News for the Hospitality Executive
The following article is Max Starkov’s latest contribution to EyeforTravel’s website:
November 29, 2012
Recently we had a professional chat with Ritesh Gupta, a technology writer for EyeforTravel, about deals being offered by OTAs and hotels across various channels. Ritesh is the resident Travel Journalist at EyeforTravel, and can be reached at email@example.com.
Ritesh Gupta [RG]: What do you recommend when it comes to hotel promotions to maximize their visibility and conversion rate?
Max Starkov [MS]: We live in a multi-channel marketing environment. We are dealing with increasingly hyper-interactive travel consumers who switch channels on an hourly basis (e.g. desktop during the day; mobile device during lunch break and after work hours; a tablet when lounging in front of the TV in the evening).
The availability of appealing packages and promotions on the hotel website and the marketing of these offers via every single “tool” in the property’s marketing toolbox are part of best practices in hotel distribution. There’s no doubt that great offers, intriguing packages and special promotions increase the amount of rooms sold. A hotel will see an immediate increase in direct bookings if there are more appealing offers and better promotions compared to previous periods.
Any hotel promotion or special offer should be marketed via a comprehensive multi-channel marketing approach that includes the desktop, mobile and tablet websites, email marketing, SEO, SEM, social media, online media, etc.
RG: How do you think channels are being used today to promote or sell deals? Do you advise same deals across hotel websites, Facebook, OTAs etc.?
MS: In digital marketing the whole is always bigger than the sum of its parts i.e. any hotel promotion or package or special offer has to be promoted via a multi-channel marketing campaign using all digital marketing tools in the direct online channel “toolbox.” You raise an interesting question about cross-channel promotions: direct online channel and the OTA channel.
There is a very simple rule for Direct Online – OTA cross-channel promotions:
Direct=Stays Only Direct: In my view, a direct online channel promotion should be strictly focused on the direct online channel and not shared with the OTAs.
OTA=Means OTA+Direct: If the hotel needs help from the OTAs and decides, for instance, to have a 24-hour sale on Expedia, the property should prepare for the 24-hour sale and launch SIMULTANEOUSLY a multi-channel digital marketing campaign promoting the SAME 24-HOUR SALE in the direct online channel, including:
MS: Hoteliers should be aware of the existence of “The Law of Unintended Channel Share Loss,” which stipulates as follows: “Any booking via a more discounted channel is one less booking for the same hotel via the hotel website, call center, GDS, or OTA (in that order).”
Therefore, the main focus and priority for any hotelier should be to sell as much inventory via the most cost-effective distribution channels that can potentially generate the most bookings, while preserving rate parity and price erosion.
In this age of rate parity, hoteliers must become more innovative in their special offers and promotions, and come up with value-added promotions that bundle the “naked” hotel rate with F&B credits, parking garage credits, event and entertainment tickets, etc. The point here is to create unique and enticing offers, packages and promotions for the hotel website and market those via the direct online channel in a multi-channel campaign fashion. Over time this approach will convince travel consumers that the hotel website is the one and only source of intriguing and meaningful hotel offers and it will become the preferred choice for booking the hotel.
RG: How do you think the industry is leveraging social media to expand the reach of your popular deals?
MS: Social media is not a distribution channel, and it was not designed as a sales platform to sell rooms. Having said that, social media should be part of any property multi-channel marketing campaign, but not used in a “silo” or as a stand-alone channel.
In my view, hoteliers that are still trying to use social media as a distribution channel are the ones trying to find some kind of meaningful ROI to justify their efforts. Smart hoteliers understand that social media is not a distribution channel in hospitality and therefore use a different set of metrics to gauge success. Despite the monumental efforts by many hotel marketers in the past five years to use social media as a “new and revolutionary” distribution channel in hospitality and travel, they all failed miserably. Today the social scene is littered with the abandoned corpses of hotel and other travel-related profiles.
Why? Because a distribution channel is primarily a one-way street: the owner or aggregator of travel inventory/information pushes inventory/information through distribution channels which have been accepted by interested parties such as the traveling public, travel agents, group planners, etc. These distribution channels have been incorporated in travel planning technology and marketing solutions like GDS, travel supplier sites, OTA sites, etc.
Social media is not a one-way street. It is a complex, multi-street maze of peer-to-peer, marketer-consumer and consumer-marketer engagements and relationships. Therefore, in travel and hospitality, social media is a customer engagement channel and a customer service channel, not a distribution channel. Hoteliers should use the same performance indicators they apply to customer service and branding initiatives.
About the Author:
Max Starkov is President & CEO of HeBS Digital, the hospitality industry’s leading full-service digital marketing and direct online channel strategy firm based in New York City (www.HeBSdigital.com).
Mariana Mechoso Safer
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