|By Max Starkov and Mariana Mechoso, September 2008
The climate of the current economic environment is forcing franchised
hotels to become more involved in their brand’s marketing strategies and
seek untapped, low-cost Internet revenue opportunities. In the first half
of 2008, occupancy rates in North America fell by 2.4%; in Europe by 1.3%
and in the Asia Pacific by 3.9%, compared to the same period a year ago
(Smith Travel Research). Franchisees are starting to realize that the hotel
chains’ e-Commerce departments cannot possibly capture all available online
revenue opportunities for their property, especially on the local level,
and are looking for new and innovative ways to generate incremental online
revenues. HeBS believes that launching a robust Local Internet Marketing
Strategy, as described here, will help franchised hoteliers weather the
economic storm and complement their traditional revenue sources and brand
Surveys show that up to 84% of travel research and planning in the U.S.
is conducted via the Web (eMarketer/TIA). The Internet has become the single
most important travel planning and distribution channel in hospitality.
In 2009, over 40% of all revenues in hospitality will be generated by the
Internet, and another third of hotel bookings will be influenced by the
Internet but done offline. Each year since 2004, Internet hotel bookings
have surpassed GDS hotel bookings.
So how does this apply to major hotel chains? Over the past 5-6 years,
most of the leading hotel brands have become proficient national and international
eMarketers, and have learned how to build brand equity on the Web.
Major Hotel Brand CRS Reservations in 2007
|* 76% - Brand website
|* 24% - Third-Party / OTAs
|Brand GDS Bookings:
|Brand Voice Bookings:
This CRS distribution ratio shows rapid growth in the Internet channel,
a flat GDS channel, and a declining voice channel. There was a further
acceleration of these trends in Q1 2008: Internet bookings comprised 47%
of CRS bookings (41.8% in Q1 2007); GDS was 32.2% (34.1% in Q1 2007) and
voice 20.8% (24.1% in Q1 2007).
The Franchisee’s Local Internet Marketing Strategy Defined
Due to the nature of online travel consumers’ purchasing habits and
the way search engines index and present content on the Web, there are
many online revenue opportunities at the property-level that derive from
local audiences and markets. These opportunities fall outside the scope
and “bandwidth” of the major hotel brands’ Internet marketing efforts:
These property-level online revenue opportunities are separate from and
are meant to complement the hotel brand’s Internet marketing efforts. We
call this the “Local Internet Marketing Strategy”, which includes:
Local events that generate overnight stays: county fairs, festivals, sports
events, concerts and performances
Local group and social event planning
Local search – over a third of all search via the major search engines
like Google, Yahoo, MSN is local in character
Online yellow pages and directories
Links and sponsorships on directories and portals
Email marketing and sponsorship opportunities
Local feeder market and key customer segment initiatives
How Franchised Hotels can build their Local Internet Marketing Strategy
Property website optimizations (both the mini-site on brand website and
the independent property website if the hotel has one)
Local search marketing
Local strategic linking
Email marketing to the hotel’s own op-in list
Key customer segment online initiatives
Feeder market online initiatives
Local online sponsorships
Local event-based and attraction-based online revenue opportunities
There is no doubt that franchised hotels have to proactively support
their hotel chain’s regional, national, and international e-Commerce initiatives.
However, hoteliers have to clearly understand that the hotel brand cannot
possibly cover all the bases and that they must take full advantage of
the myriad of local online revenue opportunities available to the property.
In order to build and take full advantage of a Local Internet Marketing
Strategy, franchised hoteliers have to:
In the following sections we will discuss five of the key elements of the
Local Internet Marketing Strategy for Franchised Hoteliers: website optimizations,
local search marketing, local strategic link building, property-level email
marketing, and online initiatives to target your hotel’s most important
Analyze the hotel brand’s guidelines and policies for property-level Internet
marketing activities. All major brands have such policies in place.
Understand best practices and latest trends in Direct Online Distribution.
Learn how to:
complement the brand efforts with a Local Internet Marketing Strategy
grow direct market share online by taking advantage of your sleepy local
generate incremental revenues and take advantage of local revenue opportunities
via the Internet
Identify and partner with an Internet marketing company experienced with
franchised hotel marketing on the Web.
Property Website Optimization
Direct Online Distribution starts and ends with the hotel website –
in this case the property mini-site on the brand website and if applicable,
the property stand-alone (external) website. The hotel website has become
the “first, main and only point of contact” with the overwhelming majority
of hotel customers.
Unfortunately for a number of hotels, including franchised properties,
many visits to the property website turn out to be the “last point of contact”
with the customer. For this reason, enhancing and optimizing the hotel
website should be the first step in developing the Local Internet Marketing
Strategy for the franchised property.
Optimization of the property mini-site on the brand website
Property website optimization focuses on two main areas: enhancing the
content (textual and visual) to improve the user experience and optimizing
the property mini-site for the search engines.
Over the past several years, a handful of hotel chains have done a good
job in presenting their franchised hotels on the brand website–both for
humans and search engine bots alike. But even in these cases there is always
room for improvement: local events and happenings that may generate overnight
stays at the property are usually not featured; services and amenities
may change; photos become dated over time; feeder market focus changes
(e.g. from fly-in to drive-in markets in this economic environment); search
engines tweak their search algorithms, etc.
Make sure the property mini-site is optimized for:
Many hotel chains offer either direct CMS (Content Management System) access
to the property pages or a special form to propose content and visual changes.
Travel consumers: the site must be up to date and describe all aspects
of the hotel product and services, position the hotel as the “hero” of
the destination, and address your key customer segments
Search engines: make sure the site’s H1 headers, body copy (keyword density),
page titles, description tags and meta tags adhere to best practices.
Optimization of the property stand-alone (external) website
Many hotel chains allow and even encourage their franchisees to launch
property stand-alone (independent) websites. Almost all hotel chains have
specific guidelines regarding these external property websites.
Optimizing or re-designing the property stand-alone/independent website
should always come after the hotel makes sure the property mini-site on
the brand website is fully optimized. Why? All major brands are spending
millions of dollars on Internet marketing. The sooner the property mini-site
is optimized, the sooner the property will start benefiting from the current
brand online advertising campaigns and from the indexed enhanced content
by the search engines.
When and why would a franchised hotel need an independent website? Here
are some examples of when a franchisee would need to strongly consider
an independent website:
In all other cases we believe that hotel franchisees can successfully market
their properties using the property mini-sites on the brand websites.
However, if they do decide to go with an independent property website because
of any of the reasons above, franchised hoteliers should keep these two
important considerations in mind:
The property is located in a resort/vacation area with plenty of activities
and attractions requiring extensive descriptions, area photography, and
packages that cannot be accommodated or described within the framework
of the existing property mini-site on the brand website.
The property is closely associated with a local attraction, military base,
university, theme park, or any other type of “local entity” that generates
a significant share of the business, and this association requires a very
unique description of the property, its services and amenities, and the
relationship with the local entity that cannot be accommodated/described
within the framework of the brand website.
The property caters to a unique audience and/or key customer segment that
is atypical to the major brand (e.g. when the target market is leisure
travelers but the brand is perceived as primarily business travel oriented;
or corporate groups and meetings if the brand is primarily leisure oriented,
The property offers a variety of amenities and services that are atypical
of the major brand (e.g. the property offers extensive property meeting
and conference facilities but the brand is perceived as a leisure travel
1) Do not duplicate content: The property independent website
must feature textual content that is significantly different from the property
mini-site on the hotel brand website. Search engines consider duplicate
content (similar content under two different URLs) as SPAM, and both the
independent and the property mini-site can suffer as a result by being
banned by the search engines. In other words, the franchised hotel has
to develop new content for the property stand-alone website—either in-house
or by hiring an outside copyrighter.
If all of this is taken into account, under the right conditions and with
the proper Internet marketing strategy, an independent property website
may reap significant rewards for the franchised hotel. Many of our franchised
hotel clients have enjoyed significant online revenues from their independent
property websites. The following case study is one of these success stories.
2) 10:1 Marketing rule: Launching an independent property website is
only the first step in developing a robust Internet marketing strategy.
Once the site is live, the property should be prepared to spend a considerable
amount marketing the website. When considering the option of an independent
site for your property, you should be aware of the so called “10:1 Marketing
Rule”. As a rule of thumb, within 12 months of the hotel website design,
the property has to spend 10 times more on marketing the website than they
spent on the design or re-design (i.e. if you spend $10,000 on a website
re-design, then you should be prepared to spend at least $100,000 that
year to promote the new website).
Case Study #1
Independent website of a franchised hotel in California with a stand-alone
website launched in 2003
Ongoing, (at least twice a year) textual and visual website optimizations
Robust direct Internet marketing strategy, including paid search, local
search, email marketing, and online sponsorships
A common question is: when should franchised hoteliers optimize and/or
re-design the property stand-alone website? As a rule of thumb, here are
the best practices that answer this question:
Each year since launch, the property stand-alone website has generated
more online revenues than the property mini-site on the brand website.
Incremental revenues: our research shows that at least two-thirds of these
revenues are incremental (i.e. would have not occurred without the property
Local Search Marketing
If the site is over 12 months old, it is time for a website optimization.
You should take full advantage of the much cheaper organic search-related
visitors to your site, and optimize your website according to today’s best
practices for the most efficient results.
If the site is over 2-3 years old, a website re-design should be considered,
or at least budgeted for early 2009.
Hotel chains are spending a great deal on paid search marketing with
all of the major search engines: Google (60% of the search market), Yahoo
(20%) and MSN (10%). These national campaigns play an important role in
achieving brand recognition and capturing brand name-related searches,
but they leave out tremendous revenue opportunities from local search initiatives.
Why franchisees should pay attention to Local Search?
Local search has gained strong momentum as more savvy online consumers
are seeking highly relevant local business listings. All of the major search
engines have introduced Local Search functionality, including Google, Yahoo,
and MSN. A survey by The Kelsey Group and BizRate.com found that 74% of
respondents conducted local searches online.
Online consumers conduct 2 billion local searches/month; 8 out of 10 local
searchers follow a search with a phone call (ComScore)
As mentioned previously, over one-third of all searches on the major search
engines are local in character (i.e. searches by Internet users for businesses
in their immediate area)
Online Yellow Pages (SuperPages.com, YellowPages.com, etc) are becoming
viable online competitors for local search market share—they are often
perceived to be “more local” than the major search engines.
Local CPC programs (cost-per-click) on popular local travel directories
and destination portals (LATimes.com, LA.com, SeattleTimes.com, SignOnSanDiego.com)
are an easy and cost-effective way to reach your local and drive-in markets
Online travel consumers search for hotel services within the context
of a particular destination. ‘Destination + hotels’ or ‘destination + accommodations’
are popular keyword searches for any location and are used for international,
national, regional and local searches.
As shown in Case Study #2, hotel brand-related keyword terms represent
only a small fraction of overall generic searches for hotel accommodations
in a particular destination: from as low as 0.01% of generic searches.
This leaves the majority of potential customers’ searches for hotel stays
in any destination unaddressed by the hotel chain, and in the hands of
savvy third-party intermediaries who are outspending all of the major hotel
brands on the Web.
Case Study #2
Brand Hotels Name vs. Destination-Related Keyword Terms
Number of Searches on Major Search Engines in July 2008:
|Generic Destination Terms
|San Diego Hotels
|San Diego California Hotels
|San Diego Lodging
|Courtyard Marriott San Diego
|Hilton Hotel San Diego
|Sheraton Hotel San Diego
|Holiday Inn San Diego
The above case study categorically provides an answer to the question
of why franchised hoteliers should care about more locally-focused, property-level
Local search marketing enables franchised hoteliers to increase online
sales by precisely targeting potential customers:
No major hotel chain can adequately address and capture these local business
opportunities via its national marketing campaigns. Savvy franchised hoteliers
can definitely take advantage of this marketing gap to generate incremental
revenues and stay ahead of the competition.
Traveling locally, i.e. drive-in market
Looking for accommodations near local attractions, e.g. a theme park
Searching for a hotel room in conjunction with a local event (fair, festival,
concert, sports event)
Interested in group accommodations for family reunions, wedding parties,
local corporate group outings and social events
Residing in top feeder markets (e.g. within the hotel’s home state, neighboring
Local Search Marketing can pursue several simultaneous avenues:
Local Strategic Linking to the Property Site
Local Search Marketing on Major Search Engines (e.g. targeting drive-in
Paid Search Marketing on Major Search Engines (e.g. targeting top feeder
Online Yellow Pages Listings (YellowPages.com, SuperPages.com, Local.com,
CPC (cost-per-click) Programs on local content, destination and directory
sites (e.g. LATimes.com, SeattleTimes.com, etc.)
Strategic Linking at the property level is the business strategy that
establishes links from highly relevant and authoritative websites to the
franchised hotel website (i.e. to build the "Link Popularity" of your hotel
website). Link popularity refers to the number and quality of incoming
links that are pointing to your website. Each relevant incoming link to
your website is considered by the search engines as a “vote of confidence”
in your website.
Why is Property-Level Strategic Linking important?
Here is a sample of local sites and directories that should be considered
by the franchised hotel. These locally-based sites can boost the Link Popularity
of the property website and generate highly relevant traffic and incremental
leads and revenues:
Exposes the property website to incremental traffic and highly qualified
Builds your website's Link Popularity, a crucial criteria used by the search
engines to determine how to rank the website in the search engine results
(e.g. Google and its PageRank). Link popularity refers to the number and
quality of incoming links that are pointing to your website.
Case Study #3: Local Strategic Linking
Local content portals and radio station sites
Local destination and city directories
State, county, and city CVB sites
Chamber of Commerce sites
Local family travel sites
Local event and meeting planner sites
Local wedding planning sites
Local golf directories and portals
Area attraction and theme park sites
Sporting event and venues sites
Local museum sites
Revenues and Return-on-ad-spend (ROAS) generated by local directories
|Napa Valley Destination Portal
|Family Travel Site
|Key West Portal
|Local Travel Directory
Local Email Marketing to the Hotel’s Own Opt-in list
Email marketing to the hotel’s own opt-in list is one of the most popular
Internet marketing formats used by hoteliers today. Today’s savvy online
travelers subscribe to multiple travel eNewsletters and love receiving
relevant email promotions, events and happenings. Many studies have found
that only a small percentage of U.S. travelers have ever unsubscribed from
any travel related list. In a recent survey by Ypartnership, 46% of online
travelers mention email notifications promoting special fares and rates
to be a feature of greatest interest.
Why is property-level email marketing important and why should it be
considered by franchisees?
Email marketing, especially to your local customers, may be used for:
Email marketing to the hotel’s own email list is the most cost-effective
online advertising format: it costs pennies per email delivered vs. expensive
print and display ads
Your emails “speak” to an audience that already knows your hotel, amenities
and services, or is at least familiar with your website
Creates personalized interactive relationships with locally-based customers
Instantaneous message delivery: thousands of potential customers may be
reached within seconds
Serves as a tool to move distressed inventory
Serves both as a direct-response vehicle and branding tool
Plants seed in the minds of recipients regarding future travel plans
Staying in touch with your local customers: recruits and retains customers,
new and old
Case Study #4
Offering specials and packages that appeal to local audiences: weekend
packages, romantic getaways, wine + dine packages, suite-based specials,
sports venue based packages, museum and theater packages, family packages,
Offering ‘Local Resident-Only’ value specials (e.g. Florida Residents Special)
Sending email reminders about specific activities at the hotel that locals
frequent (e.g. wine tastings, restaurant events such a Thanksgiving Day
or Valentine’s Day menus). This is particularly important if your hotel
offers a popular restaurant, lounge or bar, or hosts a monthly activity
such bridal shows, cooking classes, speaker appearances, etc.
Creating and maintaining “conversations” with your local customers (e.g.
asking them for testimonials, photos, etc.)
Email Marketing to Locals: Hotel with Email Newsletters for Monthly
While some major hotel brands frown upon franchised hotels collecting and
sending out emails to their own opt-in list, most hotel chains do not object
to the local email initiatives of their franchisees as they clearly understand
the powerful revenue opportunity this type of marketing represents.
2,500+ Newsletter subscribers
Newsletters include information on the wine tasting and special room rates
for the event
Average cost: approximately $250 per eNewsletter (database hosting, creative,
Each newsletter results in 30+ wine tasting/dinner reservations for the
event, and 10+ room reservations for those attending the event that want
to stay the night
Return on Ad Spend (ROAS): 10 times
Case Study # 5
Property-Level Email Marketing to Own Opt-In List
Monthly eNewsletter with hotel offers and happenings (March 2008):
Key Customer Segment Online Initiatives
eNewsletter features events in the area, email-only special offers, romantic
Sent to 5,073 subscribers
Open Rate: 30.5%
Hotel revenue: $7,164
Approx. Cost: $250
ROAS (Return-on-ad-spend): 27.6 times
Marketing to the hotel’s key customer segments is a crucial attribute
of any franchised property’s marketing strategy. Since most of these potential
customers are locally based, it is a prerogative for any franchised hotel
to identify and market to these key constituencies locally (i.e. on the
property level, outside the efforts of the hotel chain).
Food for thought:
Case Study #6
Business Travel: 86% of SME (small and medium enterprises) business travel
bookings (unmanaged business travel) are performed online (eMarketer).
Leisure Travel: 84% of leisure travel is researched and planned online
(TIA). There is a visible shift from fly-in to drive-in in the leisure
markets this year; many family travelers, seniors, couples, etc. are staying
closer to home and driving shorter distances, hence the increased important
of a property-level marketing strategy.
Meetings/Corporate Groups: 89% of meeting planners research event locations
online. 91% of corporate meetings have fewer than 200 participants. Many
of them are planned and booked locally.
Weddings and Special Events: the vast majority of these event planners
are locally based. Research and planning for these events is done heavily
online, as witnessed by the popularity of event planning sites and related
keyword terms in paid search.
Key Customer Segments: Number of Searches on Major Search Engines in
|San Diego Wedding Locations
|San Diego Wedding Reception
|Meeting Rooms San Diego
|San Diego Meeting Space
|San Diego Conference Hotel
|Romantic Getaway San Diego
|San Diego Weekend Getaways
|San Diego Family Vacation
The major hotel chains simply do not have the bandwidth to market to
these locally based audiences. It is up to the franchised hoteliers to
identify and approach these local markets. As mentioned, the Internet is
the preferred communication and marketing medium for all of these important
customer segments. If you do not “speak” to each of these audiences, you
will lose most of them to your competition.
Local initiatives targeting the franchised hotel’s key customer segments
can use a multitude of online advertising formats and channels:
The bottom line is the major hotel chains do not have the bandwidth to
keep track of local happenings that may generate overnight stays, resident-only
specials or come up with event- and attraction-based promotions at every
single franchised hotel. It is up to franchised hoteliers to inform the
locals about their services and offerings, area or at-property events,
and to establish and maintain interactive relationships with potential
local audiences and markets that can generate incremental revenues.
Local Search Marketing
Online sponsorships in local media and portal sites
Email marketing to the property own email list or email sponsorships
Local and regional directory listings
Online Yellow Pages Listings
CPC (cost-per-click) marketing
Though many hotel chains have become good eMarketers on the national
and international level, they do not have the bandwidth to cover local,
property-level online revenue opportunities such as event- and attraction-based
promotions, resident-only specials, local key market segment initiatives,
etc. It is up to franchised hoteliers to inform locals about their services
and offerings for area or at-property events, and to establish and maintain
interactive relationships with local audiences and markets that can generate
Franchised Hoteliers can boost revenues in these difficult economic
times, generate incremental online bookings and business opportunities,
improve occupancy, and “steal” market share from the competition by launching
a comprehensive Local Internet Marketing Strategy. Such a ROI-centric local
strategy includes: property website optimizations (mini-site on brand website
and independent property website); local search marketing; local strategic
link building, property-level email marketing, key customer segment online
initiatives, and local online sponsorships.
Consider seeking advice from a full-service Internet marketing hospitality
firm experienced in franchised hotel marketing to actively help you launch
a local Internet marketing strategy and implement the latest trends and
best practices in your Internet marketing efforts so you can realize substantial
ROI and incremental revenue growth.
Note: Jason Price, EVP at HeBS, also contributed to this article.
Max Starkov is President & CEO and Mariana Mechoso is Director,
eMarketing Services at Hospitality eBusiness Strategies (HeBS), the industry’s
leading Internet marketing and distribution strategy consulting firm for
the hospitality and travel verticals. Based in New York City, HeBS has
pioneered many of the "best practices" in hotel Internet marketing and
direct online distribution. HeBS specializes in helping hoteliers build
and enhance 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 ROIs. The firm brings a unique perspective to the industry, gained
through working with over 500 hospitality companies including major brands,
independent hotels, casinos, convention bureaus and hotel management companies
worldwide. Find out more about HeBS at www.hospitalityebusiness.com,
or contact HeBS at (212)752-8186 or email@example.com