By Max Starkov and Jason Price, January 2005
In 2005 25% of all revenues in hospitality will be
generated from the Internet (20% in 2004, 15% in 2003). Another 25% of
all hotel bookings will be influenced by the Internet, but done offline
(call center, walk-ins, group bookings, etc). By the end of 2006, the Internet
will contribute over 27% of all hotel bookings (PhoCusWright, CSFB). In
2004, for the first time Internet hotel bookings surpassed GDS hotel bookings.
Are hoteliers ready for this dramatic channel shift? Who owns the customer
in this new environment? How can hoteliers retain customer loyalty when
the competition is just a click away? The Top Ten New Year�s Internet Strategy
Resolutions, presented for a fifth year in a row by Hospitality eBusiness
Strategies (HeBS) provide some of the answers and action steps.
Whether you are a major hotel chain or
hotel management company, independent or branded hotel, you can stay ahead
of your competitors and capture new market share with an effective Internet
Distribution and Marketing Strategy. How smart and proactive hoteliers
utilize the Internet to their own advantage will define the industry winners
and losers in 2005 and over the long term.
As part of your 2005 Internet resolutions,
here are the Top Ten Internet Strategy Resolutions your hotel company should
urgently adopt:
1.
I will make 2005 the �Year of Building Interactive Relationships with my
Customers�. I know that today�s multi-channel marketing model requires
interactive customer relationships to be established and maintained across
all channels. In this new online environment I don�t want just to provide
the guest services, I would like to �own� the customer, and not allow the
online intermediaries to own my customers. I will make it my mission this
year to build mutually beneficial interactive relationships with my customers
in order to increase repeat business, boost revenues, and retain loyalty.
2.
I will make BrandBuilding
on the Web the focus of the marketing efforts of my hotel company. I know
that over 75% of North Americans research travel online. The multi-channel
marketing environment my hotel operates in requires a single brand image
to be communicated across all channels. I understand that a branding interaction
occurs anytime an Internet user lands on my website or sees my listing
on a search engine.
I also know that this branding interaction can be:
positive (brand-building) or negative (brand-eroding) and I will do everything
possible to build a positive brand presence and recognition on the Web.
3.
I will make Direct-to Consumer Online Distribution the centerpiece of my
Internet strategy, because I know the Internet is the ultimate �Direct
Distribution Medium� and it will provide my hotel company with long-term
competitive advantages and lessen my dependence on intermediaries, discounters
and traditional channels that are about to become obsolete. I will employ
best practices in all Direct Channel strategies such as rate parity across
all channels, best Internet rate guarantee, website optimization, search
engine marketing, email and pay-per-click marketing, link creation, loyalty
and retention programs, and trust building to encourage, entice, and convert
lookers into bookers on my own website.
4.
I will re-evaluate my exposure in the Indirect Online Distribution Channel.
I will maintain strict rate parity across all marketing channels. I will
preserve rate integrity and avoid brand erosion in today�s multi-channel
marketing environment. I will stop being taken advantage of by the Web-proficient
online intermediaries. I know that online intermediaries need me more than
I need them, as bookings for my hotel generate margins of $50 to $75 or
more for the intermediaries as opposed to margins of $5-$10 in the other
travel sectors (for car rentals and airline tickets). I will limit my exposure
in the Indirect Channel to only a selected number of hotel-friendlier intermediaries
and will make it my goal to reach the leaders in the industry who already
enjoy a �controlled exposure� of 25% or less in the Indirect Online Channel.
5.
I will adopt an ongoing Website Optimization Strategy and turn it into
a top priority. I know that the hotel website has become the �first point
of contact� with the overwhelming majority of hotel customers and I don�t
want a visit to my hotel website to turn out to be the �last point of contact�
with this potential customer. By adopting a Comprehensive Website Optimization
Strategy I will aim to enhance my hotel website�s user-friendliness, search
engine-friendliness and travel booker-friendliness. This strategy will
deal with the issues important for turning lookers into bookers (conversion
rates), improving my hotel ranking on search engines, and enhancing the
trust-building aspects of the site.
6.
I will deploy a robust Internet Marketing Strategy, and turn marketing
of my optimized hotel website into a top priority. I understand that the
Web is a key point of entry to establish interactive relationships with
my customers and to capture new lucrative markets via eMarketing initiatives
like online branding, email marketing, pay-per-click marketing, customer
segmentation and link creation strategies, etc. I know the right PPC strategy
will help me capture new markets and customer segments, and allow me to
associate my hotel with local events and happenings, and market to unique
and specialized audiences. I also know that email marketing is a crucial
component of my direct distribution channel and can create direct revenue
opportunities with past, present, and future customers. I also understand
that the Internet is all about �multiple entry points� to my hotel product
and I will aim to position my hotel website at all "points of contact"
with potential Internet travel bookers via link creation and other Internet
exposure enhancing initiatives.
7.
I will perform a comprehensive Search Engine Marketing Strategy because
I know that search engines are an essential component of the direct online
distribution strategy. I know that 80% of overall website visits begin
in a search engine or a directory service (Forrester). I know that hotel
planning is destination sensitive so by having a destination focused search
engine strategy, the search engines will be able to catalog and index my
hotel site more effectively and drive more business directly to the property
website. I will take advantage of all three main aspects of search engine
marketing: Organic Listings, Paid Inclusions, and Keyword Search Marketing
(PPC)
8.
I will carry out a comprehensive Destination Web Strategy to leverage the
popularity of my destination for my hotel's advantage, by making my hotel
or cluster of hotels the �hero� of the destination, and in the same time
turning my hotel website into a valuable destination resource for my online
customers and increasing value and relevance for the search engines. I
will identify patterns of consumer purchasing habits for my particular
destination and perform a robust destination Web strategy and destination-focused
search engine strategy.
9.
I will use competitive intelligence to constantly evaluate how my comp
set is utilizing the Internet and the Direct vs. Indirect Online Channels,
and establish a benchmark on how I am performing in Internet distribution
and marketing. I will subscribe to an Internet Distribution Monitor Report�the
competitive intelligence that will allow me to determine and monitor how
I measure up against my competitors on direct vs. indirect channel utilization.
This competitive intelligence will help me identify weaknesses and provide
recommendations and action steps, and assure that I stay ahead of the competition.
10.
To achieve all of the above, I will acquire the knowledge by partnering
with leading hospitality experts in Internet distribution and marketing
strategies. I understand the Internet has become the most important revenue
channel and will no longer rely on biased advice from PR, interactive agencies,
web designers or outsourcing this vital core competence to vendors that
lack expertise and industry depth. From this day forward I am in control.
I will seek advice from an experienced Internet distribution and marketing
hospitality consultancy to help me navigate the Internet and utilize the
Direct Online Channel to its fullest potential. From experts who can teach
me and my staff best practices and provide crucial professional development,
as well as guide my hotel company�s direct Internet distribution and marketing
strategies, online brand building strategies, e-CRM, website optimization
and search engine marketing strategies.
Max Starkov
Jason Price
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About the Authors:
Max Starkov is Chief eBusiness Strategist
and Jason Price is VP of eMarketing at Hospitality eBusiness Strategies
(HeBS), the industry�s leading Internet strategy consulting firm for the
hospitality vertical, based in New York City
(www.hospitalityebusiness.com).
HeBS specializes in helping hoteliers build their direct-to-consumer online
distribution and eMarketing strategy, and regain control of their online
brand and price integrity. The firm has integrated the latest research
and
developments in eCRM, eMarketing and eDistribution into
a comprehensive set of Internet-based consulting products and services
designed to help hotels drastically increase Internet revenues, occupancy
rates, open new markets, attract more affluent customers and reduce costs
by utilizing the Internet to its fullest potential. The firm brings a unique
perspective in the hospitality industry gained through working with over
200 hospitality companies worldwide: major brands, independent hotels,
resorts, casinos, CVBs and hotel management companies.
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