In 2017, about 52% online hotel bookings in USA and 71%% of all online bookings for independent European hotels will be made on OTAs. Most often they are the first point of call for potential guests. Studies suggest, OTAs spend an average of USD 300 per hotel on promotions and marketing. For hotels to compete with OTAs on their own in digital marketing, the cost can go up to USD 7,000 to USD 10,000. The trade-off between OTA commissions and direct customer acquisition cost remains a paradox for many hotels. While larger brands with a substantial marketing budget can compete with OTAs on visibility and presence, independent properties have to depend on OTAs for brand awareness, given their budget constraint.
In Five Things for Hotel Revenue Managers’ Checklist in 2017 – PartI; we identified what hotels need to capitalize on for stronger performance in the coming months. Here we present to you the second part of this series – read on!
3. Do invest on seamless booking experience
Online has made people more impatient, more demanding. I posted a query to an Airbnb host, and received a message within an hour. Today’s travellers want quick answers and simple processes – a phenomenon Booking.com calls ‘instant gratification 2.0’. According to an American Express survey, “78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.”Customer friction has a negative impact on the experience, and can lead to an overall negative feeling about the brand. With major OTAs and Airbnb investing hugely on guest experience with personalized trip planning, and easy cancellation features, hotels need to up their game. As booking moves to mobile, hotels can’t afford to not to have a responsive, mobile friendly, content rich and secure website for more conversions.
4. Do implement revenue intelligence
Hotels have been struggling to handle the huge unstructured customer data they gather from online and offline channels. Advanced revenue and reservation analytics like pace, price-per-conversion or optimal position help hotels to accurately estimate occupancy and optimize ADR, based on season, weather and special dates. Platforms like LIVE OS from eRevMax, provides revenue and reservation insights along with actionable strategic inputs to help hotels implement total revenue management.
5. Do open up to platform based technology
Looking at travel trends for the last 15 years, I can safely predict one winner –technology. From Expedia to TripAdvisor to Airbnb – every success story in the last one and half decades has technology at its core. There is an observation by TechTarget’s Tom Goodwin making social media rounds which say “The world’s largest taxi firm, Uber, owns no cars. The world’s most popular media company, Facebook, creates no content. The world’s most valuable retailer, Alibaba, carries no stock. And the world’s largest accommodation provider, Airbnb, owns no property. Something big is going on.”
As technology moves towards platform based model, hotel industry needs to look for a platform which can bring all their technology tools in one place. The platform based approach unifies all operation tools like PMS, OTA, Channel Management, Market Intelligence, Review Management etc and allows for the integration of external tools, channels, and vendors – providing an opportunity to leverage technology holistically. Yes, investing in technology comes with a price tag, however that doesn’t mean just not doing anything is an option.
2017 is going to be the year when online finally overtakes offline in Europe. We all have been listening to online becoming big, and getting bigger – but the reality was that offline travel bookings continued to get the lion’s share. All that is set for change though, as digital travel penetration in the continent finally crosses the halfway mark to reach close to 52% of all bookings by end of 2017, per PhoCusWright. With North America, also closing in to the tipping point, and Asia Pacific catching up faster than the average with 23% growth in digital sales, it’s time for hotels to take corrective actions.
In this article, we share what we think hotels need to capitalize on for stronger performance in the coming months.
1. Do warm up to Demand Analytics
Rate intelligence for years have focussed on shopping rates for competitor set selected by the hotel. While monitoring rate of local competitors is vital, focussing on a small subset of the overall market, hotels often overlook the larger picture, missing out the demand data on most productive sources of business in their market. Advanced demand analytics solutions, like Demand Central, helps hotels measure their performance relative to their market performance from vital sources, like channels and regions and suggest situation-specific and channel-specific actions and alerts to increase business.
2. Do make friends with OTAs
For long, hotels and OTAs have been in a tumultuous frenemy relationship. For hotels, OTAs were a disruption which they had to accept, however reluctantly. With the newest disruption looming over hotel industry in the form of Airbnb, hotels need more than ever to improve their presence in OTAs. With more people preferring experience over everything when it comes to travel, and Airbnb slowly consolidating its presence even on the luxury market, no hotel is in safe zone now. OTAs with their reach and marketing power can help hotels to increase exposure and improve online business.
Stay tuned for part two of this series which will be posted in next week.
SATTE, the largest travel trade show in South Asia is going to be held from 15 – 17 February 2017 at Pragati Maidan, New Delhi. The 24th edition of the event is expected to have over 870 exhibitors and participants from over 40 countries. Almost all of Indian State Tourism Boards are expected to be present at the event which provides a perfect platform for the companies to meet industry veterans and hospitality professionals across the world.
In last couple of years, the increased use of mobile phones and high internet penetration in India has changed the travel space dramatically. The country is one of the fastest growing travel markets in Asia that attracted 8.89 million international tourists in 2016 – a 10.7% growth compared to last year. Since thousands of hospitality professionals will be visiting SATTE, this will be the perfect platform for us to promote our award-winning RateTiger ChannelManager solutions.
eRevMax is known for its stable solutions with 99% product uptime. While other companies struggle to offer continuous connectivity, eRevMax has invested in building a robust infrastructure to provide hoteliers with uninterrupted service over the last 15 years. The company offers excellent connectivity with over 300 online channels and provides 24×7 support. Leading hotel groups including Accor, Kempinski, Oberoi Hotels, Dusit Hotels, Carlton Hotel Singapore and Golden Tulip, among others, have been the company’s loyal customers over the years.
To discuss your online distribution requirements, meet me at SATTE – drop me an email email@example.com to book an appointment.
For more details about our products and services, visit our website – www.erevmax.com.
Ram Mohan Dubey is the Regional Sales Manager at eRevMax. He can be reached at firstname.lastname@example.org.