By Max Starkov, Mariana Mechoso Safer & Evan Rosenblum

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.

HeBS is proud to announce the BNP Paribas Open 35^th Anniversary Sweepstakes Giveaway: http://www.bnpparibasopensweeps.org/. This interactive sweepstakes, designed and marketed by HeBS, allows participants to enter once a day to win exciting daily prizes in honor of the 35^th anniversary of the BNP Paribas Open tennis competition.

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!

Hospitality eBusiness Strategies (HeBS), the industry’s leading Internet marketing and distribution strategy consulting firm, today announced the firm will present during EHTEC to be held in Amsterdam Feb 14-16. This is the 4^th annual EHTEC conference, produced by Hospitality Financial and Technology Professionals (HFTP). EHTEC will offer two days of a compelling education program, bringing the latest technology information to its attendees, as well as excellent networking opportunities for hospitality professionals.

Max Starkov, HeBS’ Chief eBusiness Strategist, will present “Mobile Marketing in Hospitality: the Future is Already Here” during the Mobile Distribution session. Starkov will also be moderating a panel discussion during this session. A range of topics are to be discussed including the Mobile Distribution Channel, why travel marketers should care about mobile, mobile booking sites, an action plan for the travel ‘m-marketer,’ and more.

“The number of mobile devices has already surpassed the number of personal computers worldwide. 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). Mobile users expect instant access to information and an Internet experience that rivals the one via traditional PCs and laptops – and hoteliers must respond adequately to this growing demand,” said Max Starkov. “What is the first step any hotelier should take? A mobile-ready website is a good start. Location-based services, mobile Internet marketing including mobile search, m-CRM, and mobile apps have also quickly become part of the hotelier’s comprehensive Mobile Web strategy.”

HeBS, a pioneer in mobile strategies and implementations in hospitality, creates and implements mobile-ready websites and mobile Internet marketing strategies for its clients. HeBS’ principals have penned popular articles and research papers on the subject, including “Wireless in Travel and Hospitality: Hype or Necessity?” (September, 2001) and “Mobile Marketing & Distribution Strategy in Hospitality: the Future is Already Here.” (August, 2009). During EHTEC, Max Starkov will cover what mobile initiatives hoteliers should invest in this year, how to apply the latest trends and best practices in their mobile Internet marketing efforts, and how attendees can prepare for the future of mobile marketing.

“EHTEC has a reputation as being a high-quality educational conference,” said Frank Wolfe, CEO of Hospitality Financial and Technology Professionals. “The EHTEC Advisory Council takes that reputation very seriously when it decides the important topics and speakers that the conference offers. We want attendees to take as much as they can from this experience.”

HeBS, the industry’s leading Internet marketing and distribution strategy consulting firm, claims a strong presence in HotelMarketing.com’s Most Popular Articles in 2009, featuring six of its strategic and blog articles.

Hospitality eBusiness Strategies, (HeBS), maintains a strong presence in HotelMarketing.com’s Most Popular Articles in 2009 list with six of its strategic articles and blog articles. All six articles provide hoteliers with the latest information on hospitality industry trends as well as best practices, expert advice, and concrete recommendations for successful Internet marketing.

Remarkably, included in HotelMarketing.com’s 2009 list of most popular articles were two articles from prior years: one from August 2007, and another one from June 2008, showing that HeBS publications include solid best practices and timeless fundamentals.

Here are the HeBS articles that made HotelMarketing.com’s ‘Most Popular Articles of 2009’ list:

1. Current Trends and Best Practice in Hospitality Internet Marketing:  What Hot Marketing Topics are on the Minds of Hoteliers (Aug 2007 Article): This third most popular article in the list discusses fundamental marketing approaches and topics hoteliers need to keep in mind when constructing a competitive online marketing budget and strategy. This article was also the most popular article in HotelMarketing.com’s 2007 list.
2. Growing Tensions Between Hoteliers and OTAs: The Prisoner’s Dilemma, the Stockholm Syndrome, or a Case of Both?: (Oct 2009 Blog Article): This fourth most popular article exposed Expedia’s aggressive contract renewal negotiations tactics at the time when Expedia cut off negotiations with Choice Hotels, and analyzed the reasons behind Expedia’s bullying behavior, which has been rejected by the hospitality industry since then.
3. The TripAdvisor Review Widget on the Hotel Website: a Good or Bad Move?: (June 2009 Blog Article): Why HeBS firmly recommends against putting the TripAdvisor Review Widget on the hotel website.
4. The Hotelier’s Internet Marketing Action Plan for a Difficult Economy (June 2008 Article): An action plan to help hoteliers survive and succeed in the difficult economic environment.
5. Hotelier’s 2009 Top Ten Internet Marketing Resolutions (Jan 2009 Article): Each January, HeBS publishes the Top Ten Internet Marketing Resolutions for the upcoming year. Stay tuned for our tenth annual resolutions in January 2010.
6. Hotel Reservations Keep the OTAs Alive, for Now: Will OTAs Survive the Removal of Airline Ticket Booking Fees? (July 2009 Blog Article): This posting considers the impact that the removal of airline ticket fees will have on OTA revenues and predicts that hotel sales will remain as the OTAs only significant source of revenue.

All HeBS articles can also be viewed on the HeBS blog at: http://www.hospitalityebusiness.com/blog/.

HeBS principals and marketers are recognized “thought leaders” in the industry who publish extensively and are frequent guest speakers and presenters at hospitality industry and association events, Internet marketing conferences, government and state-sponsored tourism events. Since 2001, HeBS has been monitoring the pulse of the global online hospitality industry through its independent research, industry analysis, academic projects, client assignments and case studies, to provide a timely, unbiased review of the industry, and to forecast trends with industry-wide implications.

Max Starkov, HeBS’ President and CEO, is pleased that many HeBS publications were included in HotelMarketing.com’s Most Popular Articles in 2009 list. “HeBS continuously strives to provide hoteliers with timely articles they can use as resources to help them succeed in their Internet marketing efforts,” Starkov says. “The professional development of our clients as well as the industry is the foundation of HeBS’ mission. We look forward to providing hoteliers with more action plans, concrete recommendations, and advice in 2010 and beyond.”

HeBS’ principals and marketers all subscribe to HotelMarketing.com, the leading online magazine for hotel marketers, hoteliers, and online travel marketers.