Five trending hotel news articles and Duetto’s Take on how they will impact your hotel Revenue Strategy.
1. Mobile Claims Top Spot as Search, Booking Platform
New research reinforces the notion that mobile is taking over as the preferred search and booking platform for most people seeking travel arrangements. Data from Opera Mediaworks shows 51% of consumers prefer mobile as their digital platform of choice, and 65% prefer mobile as a search tool during the planning stages of a travel journey.
Authors of the report admonished travel marketers who believe consumers use mobile only for search and not booking hotels and other travel. According to their report, marketers need to focus their efforts and measurements on the booking conversion metric through mobile.
Duetto’s Take: The latest numbers give more evidence to the fact that a “mobile revolution” has already arrived for the hotel industry. Brands have dozens of opportunities to add value to guests through their ubiquitous smartphones, but as other experts have said, hotels must make any mobile offering additive to the guest experience.
If guests can search for a hotel to book more easily on a mobile phone, they might be more apt to book on that channel as well. If their journey is made more convenient by amenities like mobile check-ins, messaging services with the hotel staff, or being able to access their streaming content in the room on a phone or tablet, that creates the kind of positive experience that engenders true loyalty.
Hotels trying to create an app just to add people to the loyalty club or to up-sell customers in some way will very likely be disappointed.
2. OTAs Like Their Position in Hotel Loyalty Battle
According to at least one online travel agency executive, hotel chains are playing a zero-sum game when it comes to their stepped-up efforts to attract and retain loyal customers, often through rate incentives and personalized marketing and experiences.
Adam Anderson of Expedia said hotel chains in effect fight each other for the same finite pool of frequent guests, while the OTAs mine the much deeper vein of consumers who are simply looking for the best deal with the best value. That latter group of guests is relatively brand-agnostic.
But revenue strategist Sloan Dean doesn’t buy Anderson’s argument. While he agrees that many hotels haven’t fully mastered the art of distribution management and are in-turn inefficient when it comes to maximizing direct bookings, he says control of the guest has hotels wary of turning distribution over to OTA partners fully.
Duetto’s Take: Personalized pricing and dynamic loyalty programs will only become more important as hotel guests grow more discerning about how they differentiate one brand’s club from another’s.
As Duetto’s thought leaders have pointed out, OTAs still have a role to play in bringing in new customers to your hotel; it’s then your job to provide the excellent service to bring them back via direct channels — and to get contact information for beginning that personalized marketing. Once guests are using direct channels, you can offer them dynamic discounts that are fenced and that reflect their stay and spending patterns.
Another Duetto report, How to Manage OTA Channels More Profitably, urges revenue managers to segment discounted rates even further, based on how much profitability certain customer groups drive.
3. Google Talks Out Its Issues with Travel Industry
Google has created its Travel Industry Council, a group of executives from most sectors of the travel industry — including hotels — to discuss nagging issues that could become major fissures between the travel business and the search giant.
Among the issues reportedly discussed included how Google obtains the rates it shows in its metasearch function, its seeming preferential treatment to its own products over those of other suppliers, and the structure and operating functions of Google Travel.
Duetto’s Take: This is a wise move from Google. As the search company inches closer to becoming a full-fledged OTA, it has raised the hackles of many travel companies, and the council presumably could clear up any misperceptions.
Revenue managers should keep Google on their radar as their distribution strategy evolves. As search companies or other digital players like TripAdvisor move further into OTA territory, hotels have the opportunity to be more strategic in their partnerships than they were when the first OTAs emerged two decades ago. View a site like Google or TripAdvisor as an opportunity to acquire guests. The value those sites add to the hotel is that they can help the brand get in front of a potential guest higher upstream in her search process, with pricing and availability, and foster a transaction before the traveler looks at a traditional OTA.
4. Airbnb Inches Closer to the Hotel Industry
Airbnb and other sharing economy accommodations sites attract a mostly different set of guests than do traditional hotels — at least so far. That’s the conclusion of a study contrasting customer profiles of guests of both Airbnb and traditional hotels.
In a nutshell, Airbnb aficionados are risk-takers who want to have experiences while staying in the middle of the action. Amenities and facilities are less important to these adventurers. On the other hand, traditional hotel guests tend to be conservative travelers who prefer predictability to new, uncharted experiences.
Put another way: Airbnb customers like to stay with individuals; hotel guests like to stay with organizations.
Duetto’s Take: We’d caution hotels against building their distribution or segmentation strategies against sweeping generalizations about Airbnb guests. Big brands may be right about peer-to-peer lodging’s small effect on their business, due to different customer bases with different needs, but they nonetheless should learn all they can from this growing industry.
As another source of hotel room supply, Airbnb is a competitor, but it doesn’t need to be seen as a clear and present danger to your hotel, as long as you’re smart about how you respond to its growing popularity. Co-opt the parts of the sharing economy guests like, such as a user-friendly interface for booking online and properties’ knowledge of local neighborhoods. But exploit peer-to-peer lodging’s weaknesses where your hotel has a real advantage, such as lobbies open 24-7 for a safer, more convenient check-in.
5. Omni Hotels’ New Caring Approach to Direct Bookings
Omni Hotels has developed a philanthropic twist in its campaign to encourage direct bookings. For every stay booked directly on the brand’s website, Omni will make a donation to Feeding America to provide dinner for a family of four for an entire week. Donations will benefit local Feeding America organizations in the 42 communities where Omni’s 60 properties are located. The company says the initiative is part of its Local Market Leadership core value, which president Mike Deitemeyer describes as being “committed to integrating into the culture of each of our locations and caring for those communities.”
Duetto’s Take: As a hotel marketing move, this campaign is pretty brilliant. Omni of course wins because of the greater profit margin on a direct booking, with the added benefits for its public relations and branding. Unlike some of the campaigns from Hilton and Marriott, Omni’s effort to drive direct bookings isn’t emphasizing discounts and lower room rates to drive participation. By appealing to guests’ philanthropic side and reinvesting via a charitable donation — which may have been in the budget for Omni anyway — the hotel brand may be able to do well by doing good.
Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.
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