Seven trending hotel news stories that will have an impact on your hotel Revenue Strategy.
1. 1-2-1 PERSONALIZATION FUELS DIRECT BOOKINGS
Hotel operators—especially independents or those who are part of small chains—are barking up the wrong tree if they believe loyalty programs are the way to drive significant direct bookings and to break the grip of OTAs. The author says the answer is as simple as “1-2-1.”
She means hotel marketers need to craft personalized offers aimed at potential guests through e-commerce channels. The author says the key is to leverage guest information and data to speak directly to the needs of guests using communications tools that register with each one individually.
2. A GAME CHANGER IN THE BATTLE FOR DIRECT BOOKING
Every hotel revenue manager wants to increase direct bookings for his/her property or company. During a recent webinar, panelists said the key is audience targeting via paid search. (Disclaimer: One of the panelists is from Google).
Nonetheless, the speakers said audience targeting involves reconnecting with people who previously engaged with your website. As example, one speaker offered ways to use paid search to reach a mobile audience:
- Use data to identify and target a driving audience and local visitors with mobile-only campaigns;
- Offer mobile-only deals and ads that serve mobile searchers;
- Make use of voice search phrases such as “near me” to target audiences in high-demand areas; and
- Use call tracking for mobile-only campaigns to capture data on phone calls and bookings.
3. RED LION’S CONTRARIAN APPROACH TO LOYALTY
Red Lion Hotels and its CEO Greg Mount have always approached distribution, pricing and loyalty from different perspectives than the rest of the hotel industry. This interview with Mount reinforces that contrarian mindset, as he says his company drives direct bookings through social media, e-commerce, and marketing rather than loyalty programs.
Two years ago, Red Lion broke new ground in the quest for direct bookings by partnering with Expedia to offer its member-only rates on Expedia.com and Hotels.com, in exchange for automatic enrollment into its loyalty program. He says the company might consider other similar partnerships in the future.
4. BOOKING.COM MIGHT BEAT AIRBNB AT ITS OWN GAME
This data might seem esoteric, but it shows the growing mania in the hospitality sector around the subject of shared accommodations. Booking Holdings announced that its booking.com online travel agency now has more than 5 million listings of homes, apartments and other unique lodgings, topping Airbnb’s 4.85 million listings. The way the two companies keep score differs, but you get the point: The OTAs are worried about the growing power of Airbnb.
Booking executives also point to its massive advertising budget—more than $4 billion last year just on digital marketing—and its high traffic levels as other ways it tops Airbnb. Of course, this is all part of an OTA industry offensive to keep Airbnb and others from poaching its turf. It might be a losing battle in the long run.
5. MANDARIN ESCHEWS FREE NIGHTS IN LOYALTY SCHEME
A long-time holdout in the loyalty game, Mandarin Oriental Hotels has launched a frequency program called M.O. that provides guests with a variety of perks instead of the opportunity to earn free nights.
According to the chain, the perks include standard items such as streaming Wi-Fi, early check-in and late check-out, room upgrades and dining or spa credits during each stay. Chain executives say the program is built on technology, giving the company the potential to personalize amenities to the tastes, needs and likes of its gold-plated customers.
6. NEW OTA PROMISES 8% COMMISSION CAP
Competition is always a good thing, but time will tell whether Hotel Bonanza will be able to make inroads against the two major online travel agency companies. The UK-based Hotel Bonanza is a new OTA that promises hoteliers that its commission rate will never exceed 8%--a significant discount from the prevailing 15%-25% normally charged by the oligarchic OTAs.
The upstart recently signed its 10,000th hotel member following a marketing campaign that launched in January. The OTA also offers discounts and deals to consumers who are members of its Bonanza Club. Check back next year to see if this company is still in business.
7. HOW NOT TO BE A PRISONER OF THE OTAS
The author believes hotel operators, owners and revenue managers are looking at the value (or curse) of OTAs in the wrong way. As he puts it, hoteliers need to push rather than pull when it comes to OTAs.
His premise is that while OTA commissions as high as 25% are onerous and reduce profit margins, the volume of business generated through these channels far outweigh the costs associated with it. Or, as he and many others have said, you take profits (in his scenario generated by increased revenues) to the bank, not profit margins. Good food for thought.
Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.