Personalized hotel offerings are no longer optional

by Jason Q. Freed, Managing Editor | June 06, 2016

Five trending hotel news stories and Duetto’s Take on how they will impact your hotel Revenue Strategy.

1. Customers OK sharing data for personalized stay

Many travelers are willing to do what it takes, i.e., divulge personal data, to gain the advantages of a hotel experienced tailored to them, according to new data from Amadeus and research from Adobe.

According to Amadeus IT Group’s report, At the Big Data Crossroads, 4 in 10 travelers are willing to share data in the interest of personalization. They want to be served personalized digital experiences to support their actual vacation experiences, the study shows.

The study centers on Las Vegas hotels, and MGM Resorts in particular, as examples of how personalization can work. While 85% of visitors to Las Vegas are repeats, they generally have little expertise about the city and its offerings. And since 40% are willing to "share data in the interest of personalization," hotels have the opportunity to identify these guests in real time and create offerings specific to each one of them.

Duetto’s take: The expectations of travelers, especially leisure guests, are growing. Today guests not only want but expect experiences personalized to their tastes, desires and demands. Once hotels get visitors to their properties, they can offer world-class experiences and impact future lodging decisions through personalized digital experiences. This kind of optimization can have significant impacts on driving traffic to their resorts and enhancing the physical experiences visitors have while there.

We’re willing to bet that probably more than 40% of travelers are willing to share their personal information if it meant a discount off their room rate. Today, hotels have the opportunity to give customers something online travel agencies can’t: the best price. If customers are recognizable at the time of booking, typically through a password-protected loyalty program, hotels have the ability to offer private or fenced rates that are better than the best available rates shown on the hotel’s own website or elsewhere. Since these prices aren’t publicly available, they won’t violate any rate-parity agreements.

Hoteliers must make the investments in technology and expertise to capture the whims of these consumers who want to be directed to superior experiences.

2. Jumping the gun: Are hotels really gaining on OTAs?

The hotel industry is finally gaining the upper hand against OTAs and soon commissions will be lower across the board and OTAs will no longer control the distribution conversation, according to a new report from Fitch Ratings.

Larger brand owners, such as Marriott International and Hilton Worldwide, can negotiate more favorable OTA contract terms, including lower commission rates and no last room availability and price parity clauses, the article says. These are attractive benefits for current and potential franchisees that should result in outsized unit growth.

Hotel brands with comparatively limited geographic scale and product segmentation are consolidation candidates, the report notes. Smaller lodging franchisors will need to lean more heavily on their balance sheets to grow their rooms systems, which could heighten credit risk.

Duetto’s take: While it's true some brand companies have become more strident in their negotiating techniques and that increased industry consolidation creates more leverage—especially for hotels part of those big brand entities—no one should believe the OTAs will roll over, play dead and easily relinquish the amazing success they've had in creating a high-margin business at the expense of hotel bottom lines.

OTAs are bound to hone their negotiating stances, create exotic and attractive new consumer-facing products and continue to prey on the many unsuspecting hotel GMs and marketers who don't know (or are too lazy) to thoroughly collect and analyze data and trendlines, manage their distribution channels and use OTAs when and if they are advantage to their properties' bottom lines.

[bctt tweet="5 trending #hotel #RevenueStrategy articles and @OptimizeDemand’s take"]

3. Asian hotel investors are embracing importance of distribution

Distribution and revenue strategy have for the most part been shadowy hotel disciplines only discussed by other revenue managers, hotel marketers and some GMs. According to Duetto CEO Patrick Bosworth in Web in Travel, savvy hotel investors are beginning to understand "what's under the hood" of a hotel has a direct impact on a property's investment story.

Bosworth says: "Looking at revenue management data gives hotel owners important insights and even helps answer questions about when to renovate, reposition or sell. Real estate investors now understand that revenue management has to be a key part of their decision-making."

Duetto’s take: Investors and their representatives need to understand that adopting a holistic Revenue Strategy that brings together sales, marketing, revenue management and all revenue-generating functions is the surest way to drive RevPAR growth and improved profitability. 

Whether it’s in Asia or the rest of the world, customer acquisition costs continue to rise and driving direct bookings becomes a bigger priority. A moderate increase in revenue can translate into a massive increase in profit. That’s why savvy real estate investors and management companies are paying attention, and one of the many reasons the leaders of these companies are interested in what used to be just revenue management.

4. How to build a multi-channel marketing campaign

We all know mobile is on the rise as a communications, marketing and distribution tool. However, successful hotel marketing programs must cut across all channels and perform on all devices, especially mobile.

To start, Margaret Mastrogiacomo and Sara O’Brien of HeBS discuss some recent successes from HeBS’s work. They say hoteliers must determine what motivates potential customers in order to find them in the initial phases of their research and then use technology to create a sense of urgency, like a limited-time offer, to gain users attention quickly.

Next, hotels must incorporate broad and specific cultural touchstones into their marketing messaging and include a creative hook to encourage visitors and potential guests to share your message on social media.

Duetto’s take: Building successful campaigns that reach customers throughout the booking funnel can be daunting. Today’s travelers are digitally connected all over the world and it’s up to hotel marketers to inspire them to take action. 

Since the average travel consumer journey takes about 17 days, and the average visitor goes through eight research sessions including 18 site visits, hotels must ensure they’re inserting themselves in the right channels at the right time. A comprehensive Revenue Strategy that bridges gaps between operations, revenue management and sales and marketing is critical.

5. Boomers, not Millennials will lead summer travel

Every hotel marketer loves to talk about Millennial travelers. This summer, however, they take a back seat to two older age demographics—Boomers and Traditionalists—in intentions to travel.

According to DKSA, three out of five U.S. residents plan to take at least one leisure trip this summer and 35% of those will be Boomers. And while Millennials and GenXers comprise a combined 56% of the traveling cohort, they plan shorter trips than Boomers and thus will be spending less.

Duetto’s take: While this kind of data analysis is interesting, the real takeaway is that hotel marketers and revenue strategists need to consider every travel demographic as they devise their rate and marketing tactics for the summer and beyond.

It’s time for revenue strategists, marketers, general managers and owners to gather the information they need — both Big Data from external sources and property-level history and forecasts — to formulate a plan of attack for driving revenue to the bottom line this summer. It’s time to encourage and promote direct bookings as well as to work with OTA partners to develop contingency plans should sales and promotions be needed to fill soft spots in occupancy.

Stay up on hotel Revenue Strategy news and discuss industry tech trends in the Hotel Revenue Strategy Leaders Group on LinkedIn.

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Jason Q. Freed, Managing Editor

Jason joined Duetto as Managing Editor in June 2015 after reporting, writing and editing hotel industry news for a decade at both print and online publications. He’s passionate about content marketing and hotel technology, which leads to unique perspectives on hotel distribution and revenue management best practices.

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