By Mike Ford, Co-Founder and Managing Director, SiteMinder
Managed guest relationships, integrated technology systems, and improved data collection and security are the three most critical needs of hoteliers when it comes to distribution and online marketing. That is the finding of a whitepaper SiteMinder recently produced in partnership with Revinate and Dr Peter O’Connor – and it begs the question: what support is available for today’s hoteliers to meet these needs?
For those of us within the hotel technology space, it seems obvious. I recently wrote a piece as such, asking myself why some hoteliers continue to bemoan OTAs and yet do curious things like display lower room rates on third-party channels, and ignore the free opportunities provided by the world’s largest travel sites – Google and TripAdvisor – to maintain their direct relationships with guests.
But how many of our customers became hoteliers so they could be masters of distribution and online marketing? I am willing to bet there are few, if any. It is precisely our job as technologists to be the experts in these fields for them.
The Envisioning the Future of Hotel Distribution and Online Marketing whitepaper is based on research conducted in late 2015 with hotelier delegates of World Travel Market London, who said they saw overcoming the challenges of a fast-paced online environment, advancing technology and ever-increasing consolidation within the OTA space as priority.
Is this a huge surprise for us? Perhaps not, but let’s take a minute to understand why. With all the continually-shifting booking trends we are witnessing, the emergence of new and exciting technological solutions, and the plethora of headlines on acquisitions and mergers by the ‘OTA duopoly’ and others, it is becoming increasingly difficult for any player within the hospitality landscape to always lead the charge – let alone predict what’s coming next. What chance does the hotelier have, while they also make sure the beds have been made on time and their amenities are kept clean?
As Dr O’Connor – current academic director of information systems at Institute de Management Hotelier International, part of ESSEC Business School in France – rightly points out: “Most people involved in hotel distribution and online marketing would agree that the whole area is in turmoil right now, with both technology and consumer expectations evolving extremely rapidly. At the same time, competition in the online environment continues to become more intense, with the result that hotels need to pay much more attention to how and where they are being sold, as well as invest in the right systems and expertise to ensure they can compete effectively in this highly turbulent environment.”
Dr O’Connor’s words reflect the key challenges and concerns that hotelier participants nominated in relation to distribution and online marketing – now and over the next three years. Topping the list was the guest experience, with hoteliers admitting they invest too much of their already-limited time and resources into driving one-off transient bookings which lead to high costs of guest acquisition.
According to our partners at Revinate, the key to drive guest loyalty and increase direct bookings revolves around building and managing “close relationships with clients”. They say that in order to do so, as a means to exceed the expectations of these clients, hoteliers need to “collect, store, analyze and use the trove of guest data available today through a single, integrated view”.
It’s a perspective we share at SiteMinder. In addition to its strong conversion rates, built-in analytics and complete mobile functionality, the capability found within our Internet booking engine, TheBookingButton, to allow hotels to own the guest relationship with personalized email marketing – pre-arrival, during and post-stay – was developed for this very reason. Hotel users of TheBookingButton can also encourage repeat bookings by sending their guests direct incentives, such as promotional codes to gain discounted rates. And, guests can make their direct booking both in their own currency and language, which is key when considering that international tourist arrivals now top 1.2 billion and a significant portion of these travelers do not speak English.
In truth, hoteliers have access to big data that nobody else does – that is, their own guest data. Even a 100-room hotel that has 1.5 guests per room and runs at 65% occupancy has data on more than 35,000 guests every year.
What we continue to see, however, is the use of disparate, legacy systems that not only prevent the real-time automation hoteliers need to do their jobs, but eliminate any opportunity for hoteliers to see the granularity of their data. How effective is my hotel website when compared with my third-party distribution channels? Which channels are performing best for my hotel and where are my guests coming from? How can I get a seamless flow of information running through each of my systems, so I have one powerful source of truth? Every hotelier should be asking these questions. And we know from our study with Revinate and Dr Peter O’Connor that many of them are, with integrated technology systems coming in as the second greatest challenge and concern hoteliers have, but how many hoteliers can identify solutions to this?
Additionally, it’s interesting to note that hotelier participants of the study nominated improved data collection and security as their third greatest challenge and concern. If I can speak for hotel technologies specifically here, would it be inaccurate to say that far too many of these technologies today still do not meet today’s data security standards? While no technology can guarantee full protection of guest data, using technology that has achieved the industry’s stringent security benchmarks is one way hoteliers can be ahead. I am referring, of course, to PCI DSS compliance and the day SiteMinder achieved this across its full product suite two years ago was a very important one. It was an important milestone because fundamentally it meant we could ensure we not only prepared our own systems, but the systems and businesses of our hotel customers in a world where online fraud is rife and on the increase. Again, however, how many hoteliers really understand the potential consequences of using technology that does not adhere to data security standards?
It is clear that solutions do exist for hoteliers to overcome their top challenges and concerns as they relate to distribution and online marketing. However, it is up to hoteliers to adopt these solutions and it is up to us, as the experts within these spaces, to better educate all hotels and guide them to technological solutions that are both easy-to-use and affordable. Hoteliers need most to understand how they can navigate through the demands of today’s consumer-led, Internet economy and we as an industry need to do more to support them in this regard.
SiteMinder runs a number of seminars on these very issues throughout the year, all around the world, and I would encourage hoteliers to attend one in their local area.