Hospitality Paradigm

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!

I picked this up from ET-Online and liked it for its simplicity and truth…  

Essential lessons when you embark on the entrepreneurial journey.

1) Prepare your family:  “My wife wasn’t too comfortable with my entrepreneurial zeal, so we agreed to give it a year. If I failed to zero in on something within this period, I would return to a job.” – Rivi Varghese, Customer XPs.

2) Plan your finances: “You might not earn anything in the first 2-3 years, so you need to plan your family’s finances accordingly. A capital cushion is essential to ensure that your family lives comfortably.” – Ashutosh Garg, Guardian Lifecare

3) Forget the job perks: “As a manager in a company, you are accustomed to other people doing things for you. In a start-up, you have to take care of everything yourself- from operational expenses to food bills.” – Jiggy George, Dream Theatre

4) Learn to cope with failure: “I met 15 VCs before one agreed to fund me. One investor rejected my proposal within five minutes of a presentation. Instead, he spent an hour trying to convince me to go back to my job.” – Kunal Bahl, Snapdeal

5) Have a plan ‘B’ ready: “After the first few months, we realised that service was not our core competence. Besides, the margins were quite low. This was the time we concluded that it was better to focus on products.” – Rahul Anand, Happily Unmarried

6) Don’t take too much debt: “If you are thinking of starting up, this is the best time. But don’t take a home loan since it kills entrepreneurship. You can never get out of it.” – Binny Bansal, Flipkart

7) Gain enough experience: “I used to teach at a diving centre in Lakshadweep. After teaching more than 600 students for eight years, I decided to float my own diving company.” – Anees Adenwala, Orca Dive Club

8) Interact with like-minded: “My partner Abhishek was running an e-commerce portal, which was acquired by a bigger website. He expressed interest in working with me and we launched our site.” – Chetan Bafna, Fetise.com

9) Believe in yourself: “Belief in one’s idea can take you a long way. Our concept was ahead of its time, but I didn’t give up on my vision. At every step, there were people who ridiculed the idea. I had the last laugh.” – VSS Mani, Just Dial

10) Have a plan that is unique: “The business plan should be unique and clutter-free. An entrepreneur must look into his area of core competence and use it to devise a strong plan.” – Kavindra Mishra, Zovi.com

“India, with a population over 1.2 billion people and a growing economy, is allowing the Indian hotel market to prosper as hotel brands continue to expand their portfolio within India”.

India’s hotel industry is showing an overall year-to-date growth in performance data and the supply pipeline, according to new figures from STR Global. Looking at the hotel pipeline, India’s hotel inventory is expected to increase by more than 61,000 rooms in the next three years with over 30,000 rooms currently under construction

As part of this expansion, Hotels are seeking to attract and develop high-quality talent in India to drive future growth. As a result, proactive hotel companies are investing in training curriculums and accelerated leadership programs.

As India’s hotel industry readies for unprecedented growth, it is about to face a manpower crisis the likes of which it has never seen before. Too few people are being trained for the industry; many of those who have received the training choose greener pastures and fierce fights break out regularly to keep or poach the few who remain. All this while a new hotel or restaurant is being added every week – all the more reason to redouble training efforts…