News for the Hospitality Executive
2009: Another Year That Confirmed the Internet
as the Only Growth Channel in Hospitality
|By Max Starkov, March 2010
The latest eTRAK Full Year 2009 report on hotel bookings by channel yet again confirms that today, the online channel is the only growth channel in hospitality. In the difficult economic environment, when travel supply outweighed travel demand by far, Internet bookings for the top 30 hotel brands increased by a remarkable 6.6% in 2009 vs. 2008 (eTRAK).
This increase in Internet bookings comes at the expense of the GDS and Voice Channels, both of which have been declining for many years now.
The growth of the Internet channel for the top 30 hotel brands is not an isolated phenomenon. HeBS reported steady increases in direct online channel bookings across its hotel client portfolio, even in a difficult year like 2009.
In dire economic times like these, characterized by sharp declines in
travel demand, a comprehensive ROI-centric Internet marketing strategy
can help hoteliers continue to generate much needed incremental revenues
and out-smart their competition.
GDS Channel Is in Steady Decline:
Typical of economic times such as the present, the hotel industry (similar to post 9/11) has again “succumbed to the devil” in the face of the major OTAs. Since mid-2008 travel supply has outweighed demand and hoteliers have been more susceptible to panic, resulting in deep discounting and embracing of the OTAs. The result is that we have witnessed a significant shift from the direct online to the indirect online channel in 2009:
The Bottom Line: Focus on the Direct Online Channel
Hoteliers need a robust Direct Online Channel Strategy, accompanied by adequate marketing funds to be able to take advantage of the steady growth in the Internet channel and shift from offline to online bookings in hospitality due to declining GDS and voice channels. Hoteliers must carefully employ ROI-centric initiatives, including website redesign, website optimization and SEO, paid search, email marketing, online display advertising and proven social media initiatives.
Even in this economy, you should not decrease or eliminate your hotel Internet marketing budget. The Internet, and especially the direct online channel, is the only growth channel for hoteliers and the only “light at the end of the tunnel” in this environment. Even in these difficult times we see “Return on ad spend” (ROAS) as high as 3500% from Internet marketing campaigns we run for our clients.
Market researchers provide various projections for the growth of the online travel channel in 2010, from a small decline as reported by a travel research company, to growth rates as high as 11% in 2010 as projected by eMarketer. These optimistic projections are supported by the leading e-Commerce research company, which declares that overall U.S. online sales will increase by 9% in 2010. HeBS believes that online travel, having always been the most dynamic and fast-growing segment of the overall online marketplace, will experience similar growth rates. Whatever the case might be, the online travel channel, and especially the direct online channel, provides hoteliers with the only viable option for any growth during this recession.
About the Authors and HeBS:
A diverse client portfolio of over 500 top tier major hotel brands, luxury and boutique hotel brands, resorts and casinos, hotel management companies, franchisees, independents, and CVBs has sought and successfully taken advantage of HeBS’ hospitality Internet marketing expertise. Contact HeBS consultants at (212)752-8186 or firstname.lastname@example.org.
|Also See:||Hotelier’s 2010 Top Ten Internet Marketing Resolutions / Max Starkov & Mariana Mechoso Safer / January 2010|
|The Growing Tensions Between Hoteliers and Online Travel Agencies: The Prisoner's Dilemma, the Stockholm Syndrome, or a Case of Both? / Max Starkov / October 2009|