Sanibel Harbour Resort Hotel & Spa, South Seas Resorts, The
Westin Kierland Resort & Spa, Water Color Inn, and Resort and Wild
HSMAI is an 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, and bringing together customers and
members at 15 annual events, including HSMAI’s Affordable Meetings, HSMAI’s
Meeting Quest shows and the HSMAI World Quest events. Founded in 1927,
HSMAI is an individual membership organization comprising nearly 7,000
members worldwide, with 38 chapters in the Americas region.