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Monthly Archives: July 2013

Online Travel Agencies (OTAs) like Hotwire, Orbitz, and Expedia provide a great service to hotel operators by filling vacant rooms and bringing in extra revenue that hotels would have never seen otherwise. Unfortunately, OTAs have done such a good job branding that customers believe these third-party websites always offer the best price. Why should they shop anywhere else?

Rate parity requirements in agreements between hotels and OTAs make it extremely difficult to impact this perception. They prevent hotels from advertising rates for less than what’s on the deals site. Hotels do have a few tricks, however, for driving more direct bookings. It just calls for more creativity. Here’s several strategies our experts devised for competing in this climate.

Rate parity clauses only apply to prices advertised to everyone on the Internet. They don’t prevent hotel operators from publicizing deals to a limited group of people and offering packed deals with a higher value than savings from deal sites. You could, for example, advertise deals to your Facebook following. Here’s one example from the Hard Rock Hotel in San Diego. 

Hard Rock Hotel Facebook Ad

This ad leads to a special landing page where site visitors can sign up for the deal:

Hard Rock Cafe Landing Page Room Rate

While this is the same rate that advertised on Expedia, the overall value of the deal is more because you get two tickets to the event. Other common add-ons include things like free Wifi, parking, spa treatments, and discounts on food or drinks in the hotel. Here’s the same hotel advertised on Expedia:

Hard Rock Hotel Expedia

Even if you don’t have the resources to build a special landing page, you can still advertise deals directly on your Facebook page with a discount code. Here’s an example from an Atlanta hotel that offered the following deal through winter:

Atlanta-Hotel-Facebook-Promotion

This hotel reported generating more than $2,000 in bookings from this promotion in one month. Regularly, Facebook generated less than $100 in sales per month.

People that sign up for your loyalty program are another common “gated audience” for promoting your deals. Be sure to invite all guests to sign up for your email list and send monthly deals for a return stay booked direct. You can also use this list to advertise your add-on packages and offers.

“We give better rates to returning guests than any rate on a OTA,” says Gary Bruton, principal at Cypress Hospitality Management, which manages The Sanctuary Beach Resort, among others.

Other than offer packages and promoting to a limited audience, hotels can also take efforts to convert more websites visitors through smart design. In many cases, when someone is browsing for a hotel on an OTA, they will visit the hotel’s actual website. This is your chance to keep them there.

One way to do this, is by offering efficient online booking, which is offered, for example, by the Booking Button built into hetras. It should require as few clicks as possible to complete booking, and give the guest absolutely zero reason to have to call you with a question, or doubt that their reservation will go through. This starts with the placement and design of the “book now” call-to-action. Make sure that it appears at the top of the page. It should also clearly be a button or tab (rather than just text that a site visitor might not know if hyperlinked).

These buttons should be synched with a hotel management system (if you don’t currently use one, there are several top reviewed options available here), that allow the user to check room availability in real time.

These should also be optimized for mobile with responsive design that automatically adjusts to the device’s screen size. Here’s an example from WebRezPro:

WebRezPro PMS mobile

“Mobile is big,” notes Bruton, “and that’s not just tablets, but smartphones.” You need to have your mobile website able to take reservations and a button that will automatically calls the hotel for the prospect when pushed.

You can also advertise your packaged offers directly from the home page with an “offers” tab. This should take visitors to a page with a brief, two-sentence description or bulleted list of each offer, image, and a buy-now button. Here’s an example from Ritz-Carlton:

Ritz Carlton Miami Banner Offers

This tab takes you to this page:

Ritz offers page Miami

These are just a few tips hotels can use for driving more direct bookings. What strategies does your hotel use to attract travel deal seekers? Join the conversation with a comment here.

Alan S. Horowitz contributed to this report. 

Ashley Verrill has spent the last six years reporting and writing business news and strategy features. Her work has appeared in myriad publications including Inc., Upstart Business Journal, the Austin Business Journal and the North Bay Business Journal. Before joining Software Advice in 2012, she worked in sales management and advertising. Currently, her research focuses on various topics related to CRM software, sales, customer service and marketing strategy.

This is a guest post by Michael Toedt, Founder and Managing Director of Toedt, Dr. Selk & Coll.

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Michael Toedt

About ten years ago, when we decided to found TS&C, we heard warnings from various sources that the concept of a central marketing database for hotels simply had no future. The large hotel software vendors could easily add such functionality and vendors from outside the industry could offer similar solutions as well.

I repeatedly reminded my critics of the increasing complexity of marketing requirements and that a clean separation between operational and marketing-oriented systems is a fundamental requirement for professional marketing management. Furthermore, I predicted that vendors from outside the industry would seriously underestimate the data complexity of the hotel world.

Several hotels and chains have in the meantime understood the problem and have implemented marketing-specific databases separate from the operational databases in the PMS and CRS.

But not all hotel managers have understood that a functional separation of data can actually have a positive effect on revenue. In fact, the lack of IT know-how among hotel management has led to some seriously misguided investments. According to various studies, the success of campaign management projects runs at an astonishingly low 7% and for CRM projects around 15%. What can be done to improve this?

Recently „Big Data“ has become a dominant topic in the international trade press. But what is Big Data? According to MIT, company data grows by 35 to 50% per year. Companies process approximately 1000 times as much data now as they did 10 years ago. In fact, in the last two years also, more data was produced than in all previous years.

Big Data focuses on the ever-increasing mountains of data and the ability to capitalize on them for the benefit of the company. Several years ago, the founder of the Tesco Loyalty Card identified customer data as the new oil. That pretty much says it all.

Hotel companies in particular have access to enormous mountains of data but has anything changed in the way that hotel management uses this data? How have hotel companies used this data to help drive the business further? Surprisingly few have made the effort to process this data in a meaningful way, a fact that is mirrored in the poor success rate of CRM projects.

In order to capitalize on Big Data, the trade press is in agreement that a separation of operational and marketing-oriented systems, as described above, is required. A central Data Warehouse should take data from all marketing-relevant sources, clean the data and make it available for further processing. Big Data therefore carries with it not only a technical but also an organizational challenge.

IBM recently published a study with the following conclusion: Big Data will significantly change the way companies approach marketing. But today’s marketing managers typically have a traditional marketing background and may not have the skills to tackle the new and significantly more technical and analytical challenges of marketing. The McKinsey Global Institute released figures indicating that in 2018, the United States will require an additional 190,000 data experts and 1.5 million managers who are able to make decisions based on Big Data. And that’s only for the US market.

Marketing is set to undergo a major revolution, not only in terms of the tasks required but in its overall importance to the company. The quicker companies understand this, the faster they can take advantage of the competitive advantage that Big Data provides.

With this in mind, stay tuned for exciting times!

About the Author

Mr. Michael Toedt is Managing Director and CEO of Toedt, Dr. Selk & Coll. He is responsible for marketing, technology, consulting and data protection.

In the past, Mr. Toedt was regional vice president of SANSORA INTERNATIONAL, a subsidiary company of the Schoerghuber corporate group and accompanied many hotel associations during the production of their central customer and marketing data base. He was raised in his parents’ hotel and after completing a mercantile apprenticeship he graduated as cook to be employed in the 5-stars restaurant Hotel Koenigshof in Munich. 1995 he began his course of studies of business economics at the University of Applied Sciences in Munich. During this time he visited Cornell University in New York and is now a lifetime member of the Cornell Hotel Society.

In addition to his activities with Toedt, Dr. Selk & Coll., Michael Toedt is assistant lecturer at the University of Applied Sciences of Munich in the course “Customer Relationship Management in Tourism” and is guest lecturer at various universities such as the University of Applied Sciences of Bad Honnef or Kempten and is the HSMA vice president for the South-East region.

He is also a doctoral student at the University of Latvia and University of Applied Sciences of Kufstein and is writing a dissertation about the effects of communication on sales performance within Customer Relationship Marketing in the hotel business.

In his new book about the role of “Big Data” for the hotel business, Michael Toedt explains the biggest hurdles – the lack of knowledge within the senior management and the willingness to implement the necessary changes – and provides hoteliers recommendations to increase the likelihood of success of their marketing programs.

Michael Toedt has published numerous articles and whitepapers about CRM and Marketing. For further information on his publications: http://www.ts-and-c.com/en/veroeffentlichungen.html

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