A Revenue Manager’s ‘yes’ and ‘no’ for 2012

In 2012, hoteliers face more challenges than ever. From resolving to concentrate on “SoLoMo” (social, local, mobile marketing), to navigating “new” distribution channels, to implementing a Google+ strategy, to improving local search rankings via citations, it is near-impossible for a hotelier to distinguish viable strategies from trendy or temporary opportunities without a dedicated digital marketing partner.

With so many new “don’ts,” it is easy to confuse or let slide the “do’s” of hotel distribution.

In 2011, 26% of total bookings for the top hotel brands came from the Internet, with 18% from Brand.com and 8% from OTAs.

For non-branded hotels, the situation is more troubling, with 42% of bookings from the Internet – 32% from OTAs and just 1% from hotel websites.

What to do in 2012

1. Focus on your hotel’s website

First and foremost, your website must be “in good health” in order to follow and comply with best practices in hotel distribution. Make sure your current website adheres to industry’s best practices for design & site architecture.

Most importantly, make sure it is compatible with the recent Google Panda and Freshness algorithm updates.

Be sure that all site content is engaging, unique and branded. Create dedicated pages as well as specials and packages that appeal to all key customer segments.

Once your website is in tip-top shape, use search engine optimization (SEO), search engine marketing (SEM), email
marketing and other digital marketing efforts to drive traffic to the hotel’s website and encourage direct reservations.

Bring SoLoMo (social, local and mobile) initiatives to the forefront of your hotel’s targeted digital marketing strategy.

The convergence of these three content and marketing platforms allows the hotel to deliver more personalized, relevant content to existing guests and customers in real-time like never before.

2. Maintain rate parity

A principle once considered elementary now merits a reminder: All hotels must maintain their best available rates and last-room availability on their own websites!

According to RateGain, from December 2011-February 2012:

  • 60-87% of 3-star      hotels were cheaper on OTA sites
  • 75-93% of 4-star      hotels were cheaper on OTA sites
  • 69-86% of 5-star      hotels were cheaper on OTA sites

3. Use the OTA channel correctly

Focus on the “big players,” e.g. Expedia, Priceline, Booking.com, Travelocity and Orbitz. Smaller OTAs do not provide additional reach; rather, they require more work.

From day one, include in all contracts that neither the OTAs nor their affiliates may bid on branded keywords in SEM campaigns, i.e. the hotel’s official name-related keywords.

Use strict rate parity when using OTAs, and monitor their attempts to sell “lower” rates for your property by reducing their commission/markup, or using math gimmicks when calculating the overall taxes and fees.

Use OTAs for need periods: weekends, group cancelations, low season, etc., and not as a replacement for or alternative to the direct online channel. Additionally, any sale or promotion via an OTA should be used only as a last resource and should equally be promoted via the hotel website and support marketing (SEM, email, mobile, social).

What to not do in 2012

1. Don’t participate in flash/social buying sites

While flash sales may address the hotel’s immediate needs – occupancy – they do considerably more damage than good in the long run.

With heavily discounted rates out in the open, flash sales have inherently flawed business models, causing your hotel to rebuke the principles of rate parity.

The most powerful reason to forget flash sales and social buying sites is “The Law of Unintended Channel Share Loss”: Any booking via the most discounted channel (i.e. flash sale sites like Groupon or Living Social or BloomSpot or OTAs) is one fewer booking for the same hotel via its own website, call center or GDS. These sites also lead to the cannibalization of the hotel’s existing loyal consumer base.

2. Don’t do last-minute discounts via OTAs, mobile discounters

Both hotels and airlines manage perishable inventory, so rather than launching a last-minute Groupon or sale with HotelTonight, why not take a cue from the airline industry? The closer to the date of departure or check-in at the hotel, the higher the rate – not the other way around.

Mobile is by nature a last-minute distribution channel. Most hotel mobile bookings are for the same or following night; therefore, these bookings will occur in any case without discounting. Use mobile SEM and SMS marketing for last-minute reservations, but market your true best available rates and avoid the temptation to discount.

When 24- or 48-hour sales on OTAs are “necessary” to increase occupancy immediately, do not neglect the hotel’s own website. Though Expedia will not allow you to promote the same offer on Priceline, its “rate police” will not stop you from opening the same rate or package on your own site.

Sales on OTAs should be cross-promoted on your website through direct marketing campaigns

3. Don’t use social media as a distribution channel

Social media is not a distribution channel, and it was not designed as a sales platform to sell rooms. Use social media instead for customer engagement, customer service, customer relationship management (CRM), branding, awareness, etc.

Social media is best managed at the property level and needs to be monitored 24/7/365. Establish onsite champions who will speak with a consistent brand voice, provide exemplary customer service and serve as models of the hotel’s product.

Use a full-service digital marketing agency for training, auditing, recommendations and technical design and build-out for custom tabs, backgrounds, widgets, sweepstakes, etc. Post, tweet, repost, re-tweet!

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