By Max Starkov & Jason Price, January, 2009
Here at HeBS we firmly believe that a comprehensive, ROI-centric Internet
marketing strategy is the hotelier’s perfect “survival tool” in the current
economic environment. In the difficult year we expect 2009 to be, a well-executed
Internet marketing strategy can help smart hoteliers generate incremental
revenues, improve marketing ROIs, retain existing and attract more affluent
travelers, and out-smart the competition. For the past almost 14 years,
our experience shows that Internet-savvy hoteliers with robust Direct Online
Channel strategies are the winners in economic downturns like this one.
The Travel Industry Association’s (TIA) latest survey predicts a drop
of at least 1.3% in overall leisure travel in 2009. Corporate travel is
already down as a result of massive layoffs and economic contraction. There
are visible signs of decline in the corporate and association meetings
and group travel business. Unfortunately, these declines are expected to
accelerate in 2009. Yet, even with this expected decline in travel, online
travel bookings in 2009 are projected to grow by 10.5% and reach $116.1
Billion (eMarketer), primarily as a result of the dramatic shift from the
offline to online channel.
In 2009 the Hotel’s overall competitiveness and even survival will be
determined to a great extent by how well it manages its Internet marketing
and distribution efforts. In 2009, more than 55% of all travel bookings
and up to 40% of all hotel bookings in North America will be generated
from the Internet (eMarketer, HeBS), which represents a double-digit growth
over 2008. Another third of hotel bookings will be directly influenced
by online research, but booked offline. By 2010 the Internet will contribute
over 45% of all hotel bookings in North America.
Furthermore, a 2008 McKinsey survey of 340 senior marketing executives
worldwide reported that despite the decline in economic activity, 91% said
they plan to maintain or exceed current levels of online advertising, and
55% were cutting traditional media, “precisely in order to increase funding
for online efforts.” The survey shines a light on what many marketing professionals
already know. The intended and relevant audiences are online, at lower
cost, and with measurable results.
What are hoteliers to do in these dire economic times? How can they
avoid discounting pressures and further commoditization of the hotel product?
What type of marketing initiatives will produce the highest return-on-investment
(ROI) in 2009? What are the best approaches to retain customers in this
environment? The “2009 Top Ten New Year’s Internet Marketing Strategy Resolutions”,
presented by Hospitality eBusiness Strategies (HeBS) for the ninth year
in a row, provides some of these answers and action steps.
Whether you are a major hotel brand, hotel management company, independent
or franchised hotel or resort, even in this environment you can stay well
ahead of your competition and capture new market share with an effective
ROI-centric Internet marketing strategy. Smart and proactive hoteliers
who utilize best practices in Internet marketing and follow latest trends
to their own advantage will define the industry winners and losers in 2009
and in the long term.
Here are the Top Ten Internet Marketing Resolutions your hotel company
should consider adopting in 2009:
1. I will turn 2009 into the Year of Outsmarting the
Competition. Even though fewer people will be traveling to my hotel's
destination, I know there will be more than enough travelers to maintain
a healthy occupancy rate if I can “steal” market share from the competition.
I know that my competitors are skeptical about the current economic downturn
and are consequently slashing marketing budgets. I will continue to invest
in my Internet marketing and do my best to increase market share by being
a smarter marketer in 2009.
2. I will overhaul my hotel’s marketing budget to achieve the
highest return-on-ad-spend (ROAS). Unlike the competition, I will not
automatically cut my hotel’s marketing spend, but re-evaluate my marketing
efforts and advertising budget and focus on proven return-on-investment
(ROI)-centric efforts. I will shift funds from offline to online advertising
formats. I will shift funds from brand-building to direct-response initiatives.
I will track every dollar spent with sophisticated website analytical and
campaign tracking technology (Omniture, DART, etc.) to make sure that I
achieve respectable return-on-ad-spend (ROAS) from every campaign.
I understand that in this economic environment I should not be experimenting
with unproven advertising formats. In 2009 I will focus only on proven
Internet marketing formats that generate above industry-average returns
at the lowest possible cost. I will not spend valuable marketing dollars
on traditional and expensive media formats, or on “sexy” new media initiatives
like advertising on popular, but irrelevant to the travel planning and
decision process social media sites like YouTube, Facebook.com, MySpace.com,
etc. I will not fall prey to the “Stockholm Syndrome” (advertise on online
travel agencies where the advertising cost, in addition to hefty margins,
can drive the total cost to my hotel to 30%-40% from booked hotel revenue).
3. I will re-evaluate the importance of my hotel’s key customer
segments and feeder markets in lieu of the economic downturn. Have
my main feeder markets changed lately? Have my traditional key customer
segments’ contribution changed? I have already noticed a drop in my fly-in
guests’ share due to airfare hikes, cuts in corporate travel budgets, and
reduced airline capacity, and I understand the need to focus more on my
drive-in market. I will do a thorough customer segmentation analysis and
take a hard look at how my property markets to my key customer segments
(e.g. meeting planners, groups, business, leisure), as well as develop
a marketing plan to target my most important feeder markets.
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 focus on building customer loyalty via reward
programs and other eCRM initiatives.
4. I will become a smarter eMarketer in 2009. I understand
how important it is to track conversions on my website and ROIs from my
Internet marketing campaigns and figure out what works and what doesn’t.
In 2009 I will track the post-impression and post-click activity of each
campaign and track conversions (bookings, room nights, revenues) from every
campaign. I will implement the latest website analytics + campaign tracking
technology to track ROI from my online marketing efforts and adjust marketing
spend instantaneously based on ROIs. I will know exactly which Internet
marketing campaigns—search marketing, email marketing, display advertising,
strategic linking, etc.—produce bookings and revenues, how much and at
I will become ROI-centric. I know that measuring ROI is the last priority
for many vendors out there. I will no longer accept excuses from my interactive
vendors about how difficult it is to track conversions and ROAS and that
the “technology is simply not there”. I will only work with an Internet
marketing vendor that provides a comprehensive Internet marketing strategy
and focuses on online marketing formats that generate the highest ROIs.
I will demand full transparency in fees and marketing spend, and accountability
for results. I will require 24/7 access to state-of-the-art website analytical
and campaign tracking tools, utilization of industry’s best practices,
and marketing spend that can be tracked. If my current vendors cannot accommodate
my hotel, I will replace them in a heartbeat.
5. I will re-evaluate my hotel marketing strategy to provide a
Unique Value Proposition to my customers. I will create unique hotel
offers based on unique product attributes. I will not be competing only
on price. 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 understand that the online travel agencies 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 reach my key customer segments
by creating unique specials and packages, event-related getaways, and seasonal
6. I will develop my hotel’s differentiation strategy to “stand
out” amongst my competitors. I understand that in an economic
downturn, when all my competitors are slashing prices and competing on
rate alone, I have to distinguish my hotel to attract more discriminating
customers, achieve higher ADRs and increase market share. To set my hotel
apart from the online travel agencies, I will stay within rate parity,
but provide additional value such as resort or dining credits, room/suite
upgrades, etc. if guests book on my site. To differentiate my hotel from
the comp set, I will offer what my competition does not: a broader selection
of specials and packages in a variety that my customers can appreciate:
seasonal specials, suite specials, weekend specials, family specials, romantic
7. In 2009 I will continue making the direct online channel
the centerpiece of my Internet strategy because I know it provides my hotel
company with immediate results in a very difficult economic environment
as well as long-term competitive advantages. I know that the leading
hospitality brands already enjoy a very healthy 76:24 direct vs. indirect
online distribution ratio, and Direct Online Channel sales will exceed
61% for the industry as a whole in 2009. I will maintain strict rate parity
across all marketing channels and maintain a best rate guarantee, while
at the same time creating unique product offerings to provide a unique
value proposition to my customers. I will employ a comprehensive Direct
Online Channel strategy to significantly increase my direct online sales
and shift bookings from more expensive distribution channels to the least
expensive channel—my hotel website.
8. I will optimize and if needed re-design my hotel website
in 2009. I know that hotel Internet marketing starts and ends with
the hotel website and my site has become the first, and in many cases,
the last point of contact with the travel consumer. I understand that the
site is the hotel’s most important marketing asset today and enhancing
and optimizing the hotel website should be a top priority in 2009. I will
aim to enhance my hotel website’s user-friendliness, search engine-friendliness,
travel booker-friendliness, and interactive relationship-friendliness,
which will boost conversion rates, improve search engine rankings, and
website revenues. I also know that a well done website optimization and
enhancement or re-design will pay for itself within 3-4 months.
I realize that if my site is over 12 months old, a website optimization
is due in 2009, in order to take full advantage of the much cheaper organic
search related visitors my your site. I also know that if my site is over
2-3 years old, a website re-design should be considered, or at least budgeted
for late 2009. I know that my website should “speak” to two distinct audiences:
travel consumers to whom the site must comprehensively describe all aspects
of the hotel product and services, and the search engines, for which the
site must adhere to best practices related to H1 headers, body copy (keyword
density), page titles, description tags and keyword tags.
9. I will re-consider my hotel’s Web 2.0/Social Media Strategy
and implement effective, yet inexpensive, initiatives as part of my comprehensive
direct Internet marketing strategy.
I want to listen to what my customers are saying. I know that by adopting
best practices for monitoring customer review sites I can not only gain
unfiltered insights into the customer experience and immediately address
any issues and act appropriately, but I can also attract new customers.
On the other hand I know that I can establish interactive relationships
with my customers via Web 2.0/Social Media initiatives on my website such
as expert blogs, consumer experience and photo sharing, contests and sweepstakes,
10. I will take a hard look at how Best Industry Practices
are being utilized in my hotel Internet marketing strategies and by my
hotel’s Internet marketing vendors. I know that now, after almost 14 years
since the first online hotel booking, best practices have been established
in practically every aspect of hotel Internet marketing. I do not want
my Internet marketing vendors to “learn the business on my dime”.
I will make it my mission to acquire new core competencies and adopt best
industry practices by partnering with leading hospitality experts in Internet
marketing and direct online channel strategies.
I like to have a crystal-clear understanding of what the best
practices and latest trends are in Internet marketing in hospitality. What
works, what doesn’t, and why. I recognize I don’t have all the answers
and that there are thought leaders and other proven professionals who can
help me and my hotel stay competitive in these dire times, preserve and
increase market share, and generate the highest website revenues and ROIs.
Note: Mariana Mechoso, Director eMarketing Services at HeBS, also contributed
to this article.
I will work with Internet marketing experts to disseminate eKnowledge
and best practices, making my team stakeholders in the corporate Internet
marketing efforts. I will hire experts who can teach me and my staff best
practices and keep us apprised of the latest trends. These Internet marketing
practitioners will provide crucial professional development as well as
guide our direct Internet marketing strategies, online brand building strategies,
e-CRM, website re-design and optimization, search and email marketing,
and Web 2.0 initiatives.
About the Authors and HeBS:
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, is 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
A diverse client portfolio of over 500 top tier major hotel brands,
luxury and boutique hotel brands, resorts and casinos, hotel management
companies, franchisees and independents, and CVBs has sought and successfully
taken advantage of the firm hospitality Internet marketing expertise. Contact
HeBS consultants at (212)752-8186 or email@example.com.