With 2009 over and hoteliers feeling more optimistic, HeBS sees two very different approaches to hotel Internet marketing in 2010: on one side, some hoteliers are still extremely cautious when spending marketing dollars; on the other, hoteliers are hitting the ground running with more expansive online marketing budgets and an enthusiasm to participate in new initiatives.

How are hoteliers shifting the balance between offline and online marketing budgets? Which initiatives do they believe will bring the highest ROIs in 2010, and to which initiatives are they willing to start devoting more of their budget? Are hoteliers’ finding any more “wiggle-room” in their budgets now that the recession is coming to an end? With social media and mobile marketing dominating conversations these past few months, are hoteliers finally willing to invest a significant portion of their budgets to these up-and-coming marketing formats?

The purpose of the Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices is to answer these questions and to assess hoteliers’ Internet marketing priorities and strategies for the year ahead. With these direct responses from hoteliers in the field, HeBS can provide the industry with insights on how Internet marketing strategies for the hospitality industry are developing year after year.

Who Participated this Year?

The survey experienced global participation, with almost a third of the responses coming from the US and Western Europe.  This year, we also saw more participation from hoteliers in the Asia-Pacific region (14.8% vs. 12.3% last year).

Hospitality executives included general managers (22.2%), sales and marketing directors (16.7%), e-commerce managers (25.9%), and revenue managers (13%). Similar to previous years, the full spectrum of hospitality and travel verticals were represented, including boutique hotels, upscale hotels, budget, mid-scale and luxury franchised properties, major brands, real estate trusts, resorts, hotel management companies, casinos, and more. Over half of participants were hoteliers from independent properties (55.6%), and the majority was from mid-scale and luxury hotels (37% and 35.2%, respectively).

Here are the results of the 4^th annual Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices.

Main Findings from the 4^th Benchmark Survey

• As expected, the economic environment prevailed as a factor when planning budgets. Even so, hoteliers continued to shift budgets from offline to online marketing formats. In this year’s survey, 51.1% of respondents said they were shifting a portion of their budgets to online because they believe Internet marketing produces the best results (55% vs. 10% that think traditional marketing is more effective). This is a smart move considering the online channel is still the only growth channel in hospitality and the most measureable marketing channel.
• For the first time, we saw static marketing budgets rather than budget increases. Thirty-nine percent said they were not increasing their overall marketing budgets in 2010, vs. 33% last year. HeBS anticipated this, as many hotels experienced a very difficult year and needed to scale back in 2010.
• Year after year, more and more hoteliers are engaging in social media. This year, 50% of respondents said they were planning on creating profiles on social networks in 2010, a dramatic increase over last year (14%).
• In the 2010 survey, we asked hoteliers which mobile initiatives they were planning for 2010. Over one fourth of respondents (25.9%) are planning a mobile-ready website this year. This is further testament to how quickly mobile is evolving as mobile ready websites were hardly in the hotelier’s arsenal in 2008 and 2009.
• Hoteliers are under the assumption that they have hotel Internet marketing under control. Seventy-six percent responded that they believe their property conforms to the latest best practices in terms of Internet marketing, compared to just under half last year. As the industry matures, more and more hoteliers are professionally developing in this area.

Now that the Recession is Finally Coming to an End….Has Hotel Budgeting Changed?

The online channel, confirmed by the latest eTrack Full Year 2009 report on hotel bookings by channel, remains the only growth channel in hospitality. In 2009, Internet bookings for the top 30 hotel brands represented 54.2% of total CRS bookings (growth of 6.6%), while GDS and voice bookings declined by 3.7% and 2.9% respectively. Read HeBS’ blog article on the subject.

According to PhoCusWright, 60% of leisure and 40% of business travel will be booked online in the U.S. this year, and 45% of hotel bookings in 2010 will be via the Internet (HeBS). Even with these encouraging signs, survey results show that for another year, hoteliers’ Internet marketing budgets were greatly affected by the economy.

HeBS first introduced the economic environment in last year’s survey. This year, the economic environment still has a significant impact on hotel Internet marketing budget planning for 2010. Last year, 81.6% of respondents said the economy would affect their budget planning for 2009, down to 70% this year.

With these economic constraints, what portion of hoteliers’ budgets were devoted to Internet marketing activities in 2009? Again, similar to last year, most respondents devoted between 11-20% and 21-49% of their budget to the online channel (23.1% and 24.6%, respectively).

With these limited funds, what are hoteliers planning to spend their budgets on this year? In Table A below, you may see that spending on the various Internet marketing initiatives has not varied greatly from 2009. What we are seeing is a re-organization of budgets, with hoteliers making room in the budget for Web 2.0, social media and mobile marketing.

Table A

While these figures still correlate with initiatives from which hoteliers believe they will achieve the greatest ROIs, there were some surprises this year. As you’ll see below in Table B, hoteliers found room in their budgets in 2010 for Web 2.0, social media and mobile marketing because they believe these initiatives will bring some of their highest ROIs. In 2009, hoteliers stuck to the basics. In 2010, many are willing to experiment with new initiatives.

Let’s Talk about ROI

In this economy, which Internet marketing formats do hoteliers believe generate the highest ROIs for their hotel?

In the past few years, website design, website optimization, and search engine optimization were the initiatives which hoteliers said brought the best returns. This year, we see in Table B that even though social media and mobile marketing recently made their way into budgets, hoteliers are expecting real successes here.

Table B

Hoteliers may be on to something. According to eMarketer, social media, blogs and SEO are more cost-effective for lead generation. Data by HubSpot shows that more than 2/5 of companies using social media marketing channels directly acquired a customer.

How Have Web 2.0 & Social Media Evolved in the Hoteliers Action Plan?

In addition to hoteliers believing that social media will produce greater ROIs, the survey also showed a surge in the types of social media that hoteliers are participating in (or planning for 2010). More hoteliers are planning to engage in all types of Web 2.0 and social media initiatives across the board, as you may see in Table C:

Table C

We may also see from Table C that half of hoteliers surveyed (50% exactly) responded that in 2010 they are planning to create profiles for their hotels on the social networks.  The days of just waiting to see how social media develop seem to be over. In 2010, if hoteliers are not investing time on social media, their competitors are going to have a great advantage.  This hot topic of 2009 continues to be a big part of the conversation. This year, however, more and more hoteliers are going to actually act on it. The “Hotelier’s 2010 Top Ten Internet Marketing Resolutions” article is a good resource for where to start.

Mobile Marketing Proves to be a Big Addition in 2010

Mobile Marketing has quickly become one of the most talked-about marketing formats in 2010, and rightly so. The number of mobile devices has surpassed the number of personal computers worldwide. Seventy-eight percent of the U.S. population has a mobile device of some sort. Sixty-seven percent of travelers and 77% of frequent business travelers with Web enabled mobile devices have already used their devices to find local services (e.g. lodging) and attractions (PhoCusWright). More information about the Mobile Marketplace is available in the recent HeBS article, “Mobile Marketing & Distribution Strategy in Hospitality: the Future is Already Here.”

Hoteliers must quickly respond to mobile users’ demand for instant access to information as well as an Internet experience that rivals the one via traditional PCs and laptops.  From Table D below, we can see that hoteliers are indeed taking this topic very seriously.

Table D

While a significant number of hoteliers surveyed are not yet planning on mobile marketing initiatives for 2010 (32.8%), many are taking some very crucial first steps. Building a mobile-ready website and planning for a mobile booking engine, for instance, are in the plan for 2010 (25.9% and 22.4% respectively). In the HeBS article concerning mobile marketing (referenced above), we highly recommended that hoteliers start with a mobile-ready website and a mobile booking engine if possible, and that they start collecting mobile numbers (m-lists) for future SMS Text marketing.

Brand Restrictions are an Issue Once More

2010 Survey results show that brand restrictions are slowly becoming an issue again. While a high percentage of hoteliers felt there were major restrictions on their online marketing efforts between 2007-2009, the percentage was decreasing year after year. As shown in Table E, this year the percentage of hoteliers who find there to be major restrictions is slowly but surely creeping back up.

Table E

Here are some of the responses:

• “Limitations on personal blogs, Facebook and social media”
• “Want us to drop our own website”
• “Pressure to spend more than we can afford”
• “No flexibility, conversion tracking, etc.”
• “In every way we are restricted – we don’t own the brand”
• “Limited Freedom. Chains are too slow to react to the changing Scenario”
• “Lack of clear vision and not allowing us to go outside the box”
• “Brand like to restrict SEO to their own efforts or restrict our ability to measure ROI”

As survey responses from the past 4 years have shown us, there will always be restrictions on online marketing conduct for franchised properties.  This year, some brands are especially restricting activity on social media sites by banning profiles altogether. As hoteliers are becoming smarter in their hotel Internet marketing efforts, and popular online marketing initiatives such as social media and mobile marketing are becoming mainstream, the major hotel brands will need to find some sort of resolution – and quickly.

Conclusion

What can the industry take away from this year’s survey results?

Hoteliers are still shifting their budgets from offline to online, they are still focusing most of their budgets on proven, ROI-generating Internet marketing initiatives, and franchised properties continue to struggle under major brand restrictions on their online marketing efforts.

Survey results showed that many hoteliers are putting the recession behind them and considering exciting new Internet marketing formats in 2010, including Web 2.0 enhancements on the website, social media profiles, and mobile marketing.

The online channel is the only growth channel in hospitality, period. Hoteliers must embrace the online travel channel, especially the direct online channel, as it continues to be the only viable option for any growth during what continues to be a difficult economic environment. At HeBS we believe that while it is important to start dedicating a portion of the hotel’s resources to the newer online marketing formats such as social media and mobile marketing, it is still crucial that hoteliers not forget about the basics and that they focus on having a comprehensive, ROI-centric Internet marketing strategy to help them succeed in 2010.

Starkov presented the facts about mobile:

• The number of mobile devices has surpassed the number of personal computers.
• 41% of leisure guests and 54% of business guests with mobile phones with data plans used their phones for travel-related purposes.
• 10% of hotel guests with mobile phones with data plans have used them to reserve rooms.
• Mobile bookings are expected to exceed $1 billion in 2010.

Mobile marketing is the fastest growing sector in travel marketing. As technology continues to improve and mobile usage increases, Starkov maintains, hoteliers need to have an action plan in place to take advantage of the market.

The first step, as many have noticed when accessing their current sites from mobile devices, is a mobile-ready website, designed and developed for viewing on small screens. Once a mobile-ready website is in place, hoteliers should begin m-marketing including mobile search, m-CRM, and other initiatives to round out a comprehensive Mobile Web strategy.

Starkov’s presentation at EHTEC, “Mobile Marketing in Hospitality: the Future is Already Here,” explained to hoteliers why they can no longer ignore mobile marketing, its importance to the travel and hospitality industries, and where to begin.

To read HotelNewsNow.com’s coverage of this event, please click here. For more about mobile marketing, please click here.

Lake Lanier Islands Resort sweepstakes by HeBS

This interactive sweepstakes, designed and marketed by HeBS, allows participants to enter once daily to win a free night at Lake Lanier, a lovely lakeside Georgia resort. The contest also features a refer-a-friend functionality which awards a $250 cash card to the person who refers the most friends to enter the sweepstakes via the website.

Lake Lanier’s sweepstakes will encourage daily visits to the website, vastly grow its opt-in email list, and promote the resort as a luxurious and unique Georgia lakeside destination. Multi-channel marketing efforts to promote the sweepstakes include email marketing, strategic linking, and the refer-a-friend functionality, which will help the sweepstakes spread virally.

Lake Lanier Islands Resort sits on 1,100 picturesque acres in Georgia. Offering a diverse selection of accommodations from lakeside cottages to villas to floating houseboats, Lake Lanier is a truly one-of-a-kind resort.

Click here to enter the Lake Lanier Islands Resort sweepstakes!

International Palms Resort and Conference Center website by HeBS

HeBS strategically designed the International Palms Resort and Conference Center website to be user-friendly, booker-friendly, customer-interactive friendly, and search-engine friendly. Combined with its warm, Florida-inspired design, these capabilities will ensure the website will act as a robust revenue-generating tool. International Palms will heartily benefit from its new website through increased online bookings and RFPs, incremental revenues, and new business from specifically targeted consumer markets including family and business travelers, and event planners seeking to host distinct, unforgettable meetings and events.

Some of the various innovative features of this new website include:

∙          Unique, tropical website design reflecting International Palms’ two distinct Florida hotels

∙          Easy-to-use and consistent tiered navigation addressing the hotel’s key customer segments

∙          Rich, optimized description and destination content on the website

∙          Optimized website text, navigation, and design for top search engine placement

∙          Interactive Calendar of Events functionality

∙          Rich visual content including Flash animations and Photo Gallery

∙          Extensive online RFP for meeting and event planners

∙           24/7 real-time Search/Availability booking engine on the Home page

∙          Featured and bookable special offers on the Home page

The International Palms Resort and Conference Center website targets all important and potential key customer segments including families, business travelers, traveling groups, and event planners interested in Orlando and Cocoa Beach meetings and events.

Please click here to visit the new International Palms Resort and Conference Center website!

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.

Here are some of HeBS’ findings based on the latest eTRAK benchmark report, surveys and industry data from PhoCusWright, ARC and our own research.

GDS Channel Is in Steady Decline:

• GDS hotel bookings via the CRS of the top 30 hotel brands declined by 3.7% 2009 vs. 2008, and constitute 23.6% of total CRS bookings in 2009 vs. 27.3% in 2008 (eTRAK).
• Back in 2006, GDS CRS reservations constituted 31.3% of total CRS bookings for the top 30 brands. GDS share has decreased by 24.6% from 2006 to 2009, when it was reported at the 23.6% level.
• Travel Agency Share from Total Travel Market in the U.S. dropped from 41% in 2006 to 33% in 2009 (PhoCusWright).
• U.S. Travel Agency Locations decreased by 7% in 2009 vs. 2008. The number of locations has been decreasing at an average rate of 4% every year since 2001, and the number of travel agencies has declined from as high as 35,000 in 1995 to less than 16,450 in September 2009 (ARC, HeBS).

The Voice Channel Contribution Is Decreasing:

• Voice channel  hotel bookings via the CRS of the top 30 hotel brands declined by 2.9% in 2009 vs. 2008, and now constitute 22.2% of total CRS booking in 2009 (eTRAK).
• Last year’s decrease is in addition to a decline of 2.8% for the full 2008 vs. 2007 (eTRAK).

• The Voice Channel is in decline for the 6^th consecutive year (HeBS). Back in 2006, voice reservations constituted 31.3% of total CRS bookings for the top 30 brands. Voice Reservation share decreased to 25.1% in 2008 and 22.2% in 2009.

The Shift from Offline to Online Channel is Permanent:

• 54.2% of overall CRS bookings for the top 30 hotel brands come from the online channel, which is an increase of 6.6% vs. 2008 (eTRAK).
• 60% of leisure and 40% of business travel will be booked online in the U.S. this year (PhoCusWright).
• 45% of hotel bookings in 2010 will be via the Internet (direct + indirect online channels) (HeBS).

Direct vs. Indirect Online Channel:  Dynamics Follow the Economy:

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:

• In 2009, 70.9% of online bookings came from the direct online channel (i.e. the major hotel brands’ own websites), while 29.1% came from the indirect online channel (the Online Travel Agencies—OTAs) (eTRAK). This constitutes a significant increase of the contribution from the OTAs compared to 2008, when 75.2% of online bookings came from the direct online channel, while 24.8% came from the OTAs.
• Compare this to 2007, when the direct channel contributed 76% of CRS Internet bookings.

Here is a summary of eTRAK’s   most recent reports on hotel bookings by channel:

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.

Parrot Key Hotel & Resort Sweepstakes by HeBS

This interactive sweepstakes, designed and marketed by HeBS, allows participants to enter once daily to win a free night at the luxurious waterfront Parrot Key Hotel & Resort, a member of the Singh Hotels and Resorts collection. The contest also features a refer-a-friend functionality which awards a $250 cash card prize to the person who refers the most friends to enter the sweepstakes via the website.

Parrot Key Hotel & Resort’s sweepstakes will encourage daily visits to its website, appreciably grow its opt-in email list, and promote the property as a luxurious waterfront Key West destination. Multi-channel marketing efforts to promote the sweepstakes include email marketing, strategic linking, Facebook and Twitter, and the refer-a-friend functionality.

Parrot Key Hotel & Resort is an exclusive waterfront Key West Hotel located just minutes from historic Old Town. Located among five acres of lush tropical landscaping and palm groves, Parrot Key features deluxe rooms and suites, “Conch-style” cottages, private swimming pools, a sculpture garden, restaurants and cafes, spa services, water sports, and dedicated concierge services.

The Westin Westminster Site by HeBS

HeBS strategically designed The Westin Westminster’s site to be user-friendly, booker-friendly, customer-interactive friendly, and search-engine friendly. Combined with its sleek and stylish design, these capabilities ensure the website will be a robust revenue-generating tool. The Westin Westminster will benefit extensively from its new website through increased online bookings, incremental revenues, and new business from specifically targeted consumer markets including leisure travelers, business travelers, Starwood Preferred Guests, and event planners.

Some of the many innovative features of this newly designed website include:

• Unique, outdoors-inspired website design for a sophisticated Rocky Mountain hotel
• Easy-to-use and consistent tiered navigation addressing hotel’s key customer segments
• Rich, optimized description and destination content on the website
• Optimized website text, navigation, and design for top search engine placement
• Rich visual content including Flash animations
• “Share This Site” functionality to encourage viral distribution and chatter from site visitors
• 24/7 real-time Search/Availability booking engine on the Home page
• Featured and bookable special offers on the Home page

The Westin Westminster website targets all important and potential key customer segments including skiers and other leisure travelers, business travelers, and event planners interested in incredible Colorado meetings, events, and weddings.

Please click here to visit The Westin Westminster website!

BNP Paribas Open 35th Anniversary Sweepstakes by HeBS

Prizes range from Baccarat gift cards to books autographed by Andre Agassi and culminate in the Grand Prize on the 35^th day: the FILA Final Four Weekend Fan Package, which includes complimentary hotel nights March 18-20, two box seat tickets for four tennis sessions, and more! The sweepstakes also features a refer-a-friend functionality; the person who refers the most friends to enter the contest via the website will receive a $250 cash card prize.

This sweepstakes celebrates the 35^th anniversary of the annual BNP Paribas Open tennis tournament held in Indian Wells, California. The giveaway simultaneously encourages daily visits to the BNP Paribas Open website and grows its opt-in email list through registrations; other initiatives such as email marketing, the refer-a-friend functionality, Facebook, and Twitter are also used to generate interest in the tournament, Indian Wells as a destination, and tennis.

A two-week combined ATP World Tour Masters 1000 and Sony Ericsson WTA Tour Premier event, the BNP Paribas Open tournament draws more than 300 of the best men and women tennis players from around the world to Indian Wells, CA. An unparalleled experience in an unforgettable destination, the BNP Paribas Open is one of the most anticipated events of the year and will benefit from the continuity of the sweepstakes and enhanced viral promotion.

The BNP Paribas Open 35^th Anniversary Sweepstakes Giveaway began January 29, 2010 and ends March 5, 2010. Only U.S. and Canadian Residents aged 18 years or older are eligible to enter. For other rules, please click here.

For a chance to win one of 35 prizes, including the FILA Final Four Weekend Fan Package, please click here to enter!

Original Resorts website by HeBS

HeBS strategically designed the Original Resorts site to be user-friendly, booker-friendly, customer interactive-friendly, and search-engine friendly. Combined with its modern and dynamic aesthetic design, these capabilities ensure the website will be a robust revenue-generating tool. Original Resorts will benefit extensively from its new website through increased online bookings, incremental revenues, and new business from specifically targeted segments including family, romantic, and spa travel.

Some of the many innovative features of this newly designed website include:

• Unique Mexico-inspired design for a luxurious collection of all-inclusive resorts
• Easy-to-use and consistent tiered navigation addressing  all of the hotel’s key customer segments
• Rich, optimized description and destination content on the website
• Optimized website text, navigation, and design for premier placement on the search engines
• Rich visual content including Flash animations and individual Visual Galleries for each property
• Interactive Calendar of Events that supports dynamic content and media
• “Share This Site” functionality to encourage viral distribution and chatter from site visitors
• 24/7 real-time Search/Availability booking engine on the Home page
• Featured and bookable special offers on the Home page

The Original Resorts website targets all important and potential key customer segments including families and couples as well as travelers interested in all-inclusive resort and spa destinations. It also targets destination wedding planners looking for picturesque oceanfront wedding venues in Mexico with luxurious guest accommodations available.

OriginalResorts.com positions the collection as a diverse family of all-inclusive resorts—including family, adult-only, couples, and all-suites resorts—for discerning travelers seeking both leisurely and exciting getaways to Cancun, Los Cabos, and Riviera Maya.

Please click here to visit the Original Resorts website!

The sweepstakes, designed and marketed by HeBS, allows participants to enter once a day to win a free night at the brand new Hotel Indigo in Chelsea. The contest also features a refer-a-friend functionality which will award a $250 cash card prize to the person who refers the most friends to enter the contest via the website.

Hotel Indigo New York City-Chelsea Sweepstakes by HeBS

The interactive sweepstakes will serve various Internet marketing-related purposes for Hotel Indigo Chelsea including encouraging daily visits to the website, significantly growing its opt-in email list, and promoting the property as an eclectic and elegant boutique hotel in Chelsea New York City. Through efforts including the refer-a-friend functionality, email marketing, online travel deal alerts, and word-of-mouth chatter, the sweepstakes is sure to further position the hotel as the latest Chelsea hotspot.

Hotel Indigo Chelsea is a new boutique hotel in the Chelsea section of Manhattan, New York. The hotel offers modern accommodations including two penthouse suites, a rooftop bar and restaurant and ample meeting space in an environment based on balance and organic design. As the newest addition to the Chelsea Flower District, Hotel Indigo Chelsea is surrounded by rows of compelling art galleries, the best in fine dining and nightlife, renowned theatre, and chic boutiques, creating the ideal setting for a refined and relaxing New York travel experience. For the business traveler, Hotel Indigo Chelsea is at the heart of it all, conveniently located near the Jacob Javits Convention Center, Penn Station, and Madison Square Garden.

The Hotel Indigo New York City-Chelsea 30-Day Free Room Giveaway began January 19, 2010 and ends February 18, 2010. Only U.S. and Canadian residents aged 18 years or older are eligible to enter. For other rules, please click here.

For a chance to win a free night at Hotel Indigo Chelsea, please click here!