By Max Starkov and Jason Price, January 2007
This year at least a third of all hotel bookings will be generated from
the Internet (29% in 2006, 25% in 2005). Another third of all hotel bookings
will be influenced by the Internet, but done offline (call center, walk-ins,
group bookings, etc). By the end of 2010, over 45% of all hotel bookings
will be completed online (Merrill Lynch). Are hoteliers taking full advantage
of this dramatic channel shift? Has the shift increased commoditization
of the hotel product? Is there such a thing as customer loyalty in this
environment? How can the hotel increase its direct online market share?
What are some Consumer Generated Media formats and initiatives to consider,
develop and implement? Is there more hoteliers can do to compete and succeed?
The 2007 Top Ten New Year�s Internet Marketing Strategy Resolutions, presented
by Hospitality eBusiness Strategies (HeBS) for the seventh year in a row
provides some of the answers and action steps.
Whether you are a major hotel chain or hotel management company, independent
or franchised hotel or resort, you can stay ahead of your competitors and
capture new market share with an effective Internet Distribution and Marketing
Strategy. Smart and proactive hoteliers who utilize the Internet to their
own advantage will define the industry winners and losers in 2007 and over
the long term.
Here are the Top Ten Internet Marketing Resolutions your hotel company
should urgently adopt in 2007:
1. I will make 2007 the �Year of Mastering Internet
Marketing.� I know that only a comprehensive Internet marketing
strategy can significantly increase my direct online sales and shift bookings
from more expensive distribution channels to the least expensive channel�my
hotel website. I understand that a robust Internet marketing strategy consists
of many aspects, such as website re-design and optimization, customer segmentation,
eCRM, strategic linking, email and online sponsorships, search marketing
strategies, and consumer generated media (CGM) initiatives, all of which
are fundamental to growing my direct online channel. I will do my
utmost to master all of these Internet marketing formats and initiatives.
2. I will re-focus my hotel product offering and marketing
on the value side of the Value vs. Price Equation. When designing my
hotel marketing strategy, I will create unique hotel offers based on unique
product attributes. I will stop competing on price only. I know that I
will never be able to attract and retain more sophisticated travel shoppers
and more affluent customers if I compete on price alone. I will create
distinctive product offerings designed to provide a unique value proposition
to my customers, such as suite specials and romantic getaways to boost
sales of my suites and hotel packages, including family packages, weekend
getaways, museum packages, seasonal packages, golf packages, and spa packages,
to name a few.
3. I will develop a comprehensive De-Commoditization Strategy
to provide a unique value proposition to my customers. I understand
that the third-party online intermediaries have been responsible to a great
extent for the commoditization of the hotel product and services. I will
work hard against any further commoditization of my hotel product and services.
I will identify unique aspects of my hotel product and destination and
develop a differentiated approach to my key customer segments. I will create
unique specials and packages, event-related getaways, seasonal promotions
and launch one-to-one marketing initiatives to provide unique value and
personalization.
4. I will embrace Electronic Customer Relationship Management
(e-CRM) as part of my hotel�s 2007 strategic objectives and develop
programs and action steps to address all main e-CRM aspects: knowing your
customer, customer service in this interactive age, personalization, one-to-one
eMarketing, and building customer loyalty. I will continue Building Interactive
Relationships with my customers. In this new online environment I don�t
just want to provide great service to my guests, I want to �own� the customer
throughout the travel planning and decision making cycle and not allow
the third-party 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.
5. I will consider a robust Consumer Generated Media (CGM)
strategy as part of my comprehensive Direct Internet marketing strategy.
I want to listen to what customers are saying. I know that I can gain unfiltered
insights into the customer experience, and by monitoring sites that contain
reviews and comments about my property I can immediately address any issues
and act appropriately. On the other hand I know that I can establish
interactive relationships with my customers via corporate-sponsored CGM
initiatives, such as blogs and consumer experience and photo sharing CGM
initiatives. I also know that as a smart hotel marketer I can utilize the
various types and formats of CGM to promote my hotel�s products and services,
and will make CGM a line item in the Internet advertising budget.
6. I will continue making Direct Internet Marketing and Distribution
Strategy the centerpiece of my Internet strategy, because I know it
provides my hotel company with long-term competitive advantages and will
lessen my dependence on intermediaries, discounters and traditional channels
that are expensive or about to become obsolete. I understand that 69% of
all online travel consumers prefer to deal with me as a travel supplier
directly. I know that the leading hospitality brands already enjoy a very
healthy 85:15 or even 90:10 direct vs. indirect online distribution ratio,
and Direct Channel sales will exceed 60% for the industry as a whole. I
will maintain strict rate parity across all marketing channels and maintain
a best rate guarantee, and create unique product offerings designed to
provide a unique value proposition to my customers. I will employ a comprehensive
Direct Channel strategy, including website re-design and optimization,
search engine marketing, email marketing, strategic linking, e-CRM, loyalty
and retention initiatives, consumer generated media (CGM) initiatives and
online sponsorships to encourage, entice, and convert lookers into bookers
on my own website.
7. I will continue to lessen my exposure in the Indirect Online
Distribution Channel. I know that third-party online intermediaries
(TPIs) need me more than I need them, as bookings for my hotel generate
margins that are 10-20 times higher than margins the TPIs get in the other
travel sectors (car rentals and airline tickets). I know that best practices
now require my hotel company to work with fewer TPIs and only with those
that can access my inventory via automated inventory feeds, such as Pegasus
or GDS feeds. I will no longer use TPIs extranets to upload rates and inventory.
I will definitely stop paying abnormally high margins of 20%-25%, since
I know that a booking via my website costs less than $3-$5. I will further
lessen my dependence on TPIs and make it my goal to reach the leaders in
the industry who already enjoy a �controlled exposure� of 15% or less in
the Indirect Online Channel.
8. I will take a hard look at my Internet assets and adopt
a robust Website Re-Design and Optimization Strategy this year. 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. I understand that a branding interaction occurs anytime an Internet
user lands on my website. 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. By adopting a comprehensive Website Optimization Strategy I
will aim to enhance my hotel website�s user-friendliness, search engine-friendliness,
travel booker-friendliness, and interactive relationship-friendliness.
This strategy will deal with the issues important for turning lookers into
bookers (conversion rates), improving search engine rankings, and boosting
ROIs.
9. I know that to achieve my ROI goals, I have to go beyond
PPC marketing and employ a comprehensive Internet Marketing Strategy,
focusing on marketing key aspects of my hotel product to my key market
segments in my key feeder markets. I will employ a robust Customer Segmentation
Marketing Strategy since I know that each of my key customer segments requires
a differentiated approach, information and offering. I will adopt an aggressive
search marketing strategy, including thematic and event-related keyword
buys, seasonal promotions and other direct-response driven campaigns, supported
by special landing and private web pages. I will take advantage of all
five main aspects of search engine marketing: organic search, paid inclusion,
keyword search marketing (PPC), local search and vertical/meta search.
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 email marketing,
strategic linking, email and online sponsorships, CGM initiatives and other
Internet exposure enhancing initiatives.
10. To achieve all of the above, I will Acquire New Core Competencies
and Adopt Best Industry Practices 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 vendors, interactive agencies, web hosting
and design companies, or outsourcing this vital core competence to vendors
that �keep me in the dark.� From this day forward I will be in control.
I will seek advice from an experienced Internet marketing hospitality consultancy
to help me navigate the Internet and utilize the Direct Online Channel
to its fullest potential. I will utilize expert advice on how to disseminate
eKnowledge and best practices to my employees and make them stakeholders
in the corporate Internet marketing efforts, 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.
About the Authors:
Max
Starkov is Chief eBusiness Strategist and Jason Price is EVP at Hospitality
eBusiness Strategies (HeBS), the industry�s leading Internet marketing
strategy consulting firm for the hospitality vertical, based in New York
City (www.hospitalityebusiness.com).
HeBS has pioneered many of the "best practices" in hotel Internet marketing
and direct online distribution. The firm specializes in helping hoteliers
build their direct Internet marketing and distribution strategy, boost
the hotel Internet marketing presence, establish interactive relationships
with their customers, and significantly increase direct online bookings
and ADRs. A diverse client portfolio of over 350 top tier major hotel brands,
multinational hospitality corporations, hotel management and representation
companies, franchisees and independents, resorts, casinos and CVBs and
has sought and successfully taken advantage of the firm hospitality Internet
marketing expertise. Contact HeBS consultants at (212)752-8186 or [email protected].
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