What’s the Issue?

Google recently rolled out “Search Plus Your World,” a layout that includes social recommendations made by users in your Google+ circles.  When logged into your Google account, not only do you see results with recommendations…:

…if there is enough interest, there is a separate sidebar dedicated to relevant Google+ pages:

You can also toggle between showing and hiding “personal” results in the upper right-hand corner. Showing these results displays relevant articles/posts/shares on friends in your circles:

This hyper-personalized results page lets you see what your friends are saying about a topic. Since users are much more likely to rely on friends’ recommendations, this is a powerful search tool.

The other effect “Google Search Plus Your World” has on search is how you collect data. When logged in, users’ search terms are encrypted, meaning they show up in analytics tools as “unknown.” With more benefits available to logged-in users, the number of encrypted searches is bound to rise.

Ostensibly the goal behind this new offering is to provide users with a more personalized search; however, the social benefits tend to heavily favor Google.

What Does it Mean for Hoteliers?

With such a large market share, Google is somewhat able to dictate what businesses must do to be successful. With a greater emphasis on social relevancy and personalization comes the expectation that businesses will catch up – sooner rather than later.

As Google seems to be favoring its own social networks, it is imperative that hotels develop a Google+ page. While some hotels have already created pages, the adoption rate is not as quick as Facebook and there is still room to be an “early adopter” in this channel. In no uncertain terms, the more you interact with other Google+ users in your circles, the greater the likelihood that your content & activity will show up in personalized search results.

What is the Solution?

First, create a Google+ business page. Add a quality photo and fill out the ‘About’ section to get started. Good examples to follow here are Mandarin Oriental Hotel Group, Coca-Cola, Ford Motor Company, and the HeBS Digital client, Sorrel River Ranch (screenshot below). This will make it easier for people to find your page and add it to one of their circles.

Second, maintain your Google+ page. Think of it as an extension of your Facebook page or a blog – it needs to be updated regularly to avoid becoming stale. Nothing is worse than having a social media presence where the last activity was months ago. Share interesting articles, comment on activity within your page, and actively reach out to users you find interesting or engaging. The more circles you are in, the higher your chances of showing up in their personalized results. Posts will show up on a main “feed” where users can interact with your posts: comment, share, or +1.

Once you get in a rhythm of sharing, commenting, and expanding your circles, you will be eligible to show up on the right-hand side of search results. The more quality content you create, the more prominent your Google+ page will become.

What Do the HeBS Digital Marketing Experts Recommend?

At HeBS Digital, we stand behind all of the best practices above; simply, create and maintain a Google+ page! Your digital marketing agency should be able to offer you setup and optimization services, as well as ongoing management.

HeBS Digital offers a Google+ Business Page product that includes page setup with a branded main image, optimized hotel description & tagline, and a verified connection to your hotel website to leverage search benefits and increase traffic to your Google+ page. For more information about setting up your Google+ Business Page with HeBS Digital, view our product description, or contact us at sales@hebsdigital.com.

Sue Wiker is Lead Copywriter, Copywriter & SEO Dept. at HeBS Digital

Background

On January 11, 2012 six of the top hotel brands in the world launched RoomKey.com, a “hotel search engine website that facilitates booking on better terms than most online travel agencies.” RoomKey.com offers “meta search” for 23,000 properties spread among the six brands. The founding hotel chains include: Choice Hotels, Hilton, Hyatt, IHG, Marriott and Wyndham, which are equal shareholders in the new venture. Later in the week Best Western announced that their 4,000 properties will be joining RoomKey.com. More hotel chains are expected to join in the future.

The “direct connect” technology platform, similar to Jack Rabbit Systems, was acquired from Hotelicopter.com in an asset deal that closed last year.

“The intent all along was to drive down the cost of distribution and provide consumers with a better experience,” said John Davis III, RoomKey.com CEO. “Allowing them to book directly and become a direct guest of the hotel is a game-changer.”

RoomKey.com is Not the Only New Kid on the Block

In late 2011, several other organizations and entities announced the launch of hotel meta-search and direct booking sites meant to circumvent the OTAs:

www.mybesthotelrate.com – Launched by the Asian American Hotel Owners Association (AAHOA), an organization which has over 10,000 members owning 20,000 hotels. The CRS is powered by Citibreak, a reservation technology vendor focused on destinations. The site’s proclaimed objective is to help lessen its member hotels’ dependency on the OTAs. The site will charge participating hotels an undisclosed commission for every booking.

www.globalhotelexchange.com – Launched by Magnuson Hotels, “the world’s largest independent hotel group” with 2000 member hotels. The site will charge a small pass-through fee to the consumer, in the range of $3, to “underwrite the marketing and technology necessary to market and sell rooms without charging hotels a fee. There’s no commission fee charged to the hotel.”

What Would It Take For the New “Anti-OTA” Sites to Become Viable Industry Players

Last year over 30% of Internet bookings for the top hotel brands came from OTAs. Overall, 40% of all hotel bookings in North America came from the OTAs. STR estimated that the industry has lost over $2.5 billion in OTA commissions last year alone.

I have been the most outspoken direct online channel advocate for 16 plus years now.  I can only applaud these and any new “direct connect” initiatives by the major hotel brands and other hotel organizations to circumvent the OTA channel and lessen their franchisees’ and members’ dependence on the OTAs. I am rooting wholeheartedly for their success. And yet, I have serious questions and concerns about the viability of these new “anti-OTA” players.

What would it take for the new “anti-OTA” players like RoomKey.com to become viable industry players? In my view there are three main challenges new travel consumer sites like RoomKey.com have to overcome in order to secure sustainability and become real players in the industry:

1.    Establishing a Unique Value Proposition in the Marketplace

Let’s talk about the unique value proposition provided by these new anti-OTA players like RoomKey.com. I can clearly see what the value is from hotelier’s perspective: direct connect to the member hotels’ own booking engines at a comparatively “palatable” success fee (commission).

For these anti-OTA players to survive, they have to offer a powerful value proposition from a travel consumer perspective. Obviously, due to contractual obligations with the OTAs for rate parity and the best rate guarantees on the major brand websites, the value proposition cannot come in the form of lower or unique rates.

So what it is the value proposition that RoomKey.com or MyBestHotelRate.com can offer to the traveling public that is above and beyond a typical OTA site?

• Last Room Availability: HotelChatter reported earlier this week that while RoomKey.com and Expedia offered the same rates (rate parity), RoomKey.com showed availability for some hotels which were not available on Expedia. With rising travel demand, this could turn into a serious advantage as long as it is not in breach of existing contracts with the OTAs.

• Earning Reward Points: Currently merchant reservations via the OTAs do not qualify travel bookers to earn points from the major hotel brands. Since booking through RoomKey.com is booking via the major hotel chain’s CRS, travel consumers will be earning reward points, which is another serious advantage.

• Usability: RoomKey.com counts on its easy-to-use search functionality and a clean & elegant look. In addition, the site plans to have independent customer reviews, and the ability to compare, plan and share with friends and family. Would that be sufficient? Travel planning is a very complex process. Hotel bookers need more than hotel location, availability and rate, and peer reviews. Hotels are an integral part of the destination experience hence any hotel booking site needs to offer rich destination information, local activities, events, mapping, etc. In other words it is questionable whether the “clean and elegant” look of these new players will win travelers over the information-rich OTA sites.

• Social Media and WOM: Any new travel consumer site needs to appeal to today’s hyper-interactive travel consumers. Is RoomKey.com or MyBestHotelRate.com ready for these new breed of travel consumers? Only time will tell.

• Lots of Luck: Any new industry player in the current economic environment needs a ton of “economic luck” in the form of good timing, a business model that is in tune with the times, quick adoption by consumers, ability to take advantage of social media and word-of-mouth (WOM), etc.

 2.    Securing Serious Ongoing Revenues Needed to Establish a New Travel Consumer Brand

It is prohibitively expensive to establish a new travel consumer brand. The last two major travel brands to be successfully established were Orbitz (2003) and Kayak.com (2004). In addition to the initial investments for technology, website design and architecture, hosting and analytics, there is a serious need for ongoing operational and promotional expenses.

I doubt any RoomKey.com founding member is going to promote RoomKey.com on their own since this site features 5 of their biggest competitors.  No AAHOA member hotel will promote MyBestHotelRate.com wholeheartedly, since this site features concrete competitors to the member’s own properties.

RoomKey.com and the other “anti-OTA” players need to promote themselves – in other words, they need to generate revenue in the form of commissions or “success fees” in order to pay for the sites’ operational expenses, advertising, etc.

How much of a commission would suffice? RoomKey.com earns a commission from the booking, which as described by the company “is at a more supplier-friendly rate than what third party OTAs are offering, as it redirects users to the hotel company’s website for a direct booking.” Magnuson’s Global Hotel Exchange will be offered “at no cost to hotels struggling with economic instability” and will charge travel consumers a small “pass-through fee in the range of $3.”

In my view, any commission below 10%-15% would generate too small of a revenue stream for a site that is making baby steps and is trying to divert bookings from well-entrenched OTAs.

3.    Overcoming the Reaction and Legal Challenges by the OTAs

If history is any indicator (remember Orbitz?) as to how the OTAs would react to the launch of RoomKey.com and similar industry sites, I believe the OTAs will ask the Justice Dept to look into these new services because they  “smell of collusion” by and among major industry players.

A Word About MyBestHotelRate.com Initiative by AAHOA

I am fully aware of what AAHOA stands for as an organization and respect AAHOA’s objective to help lessen its member hotels’ dependency on the OTAs.  In my humble opinion, creating a new AAHOA consumer brand website does not solve the main underlying issue: lack of understanding among AAHOA member hoteliers about how to take full advantage of the direct online channel, what are the best practices, and ROI-centric initiatives. How to make sense of this very convoluted online travel marketplace?  Is Google Hotel Finder good or bad for me? Are flash sales sites like Groupon and Living Social good or bad for my hotel? Why is it detrimental for my hotel to use open-discount last-minute sales sites like HotelTonight.com?  What is the correct use of social media – is it a distribution channel or a customer engagement channel? How to take advantage of Google Places?

This is where AAHOA can play a crucial role by educating its members on direct online channel strategies, vanity website best practices, SEO, SEM, social and mobile marketing, online media and re-targeting, email marketing, etc.

Diverting online travel consumers from the OTAs to a new consumer website MyBestHotelRate.com is not only prohibitively expensive, but it does not help AAHOA members help themselves fight their addiction to the OTA distribution channel.  Instead, AAHOA should spend its organizational funds to develop robust educational and professional development programs for its member hotels, focused on the direct online channel, hotel digital marketing, and industry best practices and notable trends.

Click here to read the entire blog article on HOTELSMag.com, as well as a full selection of Max Starkov’s blog articles on hot industry topics and latest trends in the online channel in hospitality.

About the Author:

Max Starkov is President & CEO of HeBS Digital (Hospitality eBusiness Strategies), the hospitality industry’s leading direct online channel strategy, full-service digital marketing and website design firm (www.HeBSdigital.com)

Back in early 2011, in an interview article “Another look at flash sales sites,” for HOTELS Magazine’s successful eMarketing Blog, I argued social buying and flash sales sites such as Groupon Getaways with Expedia, Living Social, SniqueAway.com, BloomSpot, etc. were a recessionary phenomenon, and not a new, emerging distribution channel that was here to stay. There is no doubt that as the economy improves, some of these flash sales sites will go away, and the remaining players will have severely diminished roles in hospitality.

Since 2001 we have witnessed a similar “countercyclical” increase and decrease in OTA market share: the better the economy, the smaller the OTA market share. As an example, the OTAs’ share of CRS reservations for the top 46 hotel brands increased from 11.8 percent in 2008 to a height of 17.1 percent in 2010 and shrank to less than 16.5 percent in 2011 (eTRAK, HeBS Digital Research). All trends point out that the OTA share will decrease to well below 15 percent in 2012.

I also cautioned hoteliers of 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 less booking for the same hotel via the hotel website, call center and GDS (in that order).

Last year, in several articles and industry presentations I predicted that as recessionary phenomena, the social buying/flash sales sites would suffer from an improving economy and rising travel demand. Why? Social buying and flash sales sites such as Groupon, 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).

Since travel consumers and customers in general (the demand side) are always open to discounts and deals of any sort, an increasingly important part of any social buying/flash sales site is its ability to convince the supply side, i.e. hoteliers, to run deals and accept the large discounts that are integral to the offers.

Similar to 2011, in 2012, all signs are indicating that the hospitality industry continues to be in recovery mode. STR projects all three of the key performance measurements (occupancy rate, ADR and RevPAR) will enjoy steady increases for the year as a whole: a 0.2-percent increase in occupancy to 60.0 percent; a 3.7-percent jump in average daily rate to $105.29; and a 3.9-percent rise in revenue per available room to $63.18.

As travel demand improves, hoteliers have already become reluctant to participate in social buying/flash sales sites because of their “open discount” business model, and provide the supply side of the equation with fresh, intriguing deals. As a result, both sides of the equation suffer and shrink. Online travel consumers, disappointed by the lack of fresh and intriguing hotel deals, have started reverting back to the traditional booking channels: hotel direct, OTAs, GDS and voice.

Here are only some of the indisputable signs of this weakening and shrinkage in the supply side we witnessed in 2011, which have already weakened the demand side as well:

• Visits to social buying/flash sales sites declined in 2011 by 25 percent since June 2011 (Hitwise), due to:
  • Too many competitors
  • Deal fatigue
  • Not enough good deals
• Groupon was forced to partner with Expedia
• Groupon: Customer acquisition costs are out of control:
  • Advertising costs: $263M in 2010 vs. $4.5M in 2009. $180M in Q1 2011!
  • Revenue per subscriber has fallen by 64.2 percent (06/09-03/11)
  • Number of deals sold per customer have decreased by 34 percent
• Off & Away, an aggressive hotel discounter, was forced to shut down at the end of 2011

The most recent developments in early 2012 further support my predictions for “shrinkage” of the social buying space. Groupon, Inc. shares fell more than 7 percent so far in January , 2012 – below the company’s initial public offering price of $20 – on “concern the company may not have as many daily deals to offer as some merchants pull back (as reported by Alistair Barr (Reuters).”

Susquehanna Financial Group and Yipit  (a daily deal industry tracking firm) surveyed almost 400 merchants recently about their experiences running daily deals with Groupon, LivingSocial and other providers. According to the survey, “52 percent of the surveyed merchants are currently not planning to feature deals in the next six months. Nearly 24 percent of the merchants intend to feature only one deal in the next six months, the poll also found.”

I told you so!

Why should hoteliers be wary of using the social buying/flash sales sites? Here are only a few of the reasons that the economics do not work for the hospitality industry:

• Flawed “Open Discount” business model:
  • Discounted rate is out in the open, which is against rate parity/BRG principles
  • Destroys rate integrity: against existing contracts (OTAs, corporate travel)
• Lack of opaqueness establishes new lower market price: Hotel cannot charge rack rate since customer has accepted the discount rate as the new market value
• Cannibalization of existing customer base: 65 percent of daily deal buyers are already frequent (38 percent) or infrequent (27 percent) customers (ForeSee 06/11)
• Deal face value is artificially ballooned to show value: This puts off potential customers by positioning the hotel as “too expensive”
• Steep discounts of 50 percent to 67.5 percent are simply unacceptable

Here is a case study clearly showing the true cost of distribution via the flash sales sites:

As we see from the example, the cost of distribution via the social buying/flash sales site is 27 times higher than the cost of a booking via the hotel own website.

Why are some hoteliers still finding the social buying/flash sales sites attractive? There are two types of hoteliers in the industry:

• Smart, sophisticated hoteliers who understand that using social buying/flash sales sites leads to price and brand erosion, and ultimately damages the hotel’s price integrity and overall online revenues in the long run
• Hoteliers who employ a “lazy man’s approach” to hotel distribution and who are more interested in the immediate results, while ignoring or not caring about long-term repercussions

Some hoteliers participate in social buying and flash sales sites merely because their competition is doing so. My advice? Don’t succumb to the devil. A smart hotelier would never repeat the mistakes or dumb moves of a dumb competitor, so why do it now with the flash sales sites? Stick to the fundamentals in hotel distribution and make sure you are covering all your bases in the Direct Online Channel, including website re-designs, SEO, SEM, email marketing, social media, mobile web, online media, the voice channel, and GDS Travel Agent channel.

So, should hoteliers “flash or not flash” in 2012?

The answer is a categorical NO! As mentioned above, the economic model of social buying/flash sales sites does not work for the hospitality industry. The flawed open business model destroys rate parity and establishes a lower market price. The deals cannibalize hotels’ existing customer base while putting off potential new customers with artificially ballooned deal face values

What should hoteliers do in 2012 as far as the online channel is concerned?

The main focus and priority for any hotelier should be to sell as much inventory via the most cost-effective distribution channels that can potentially generate the most bookings while preserving rate parity and price erosion. This is the direct online channel – the hotel’s own website.

Click here to read the entire blog article on HOTELSMag.com, as well as a full selection of Max Starkov’s blog articles on hot industry topics and latest trends in the online channel in hospitality.

About the Author:

Max Starkov is President & CEO of HeBS Digital (Hospitality eBusiness Strategies), the hospitality industry’s leading direct online channel strategy, full-service digital marketing and website design firm (www.HeBSdigital.com)

With the rapid growth of the mobile channel, SMS marketing is becoming a vital component of a well-rounded digital marketing strategy. Unfamiliar with Best Practices for leveraging this channel, many hoteliers are missing out on one of the most effective ways to connect with customers anytime, anywhere.

With more than 7 trillion text messages sent around the world in 2011, it is no secret that mobile users are hyper-engaged and hyper-connected via mobile messaging. Why is it then that marketers continue to overlook this opportunity to build a relationship with customers?  In a recent Hipcricket survey of mobile users, 57 percent of respondents said they would be interested in opting in to a brand’s SMS loyalty program. Yet, 80 percent of survey respondents said they have not been marketed to via SMS by their favorite brands. Even more compelling, 90% of survey respondents who had participated in an SMS loyalty club felt they had gained value from being a part of the program.  Why the hesitation to include SMS into the marketing mix? Many hoteliers simply don’t know where to start, and are rightfully cautious to reach consumers through this nascent channel.

Despite hoteliers’ apprehension to engage in this channel, many hoteliers understand the potential SMS offers to effectively reach consumers. In HeBS Digital’s 5^th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning, 25% of hoteliers indicated that SMS marketing was an initiative they planned to leverage in 2011.

What are the Types of SMS Marketing?

There are two basic types of SMS marketing: mobile push and keyword opt-in. SMS push marketing is the sending of a mobile blast via text message in 160 characters or less. Mobile pushes can promote a contest, special, upcoming event, or last minute rates.

Even more important for engaging customers is an interactive keyword opt-in campaign.  A keyword opt-in campaign prompts users to text a designated keyword to a short code (a short series of numbers) to opt-in to a mobile list. Users immediately receive an auto-response marketing message revealing promotion details or announcing successful opt-in. Some creative ways to engage guests via keyword campaigns are mobile trivia surrounding the destination or property, mobile sweepstakes, and allowing customers to “unlock” deals.

Before leveraging SMS in your marketing mix, it is imperative to prepare an SMS marketing strategy in line with Best Practices. From understanding the personal nature of mobile to setting clear metrics to measure performance, HeBS Digital explores SMS marketing Best Practices and the right ingredients for mobile marketing success.

Top 20 SMS Best Practices

1. Remember it’s personal.  Just as you respect the privacy of your hotel guests during their stay, it is important to respect the private nature of their mobile phone. A mobile device has become one of the most personal belongings for customers. This device is the gateway to a user’s photos, email, social media profiles, agenda, and more importantly, personal conversations with friends and loved ones.

When engaging in mobile SMS marketing, it is extremely important to ensure that your campaign provides meaningful content that resonates with your customers. Otherwise, you risk your SMS campaign delivering with the intrusive nature of a telemarketer. What’s the first step in connecting with your customers via SMS on a personal level? Focus less on the use of the technology and more on the people using it. Tap into your customers’ passion points and align with them.

2.  Don’t send a mobile push unless you have engaged with the customer via mobile campaign within the last four months.  A key thing to remember when sending an SMS blast to any mobile list is that your customers must be aware that they’ve opted-in to receive mobile messages, and that they are comfortable engaging with your brand on the mobile platform. As tempting as it may be to export mobile numbers from your email list or a database you’ve collected over time, these customers have yet to engage with your brand via SMS. Sending a mobile blast to users who have not participated in a keyword opt-in campaign will seem intrusive and unexpected in the eyes of the consumer.

To avoid this, engage with your customers with a fun and relevant keyword campaign where they text a keyword to a short code to interact with your brand and opt-in. This will get your customers comfortable and familiar with your brand on the mobile platform. Within four months of this mobile interaction, you can begin sending mobile pushes to the opt-in list. Customers now expect messages from your brand via SMS and will always have the option to opt-out with every message sent.

3. Provide customers with value. Make sure every mobile campaign and mobile push is highly relevant to your customers and provides unique and useful value.  Part of ensuring that mobile messages speak to your customer segments is keeping in mind the immediate, hyper-local nature of mobile that allows us to reach our customers anywhere, anytime.

 First, consider the demographics of your customers and their mobile behavior. A mother who is interested in booking family travel has very different lifestyle behaviors at 10 am on a Wednesday than she does at 12 pm on a Sunday. It’s vital to reach your customer segments at the right time with the right information.

It’s also important when putting together your SMS strategy to consider ways to keep your customers connected and build a brand relationship. How can you reach your customers on a consistent basis and either help enhance their everyday life or make their lives easier? For instance, if your hotel property has an onsite restaurant that you wish to promote, you may want to consider launching a Chef’s Tips mobile campaign where once a month you send cooking tips a few hours before the average dinner time. These messages can include links to easy recipe ideas and fun cooking advice.  This message is immediately relevant to your customers’ everyday life and is a great way to stay connected.

Remember, SMS is a way to reach your most loyal and passionate customers. Allow your customers to opt-in to monthly messages or tips that tap into their passion points such as cooking, family travel, wine, and more.  Sharing recipes from the onsite chef, beauty and health tips from the onsite spa, or even wine recommendations and wine-tasting tips, are great ways to keep loyal customers engaged with your brand.

4. Keep it interactive with mobile keyword campaigns, contests, and trivia. Remember, mobile should be engaging. Including fun and creative keyword campaigns and mobile trivia that speaks to your customer segments is a great way to build a brand relationship and generate revenue.

 Consider running a “Secret Ingredient” promotion featuring a hotel special package that has a surprise add-on or free gift. To redeem the package and find out the secret add-on, customers have to text the keyword to a short code. The auto response message will reveal the add-on and the promo code to book the package. A successful HeBS Digital mobile SMS opt-in campaign generated 76 mobile opt-ins, 23 room nights, and 636% ROAS.

 Other engaging campaigns to consider are fun mobile trivia surrounding a hotel or brand theme. Here is a great opportunity to highlight interesting facts and selling points of your hotel. Don’t be afraid to get creative with your trivia. Fun destination themed trivia tends to perform best.

5.  Make it clear that customers are opting in. When a customer participates in your mobile campaign, always make it clear that by texting a keyword to the short code they are opting in for future mobile messages. To be safe, you may also want to include a double opt-in.

6. Test. Test. Test. With any new marketing channel, it is important that you put your trust in industry experts and develop a clear outline of necessary tests before the launch of every mobile campaign.  Before launching any mobile campaigns, create a test list of mobile numbers to receive your marketing message. If you are launching a keyword campaign, be sure to have 3-5 people text the keyword to the short code and examine the auto-response message.  Make sure that the message is correct with a clear call to action and all shortened links included are properly working.

7. Capitalize on the immediacy of mobile.  The mobile channel allows you to reach customers anytime, anywhere. Take advantage of this immediacy to promote last minute specials to your local feeder markets.

 SMS mobile blasts are perfect for marketing your onsite restaurant to locals. Alert your local customers of happy hour specials, new entrees added to the menu, and upcoming events.

8. Include clear opt-out instructions with every mobile message sent.  Just as customers can opt-out of an email list at any time, every mobile message must include the option for customers to opt-out. Without this option, customers will feel prisoner to your marketing message and it will taint the brand relationship.

9. Define clear metrics of success. The success of an SMS campaign can be a hard thing to measure. Before launching any SMS campaign, set goals that you want the campaign to achieve. If the SMS campaign includes a link, click-through rate is a great way to measure the effectiveness of your mobile blast. Other metrics include number of mobile opt-ins for a keyword campaign, redemption rate for promotions utilizing mobile coupons or promo codes, contest sign ups, increase in mobile website traffic, and brand awareness.

10. Include a clear call to action or instructions to redeem in the mobile message. Reaching customers with your mobile marketing message isn’t enough. For a mobile marketing campaign to be successful there must be a clear call to action. Once you set goal metrics for your marketing campaign, include a call to action in your marketing message that helps you achieve your metrics of success. Whether it be texting a keyword to a short code, booking a package, or signing up for a contest, make your call to action clear with no more than two steps for customers to reach your end goal.

11. Utilize mobile coupons. One in ten mobile users redeem mobile coupons (emarketer).  Mobile coupons are a great way to drive bookings and increase incremental revenues.  Consider utilizing mobile coupons for up-sells and add-ons to special packages. Allow users to text the add-on of their choice to a short code to receive a mobile coupon to redeem by presenting at check-in.  Mobile coupons are also a great way to drive foot traffic to your onsite restaurant or spa.

12. Utilize the mobile channel for your most loyal customers. Keeping in mind the personal nature of mobile, you want to utilize this channel for your loyal customers and Brand Ambassadors. Consider integrating mobile into your hotel’s loyalty program, or create a mobile loyalty program if one doesn’t already exist.

The mobile loyalty program can grant members access to exclusive offers, insider updates, and travel tips. You can even consider rewarding members with a mobile coupon valid for the month of their birthday or special occasions.

13. Segment your mobile lists to send more targeted messages.  A highly targeted mobile marketing strategy means a higher campaign conversion rate.  There are creative keyword opt-in campaigns you can implement to segment your mobile list based on interest and location.

To better target your mobile customers by interest, consider creating segmented deals for customers to “unlock” by texting a keyword to a short code. These deals can be segmented by spa, dining, hotel, and events. Website visitors will be prompted to text the category of their interest to the short code to receive mobile alerts for that particular category.  This helps ensure that mobile messages are highly relevant to the customers who receive them.

To better target your local customer segments, consider a landing page on your website dedicated to locals where they can opt-in to receive mobile alerts for dinner specials, last minute rates, and news on upcoming events.

14. Direct users to a mobile landing page. One of the biggest mistakes that marketers make is sending a mobile blast that doesn’t link to a mobile landing page. When executing any mobile campaign, always keep the user experience in mind.  If a customer follows a link on their mobile device and it leads them to a landing page that is hard to navigate or read, this is going to dramatically affect your conversion rate.

15. Remember that mobile is just one touch point in a multi-channel strategy.  For true SMS Marketing success, you must integrate SMS into the comprehensive marketing mix. You can promote keyword opt-in campaigns to your email list, highlight your mobile promotions on your hotel website, feature your mobile promotions on your social media profiles, and even integrate SMS into your banner campaigns.

Don’t overlook the utility that SMS messaging provides. On the Maps & Directions section of your hotel website, include a “Text to get Directions” option so website visitors can easily access directions to your hotel from their mobile device.  Other great website utilizations of SMS are a “Text Event Details” on your hotel website’s Calendar of Events, a “Remind Me When This Special Ends” alert on hotel special packages, and a “Text Reservation Details” on hotel reservation confirmations.

16. Include images when possible. Just as rich imagery on your hotel website sells your property and destination, including an image with an SMS blast helps to increase conversions. Make sure your image corresponds with the details of your offer to enhance the effectiveness of your campaign. For instance, if you are promoting a summer special, rich imagery of a hotel’s rooftop pool will make the package more enticing for customers.

17. Ask customers to register their preferences. The frequency in which a customer receives a mobile marketing message can mean the difference between an opt-out and a life-long mobile subscriber. Send customers a mobile survey asking them how often they would like to hear from you and what topics interest them most. This way all messages are highly targeted and your mobile marketing strategy is in line with customers’ preferences.

18. Learn from the results. Simply measuring the success of your campaigns is not enough. Analyze the results to shape future SMS promotions to better target your customer segments and increase conversions. Some key questions you should ask yourself: What is the best time of day to send a mobile blast based on past results? What types of campaigns have the highest number of opt-ins? Which customer segments are most engaged with my brand via mobile, and how can I provide these customers with more value?

19. Know your competitive set.  Just as you know what services the hotels in your comp set provide guests, it is important to understand how your comp set is engaging with customers via SMS marketing.  If available, consider opting-in to your competitors’ SMS lists to understand how they are staying connected with customers. What are they doing well? How can you differentiate your hotel’s SMS marketing strategy?

Browsing a competitor’s website is a great way to see if they are running any SMS promotions.  If you find the majority of your comp set isn’t running any SMS campaigns, this presents an even greater opportunity to own this channel with your customers.

20. Find a trusted partner. Finding an SMS marketing vendor that has a secure, intuitive platform and expert advice in SMS Best Practices is not always easy. Make sure you do adequate research to find the right vendor who meets your needs. Aside from exploring the vendor’s SMS platform capabilities, ask for case studies, client testimonials, and details regarding their client assistance services. The right vendor won’t just help you launch SMS campaigns; they will assist in executing a successful SMS strategy.

Conclusion

The immediacy of SMS and the opportunity it presents to build a deep connection with customers can no longer be ignored. Mobile is a way of connecting with your audience, tapping into their passion points, and allowing your guests to welcome your brand into their lives.

With any new channel, a well-executed strategy that understands its audience is key. For true success, no channel can exist as an island and should be integrated into a comprehensive marketing mix including multi-channel campaigns and promotions.

Remember to set goals and define metrics of success before launching any SMS campaigns.   These metrics will guide your SMS strategy and campaign execution. Learning from the results of your campaigns is the true secret to SMS success, and with Best Practices and professional consulting, you can watch your SMS strategy soar.

About the Author

Margaret Mastrogiacomo is Manager, New Media & Creative Strategy at HeBS Digital.

Every year, Google makes more than 500 updates to its search algorithm. The most significant update in 2011 was the Google Panda Update, now in version 2.5, which made most hotel websites obsolete by introducing very strict requirements for content, interactivity, and page download speeds. This required sites to generate engaging and unique website content (as opposed to bland, old and tired content) that would intrigue users and increase the site’s “stickiness.”

After frustrating hospitality digital marketers with the seemingly never-ending Panda update saga, Google went a step further by releasing the broadest, most-impactful algorithmic change to date, just to keep us all on our toes. Last week Google announced that they had rolled out an update now known as the “Freshness” update, which was said to affect 35% of total searches and would allow for more relevant, current information to be displayed for a bevy of high-volume search queries.

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.

The update, essentially, is an amendment to the “Caffeine” update Google rolled out in 2010, whose sole purpose was to make general search queries 50 percent “fresher.” So when you were searching for a sports score or who won last night’s election, for example, you would be delivered the most up-to-date articles and commentary. Problem is, in only a year’s time search queries have risen in number and the amount of online media continues to grow. Each story – each topical event – is being discussed, reported on, and dissected hundreds and thousands of times over, simply because the platform is available and the medium, the Internet, is effective. This is what spawned the rise of this new “freshness” update that has set off alarms from Palo Alto to the burgeoning tech hub that is New York.

So who does this new “Freshness” Update affect?

Every online entity. No longer can we truly separate a blog, a news site and a content site that offers up-to-date “local news” in the form of local events, happenings or promotions such as a hotel website.

Let’s use the news sites as a case study. Articles discussing political news, global news, sports news, celebrity news – things that change at the drop of a hat – will be refreshed within SERPs more than ever before. For example, the night before this blog post was written the Philadelphia Eagles lost to the Arizona Cardinals. Here is what the first page SERP looks like for the query “Arizona Cardinals beat Eagles:

As you can see, a search with no defined publish date (note: the search was set on “any time”) returned only results that were published within the last 24 hours, some as recent as an hour! And what makes this more amazing is that this isn’t the news feed, this is the organic listing as it appears. But, of course, this is a sports score, an instrisically topical item with an extremely low shelf life.

How does this latest Google algoritm update apply to hotel queries?

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 “fresh” content is certainly lacking, and this is the main issue with current hotel websites after the latest Google algorithm updates.

So if hotel websites aren’t intrisically fresh, then how do hoteliers respond to the latest Google “Freshness” Update?

Case Study: HeBS Digital CMS Plus and the Google Panda & “Freshness” Updates

HeBS Digital’s proprietary website content management system (HeBS Digital CMS Plus) was specifically conceptualized and built to accommodate the stringent Google Panda and “Freshness” updates by allowing hotel marketers to maintain fresh content on the hotel website in the form of:

• Promotional landing pages for timely specials and packages (e.g. a March Madness package as opposed to an Advanced Purchase package valid for all of 2012)
• Event landing pages for events and happenings at the property and in the destination
• Promo tiles and banners on the website for featured specials and events
• Marketing and sales messages in the main image window on every page focusing on various aspects of the hotel product: room and dining promotions, complete meeting packages, wedding promotions, etc.
• New content pages on various topics: from seasonal and sports events, to local festivals and customer segment-specific content (family travel, seniors, weekend travel, romantic getaways, etc.)

Each local promotion or event page has “micro-formats” applied to it, which are rich snippets of data that signify to a search engine that these events are in fact stand-alone, current events, with exact starting and ending times associated. These ensure that all of our events are viewed as “current” rather than repetitive or stagnant.

Schemas codes are also incorporated on all time-sensitive landing pages: local promotions, special offers or events at the property and in the destination, as well as on a variety of pages site-wide: dining, accommodations, hotel services and amenities, etc.

The result?  A typical single-property website has 40-60 pages of content indexed by Google. The HeBS Digital CMS allows clients to build a multitude of new landing pages and fresh content over time, and typically has over 2,500 -4,500 pages of relevant and deep content indexed by the search engines.

What else do we recommend hoteliers do?

Blog, Blog, Blog!

Oftentimes, we incorporate a blog onto a hotel website. This serves as a section of the site that constantly and continually provides new content about both hotel-related information and regional topics. It offers quality content – content people want to link to and share – for a website that is not in the content-creaton business. Blogs allow hotels and restaurants to highlight specials and events as well as general hotel news. Talk about local events, highlight someone’s stay, discuss seasonal activities in the area, or feature infographics about your hotel or region that deeply engage users. Blogs allow hotels to spread a message they otherwise couldn’t, and spread it instantly. We recommend blogs to hospitality websites that are concerned about new content creation. There is simply no better platform.

Focus on Social Media Interaction

We also recommend 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. The transparency of our actions boosts our standing in accordance with the new standards in place from the “Freshness” update.

Having a strong presence on Twitter and Facebook are excellent steps to take to ensure that you  are constantly broadcasting news about your brand, whether it’s new promotions and vacation packages, group travel deals, sweepstakes and giveaways, or upcoming events at the property or nearby. This type of topical messaging can generate frequent interaction with your business. This messaging should be deeply intertwined with your website, meaning your website should reflect your usage of social platforms, whether that’s a live Twitter feed, Facebook “like” buttons site-wide, or even Google+1 buttons. Interaction is certified fresh.

Make Sure Your XML Sitemap is Up to Date

XML sitemaps are vital in allowing search engines to gauge the true depth of a given site and quickly crawl the pages that you are displaying. Oftentimes, however, sites can fall prey to the viscious affliction known as apathy: they don’t update their XML sitemaps when new pages are developed, new events are displayed, or new specials are pushed live. Make sure you stay on top of XML sitemap updates and Google will see only the freshest backend view of your site.

For every update we apply to a website we ensure this is reflected in the XML sitemap, so that when a search engine crawls our XML sitemap to gauge a site’s depth, there are no missing pieces or erroneous information. It will appear as up to date as the visible content suggests it is.

A Word About the Schema Code

“What’s a schema?” Schema code is a relatively new code-based element that Google released at the end of June 2011. In simple terms, they can be viewed as augmented meta data. They allow you to describe, in depth, details about a given page, sale, or event that otherwise wouldn’t be included on the website. For every dining page, packages page, event  page, our hotel page, and any other content-rich page on the site, Schema codes allow you to embed in the code exact information such as geographical location, start and end date, author or host, sale paremeters, sources about a subject, and a litany of extra granular points of information. These back-end bits of code enhance each page from an informational standpoint, and allow search engines to better understand what a page is all about and what exactly the page is targeting. It’s all about context and intention, things that topical search queries are framed around.

Conclusion:

• The Google Panda Update made most hotel websites obsolete. Bare, sparse copy stuffed with keywords can no longer sustain a respectable SERP ranking.
• The latest Freshness Update created the need to add fresh content to the website on an ongoing basis.
• In order to react to these two algorithmic updates, hoteliers need to re-evaluate their website re-design strategies and budget for website re-design or an optimization overhaul in early 2012.

Be proactive when dealing with your content and the various assets you own. Highlight what’s great about you and make sure that whatever you’re proud of is reflected on the back end of your website, on social media, and within blogs and press releases. Success will continue to come, especially if you stay ahead of the curve.

Sue Wiker is Lead Copywriter and Will Jerome is SEO Specialist at HeBS Digital.

by Sue Wiker

Everyone knows that having a successful search engine optimization strategy is crucial to your site’s overall success. But how do you know if your strategy is successful? The 2011 Google Panda Update imposed new SEO requirements that made many hotel websites obsolete. The new (and constantly-updated) algorithm encourages engaging and unique content, interactivity, and quick download speeds.

For many hoteliers, it is hard to look beyond revenue and site traffic as key performance indicators (KPIs). Three other indicators that are commonly benchmarked in the SEO process are organic SERP rank, total number of inbound quality links, and number of social media shares across Facebook, Twitter, and Google +1.

However, it is more important than ever to look beyond those five metrics to determine the true SEO success of your website. Because the Panda Update takes many more factors into account, there are ten other factors that serious SEO-ers evaluate when monitoring a site’s SEO health.

Time on Site – A user statistic gathered by Google through Google Analytics and Chrome, this metric tells search engines whether visitors are finding what they need on your site. Look at your average time on site through your analytics. If it is under a minute or two, you may need to tweak the information on your site.

Depth of Visit – This can be determined through your analytics and is measured in pages. Do visitors read your homepage and leave? Or are they browsing through your thoughtfully-organized navigation to find what they need?

Entry & Exit Points – Your analytics should offer some sort of path report that shows how the majority of visitors use your site. This should have a function where you can determine major visitor entry and exit points. If users are leaving too soon, find a way to redirect them to the information you want them to find.

Conversion Funnel – This ties in with entry & exit points. Are people navigating to the “fluff” sections of your site and missing the meat? You may want to reconsider your navigation structure to help guide people to conversions.

Bounce Rate – Bounce rate is measured as the percentage of people who arrive at your site and leave right away. A high bounce rate means that people are not finding what they are looking for. One important thing to keep in mind is true bounce rate versus overall bounce rate. Let’s say that someone arrives at your site, reads the full page they landed on, but don’t progress any further in the site and leave instead. This is not a true bounce because they read and interacted with that one page before leaving. This is why monitoring time on site in conjunction with bounce rate is important.

Newsletter Conversion Rate – Using analytics and tracking codes, you should be able to see the conversion rate for people receiving your emailers. If the rate is exceptionally low, you may want to reconsider what newsletters you are sending out, or what landing page you direct the recipients to.

RFP Conversion Rate – You should also be able to track information on your RFPs and forms. If people visit the landing page for your RFPs but do not complete the forms, reconsider both the information you provide and the information you ask for – a long form with multiple fields can sometimes deter people.

Google Places Listing – While these listings are not organic listings in and of themselves, they do play a role in how your site is organically ranked. A properly-optimized listing full of valuable information for searchers increases your presence in the eyes of Google. As they continue to change the layout of their SERPs, it may be combined with your organic listing and boosted to the top of the page.

Page Load Time – This can be determined by an online tool such as Pingdom. If your site is experiencing long load times, this may affect your bounce rate as people get frustrated and leave. Speak with your website developer about what could be slowing down the loading process; frequently it is an easy fix.

Number of Indexed Pages – You can test this by visiting Google and typing in site:http://www.website.com. However many “results” Google returns is how many pages Google has indexed for your site. While there is no baseline number that every site must surpass, keep a baseline knowledge of it so that you are aware if Google doesn’t index some pages that you publish, or for some reason you see a huge drop in total number of indexed pages.

Revenue, traffic, organic SERP rank, quality inbound links and social media shares are the main KPIs for a reason – they give a good picture of how your site is performing. However, if any of those metrics are off, or you are looking for a way to further develop a successful SEO strategy in the face of Google Panda, the ten additional metrics outlined above are a good starting point. Remember that none of these should be analyzed in isolation; they are all related and, together, give a more in-depth view of your site’s SEO health.

Sue Wiker is Lead Copywriter, Copywriting & SEO Dept. at HeBS Digital.

The following article is Max Starkov’s latest contribution to the “Successful eMarketing” blog on HOTELS magazine’s website.

Last-minute sales in travel are not a new phenomenon. There have been many attempts to find a way to dispose of these empty airline seats, idle rental cars, and empty hotel rooms at any cost.

Theoretically it makes economic sense: it is 4PM, I have 20 empty rooms, and if I sell them at 50% off rack, I will still be making some money from my otherwise perishable inventory, right? Wrong!

Last-minute sales in hospitality at lower discounted rates are not sustainable in hospitality as this approach jeopardizes all other distribution channels (hotel mobile site, hotel traditional website, GDS, phone reservations, even OTA distribution). This is especially valid today in the viral and mobile environment we live in and with the smart, hyper-interactive travel consumers we are dealing with today.

What Is the Situation in Hospitality?

Last-minute sales have been tried and failed repeatedly in the hospitality industry. Remember LastMinuteTravel.com? Where is this site today? At the height of the dot-com bubble this site even had a splashy multi-million Super Bowl commercial.

Currently Hotels.com has a last-minute hotel deals section on their site (http://www.hotels.com/last-minute-hotel-deals/).  Our analysis shows that these last-minute deals are more of a marketing gimmick and, due to contracted rate parity provisions with the hotels, these “last-minute” rates are no different from the “regular” hotel rates you can find on the main section of the site, on any other OTA, or on the hotel’s own website.

Priceline recently announced opaque Last-Minute Hotel Deals as part of a broader last-minute travel section on the site. Travel consumers can now book hotel rooms up to 11pm the same day they travel and still save up to 40 percent over other leading online sites when they use the “Name Your Own Price” model, which is Priceline’s traditional opaque program.

There is a new kid on the block, a mobile-only last-minute discount OTA called HotelTonight.com, which operates in the following manner:

• Hotels upload room allotment and rates for the same day via an extranet
• Average discounts range from 30%-35%

For these last-minute discount sites to exist there must be a Market Equilibrium (Price-Quantity) between: The Demand Side (quantity of engaged last-minute deal buyers) and The Supply Side (quantity of fresh, intriguing last-minute deals).

As travel demand improves, hoteliers will become increasingly reluctant to participate and provide the supply side of the equation with fresh, intriguing last-minute discounts. Online travel consumers, disappointed by the lack of fresh/intriguing last-minute discounts, will revert back to the traditional booking channels: hotel direct, voice, GDS and OTAs. As a result, both sides of the equation will suffer and shrink.

In this sense HotelTonight.com and some OTAs are trying to re-create in the mobile space what other players in the field have tried to do repeatedly and failed. My prediction is that HotelTonight.com and similar last-minute discounters will not last long as these sites employ a business model that is against the hospitality industry’s best practices for channel management and rate parity, and will suffer as a result of supply and demand economics.

Why Hoteliers Should Avoid Last Minute Sales?

Here are only some of the reasons why it is not a good idea for hoteliers to utilize the last-minute deal business model and why this business model will not survive the test of time in hospitality, similar to the example from the airline industry:

• Last-minute sales sites are a recessionary phenomenon, not a new and exciting distribution channel. There is nothing revolutionary about their technology, which has been around for years.
• The mobile channel is not the reason for the emergence of  HotelTonight.com and similar last-minute discounters, it is a mere enabler. The recession is the only reason for these last-minute sites’ resurgence of late.
• Last-minute sales of empty hotel rooms may sound logical and makes sense in theory, but in reality they work against rate parity and destroy all other distribution channels and price integrity.
• The economics does not work for the hospitality industry:
• Flawed business model: the discounted rate is out in the open, which goes against rate parity principles, contractual obligations with OTAs, preferred corporate accounts, group rate contracts, best rate guarantees, etc.
• Lack of opaqueness establishes a low market price: hotels can hardly charge rack rate again since the customer has accepted the discount rate as the market rate.
• Leads to cannibalization of existing customer base: as discussed below, most mobile bookings happen at the last minute anyway.

In this hyper-connected social and mobile world, the booking window has shrunk tremendously over the past few years and travel consumers have embraced the mobile Web as a legitimate booking channel:

• Typically, mobile bookings are for the next 48 hours (Google).
• Many major hotel brands report that 80% or more of their mobile bookings are for the same or the following day.
• Sixty-one percent of online consumers are willing to book travel via a mobile device (Google, September 2011).

In other words, people are booking closer and closer to the day of actual arrival, meaning that it is easier for them to wait until the last minute and see what the last-minute rates on HotelTonight.com or a similar service are as opposed to booking in advance via the hotel desktop or mobile sites.

In the age of social and mobile “word of mouth,” it will not take long for all regular and frequent guests at your hotel to hear about the lower last-minute rates offered via an OTA or a service like HotelTonight.com. What will be the result? The hotel will soon witness that:

• Booked guests are canceling existing reservations made via the hotel website, phone, GDS, OTAs and re-booking the lower rates via HotelTonight.com.
• Potential guests are waiting until the last minute to see what the last-minute rates are for the property and other hotels in the city/location they are traveling to and booking at the last minute.
• OTAs are after the hotel for these last-minute “deviations” from contracted rate parity clauses.

A Case Study from the Hospitality Industry:

There is a very good case study where a luxury boutique hotel in New York City was (mis) using Twitter to offer last-minute discounts for unsold rooms for the night:

• Every day at 5PM the hotel would send out a Twitter-only Last-Minute Special that was 25%-30% below BAR (discount varied based on number of empty rooms available for the night).
• All 8,000-10,000 Twitter followers received notice of this last minute special.
• Potential guests, new and old, frequent and occasional, were waiting for these last-minute specials to book via their mobile phones or call from the airport or from the taxi cab while en route to the hotel (5PM traffic to Manhattan – you get the picture).
• There have been numerous cases where people were waiting in the lobby of the hotel to receive the 5PM last-minute deal and then walked up to the reception desk and booked their stay right then!
• There have been many cases where guests arriving with advance reservations booked at much higher rates via the hotel website, voice, GDS or an OTA, and then demanded at the front desk to be accommodated at the lower “last-minute rate of the day.” The front desk had to oblige reluctantly.
• Major ruckus and noisy scandals at the front desk were a common occurrence on a daily basis.

After 6 months or so the hotel discontinued the practice and spent at least a year after that repairing the damage to its price integrity.

What Should Hoteliers Do to Avoid Last Minute Sales?

Now that we have discussed that last-minute room sales are against industry best practices and do not work in hospitality, what should hoteliers do?

To begin with, if hoteliers are doing everything right in the direct online channel, the hotel would not need to use last-minute discounters. Instead of relying on last-minute discounters, hoteliers should invest in the direct online channel, both the traditional and mobile Web.

Second, make the mobile web your priority in Q4 2011 and 2012. The mobile channel has already become an important travel planning and transaction channel in the U.S. and worldwide. Hotel guests and travel consumers are already mobile-ready, and hoteliers and travel suppliers have to respond adequately to this growing demand for mobile travel services.

Third, hoteliers should not focus on “naked” rate discounts like last-minute deals, but rather on hotel special offers, packages and promotions that provide real value, such as: limited time offers, advance purchase promotions, complimentary amenities and upgrades, loyalty point promotions, family, weekend, spa and romantic packages, etc.

In this economic environment, it is essential for hoteliers to embrace all three of the above steps in order to increase market share by taking advantage of this new mobile travel planning and booking consumer behavior, as well as the shortened booking window and last minute nature of mobile bookings.

Please continue to read the entire blog article on HOTELSMag.com, as well as see a full selection of Max Starkov’s blog articles on hot industry topics and latest trends in the online channel in hospitality.

The Google Hotel Finder:  A Game Changing Event, a “Greed is Good” Defining Moment, or a Natural Move to Serve Better Search Results?                                                                                                                                        

First of all, let’s make one thing clear: with the introduction of the Google Hotel Finder (http://www.google.com/hotelfinder/), Google is not entering the OTA space and is not becoming an online travel agency. All bookings originating from the Google Hotel Finder take place on the hotel website or OTA website.

The Google Hotel Finder is a logical extension to the Google’s Hotel Price Ads cost-per-click (CPC) advertising program, introduced in Q3 2010. This CPC lead-generation program initially started as a pilot with a number of big OTAs with the introduction of a pricing menu in the property Google Places page as well as in the Google Maps results pages.

Therefore, in my view, the introduction of Google Hotel Finder is not a “revolutionary” and “game-changing” event as some industry commentators claim. So what kind of an event is the Google Hotel Finder?

• It is a “Greed is Good” moment: Google has figured out a smart way to generate incremental revenues from the search engine results real estate it provided for free in the past, such as Google Places, Google Maps, etc.
• It is also a natural progression of Google’s quest to provide the a) most relevant information, and b) the best user experience. When users are searching for hotels, they care about three important pieces of information in the result pages: hotel location (proximity to where the user is going to – Google has addressed this via the insertion of a Google Map in the results pages), price, and availability. The real-time availability widget and the pricing menus in Google Places, Google Maps and Google Hotel Finder address the latter.

At the same time, the hotel pricing and availability content in Google Places and Google Maps is a natural progression in Google’s strategic objective to accumulate the deepest and most relevant depository of local content ever created on this planet. Google has already achieved that.

The Yellow Pages were supposed to do that and failed; CitySearch tried to do it and failed miserably. Why does Google need local content? First, over 30% of all searches are local in character. Second, local content equals mobile content. Google is preparing for the dramatic entrance of the next digital medium that is already changing the way people access information and interact online – the mobile web.

Who are the winners from the new Google Hotel Finder?

• The OTAs are winners: Now the OTAs are dominating the pricing menus in each hotel’s Google Places page – in the past the only way an OTA could seep onto a Google Places page was via an AdWords paid search ad.
• The major hotel brands are the winners: Once they implement the Google API and start pushing real time availability and pricing information to Google, it becomes another direct online channel to pursue.

Who are the losers from the new Google Hotel Finder?

• The OTAs are also losers: Over the years the OTAs have become a type of meta search engines themselves. Expedia claims that 40% of their traffic researches hotels on Expedia but then visits and books on hotel branded websites. The OTAs will lose at least a portion of these “meta search” and “shopping around” users to Google Hotel Finder.
• All meta search sites, including Kayak.com, are definite losers. Now Internet users have a similar meta search environment to find the hotel, its location, pricing and availability and transact with the hotel or an OTA.

What is the cost to participate in the Google Hotel Finder?

This is “pure” advertising; Google is not into charging OTA commissions. The Google Hotel Finder is a straightforward CPC (cost-per-click) lead generation program. Every time a user clicks on a listing in the drop-down pricing menu in the property’s Google Place page, Google Maps or Google Hotel Finder, the advertiser whose listing in the pricing menu has been clicked on pays a cost-per-click fee of  .2%

Example:

For a 2 night stay and ADR (including taxes) of $100, the advertiser pays $.40 per click (2 nights x $100=$200 x .2% = $.40 per click).

Based on the propery ADR, this fee could be lower or higher than the typical cost-per-click (CPC) fee of the property’s Google AdWords paid search campaigns.

In the future, Google is also planning a bidding pricing mechanism that will allow hotels to position themselves higher in the Google Hotel Finder results. Advertisers will be able to use a Google AdWords type of bidding and increase or decrease CPC based on their budgets and campaign objectives.

Who is participating in the Google Hotel Finder Program?

As mentioned, the Hotel Price Ads CPC program was introduced as a pilot program with OTA participation. All major OTAs today participate in the program.

All major hotel brands are working hard to implement the Google API (interface) between the brand CRS (Central Reservation Systems) and the Google back-end. Very soon we will start seeing real-time availability and pricing provided by the major brands in the pricing drop-down menus in Google Places, Google Maps and Google Hotel Finder.

As for the independent hotels, they have to push their GDS connectivity providers (such as Utell, SynXis, iHotelier, Genares, etc.) to implement the Google API and start serving real-time availability and pricing to the Google Hotel Finder and the drop-down pricing menus in Google Places and Google Maps.

Click here to read the entire blog article on HOTELSMag.com, as well as a full selection of Max Starkov’s blog articles on hot industry topics and latest trends in the online channel in hospitality.

About the Author:

Max Starkov is President & CEO of HeBS Digital (Hospitality eBusiness Strategies), the hospitality industry’s leading direct online channel strategy, full-service digital marketing and website design firm (www.HeBSdigital.com)

2012 is quickly approaching and budget-planning season is upon us. Whether you are just starting to think about where you are going to allocate your dollars, or are moving towards finalizing your budget for next year, this is the perfect time to take a step back, review the state of the industry as well as your property’s successes and failures in 2011, and prepare for a year of driving the most revenue ever through your most cost-efficient channel – the hotel website.

In an industry as dynamic as ours, 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 your hotel digital marketing campaigns for optimal results.

Recapping 2011 and Preparing for 2012

Despite the current rocky state of the economy, the hotel industry enjoys a relative robust travel demand.  The U.S. hotel industry reported increases in all three key performance metrics for second-quarter 2011 in year-over-year measurements, according to data from Smith Travel Research (STR). The industry’s occupancy increased 4.5 percent to 63.4 percent, average daily rate rose 3.5 percent, and revenue per available room was up 8.1 percent. STR projects that all three key performance measurements will realize increases for the year as a whole.

So what are the main criteria hoteliers should use when determining their 2012 digital marketing budgets?

Sources of Business:

The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace.  It should be a direct reflection of the sources of business:

• What are your main distribution channels?
• What are your property’s main feeder markets?
• What are your property’s main customer segments: transient corporate or leisure, corporate group, meetings, social events, family travelers, etc.

Here are the main distribution channels in hospitality in the U.S.

• Rapidly Growing Online Channel (+25% in 4 years)
• Decreasing GDS Travel Agent Channel (-25% in 4 years)
• Decreasing/Flat Voice Channel (-11.1% in 4 years)

eTRAK, HeBS Digital 

What do these distribution trends mean for hoteliers? The hotelier’s 2012 marketing budget needs to focus on the online channel, the only growth channel in hospitality.

Not all online bookings are created equal

Online hotel bookings are on the rise, but are they coming from the property’s website or from the OTAs? Since 2008, the OTAs have increased their market share by 45%, measured as contribution to CRS bookings for the top 46 hotel brands! In 2010 alone, the true cost of OTA distribution to the industry was $2.5 Billion (STR).

eTRAK, HeBS Digital

What do these distribution trends mean for hoteliers? The 2012 digital marketing budget needs to focus on the Direct Online Channel to allow hoteliers to “Own the customer”, stay competitive and reverse the troubling trend of the OTA’s growing market share.

Return-On-Investment (ROI)

Of all hotel digital marketing initiatives in the HeBS Digital 5^th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices survey, hoteliers believe that website optimization produces the highest ROI. Social media however, introduced as its own category this year, was not far behind at 43%. This shows a dramatic change in the perception over the past few years of how much revenue Facebook, Twitter, etc. really generate.  While social media is not a distribution channel, it is increasingly becoming an important customer engagement channel. Whereas in the past hoteliers were skeptical as to whether social media should even play a role in their Internet marketing strategy, today it is one of the fundamentals.

**In 2011 Social media was separated from Interactive/Web 2.0 for the first time. All years prior these initiatives were combined in this question.

Most respondents (34.5%) expect to achieve 11-15 times ROI from their Internet marketing campaigns in 2011, as they should if they are following best practices.

The hospitality industry is facing major challenges

It has been 16 years since the advent of the Internet distribution channel, the most cost-efficient hotel distribution and marketing channel ever. While we have come a long way, the many challenges of the past three years – such as the emergence of the hyper-interactive traveler, social media, and mobile marketing – have made it difficult for many hoteliers to keep up.

What are the main challenges facing the hospitality industry over the next 24 months?

• Continued Shift from Offline to Online
• Significant Increase in OTA Market Share
• Social Media: Mainstream Customer Engagement Channel
• Mobile Web: Exploding Distribution Channel
• Meet Your New Guest: the Hyper-Interactive Consumer
• Channel Convergence and Need for Multi-Channel Marketing

Here are some of the biggest developments of 2011 that should be kept in mind when preparing the 2012 hotel digital marketing budget:

• Multi-channel marketing has become the norm and 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. Unleashing a marketing promotional campaign simultaneously across all available marketing channels produces a compound effect and far greater returns than each individual marketing format.

• Big Changes in SEO Best Practices: Google “Panda”, the next evolution in Google search algorithms, is more than ever based on relevancy and quality of web content. Hoteliers must take these updates into account and budget for in-depth website optimizations and redesigns for next year.

• Another Big Year for Mobile Marketing: The amount of users researching travel is expected to grow 51% next year, and by 2012 18% of mobile users will also book from their smart device (Google). Many hoteliers are still behind and have not invested in a mobile website or any mobile marketing efforts.

• Travel is Social: There are more Facebook profile pages than there are web pages (Facebook). As more and more hotels launch Facebook pages with custom tabs, twitter accounts, YouTube channels, etc., hoteliers need to focus more energy on differentiating themselves while also providing value to their audience. Also of note – social networks will capture 11% of online ad spending in 2011 (eMarketer), which further proves your hotel will need to be as creative as possible to cut through all the noise.

• Flash Sale & Group Buying Sites:  While popular in 2010 and the early part of 2011, flash sale and group buying sites have proven to be detrimental to the hotel industry from a pricing and branding perspective. Hoteliers must preserve rate parity and their brand by utilizing the most cost-effective distribution channels, instead of using desperate measures to sell inventory.

Listening to Your Peers: How Are They Allocating their Budgets?

In the 5^th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices, hoteliers responded that their 2011 Digital Marketing Budgets were Higher than 2010. Hoteliers increased their website re-design/design (20.2%) and website optimization (13.7%) budgets this year. Even so, over 73.4% of hoteliers reported that the economic environment and overall budget constraints continue to affect Internet marketing budget planning (30.3% and 43.1% respectively).  The good news is that for 74.5% of respondents, their 2011 Internet marketing budget was higher than in 2010.

 Here is how hoteliers spent their hotel digital marketing budgets over the past few years, and what they project to spend in 2011:

Overall this year, hoteliers made more room in their budget for website re-designs and optimizations, SEM/paid search and SEO, mobile marketing and social media initiatives. The numbers also showed that many hoteliers are seriously budgeting for hotel website redesign/designs.

Building Your 2012 Hotel Digital Marketing Budget 

While hotel distribution has changed quite dramatically over the past 16 years (since the advent of the “commercial” Internet), the fundamentals of hotel distribution have not changed. As HeBS Digital has been saying for years, hoteliers need to continue to focus on the distribution channels that are cost-effective, generate the most bookings, protect rate parity and price integrity, and reach their key customer segments.

What line items should you include in your 2012 hotel digital marketing budget in order to drive as many revenues as possible through the direct online channel?

Here is a quick snapshot of how you should allocate your 2012 budget:

Hotel Website Re-Design & Optimization

All hotel digital marketing starts and ends with the hotel website, the hub of your multichannel marketing efforts. What elements make up an effective website? Don’t scrimp when it comes to the essentials – saving $5,000 upfront may lose you hundreds of thousands of dollars in revenue in the future. Poor decisions include websites with little content (15 pages or less), no RFP forms, no Best Rate Guarantee form, only half of the pages optimized for the search engines, etc.

As mentioned above, the new Google Panda update has raised the bar for hotel websites. This major update demands not only deep and relevant content on the hotel website, but unique and engaging content.  Your old and tired 2-3 year old website cannot possibly meet these new requirements and most probably has “fallen off the cliff“ i.e. has already experienced deteriorating search rankings.

Don’t underestimate the power of a hotel website that offers interactive elements (see examples below), optimized content, updated imagery and videos, and generally is up to date with 2011 best practices. You may have a highly creative social media strategy, the most targeted SEM strategy, and an email marketing strategy that is incredibly effective in driving traffic to your site – but are your website visitors converting once they arrive? If your website is over 2 years old, it is time for a redesign. If it is newer than that, include a website optimization and enhancements to the site in your budget this year.

Recommended share of the 2012 hotel digital marketing budget: 15%-25%

Video

While online video was an important part of the hotelier’s strategy in 2011 – Google even branded the year to be “The Year of Video” – for 2012 it is even more essential that video marketing be in the hotelier’s arsenal. Videos excel at selling your hotel product and engaging consumers better than any other medium.  Also important in 2012: consumers will be watching video even more while on the go, on their iPhones, Android devices, tablets, etc.

Develop hotel videos presenting hotel services and amenities to your different customer segments, post them on the hotel website and YouTube, and send them out via MMS messaging. Due to the shortened attention span of today’s traveler plus mobile distribution restrictions, best practices require not a single 30-minute video, but shorter 30- to 60- second videos illustrating different aspects of the hotel product: weddings, spa, entertainment, etc.

Additionally, advertise your videos on YouTube (an easy and cost-effective marketing tactic), and make sure your videos can easily be found on your hotel’s website, its Facebook page and from your email newsletters.

Recommended share of the 2012 hotel digital marketing budget: 3%-7%

Interactive Initiatives

The hyper-interactive, hyper-connective consumer has high expectations for a hotel website.  Hoteliers must align the interactivity of the hotel website with the behavior of today’s travel consumer – who will give your hotel website just a few minutes to capture and keep their attention once they arrive.

Interactive initiatives such as sweepstakes generate buzz, increase traffic to the site, encourage repeat visits, increase time spent on the hotel website, and ultimately increase bookings. Considering participating in a flash-sale or group-buying site? Don’t! Save thousands in lost revenues and conduct a coupon or a value-add sale on your own site or landing page, with a countdown ticker, sign up form, and forward-to-a-friend functionality. These initiatives also may serve to build your email and mobile-opt in lists for future marketing efforts.

It’s important that you allow your website visitors to share the content on your website. Additional examples of interactive initiatives include a calendar of events, blog on the hotel website, customer review form functionality, live chat, surveys, and Facebook Like/Tweet/Google +1 Buttons.

Recommended share of the 2012 hotel digital marketing budget: 4-6%

Search Engine Optimization (SEO)

In 2011, many hoteliers’ websites were hit hard by the Google Panda updates.  This, along with ever changing algorithms by search engines to improve the user experience, has been a change in the way that websites approach their keyword targets, content appearance, and site structure.

With SEO constantly evolving, it is more important than ever to benchmark and track SEO efforts and successes. In addition to maintaining a focus on on-page optimization techniques, it is important to review and improve the quality, uniqueness, and value of a hospitality website’s wealth of content. Now more than ever, hotel websites cannibalize each other’s search rankings because of similar content and non-differentiated message. Useful, shareable content is increasingly becoming king. This is why once a solid SEO-focused coding foundation is applied, the content must be of a high editorial quality and totally unique from page to page, focusing more on readability and value to the consumer than pure keyword-stuffing and link sculpting.

Recommended share of the 2012 hotel digital marketing budget: 8%-10%

Search Engine Marketing (SEM)

Search Engine Marketing (SEM) has long been a staple of hotel Internet marketing budgets for one main reason: it works. Smart SEM marketers typically find that their campaigns generate significant revenues for their property and upwards of 1,500% ROI.

Recently, Google released a study that addressed the question: “What percentage of paid clicks would be acquired organically if I pause my SEM campaigns?”  Results showed that 89% of paid clicks would not be recouped organically – only 11% would be covered by organic search results. A competitive market (especially in popular tourism destinations), increased focus on local search, retargeting/remarketing campaigns to target users who previously visited your site, the need to reach more travelers on the go through mobile search, and a heavy OTA presence means that hoteliers need to spend more to get their market share.

Recommended share of the 2012 hotel digital marketing budget: 25%-30%

Email Marketing

Email marketing is still an essential component of the hotelier’s direct online channel strategy, and an easy and affordable way to send messages to your key customer segments.  Email marketing campaigns still generate significant ROIs for hoteliers, keeping this initiative as a crucial line item in almost every hotelier’s budget.

Smarten up your email marketing strategy by performing more data-driven email marketing. Consider sending a ‘re-engagement’ email to those that have not opened or clicked on an email campaign for 90 days, enticing them with a special offer to get them interested again. Resend your emails to all bounces after three days. Send an email offer to people that have started but then abandoned the booking process. Pay attention to how you segment your list and make sure you are sending offers out to those who specify their interest in that topic. If you have been using the same exact email template for over a year, it’s time for a refresh.  Lastly, with so many people viewing your email newsletters on a mobile device, make sure you are providing a mobile-optimized version of your email.

Recommended share of the 2012 hotel digital marketing budget: 4%-5%

Online Media & Re-Targeting Advertising

Once you have budgeted for the revenue generating basics such as website re-design and optimizations, SEO, SEM, social, mobile and email marketing, consider adding online advertising initiatives.  Be sure to carefully analyze what websites you work with (that the site is part of your key customer segment’s travel purchasing process), and take advantage of retargeting and behavioral targeting options.

According to the Interactive Advertising Bureau (IAB), 38% of every online advertising dollar in the U.S. goes to display – related advertising (commonly called banner advertising). In 2010 alone, nearly $10 billion were spent on display advertising, including all of its formats: banners, digital video ads, online sponsorships, rich media, retargeting, etc.

In 2012 consider launching a retargeting/remarketing campaign for your property. Retargeting is a form of display advertising in which you target users who have previously visited your website with banner ads or text ads on display networks. You can target users that went to a specific part of your site, or the whole site. In addition, you can customize messages based on which part of the site the user has visited. In its simplest form, retargeting gets previous visits back to your site.

Consider only high quality retargeting advertising networks, such as Google Display Network, Yahoo Network, etc. Avoid retargeting networks offered by some of the OTAs – typically these networks consist of low quality sites and affiliate sites. While the retargeting banners do link to the hotel website, these OTA-related networks manipulate the users to book via the OTA booking engine, which means merchant rates and revenue loss for the hotel.

Recommended share of the 2012 hotel digital marketing budget: 7%-10%

Mobile Websites & Marketing

By 2014, mobile Internet users will surpass the number of desktop Internet users. The most important statistic though is the number of smartphone users. Smartphones are changing how we do business in hospitality, how we market, how we service customers. There are nearly 75 million smartphone users in the U.S. alone; their number will exceed 100 million by 2014.

Did you know that 1 out of 5 hotel queries come from mobile devices (Google, May 2011)?  Additionally, Google revealed that 20 percent of searches across Google are local, but that number bumps up to 40 percent for mobile searches.

The mobile channel is already a reality and has become an important travel planning and transaction channel in the U.S. and worldwide. Hotel guests and travel consumers in general are already mobile-ready, and hoteliers and travel suppliers have to respond adequately to this growing demand for mobile travel services.

HeBS Digital’s own research and other industry sources show that in 2011 between 2.5% -5.0% of visitors to hotel websites came from consumers accessing the hotel site via mobile devices. This year we saw increases of 3-5 times in mobile bookings for many of our clients.

As consumers continue to embrace their phones for all types of activities, mobile devices play an increasingly important role in the travel sector, especially in last minute bookings.

Mobile is an excellent platform to reach your key customer segments anywhere, at anytime.  In 2012, independent or franchised hotels and resorts, as well as small and mid-size hotel chains and multi-property hotel companies, should focus on building and enhancing their mobile websites. The main focus should be:

• Creating mobile-friendly textual and visual content that presents the hotel product well.

• Enhancing the mobile user-experience via well-developed mobile site navigation, a mobile booking engine widget, mobile calendar of events, etc.

• Increasing website “discoverability” via mobile SEO and mobile SEM (e.g. Google mobile AdWords) and online media initiatives.

• Making the mobile website more interactive via mobile-social media initiatives, interactive sweepstakes and contests.

• Soliciting sign-ups to the mobile opt-in list via the traditional hotel website and the mobile website, via hotel email marketing campaigns and various sweepstakes and contests, such as interactive scavenger hunts, QR Code promotions, etc.
• Tracking conversions and user behavior via mobile analytics (e.g. Omniture) and special tracking phone functionality.

Recommended share of the 2012 hotel digital marketing budget: 9%-10%

Social Media

Let’s set the record straight: Social media is not a distribution channel in hospitality. Social media is a customer engagement channel, and an extremely important one at that.

There is no doubt that Social Media has changed how travel consumers research and plan travel, access travel information, and perceive credibility of information. There is no doubt that Internet users are increasingly influenced by social media sites and peer reviews. By utilizing a comprehensive social media strategy, hoteliers can create social media “buzz” around the hotel, target receptive audiences, and ultimately stimulate hotel website visits, interactions and conversions on the hotel website.

Social marketing should continue to be an important component of any hotel’s digital marketing mix in 2012 and part of the comprehensive direct online channel strategy for any hotel company. Naturally, it is important to use the right ROI metrics to measure the success of social marketing efforts of the hotel.

As discussed above, social media and social marketing initiatives should be reviewed with “sober eyes” and within the context of the impact of the multi-channel marketing strategy of the hotel. Instead of focusing on bookings and revenue when measuring results from social media marketing, remember that currently the best uses of social media are:

• An important component of the hotel’s multi-channel marketing efforts
• Buzz-building
• Brand-building
• Interacting with and engaging customers
• Keeping up with the times, making the hotel look current, cool and up-to-date
• Driving engaged and relevant traffic to the property’s own website

A strong presence on social media channels such as Facebook, Twitter, YouTube, Flickr, Foursquare, and LinkedIn must be budgeted for. Your hotel website is also a place where you can encourage social interaction – see the section above on ‘interactive initiatives.’ Now that hoteliers have started engaging their customers, now begin to monetize your presence. Including a Facebook custom tab that reveals an exclusive discount only to Facebook fans, promoting limited time offers via Twitter, and social media contests are great ways to turn social media into a revenue channel.

Recommended share of the 2012 hotel Internet marketing budget: 6% – 8%

Reputation Management

Every year it becomes more important to monitor (and respond when appropriate) your customer reviews, make sure consumer-generated content about your hotel is aligned with the content on your website, make sure your profiles on sites like TripAdvisor are complete and optimized, and to monitor your competitor’s reviews and response strategy. According to respondents of a recent TripAdvisor survey, 92 percent of travelers are more likely to book accommodations for a hotel that posts a detailed property description and photos.

In 2012 hoteliers should pay special attention to Google reviews, which are part of Google Places. Recently Google removed all third-party customer reviews, including TripAdvisor, from the Google Places pages, except for its own customer reviews. Enhancing the hotel content on the property’s Google Place page with photos and videos, as well as steering guests to comment on Google Reviews should become a priority for any hotelier.

In many cases, investing in a tool such as Revinate is well worth it in time-savings and insight into where you rank against your competitors that could not be gained by monitoring these sites manually.

In addition to allocating budget dollars to reputation management, consider participating in TripAdvisor’s Cost Per Click and Business Listing programs if your property has good reviews. These programs drive traffic directly to your website and divert bookings from the OTAs which have a heavy presence on TripAdvisor, and tend to covert well because people looking at reviews are closer to the purchase process.

Recommended share of the 2012 hotel Internet marketing budget: 3%-4%

Web Analytics & Tracking

Smart business decisions may not be made without investing in a web analytics and tracking tool. A tool like Adobe’s Online Marketing Suite Powered by Omniture will provide you with the information you need to stay competitive and continue (or halt) spending your budget dollars on campaigns that perform and drive revenue through the direct online channel. Make sure that you also budget for someone to analyze the data: the best analytical tool out there will do nothing for your hotel if you have not invested in resources (either staff or a hotel digital marketing firm) to slice and dice the data.

Recommended share of the 2012 hotel digital marketing budget: 1%-2%

Website Operations & Campaign Management Fees

Website hosting and maintenance should not exceed 5%-6% of your budget. Campaign management and direct online channel consulting by an experienced digital marketing firm that will deliver a high ROI should not exceed 11%-12% of your overall Internet marketing budget.

Conclusion

The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace.  It should be a direct reflection of the sources of business and the overarching focus on the direct online channel, expected ROIs from the various advertising formats, and solutions to the emerging challenges and trends that affect online revenues in the hospitality industry.

Following best practices means achieving the best ROIs. Once you have determined how you will allocate the 2012 budget, consider the know-how needed to make these campaigns perform.

The shift from the offline/traditional channel to the online channel is permanent, and the direct online channel is the only growth channel in the hospitality industry that makes economic sense and creates long-term benefits and competitive advantage. Therefore, mastering the direct online channel and all of its segments: traditional Web, SEM, SEO, email, social media, mobile Web, etc., should be a top priority for any hotelier in 2012.

In 2012 hoteliers need to employ multi-channel marketing and distribution strategies, supported by smart allocation of the 2012 digital marketing budget.

Partner with a digital marketing firm that understands the best practices in hotel digital marketing and direct online channel strategies, has proven results in multi-channel campaign management, generates above-industry ROIs and is accountable for every advertising dollar spent. 

The existence of the so-called billboard effect is not a new marketing phenomenon. It has existed long before the online channel became a reality. As confirmed by many studies, any marketing exposure by a hotel produces a billboard effect:  when you launch a banner advertising campaign; when you purchase a full-page ad in the New York Times travel section; when you launch a paid search campaign on Google, etc.

The OTA Billboard Effect

Lately Expedia reps have been aggressively using a new Cornell Hospitality Report, namely “Search, OTAs and Online Booking: An Expanded Analysis of the Billboard Effect” to convince hoteliers that they should use Expedia in order to generate more bookings from the hotel’s own website due to the so-called “Billboard Effect.”

The Cornell Report, based on data from Expedia and InterContinental Hotel Group (IHG) from 2008-2010, is a continuation of a previous report on the subject, heavily supported by Expedia. The report’s analysis determined that when an IHG property was listed on the first results page of Expedia, this created an increase of between 7.5% and 14.1% in bookings for the same property on IHG’s own brand website. In other words, this is a confirmation for Expedia’s billboard effect, which hoteliers should take into consideration when griping against the 25% plus merchant OTA commission. When these “billboard effect bookings” are taken into consideration, Expedia’s commission “would effectively be reduced to single digits,” states the Cornell Report.

Hoteliers, rejoice! We have found the perfect recipe for success: we do nothing as far as marketing the property website is concerned. Instead, we plaster Expedia with our sales promotions and wait for the travel consumers to come to our own website and book.

As discussed, the billboard effect is not strictly an OTA territory. In my view, the Cornell Hospitality Report is a one-sided research project, very proactively supported by Expedia, similar to the first report on the billboard effect published in 2009. Cornell, the finest hospitality institution in the U.S., should know better than to come up with this half-baked “scientific” research, which does not account for the complexities of hotel distribution as well as the “digital information cloud” we all live in and the resulting marketing and distribution channel convergence which directly affects the purchasing habits of today’s hyper-interactive travel consumers.

This report makes conclusions that do not take into account, among many other things, the following:

Complex Travel Planning Patterns in Hospitality

Many surveys show that people are shopping around on a number of hotel and travel websites before narrowing down their search. Typically in hospitality, these sites include a hotel search on a search engine e.g. Google (65% market share), an OTA website, TripAdvisor, the hotel’s own website, etc. Therefore jumping from an OTA website to a hotel branded website and vice versa is at least partially due to particular travel research patterns unique to the users and not due to the so-called billboard effect:

• Step 1: “I always search on Google first where I identify a property I like”
• Step 2: “I go to Expedia and see what the rate for this property is”
• Step 3: “I visit TripAdvisor to read my peer reviews for this hotel”
• Step 4: “I visit the hotel website and book if I like the location, rate and what I have read and seen about this hotel”

The Rate Parity Effect

Typically, and Internet users already know this well, Expedia places a hotel on the first search results page when it has a particularly good rate for this property e.g. a special rate, a 24-hour or a 72-hour sale. In this day and age of strict rate parity, particularly in the case of branded hotels as in the new Cornell study, the hotel has, due to mandated rate parity, the same special rate or the same 24-hour or 72-hour promotion on its own website. So the fact that there is a natural uptick in bookings on the hotel website during the exact same time the hotel is on Expedia’s first search results page is at least partially due to the rate promotion, and not due to the so-called billboard effect.

Let’s Examine Expedia’s Billboard Effect

So how big is the exposure for an average property on Expedia.com? In June 2011, Expedia.com had 19,066,141 unique visitors (Compete.com). In the same time, Expedia featured 135,000 hotels on its website, i.e. 141 unique visitors per hotel per month. In other words, on average, the customer engagements any hotel can get on Expedia.com is with 141 unique visitors.

Naturally, Expedia.com’s users are not evenly spread among the 135,000 hotels featured on the site. Some hotels get more visits based on property location, brand recognition, rate, or some users visit multiple property listings on the site.  Whatever the case is, even if you believe that your hotel gets double and triple and quadruple attention by Expedia users, this number pales in comparison to the potential customer engagements you could achieve via the direct online channel.

We believe the billboard effect from a property’s exposure on Expedia.com is limited in scope, and has a far smaller effect on the hotel revenues than the property’s paid and SEO initiatives on Google, email marketing, mobile marketing, website optimizations, etc.

Let’s Examine the Billboard Effect from the Direct Online Channel

By utilizing the direct online channel and multi-channel marketing initiatives, any 100- to 150-room independent or branded hotel on average:

• Should have a minimum of 6,000-10,000 visitors to the hotel website/month
• Should send out a monthly email marketing piece to the hotel opt-in list of min 5,000-10,000 email recipients
• Should get an exposure via paid search:
  • min 1,500-2,000 visits from PPC ($1,250-$1,500 monthly budget)
  • over 100,000 -133,000 free impressions (people who have seen the PPC listing) at 1.5% CTR
• Should get at least 500,000 impressions from its Google Re-Marketing/Re-Targeting campaign
• Should communicate at least 3-4 times/week with its 1,000-1,500 Twitter followers
• Should communicate at least 3-4 times a week with its 750-1,250 fans on Facebook
• Should get at least 1000 mobile visitors and generate a significant amount of reservation calls from its mobile website

In other words, by unleashing a marketing promotional campaign simultaneously across all available marketing channels, thus producing a compounded effect and far greater returns than each individual marketing initiative, the hotel could realize over 650,000 customer engagements/per month. Many of these will be realized repeatedly with potential customers across different marketing channels, which is the best recipe for customer conversion.

Compare this Direct Online Channel billboard effect with the one via Expedia!

Click here to read the entire blog article on HOTELSMag.com, and decide for yourself whether the OTA Billboard effect makes any sense for the hospitality industry.