By Max Starkov & Mariana Mechoso Safer
Last year the economy remained in “recovery mode,” allowing the industry to focus its efforts more on marketing to the travel consumer and less on scaling back budgets for the first time in several years. The convergence of social media, mobile Web and location-based services, increased personalization and relevancy of marketing messages, the continued onslaught by social buying/flash sales sites and other heavily discounted distribution channels, the Google Panda and ‘Freshness’ updates, and ‘engaging’ the traveler at all touch points via multi-channel marketing were all hot topics last year and will continue to dominate in 2012.
How can hoteliers use real-time customer information to create time- and location-relevant promotions? Which digital channels and formats most effectively reach today’s hyper-interactive travel consumers and generate the highest ROIs? Should hoteliers be dedicating a significant amount of time to managing review sites and social media channels? What strategy should hoteliers adopt to stay competitive in search engine results when Google is consistently changing its algorithms?
The 2012 Top Ten New Year’s Digital Marketing Strategy Resolutions, presented by HeBS Digital for the 12th consecutive year, answers these questions and provides guidance on what hoteliers should do to succeed in the year ahead. With an improved outlook for the industry, technological advances, and the usage of mobile devices growing exponentially, opportunities for incremental revenues abound.
Here are the Top Ten Digital Marketing Resolutions your hotel company should consider adopting in 2012:
1. I will bring social, local and mobile marketing initiatives to the forefront of my hotel digital marketing plans this year.
Situation:
In 2012 hoteliers will be hearing a lot of the buzzword SoLoMo (SOcial, LOcal, MObile). Meant to convey the convergence of these three major media, the term SoLoMo describes a “marriage made in heaven” between the three content and marketing platforms. Why does this mean for hoteliers? Hotel guests are avid SoLoMo services users. Most social network engagements by travel consumers are done via mobile device. Consumers perform more than 3 billion local searches every month, and one in three mobile searches have local intent vs. one in five desktop searches (Google).
Unlike the desktop Web world, SoLoMo allows hoteliers to combine real-time customer geo-location with their demographic and psychographic information and time- and location-relevant promotions. The success of location-based social media such as Foursquare has shown us that rewards and recommendations are only the beginning. Hoteliers need to consider how to best utilize SoLoMo to engage their customers and generate incremental revenues.
Action Steps:
By focusing efforts on social media, local marketing, and mobile marketing, hotel marketers have the ability to deliver more personalized, relevant content and engage existing guests and potential customers like never before.
To begin with, how well optimized are your property profiles in the main data providers, which feed many local directories and geo-social sites? How well optimized are your property local search listings on Google Places, Yahoo Local, and Bing Local? What about all the local online directories and yellow pages? Do you have a local citation listing program in place?
Once you take care of your local content and listing strategy, it is time to enhance your mobile marketing presence. How deep, relevant and engaging is the local content on your mobile site? Do you have automated push of specials, promotions and local events from the property “desktop” website to the mobile site to keep your mobile presence “fresh?” Do you use micro-formats and Schema codes to relay the time- and location-relevant nature of these promotions and events to the search engines? Does your property take advantage of coupon promotions through Google?
Other recommendations include engaging your local customers via time- and location-relevant check-in promotions and rewards, launching social media promotions, contests, and post series via Facebook and Twitter, and blogging. Geo-social marketing initiatives allow hoteliers to integrate into customers’ lifestyles and connect (and stay connected) with them in ways that were not possible before. Industry experts already predict the end of the Foursquare-type check-in and envision a deeper and more experiential form of “social sharing” instead. Social, local and mobile marketing are great for time- and location-sensitive promotions. In 2012 focus on SoLoMo initiatives and you will remain ahead of the competition.
2. I understand this industry is complex and will work to make sense of a very convoluted digital space/online marketplace.
Situation:
Hoteliers have been rightfully confused by the myriad of headlines about the changing landscape of hotel distribution, from articles titled “Google will change your hotel’s distribution strategy” and “Facebook as an E-commerce engine,” to “How to make Twitter Sell” and “Mobile Apps to Impact Hotel Distribution.” In other articles OTAs are proclaimed to be a “good thing” because of the so-called billboard effect and contribution to new client acquisitions. On a daily basis, hotel owners, managers and operators are bombarded by far-fetched and often conflicting messages and claims.
The recession brought an onslaught of new players to the travel marketplace, which further convoluted the complex online marketing and distribution channels and online travel consumer behavior. Social buying sites (group buying, flash sales sites, member-only sites) and last-minute mobile sites are all presenting themselves as the “future of hotel distribution.” To add to the confusion, mobile and social have forever changed the way people research, plan and purchase travel – shorter booking windows, greater transparency, and peer recommendations are just some of the ways the integration of social and mobile have affected purchasing habits. Understanding this increasingly convoluted digital space and the increasingly complex online travel consumer behavior can feel like a monumental undertaking.
Action Plan:
In this dynamic industry, taking time on a daily basis to stay current with hotel digital marketing trends is a must. To start, adopt a business approach when analyzing whether or not use these new marketing formats and channels. In spite of all that is happening in the digital space, hotel marketing and distribution fundamentals have not changed. Try to correctly categorize these new sites, players and business models by asking yourself a set of simple questions: Is the site an advertising medium or a distribution channel? Does it work against accepted rate parity and best rate guarantee principles? Would a promotion via one of those sites alienate your existing corporate, group and leisure clients? Does working with these new players adhere to industry’s best practices in marketing and distribution?
Look deeper to understand the influence of each digital marketing initiative on the new online travel consumer. Advanced analytical tools can also help you make sense of this convoluted space. In this increasingly complex environment, consider partnering with a direct online channel strategy consulting firm to keep you informed and ahead of the competition.
3. I will continue to account for the continued shift from offline to online, and engage the hyper-interactive travel consumer via multi-channel marketing efforts.
Situation:
The shift from offline to online continues. The online channel has been rapidly growing for 16 years straight. Internet bookings for the top 46 hotel chains now constitute 54% of all the chains’ CRS bookings. The online channel has grown by 25% in the last four years alone, while the share of the GDS travel agent channel and voice channel has decreased by 25% and 11.1% in the past four years, respectively. It’s critical that budget dollars are shifted to online marketing budgets, and that these budgets stay focused on hotel distribution channels that generate the most bookings, are cost-effective, and protect rate parity and price integrity.
In 2012 the mobile Web and social media will further establish the new breed of hyper-interactive travel consumers who demand “immediate, anywhere and anytime” customer engagement, information access, transaction capabilities, content sharing and customer service in real-time. Marketing to this new type of consumer requires a completely new, multi-channel marketing approach where the hotel engages consumers at all touch points.
Action Plan:
Multi-channel marketing is the foundation for a smart direct online channel strategy. In this environment, the hotel website, SEM campaigns, email marketing, social media presence, mobile, etc. have a symbiotic relationship. For example, if you launch a website promotion, you should also send an email to the hotel’s opt-in list, announce it on Twitter and Facebook, launch a paid search campaign and publish a blog posting via the hotel blog.
In 2012, hoteliers need to invest in technologies and expertise needed to better execute these types of multi-platform and multi-format campaigns. For example, invest in technology that allows for smart and centralized marketing content delivery: All new special offers and events at the property and destination are automatically pushed by your hotel “desktop” website Content Management System (CMS) to your property’s mobile site and Facebook and Twitter accounts.
What line items should you include in your 2012 hotel digital marketing budget in order to drive revenue through the direct online channel? In our recent article, The Smart Hotelier’s Guide to 2012 Digital Marketing Budget Planning, we provide detailed recommendations how to allocate your 2012 budget to achieve the highest direct online revenues and ROIs.
4. I will take advantage of the Mobile Channel, especially in this marketplace where my competitors are behind the times.
Situation:
Today’s hyper-interactive travel consumers demand instant information and transaction capabilities, user location-oriented services, and personalization, attributes only the Mobile Web can deliver. Mobile users demand not only instant access to travel planning and booking capabilities, but a Mobile Web user experience that rivals and surpasses the Desktop Internet experience.
Mobile Internet usage will surpass desktop Internet usage by 2014 (Morgan Stanley). Google reports four-fold YOY increase in mobile search, and that one out of five hotel queries come from mobile devices. Coda Research projects 65% compounded annual growth of mobile commerce from 2010 through 2014, to reach $24 billion. Many OTAs and hotel chains reported several-fold increases in their mobile bookings in 2011. Last year more than 4.7% of website visits and more than 3% of all bookings came from mobile devices across our hotel client portfolio.
Smart hoteliers already know that the mobile Web adheres to different rules than the conventional desktop Internet. Mobile users have shorter attention spans than do traditional desktop users. They have less time to browse and are often on the go.
Action Plan:
Hoteliers need to develop and implement mobile Web-specific marketing initiatives, and not try to adapt existing “desktop” Internet assets like the property desktop website for use in the mobile space. It has become obvious that trying to squeeze your wide-screen 1280 x 1024-pixel “desktop” hotel website onto the tiny 320×480-pixel screen of a mobile device is a futile exercise that inevitably destroys usability and conversion rates.
In 2012, hoteliers should continue to focus on building and enhancing their mobile websites and launching mobile marketing initiatives, such as mobile SEM, SEO, mobile-social media initiatives, interactive sweepstakes and contests. In 2012, hotels should spend 9%-10% of their overall digital marketing budget on mobile marketing initiatives.
Start with the mobile website, your mobile hub for customer engagement. Is your mobile website specially designed to provide an excellent user experience in a mobile environment? Does it offer an engaging, contemporary design and functionality? Does it include content sections targeting your main customer segments? Have you increased your mobile site’s “discoverability” via mobile SEO and mobile SEM (e.g. Google mobile AdWords) and mobile media initiatives? Have you made the mobile website more interactive via mobile-social media initiatives, interactive sweepstakes and contests? Is your mobile website compatible with the recent Google Panda and “Freshness” updates and their requirement for unique and engaging content?
Here are the top mobile marketing initiatives hoteliers should focus on in 2012: mobile SEO, mobile link building to the site from mobile directories and sites, mobile SEM (paid search) campaigns, mobile banner advertising in the main mobile feeder markets, mobile contests and sweepstakes, and mobile promotions via SMS. Read our “Top 20 Secrets to Success in Hotel SMS Mobile Marketing” to help you get started.
As for the question of whether hoteliers should develop mobile apps or focus on developing and enhancing their mobile website, we firmly believe that hotels do not need a mobile app if they are a single-property, independent hotel. Nor do franchised hotels and resorts or smaller and mid-size hotel chains and multi-property companies. These hotel companies are better off focusing on building and enhancing their mobile websites and promoting the mobile site via mobile marketing initiatives. A single-property mobile site is six to ten times cheaper than a comparable mobile app. With rapid advancements in mobile technology, the lines between mobile apps and mobile websites are disappearing. Also, a mobile website is by default a cross-platform entity that can be viewed on all mobile platforms (iPhone, BlackBerry, Google Android, Windows Mobile, etc.), while apps or a customized version of an app must be created for every major platform.
5. Now that I know social media is a customer engagement channel and not a distribution channel in hospitality, I will use Social Media correctly to create “buzz” around my hotel, target receptive audiences, provide customer service and enhance customer experiences. This will ultimately stimulate hotel website visits, interactions and conversions on the hotel website.
Situation
There is no doubt that social media has changed how travel consumers research and plan travel, access travel information, and perceive the credibility of information. Internet users are increasingly influenced by social media sites and peer reviews. By utilizing a comprehensive social media strategy, smart hoteliers engage their customers and enhance their experiences, generate buzz and improve customer service.
Many hoteliers have underestimated the complexities and involvement required for managing the property’s social media profiles. Infrequent or bland, “sales pitch” postings, lack of interactivity, creativity, fun and intrigue plague the social media presence of many hotels.
Action Plan:
In 2012 social marketing should continue to be an important component of your property’s marketing mix and part of the comprehensive direct online channel strategy for any hotel company.
Social media and social marketing initiatives should be reviewed as part of the overall multi-channel marketing strategy of the hotel. Instead of focusing on only bookings and revenue when measuring results from social media marketing, use social media for brand-building and buzz-building; as a medium to interact with and engage customers; as an important customer service channel; as a source of engaged and relevant traffic to the hotel website, and a way to make the hotel look current, cool and up-to-date.
This year work on establishing or enhancing a brand consistent Facebook and Twitter presence; monitor customer reviews/engagements for any customer service issues; use engaging posts (ask questions, use trivia, hold contests); locate/designate your on-property Social Media “Champion”, and partner with a social media strategy and technology firm to provide strategy, training, and technology implementations such as Facebook custom tabs, contests, etc.
In light of the recent Google Panda updates (to be discussed in more detail in the next resolution), allowing your website visitors to share your site’s content with Facebook Like/Tweet/Google +1 buttons is important to stimulate conversation and for search engine optimization purposes.
Avoid the all-too-common mistakes made my many hoteliers when participating on social media channels, including posting infrequently, only focusing on promoting packages and specials, not responding to questions and comments made to the hotel, and deleting comments.
6. I will rise to the challenge imposed by the recent Google Panda and ‘Freshness’ updates!
Situation:
Today’s hotel website must adhere to very high expectations from not only website visitors but also the search engines. In a typical year Google makes more than 500 updates to its search algorithm. 2011 saw two major updates: the Google Panda Update (now in version 2.5) and the Google “Freshness” updates, which made most hotel websites obsolete by introducing very strict requirements for content, interactivity, and page download speeds. The Panda update requires websites to have engaging and unique website content (as opposed to bland, old and tired content and in addition to the existing requirement for deep and relevant content) that increases the site’s “stickiness”. The recent Google “Freshness” update requires that hotel websites maintain fresh and new content to rank high in the search engines.
Why are these updates important for the hospitality industry? Between 50%-70% of hotel website visitors and website bookings originate as leads from the major search engines. Traditionally, hotel websites are content rich vs. news rich, with descriptions and information featuring and explaining in detail every facet of the hotel business and service, from the bed linens to the capacity of a meeting room. The “static” content is there, but the “unique and engaging” and “fresh” content is lacking. This is the main issue with current hotel websites after the latest Google algorithm updates.
Action Plan:
In 2012 hoteliers must work harder than ever to enhance the uniqueness and engaging nature of the content on the property website by employing professional hospitality copywriters and maintaining fresh content on the hotel website year-round.
Build promotional landing pages and tiles for timely specials and events. Create new content pages on various topics including seasonal and sports events, local festivals and customer segment-specific content. Use “micro-formats” applied to every local promotion and event, which signifies to the search engine that these events are in fact standalone current events, with exact starting and ending times. Incorporate Schema codes on all time-sensitive content pages. Maintain a blog highlighting specials and events along with general hotel news. Talk about local events, highlight someone’s stay, seasonal activities in the area, or feature infographics about your hotel or region that deeply engage users.
Another must is incorporating real-time Twitter feeds and Facebook interaction information in the hotel website to ensure that interaction is recorded, up-to-the-minute, and relevant.
Updating the hotel website should not be a costly endeavor – a good content management system should give hoteliers the tools they need to perform these updates easily, efficiently, and without extra cost to the hotel, as well as ensure automated push of new content (e.g. promotions, events, packages, etc.) from the “desktop” website to the property mobile site and Facebook and Twitter pages.
7. I will decrease dependence on the OTAs this year, adding thousands of dollars in incremental revenues to my hotel’s bottom line.
Situation:
Did you know that since 2007, OTAs have increased market share by 32% at the expense of the hotel direct online channel (hotel websites)? STR estimated that the true cost of OTA distribution in 2010 alone was more than $2.5 billion in the form of abnormally high merchant commissions. It is 10 to 15 times cheaper to sell your rooms via the direct online channel compared to the OTA channel.
We do not envision a scenario in which 100% of Internet bookings are made via the direct online channel. The OTAs and other intermediaries in the indirect online channel do play a necessary role in certain areas of the travel planning and purchasing process (dynamic packaging). Even pre-Internet, approximately 25% of all hotel bookings in the U.S. came via the indirect channel (travel agents, tour operators, and wholesalers).
Action Plan:
Driving bookings through the direct online channel – the hotel website – needs to be every hotelier’s priority in 2012. In addition to being the most cost-effective distribution channel, the direct online channel provides long-term benefits and competitive advantages. It prevents rate and brand erosion, helps the hotel “own” the customer, enables cross-channel and multi-channel marketing initiatives, builds brand loyalty, and more. The OTAs’ fair share should not be higher than 15% for franchised and 25% for independent properties from all Internet bookings. We should not be seeing the current industry average of 40% OTA contribution.
Start by changing the property mindset: OTA commissions = marketing dollars. Do a distribution cost analysis. Maintain strict rate parity and a best rate guarantee. Focus on and budget accordingly for the direct online channel. Redesign the hotel website as per Google’s Panda and Freshness updates – you will gain competitive advantage over the OTAs and your comp set. Learn how to market your hotel better and smarter than the OTAs do. Embrace the mobile distribution channel and utilize social media to engage your customers. Focus on the customer experience.
And finally, utilize the OTAs as an incremental distribution channel: low season, group cancellations, weekends, or other scenarios.
8. I will NOT resort to desperate measures and use social buying and flash sales sites in 2012.
Situation:
Social buying and flash sales sites emerged as a result of the recession. Social buying and flash sales sites in travel and hospitality, such as Groupon Getaways with Expedia, LivingSocial.com, and SniqueAway.com are an integral part of the economy and the supply-demand market equilibrium. For social buying and flash sales sites to exist, there must be market equilibrium (price-quantity) between the demand side (quantity of members/engaged social buyers) and the supply side (quantity of fresh, intriguing deals).
In 2012, all signs are indicating that the hospitality industry is in recovery mode. STR projects that all three of the key performance measurements (occupancy rate, ADR and RevPAR) will realize steady increases for the year as a whole.
As travel demand improves, hoteliers have become reluctant to participate in social buying/flash sales sites because of their “open discount” business model need for steep 50%-60% discounts. Online travel consumers, disappointed by the lack of fresh hotel deals on the social buying sites, are reverting back to traditional booking channels: hotel direct, OTAs, GDS and voice.
Action Plan:
Some hoteliers participate in social buying and flash sales sites merely because their competition is doing so. Our advice? Don’t succumb to the devil. Stick to the fundamentals in hotel distribution and make sure you are covering all the bases in the Direct Online Channel.
Hoteliers should realize the existence of “The Law of Unintended Channel Share Loss” which stipulates the following: Any booking via the most discounted channel (i.e. Flash Sales Sites such as Groupon, LivingLocal.com or SniqueAway.com or an OTA) is one fewer booking for the same hotel via the hotel website, call center and GDS (in that order).
This is why we recommend that hoteliers focus on the direct online channel (the hotel branded website), which is by far the cheapest distribution channel. A booking via the property website of an independent hotel costs $10-$11, including all marketing and advertising expenses.
9. I will focus on determining the effectiveness and ROI of my digital marketing campaigns and make smarter use of analytics technology to determine true ROI and campaign effectiveness, as well as test, test, test to achieve better results.
Situation:
Is social media a hotel distribution channel? Is the mobile Web generating bookings? Do we still have to engage in the “old-fashioned” email marketing, which many hoteliers have branded “ineffective”? What are the ROAS (return on ad spend) from my search engine marketing (SEM)?
The explosion of social media and mobile marketing, along with channel convergence and multi-channel marketing, has made it more imperative for hoteliers to track the effectiveness of hotel digital marketing initiatives and optimize returns from their limited budget resources. The available analytical technology tools today offer cost-effective yet powerful ways to track the results. They allow us to track conversions from the hotel website and all digital advertising campaigns such as SEM, banner advertising and re-targeting. Call analytics allows us to track the effectiveness of the voice channel, as well as the mobile Web and print ads.
In addition, we can retarget and behaviorally target website visitors and have more access than we have ever had to consumer’s browsing and purchasing habits. So why do we work so hard to get consumers to our website, yet fail to make the same effort in making sure our website meets the needs of these visitors? Making small tweaks to a hotel website may often result in significant increases in conversions.
Action Plan:
Invest in analytics technology in 2012 if you haven’t already! Having a full understanding of which initiatives work and which don’t will offset the cost of the investment.
For your website, utilize a web analytics tool like Adobe SiteCatalyst, powered by Omniture, the most advanced web analytics technology today, used by many major hotel brands and OTAs alike. For your paid search campaigns use Adobe SearchCenter, powered by Omniture, a sophisticated real-time paid search campaign management tool.
For your banner advertising and re-targeting campaigns, use a banner delivery and tracking tool like DART to track post-impressions and post-click activity and conversions and gain a deep understanding and knowledge of your banner campaigns’ returns.
Did you know that 7 of 10 hotel bookings from mobile devices actually happen via the voice channel? Track the contribution of mobile website and mobile marketing initiatives, as well as voice reservations from your desktop website, via call analytics to determine the true effectiveness of these media. Using call analytics and QR Codes in your offline print advertising has become the norm.
As discussed above, social media is not a distribution channel and social marketing initiatives should be reviewed with “sober eyes” and within the context of their impact on the multi-channel marketing strategy of the hotel. Instead of focusing on bookings and revenue when measuring results from social media, consider the quality and quantity of “customer engagements” such as “Likes”, initiated conversations, comments and questions on Facebook and @replies, and retweets on Twitter, as well as the impact of social marketing initiatives on customer service, customer relationship, buzz- and brand-building for the hotel, as well driving relevant, engaged traffic to the property website.
Invest in a tool like Adobe® Test&Target™, powered by Adobe Omniture®, to test multiple versions of a webpage to separate targeted populations. Track each version for key revenue metrics and visitor behavior in order to compare results. Suggested test projects include: testing locations of the booking engine widget on four different sections of a home page; rearranging the display of promotional tiles for greater usage and visibility; testing different marketing messages on the home page hero space; and comparing a rollover drop down navigation vs. static navigation on the main navigation. Dedicating some time and resources to tests such as these will give you insight into how best to structure the elements of your website for the highest conversion rates.
10. I will partner with savvy digital marketers who know it all and can guide me through this process, so I can drive the most revenue ever through my most cost-efficient channel – my hotel website.
Situation:
Navigating the online marketplace can be confusing and overwhelming. The pace of change in this industry, including technological advancements, updates to search engine algorithms, and new solutions for driving direct online revenues are almost impossible to keep up with.
Additionally, most hoteliers are already shuffling many different priorities each day and are not able to devote the majority of their time – if any time – to keeping up with industry trends and best practices.
Action Plan:
In this dynamic industry it is important to stay on top of quickly moving trends, prioritize initiatives that generate direct online bookings, and be flexible enough to continuously adjust hotel digital marketing campaigns for optimal results.
Partner with digital marketing experts who will make driving direct online revenues for your hotel their priority: Experts who will keep you up to date with best practices without you having to ask, who will proactively bring forth ideas to generate the highest website revenues and ROIs.
Work with a team of savvy digital marketers who will show you new ways to recoup lost opportunities, teach you how to stay on top of changes in the industry, and provide your hotel and team with real value, not just a service.
About the Authors
Max Starkov is President & CEO and Mariana Mechoso Safer is VP, Marketing of HeBS Digital, the industry’s leading full-service hotel digital marketing, website design and direct online channel strategy firm based in New York City (www.HeBS Digital.com).
HeBS Digital has pioneered many of the “best practices” in hotel digital marketing, social and mobile marketing, and direct online channel distribution. The firm specializes in helping hoteliers build their direct Internet marketing and distribution strategy, boost the hotel’s Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ROIs.
The firm has won over 160 prestigious industry awards for its digital marketing and website design services, including numerous Adrian Awards, Davey Awards, W3 Awards, WebAwards, Magellan Awards, Summit International Awards, Interactive Media Awards, IAC Awards, etc.
A diverse client portfolio of over 500 top tier major hotel brands, luxury and boutique hotel brands, resorts and casinos, hotel management companies, franchisees and independents, and CVBs has sought and successfully taken advantage of the firm hospitality Internet marketing expertise offered at HeBS. Contact HeBS Digital consultants at (212) 752-8186 or success@hebsdigital.com.
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