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"What the Heck is Hotel Revenue Management, Anyway?"

Hoteliers…What is Your eMarketing Proficiency?

An Electronic Marketing White Paper

By: Neil Salerno – Hotel Marketing Coach

Electronic channels have changed hotel sales and marketing forever. Internet web site marketing, the Global Distribution System, social media, and third-party aggregators have all presented new marketing opportunities for hotels around the world. In effect, the Internet has created the first affordable global marketplace for large and small hotels everywhere. 

For a while, it appeared like the Internet would be a simple answer to everyone’s occupancy problems; an inexpensive and effective way to sell rooms. All one needed was a website. But, as Internet marketing matured and search engine technology evolved, design requirements for websites have also matured; even simple web sites must be designed to follow guidelines established by the search engines. After-all, a website needs traffic to be effective.  

A well-designed website will produce incremental room business with an incredible return on a modest investment, but not without some effort. Tags, links, and properly written text (content) are the key components of a productive website, yet most website designers cannot be relied upon to produce these on their own.

Knowledge of hotel marketing techniques is a necessary element. A hotel website is not an online brochure; it should be an interactive online sales tool, which focuses on destination, first. Knowledge of how and why consumers select accommodations is essential to the site’s design. 

I can’t tell you how many hoteliers world-wide contact me citing their disappointment with their professionally designed website. Many of these sites lack, even the basics, of hotel marketing expertise, while others are dysfunctional because of over-zealous designers who are more interested in creating a visual masterpiece than creating a functional site. Content is king; yet much of their site’s text lacks a focused search and hotel sales theme. 

Many hotel websites, unfortunately, are the result of “committee” input, which usually results in over-complicated, difficult to navigate, confusing, and ineffective websites. Knowledge of how search engines find and rank websites is also essential. There is much more to website design than that which the visitor sees online. This internal construction has much to do with the eventual popularity of the site. Increased popularity relates to increased reservations. 

The Global Distribution System (GDS)

Unlike many of today’s naysayers, I believe that travel agents will continue to play an important role in leisure travel for a long time to come. As people begin to feel the personal disconnect created by electronic marketing. I believe that many travelers will return to the personal touch that only travel professionals can provide. 

The GDS may never possess the same popularity it once enjoyed before the Internet, but I believe that many travel agents will adapt to their new role in leisure travel. At this point, the GDS can still supply your hotel with needed, often rack-rated, room business. The GDS is your hotel’s connection to travel agent bookings.  

Many franchised hotels didn’t take much notice to changes in GDS business, because most franchises control GDS submissions for their franchisees. But, if you have an independent hotel, the GDS connection may be made through several GDS providers. It’s very cost-effective and can be very rewarding.

The Global Distribution System was the first breakthrough in electronic marketing; many years ago. It enables travel agents and airlines to see real-time rate and inventory availability for your hotel. The amount of business which is transacted through GDS is still significant. 

For independent hotels, another consideration is the fact that GDS providers also include access to the top three travel aggregators; Expedia, Travelocity, and Orbitz. Rate and inventory submissions to the GDS are transmitted to these productive online travel agents as well.

Third-Party Travel Aggregators

I have written many articles in the last few years about the battle between hotel franchises and third-party aggregators. I’m happy to say that their fight for Internet superiority appears to be settling into some positive forms of mutual co-operation. This is a welcomed turn of events, which will benefit the entire industry. With the unique ability to package air travel, car rental and hotel rooms, third-party aggregators captured a niche on the Internet. They are here to stay.

True, some data shows that many travelers prefer to deal directly with hotel suppliers, rather than a third party, but the convenience of one site travel transactions appeals to many Internet savvy travelers. Third-party marketing techniques on the Internet appear to have no equal. The vast majority of sponsored web search results are dominated by third-party marketers. No small feat and very costly. And they are selling your hotels. 

In spite of what you might be hearing from your franchise, third-party aggregators are capable of producing solid base business for your hotel. You’ve been hearing for months that only about 20% of hotel web searches are brand specific. Can you really afford to put all your emarketing eggs in one franchise basket? 

Independent hotels have even more to gain from creating a sales alliance with third-party travel sites; in addition to more room nights, they could receive needed sales exposure on the Internet. Although the exact numbers are fuzzy, many people feel that at least 80%, or more, of all hotel reservations are first researched on the Internet. The additional exposure provided by third-party sites is invaluable, especially for Independent hotels.

For independent hotels with limited marketing dollars and, perhaps, unsophisticated websites, the market exposure is absolutely vital. There are many independent hotels which would be virtually invisible in the electronic sales marketplace, if it were not for the exposure provided by third-party sites.

The strongest third-party sites dominate search results on sponsored pay-per-click searches in almost every primary, secondary, and tertiary market. These sites provide needed exposure for all hotels. Anyone familiar with pay-per-click knows that there is considerable expense involved in this type of marketing. Anyone questioning the true value of third-party sites needs to get on the Internet and perform a few web searches.

Not all hotels can afford an effective sponsored search (pay-per-click) program. This is the primary reason why responsible website developers strongly advocate an emphasis on designing hotel websites to accommodate organic search. Organic or "natural" search should be the ultimate goal for all hotel websites. This is the reason why it is so important to choose a marketer, not just a techie, to design your website.

Social Media on the Internet

Of course, no white paper on electronic marketing would be complete without discussing social media (web 2.0). The uniqueness of social media is that it consists of direct user-generated content. For hotels, travel-related social media, like TripAdvisor, presents the best opportunities.

Experts say that most travelers (around 70%) will check TripAdvisor before or after making a hotel reservation. Since no hotel has a perfect operation, it is vital to monitor comments made about your hotel by your former guests. TripAdvisor gives you the ability to post your response to comments too. Through its RSS Feed, they will automatically notify you when new comments are posted about your hotel.

Now, I know that many hoteliers appear consumed with FaceBook and twitter; after all, they are free, easy to work, and fun. I see FaceBook and Twitter links on more and more hotel sites, but very few with links to the TripAdvisor widget.

Some site designers debate the value of using the TripAdvisor widget on a website. Personally, none of the arguments I have heard hold any value and are very short-sighted. Third-party endorsements are still the strongest marketing tools; why not use them.

How Much Do You Know About Your Website's Performance?

Whoever has had the privilege of designing your website is also obligated to monitor its performance. Any site designer, worth his salt, will provide website analytics (performance data) and, more importantly, use those analytics to constantly alter and improve your site's performance. There is no excuse for webmasters not to provide analytics reports to you, since they are free from Google.

The true performance of your website is measured by the number of conversions from site visitors into reservations. This is your "Look to Book" percentage. And, it makes a huge difference. Unless your local bank allows you to deposit site visitors, knowing the number of reservations generated from your site is far more important than simply counting visitors.

For franchised hotels, several franchises now provide a separate accounting of reservations booked through your proprietary site versus their franchise site. If your franchise is not among those enlightened ones, you can get a good idea of performance by tracking the increases in website bookings in their report. If you are a hotel owner or manager, you should know how well, or how poorly, your site is performing.

There are several reliable companies which will perform an inexpensive website analysis of your site to evaluate the health of your site's overall structure and content. If you are considering a re-design of your site, this could help you to avoid repeating design errors and improve your site's ability to capture reservations.

Internet and electronic marketing is here to stay for hotels. For many hotels, the Internet is  helping them through a very difficult time.

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