| |
The slowing economy is affecting the hospitality industry in a number of negative ways: commercial bank credit is extremely tight, energy and food prices are on the rise, leisure travel consumers are staying home, and companies are re-assessing their corporate travel budgets. Smith Travel Research reports that year-to-date (January-April 2008) occupancy rates in North America fell by 1.9%; in Europe by 0.7% and in Asia Pacific by 3.1%, compared to the same period a year ago. What should hoteliers do in an unstable and uncertain economic environment? What are the strategies that would help alleviate the adverse impact of negative growth in occupancy? What action plan should hoteliers follow at this time?
The Internet – Your Survival Tool in 2008-2009
In a difficult year like this one, Internet marketing can help smart hoteliers generate incremental revenues, improve marketing ROIs, attract more affluent travelers, and out-smart the competition. For the past 13 years, our experience shows that Internet-savvy hoteliers with robust Direct Online Channel strategies in place are the winners in economic downturns like this one. We believe that a comprehensive, ROI-centric Internet marketing strategy is the perfect “survival tool” in the current economic environment.
Fact: 83% of travel planning in the U.S. is done online (TIA). Online travel planning will only intensify this year, fueled by travel consumers searching for the best deals online.
The Internet has established itself as the most important distribution and marketing channel in hospitality. In 2008, 37%-38% of all hotel bookings will be generated from the Internet (one-third in 2007, 29% in 2006). At least another third of all hotel bookings will be influenced by the Internet, but done offline. All major hotel brands are already generating an excess of 40% of the CRS bookings via their brand websites. By the end of 2010, over 45% of all hotel bookings will be completed online (Merrill Lynch).
What should Hoteliers do in 2008?
- Unlike the competition, do not cut your marketing spend, but re-evaluate the marketing efforts and advertising budget, and focus on proven ROI-centric efforts
- Shift funds from offline to online advertising formats
- Shift funds from brand-building to direct-response initiatives
- Track every dollar spent with sophisticated website analytical and campaign tracking technology (e.g. Omniture Analytics).
2008 Do’s and Don’ts
So what should hoteliers do? What marketing initiatives should they avoid right now? Hoteliers should NOT:
- Experiment with unproven advertising formats
- Advertise on Third-Party Intermediary Sites (TPIs) –ad cost+TPI commission = total cost of 30%-40%
- Try “sexy” new media initiatives (e.g. advertising on social media sites like YouTube, Facebook.com, MySpace.com, etc.)
Here is what you should focus on right now:
- Proven, ROI-centric Internet marketing strategies + formats
- Launching a comprehensive Internet Marketing strategy to reach potential customers
- Launching a Local Internet Marketing Strategy to reach drive-in and impulse-buy customers
- Launching a Differentiation Strategy as a top priority: identifying and promoting the unique value proposition of the hotel.
Take a hard look at what you are doing: are you taking chances with new and unproven marketing formats? Is your Internet marketing budget ROI-centric? Have you satisfied the basics? These include:
- Website Re-design and Optimization
- Search Marketing
- Email Marketing
- Strategic Linking
- eCRM
- Website analytics and campaign tracking.
2008-2009 Step-by-Step Action Plan
Step 1: Audit the 2008-2009 Internet Marketing Budget / Plan
- Overhaul the budget to become ROI-centric
- Hold off on online advertising that has not proven to bring you ROIs in the past
- Customer Segmentation Analysis + Action Plan:
- Take a hard look at how your property markets to your key customer segments
- Re-evaluate the importance of your key customer segments and feeder markets in 2008-2009 (e.g. if fly-in guests’ share is decreasing due to airfare hikes, cuts in corporate travel budgets, or reduced airline capacity, focus more on your drive-in market).
Step 2: Become a Smarter eMarketer
- Focus on marketing formats that generate above industry-average returns
- Implement the latest website analytics+ campaign tracking technology
Don’t fall for “free” analytical tools–they simply do not work
Step 3: Back to the Basics: Focus on the Direct Online Channel
- Your hotel’s efforts in the direct online channel provides both short-term, immediate as well as long-term, strategic benefits
- Your ROI-centric marketing plan should include: search engine marketing, including organic search, paid search (PPC), local search, meta search, mobile search, Web 2.0 search; email marketing to your own list; online sponsorships; proven display advertising; strategic linking; customer segment and feeder market initiatives.
Step 4: Audit the Hotel Website Asset
Hotel Internet marketing starts and ends with the hotel website. The hotel website has become the first, the only and in many cases—the last point of contact with the travel consumer. It is only natural that enhancing and optimizing the hotel website should be the top priority. Our experience shows that any website optimizations, enhancements or re-designs pay for themselves within 3-4 months.
Here are some important items to consider:
- Maximize the value of the site – it is the hotel’s most important marketing asset today
- Make the site reflect 2008-2009 industry’s best practices: user-friendly, search engine-friendly, travel booker-friendly, and Web 2.0 friendly
- Optimize, enhance, and re-design if necessary.
- If the site is over 12 months old, a website optimization is now due, in order to take full advantage of the much cheaper organic search related visitors to your site. Make sure the hotel website is optimized for travel consumers: the site must describe all aspects of the hotel product and services; and search engines: make sure the site H1 headers, body copy (keyword density), page titles, description tags and meta tags adhere to best practices.
- If the site is over 2-3 years old, a website re-design should be considered, or at least budgeted for in early 2009
Step 5: Identify Your Hotel’s Unique Value Proposition:
- Identify which aspects of your product resonate best with your customers: why are people staying at your hotel to begin with? Good location, business amenities, free breakfast, etc.
- Market your hotel’s unique value proposition to potential customers, for example create unique hotel offers based on your unique hotel product attributes or attributes in the local environment
- Value vs. Price Equation: do not compete on price only! Focus on the value side of the Value vs. Price Equation.
Step 6: Develop Your Hotel’s Differentiation Strategy
- Hotel Product Differentiation vs. Third-Party Intermediaries (e.g. stay within rate parity, but provide gas rebates, room/suite upgrades, etc. if people book on your site)
- Hotel Product Differentiation vs. Your Hotel’s Comp Set (i.e. offer what your competition does not)
- Offer a broader selection of specials and packages than the competition and provide the variety of choices your customers expect
- Differentiated approach to the hotel’s different key customer segments (i.e. luxury lifestyle leisure, family travel, business travel, meeting or wedding planners, etc.)
Step 7: Establish Several Achievable Objectives for the Year:
- Hotel website: create a system for fresh website content creation on an ongoing basis
- Web 2.0/Social Media: develop a Brand Defensive Strategy and at least one Web 2.0 initiative for the hotel website
- Make eCRM your top priority: building interactive relationships; “Owning” the customer
- Building Loyalty via product and customer differentiation
- Professional Development + Training.
|
info[.]hospitalityebusiness.com 
