News for the Hospitality Executive
Travel is Changing … What Will Hotels Do to Keep-Up?
By: Neil Salerno, April 2009
The bursting of the economic bubble altered why and when people travel and has intensified the way they choose where to stay. But, fortunately, a few things haven't changed. Travel has slowed, but it hasn't stopped. Location and perceived value are still the most important criteria in the hotel selection process and reducing rates is still a terrible idea and does not create new business.. None-the-less, hotels will need to make some adjustments to keep-up with consumer travel changes.
People will still travel for a variety of reasons; business, celebration, planning, education, and a whole selection of social reasons like weddings, attractions, gambling, sports, etc. No, sorry, they don't travel just to stay in one of your gorgeous rooms and experience your unrivaled service. People travel to get somewhere and/or to experience something; choosing a hotel is almost always secondary and rarely a "reason" for travel.
Location and Value
I believe that keeping-up will require a greater emphasis on the hotel's location and perceived value. Hoteliers will finally realize that people travel to get to a particular location and then, with few exceptions, choose a hotel based upon the best-value deal within that location. Hoteliers will ultimately understand that rate alone doesn't sell rooms, no matter how low; what one gets for that rate is how we determine "value". Perceived value sells rooms, not rates.
Hoteliers will learn the art of prioritizing sales and marketing tactics. I encourage hotels to resist the impulse to reduce sales and marketing expenses during this recession, but, if you absolutely must, choose wisely.
Hotels will need to use a targeted rifle-shot approach to capture a larger piece of a pie which is now measurably smaller. Stealing business is fair-game.
More Competition Than Ever Before
There will be a further blending of business segments; more hotels will be targeting business within new market segments in order to capture additional revenue. Many hotels will be expanding their competition sets to explore and capture new business that was not in their original 2009 business plan.
Keeping-up will certainly include an awakening that the Internet and other forms of electronic marketing provide a larger and faster return-on-investment than most other forms of sales and marketing. This realization will include the understanding that simply having a hotel website is no longer enough; especially since so many of them don't work very well and are not marketed.
A Huge Marketplace
I won't bore you with the latest Internet statistics, but it should be sufficient to understand that more than 70% of travelers research hotels on the Internet prior to making a reservation. If that doesn't convince you, then nothing will. The proliferation of hand-held Internet access devices, like Sony's iPhone, is bound to increase traffic measurably by allowing people to see your website on the move.
Keeping-up will require hoteliers to understand that their hotel website should be a living, breathing sales piece, constantly changing and evolving. Website optimization and site promotion will be principle tools to tap into a greater share of the world-wide marketplace. Hoteliers will use their websites to introduce and promote packages, local attractions and events, spas, golf, and many other local activities; giving travelers even more reasons to visit the area.
TripAdvisor has taught all of us the great value of guest comments and the huge numbers of travelers who rely upon them. Hoteliers will learn that an RSS feed from TripAdvisor along with posted guest comments on the site, satisfies an important traveler need. Your past guests can become one of your website's best sales tools; stop making people leave your site to check-out what guests think of your hotel.
Hoteliers will realize that every page on a hotel site is a potential landing page for search results and has to be designed for that purpose. Website designers will realize that keyword-rich text content is most important to the search process. Franchised hotels will realize that they cannot continue to rely solely upon the franchise website; they need their own site too.
Smart hoteliers will work to create partnerships with the "reasons" why people visit the area; attractions and events, city or area promotions, and room generating companies. Hoteliers will learn to think bigger, beyond the four corners of their own buildings. Hotels and airlines must do more to join the efforts of people in their communities to promote travel to the area. The Internet is a perfect vehicle to get this done, but it will require more cooperation and collaboration.
Third-Party Travel Aggregators (Again)
It's time for hoteliers to finally understand the benefits of working with third-party travel sites. Not long ago, the press was deluged with articles gleefully claiming that supplier sites were out-producing, or gaining ground, on third-party sites. Who cares? As long as T/A's exist, they will claim a portion of the travel market; working with them to get your fair share of their business can only be a win-win situation. It's business you wouldn't get on your own.
Travel is changing. There's a lot of talk about average rates dropping in many markets, but don't kid yourself, it's all about value. Packaging is a wonderful way to add to perceived value without sacrificing your rate positioning in the marketplace. Getting more for less is pretty much a human concept. There is still a lot of business out there; we'll just have to work smarter to get it.
|Also See:||Choice Hotels Creates Application for Apple's Internet Connected iPhone; First Global App from a Hotel Company / March 2009|