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By Max Starkov & Mariana Mechoso Safer

Last year the economy remained in “recovery mode,” allowing the industry to focus its efforts more on marketing to the travel consumer and less on scaling back budgets for the first time in several years. The convergence of social media, mobile Web and location-based services, increased personalization and relevancy of marketing messages, the continued onslaught by social buying/flash sales sites and other heavily discounted distribution channels, the Google Panda and ‘Freshness’ updates, and ‘engaging’ the traveler at all touch points via multi-channel marketing were all hot topics last year and will continue to dominate in 2012.

How can hoteliers use real-time customer information to create time- and location-relevant promotions? Which digital channels and formats most effectively reach today’s hyper-interactive travel consumers and generate the highest ROIs? Should hoteliers be dedicating a significant amount of time to managing review sites and social media channels? What strategy should hoteliers adopt to stay competitive in search engine results when Google is consistently changing its algorithms?

The 2012 Top Ten New Year’s Digital Marketing Strategy Resolutions, presented by HeBS Digital for the 12th consecutive year, answers these questions and provides guidance on what hoteliers should do to succeed in the year ahead. With an improved outlook for the industry, technological advances, and the usage of mobile devices growing exponentially, opportunities for incremental revenues abound.

Here are the Top Ten Digital Marketing Resolutions your hotel company should consider adopting in 2012:

1. I will bring social, local and mobile marketing initiatives to the forefront of my hotel digital marketing plans this year.

Situation:

In 2012 hoteliers will be hearing a lot of the buzzword SoLoMo (SOcial, LOcal, MObile). Meant to convey the convergence of these three major media, the term SoLoMo describes a “marriage made in heaven” between the three content and marketing platforms. Why does this mean for hoteliers? Hotel guests are avid SoLoMo services users. Most social network engagements by travel consumers are done via mobile device. Consumers perform more than 3 billion local searches every month, and one in three mobile searches have local intent vs. one in five desktop searches (Google).

Unlike the desktop Web world, SoLoMo allows hoteliers to combine real-time customer geo-location with their demographic and psychographic information and time- and location-relevant promotions. The success of location-based social media such as Foursquare has shown us that rewards and recommendations are only the beginning. Hoteliers need to consider how to best utilize SoLoMo to engage their customers and generate incremental revenues.

Action Steps:

By focusing efforts on social media, local marketing, and mobile marketing, hotel marketers have the ability to deliver more personalized, relevant content and engage existing guests and potential customers like never before.

To begin with, how well optimized are your property profiles in the main data providers, which feed many local directories and geo-social sites? How well optimized are your property local search listings on Google Places, Yahoo Local, and Bing Local? What about all the local online directories and yellow pages? Do you have a local citation listing program in place?

Once you take care of your local content and listing strategy, it is time to enhance your mobile marketing presence. How deep, relevant and engaging is the local content on your mobile site? Do you have automated push of specials, promotions and local events from the property “desktop” website to the mobile site to keep your mobile presence “fresh?” Do you use micro-formats and Schema codes to relay the time- and location-relevant nature of these promotions and events to the search engines? Does your property take advantage of coupon promotions through Google?

Other recommendations include engaging your local customers via time- and location-relevant check-in promotions and rewards, launching social media promotions, contests, and post series via Facebook and Twitter, and blogging. Geo-social marketing initiatives allow hoteliers to integrate into customers’ lifestyles and connect (and stay connected) with them in ways that were not possible before. Industry experts already predict the end of the Foursquare-type check-in and envision a deeper and more experiential form of “social sharing” instead. Social, local and mobile marketing are great for time- and location-sensitive promotions. In 2012 focus on SoLoMo initiatives and you will remain ahead of the competition.

 

2. I understand this industry is complex and will work to make sense of a very convoluted digital space/online marketplace.

Situation:

Hoteliers have been rightfully confused by the myriad of headlines about the changing landscape of hotel distribution, from articles titled “Google will change your hotel’s distribution strategy” and “Facebook as an E-commerce engine,” to “How to make Twitter Sell” and “Mobile Apps to Impact Hotel Distribution.” In other articles OTAs are proclaimed to be a “good thing” because of the so-called billboard effect and contribution to new client acquisitions. On a daily basis, hotel owners, managers and operators are bombarded by far-fetched and often conflicting messages and claims.

The recession brought an onslaught of new players to the travel marketplace, which further convoluted the complex online marketing and distribution channels and online travel consumer behavior. Social buying sites (group buying, flash sales sites, member-only sites) and last-minute mobile sites are all presenting themselves as the “future of hotel distribution.” To add to the confusion, mobile and social have forever changed the way people research, plan and purchase travel – shorter booking windows, greater transparency, and peer recommendations are just some of the ways the integration of social and mobile have affected purchasing habits. Understanding this increasingly convoluted digital space and the increasingly complex online travel consumer behavior can feel like a monumental undertaking.

Action Plan:

In this dynamic industry, taking time on a daily basis to stay current with hotel digital marketing trends is a must. To start, adopt a business approach when analyzing whether or not use these new marketing formats and channels. In spite of all that is happening in the digital space, hotel marketing and distribution fundamentals have not changed. Try to correctly categorize these new sites, players and business models by asking yourself a set of simple questions: Is the site an advertising medium or a distribution channel? Does it work against accepted rate parity and best rate guarantee principles? Would a promotion via one of those sites alienate your existing corporate, group and leisure clients? Does working with these new players adhere to industry’s best practices in marketing and distribution?

Look deeper to understand the influence of each digital marketing initiative on the new online travel consumer. Advanced analytical tools can also help you make sense of this convoluted space. In this increasingly complex environment, consider partnering with a direct online channel strategy consulting firm to keep you informed and ahead of the competition.

 

 3. I will continue to account for the continued shift from offline to online, and engage the hyper-interactive travel consumer via multi-channel marketing efforts.

Situation:

The shift from offline to online continues. The online channel has been rapidly growing for 16 years straight. Internet bookings for the top 46 hotel chains now constitute 54% of all the chains’ CRS bookings. The online channel has grown by 25% in the last four years alone, while the share of the GDS travel agent channel and voice channel has decreased by 25% and 11.1% in the past four years, respectively. It’s critical that budget dollars are shifted to online marketing budgets, and that these budgets stay focused on hotel distribution channels that generate the most bookings, are cost-effective, and protect rate parity and price integrity.

In 2012 the mobile Web and social media will further establish the new breed of hyper-interactive travel consumers who demand “immediate, anywhere and anytime” customer engagement, information access, transaction capabilities, content sharing and customer service in real-time. Marketing to this new type of consumer requires a completely new, multi-channel marketing approach where the hotel engages consumers at all touch points.

Action Plan:

Multi-channel marketing is the foundation for a smart direct online channel strategy. In this environment, the hotel website, SEM campaigns, email marketing, social media presence, mobile, etc. have a symbiotic relationship. For example, if you launch a website promotion, you should also send an email to the hotel’s opt-in list, announce it on Twitter and Facebook, launch a paid search campaign and publish a blog posting via the hotel blog.

In 2012, hoteliers need to invest in technologies and expertise needed to better execute these types of multi-platform and multi-format campaigns. For example, invest in technology that allows for smart and centralized marketing content delivery: All new special offers and events at the property and destination are automatically pushed by your hotel “desktop” website Content Management System (CMS) to your property’s mobile site and Facebook and Twitter accounts.

What line items should you include in your 2012 hotel digital marketing budget in order to drive revenue through the direct online channel? In our recent article, The Smart Hotelier’s Guide to 2012 Digital Marketing Budget Planning, we provide detailed recommendations how to allocate your 2012 budget to achieve the highest direct online revenues and ROIs.

 

 4. I will take advantage of the Mobile Channel, especially in this marketplace where my competitors are behind the times.

Situation:

Today’s hyper-interactive travel consumers demand instant information and transaction capabilities, user location-oriented services, and personalization, attributes only the Mobile Web can deliver. Mobile users demand not only instant access to travel planning and booking capabilities, but a Mobile Web user experience that rivals and surpasses the Desktop Internet experience.

Mobile Internet usage will surpass desktop Internet usage by 2014 (Morgan Stanley). Google reports four-fold YOY increase in mobile search, and that one out of five hotel queries come from mobile devices. Coda Research projects 65% compounded annual growth of mobile commerce from 2010 through 2014, to reach billion. Many OTAs and hotel chains reported several-fold increases in their mobile bookings in 2011. Last year more than 4.7% of website visits and more than 3% of all bookings came from mobile devices across our hotel client portfolio.

Smart hoteliers already know that the mobile Web adheres to different rules than the conventional desktop Internet. Mobile users have shorter attention spans than do traditional desktop users. They have less time to browse and are often on the go.

Action Plan:

Hoteliers need to develop and implement mobile Web-specific marketing initiatives, and not try to adapt existing “desktop” Internet assets like the property desktop website for use in the mobile space. It has become obvious that trying to squeeze your wide-screen 1280 x 1024-pixel “desktop” hotel website onto the tiny 320×480-pixel screen of a mobile device is a futile exercise that inevitably destroys usability and conversion rates.

In 2012, hoteliers should continue to focus on building and enhancing their mobile websites and launching mobile marketing initiatives, such as mobile SEM, SEO, mobile-social media initiatives, interactive sweepstakes and contests. In 2012, hotels should spend 9%-10% of their overall digital marketing budget on mobile marketing initiatives.

Start with the mobile website, your mobile hub for customer engagement. Is your mobile website specially designed to provide an excellent user experience in a mobile environment? Does it offer an engaging, contemporary design and functionality? Does it include content sections targeting your main customer segments? Have you increased your mobile site’s “discoverability” via mobile SEO and mobile SEM (e.g. Google mobile AdWords) and mobile media initiatives? Have you made the mobile website more interactive via mobile-social media initiatives, interactive sweepstakes and contests? Is your mobile website compatible with the recent Google Panda and “Freshness” updates and their requirement for unique and engaging content?

Here are the top mobile marketing initiatives hoteliers should focus on in 2012: mobile SEO, mobile link building to the site from mobile directories and sites, mobile SEM (paid search) campaigns, mobile banner advertising in the main mobile feeder markets, mobile contests and sweepstakes, and mobile promotions via SMS. Read our “Top 20 Secrets to Success in Hotel SMS Mobile Marketing” to help you get started.

As for the question of whether hoteliers should develop mobile apps or focus on developing and enhancing their mobile website, we firmly believe that hotels do not need a mobile app if they are a single-property, independent hotel. Nor do franchised hotels and resorts or smaller and mid-size hotel chains and multi-property companies. These hotel companies are better off focusing on building and enhancing their mobile websites and promoting the mobile site via mobile marketing initiatives. A single-property mobile site is six to ten times cheaper than a comparable mobile app. With rapid advancements in mobile technology, the lines between mobile apps and mobile websites are disappearing. Also, a mobile website is by default a cross-platform entity that can be viewed on all mobile platforms (iPhone, BlackBerry, Google Android, Windows Mobile, etc.), while apps or a customized version of an app must be created for every major platform.

 

 5. Now that I know social media is a customer engagement channel and not a distribution channel in hospitality, I will use Social Media correctly to create “buzz” around my hotel, target receptive audiences, provide customer service and enhance customer experiences. This will ultimately stimulate hotel website visits, interactions and conversions on the hotel website.

Situation

There is no doubt that social media has changed how travel consumers research and plan travel, access travel information, and perceive the credibility of information. Internet users are increasingly influenced by social media sites and peer reviews. By utilizing a comprehensive social media strategy, smart hoteliers engage their customers and enhance their experiences, generate buzz and improve customer service.

Many hoteliers have underestimated the complexities and involvement required for managing the property’s social media profiles. Infrequent or bland, “sales pitch” postings, lack of interactivity, creativity, fun and intrigue plague the social media presence of many hotels.

Action Plan:

In 2012 social marketing should continue to be an important component of your property’s marketing mix and part of the comprehensive direct online channel strategy for any hotel company.

Social media and social marketing initiatives should be reviewed as part of the overall multi-channel marketing strategy of the hotel. Instead of focusing on only bookings and revenue when measuring results from social media marketing, use social media for brand-building and buzz-building; as a medium to interact with and engage customers; as an important customer service channel; as a source of engaged and relevant traffic to the hotel website, and a way to make the hotel look current, cool and up-to-date.

This year work on establishing or enhancing a brand consistent Facebook and Twitter presence; monitor customer reviews/engagements for any customer service issues; use engaging posts (ask questions, use trivia, hold contests); locate/designate your on-property Social Media “Champion”, and partner with a social media strategy and technology firm to provide strategy, training, and technology implementations such as Facebook custom tabs, contests, etc.

In light of the recent Google Panda updates (to be discussed in more detail in the next resolution), allowing your website visitors to share your site’s content with Facebook Like/Tweet/Google +1 buttons is important to stimulate conversation and for search engine optimization purposes.

Avoid the all-too-common mistakes made my many hoteliers when participating on social media channels, including posting infrequently, only focusing on promoting packages and specials, not responding to questions and comments made to the hotel, and deleting comments.

 

 6. I will rise to the challenge imposed by the recent Google Panda and ‘Freshness’ updates!

Situation:

Today’s hotel website must adhere to very high expectations from not only website visitors but also the search engines. In a typical year Google makes more than 500 updates to its search algorithm. 2011 saw two major updates: the Google Panda Update (now in version 2.5) and the Google “Freshness” updates, which made most hotel websites obsolete by introducing very strict requirements for content, interactivity, and page download speeds. The Panda update requires websites to have engaging and unique website content (as opposed to bland, old and tired content and in addition to the existing requirement for deep and relevant content) that increases the site’s “stickiness”. The recent Google “Freshness” update requires that hotel websites maintain fresh and new content to rank high in the search engines.

Why are these updates important for the hospitality industry? Between 50%-70% of hotel website visitors and website bookings originate as leads from the major search engines. Traditionally, hotel websites are content rich vs. news rich, with descriptions and information featuring and explaining in detail every facet of the hotel business and service, from the bed linens to the capacity of a meeting room. The “static” content is there, but the “unique and engaging” and  “fresh” content is lacking. This is the main issue with current hotel websites after the latest Google algorithm updates.

Action Plan:

In 2012 hoteliers must work harder than ever to enhance the uniqueness and engaging nature of the content on the property website by employing professional hospitality copywriters and maintaining fresh content on the hotel website year-round.

Build promotional landing pages and tiles for timely specials and events. Create new content pages on various topics including seasonal and sports events, local festivals and customer segment-specific content. Use “micro-formats” applied to every local promotion and event, which signifies to the search engine that these events are in fact standalone current events, with exact starting and ending times. Incorporate Schema codes on all time-sensitive content pages. Maintain a blog highlighting specials and events along with general hotel news. Talk about local events, highlight someone’s stay, seasonal activities in the area, or feature infographics about your hotel or region that deeply engage users.

Another must is incorporating real-time Twitter feeds and Facebook interaction information in the hotel website to ensure that interaction is recorded, up-to-the-minute, and relevant.

Updating the hotel website should not be a costly endeavor – a good content management system should give hoteliers the tools they need to perform these updates easily, efficiently, and without extra cost to the hotel, as well as ensure automated push of new content (e.g. promotions, events, packages, etc.) from the “desktop” website to the property mobile site and Facebook and Twitter pages.

 

 7. I will decrease dependence on the OTAs this year, adding thousands of dollars in incremental revenues to my hotel’s bottom line.

Situation:

Did you know that since 2007, OTAs have increased market share by 32% at the expense of the hotel direct online channel (hotel websites)? STR estimated that the true cost of OTA distribution in 2010 alone was more than .5 billion in the form of abnormally high merchant commissions. It is 10 to 15 times cheaper to sell your rooms via the direct online channel compared to the OTA channel.

We do not envision a scenario in which 100% of Internet bookings are made via the direct online channel. The OTAs and other intermediaries in the indirect online channel do play a necessary role in certain areas of the travel planning and purchasing process (dynamic packaging). Even pre-Internet, approximately 25% of all hotel bookings in the U.S. came via the indirect channel (travel agents, tour operators, and wholesalers).

Action Plan:

Driving bookings through the direct online channel – the hotel website – needs to be every hotelier’s priority in 2012. In addition to being the most cost-effective distribution channel, the direct online channel provides long-term benefits and competitive advantages. It prevents rate and brand erosion, helps the hotel “own” the customer, enables cross-channel and multi-channel marketing initiatives, builds brand loyalty, and more. The OTAs’ fair share should not be higher than 15% for franchised and 25% for independent properties from all Internet bookings. We should not be seeing the current industry average of 40% OTA contribution.

Start by changing the property mindset: OTA commissions = marketing dollars. Do a distribution cost analysis. Maintain strict rate parity and a best rate guarantee. Focus on and budget accordingly for the direct online channel. Redesign the hotel website as per Google’s Panda and Freshness updates – you will gain competitive advantage over the OTAs and your comp set. Learn how to market your hotel better and smarter than the OTAs do. Embrace the mobile distribution channel and utilize social media to engage your customers. Focus on the customer experience.

And finally, utilize the OTAs as an incremental distribution channel: low season, group cancellations, weekends, or other scenarios.

 

8. I will NOT resort to desperate measures and use social buying and flash sales sites in 2012.

Situation:

Social buying and flash sales sites emerged as a result of the recession. Social buying and flash sales sites in travel and hospitality, such as Groupon Getaways with Expedia, LivingSocial.com, and SniqueAway.com are an integral part of the economy and the supply-demand market equilibrium. For social buying and flash sales sites to exist, there must be market equilibrium (price-quantity) between the demand side (quantity of members/engaged social buyers) and the supply side (quantity of fresh, intriguing deals).

In 2012, all signs are indicating that the hospitality industry is in recovery mode. STR projects that all three of the key performance measurements (occupancy rate, ADR and RevPAR) will realize steady increases for the year as a whole.

As travel demand improves, hoteliers have become reluctant to participate in social buying/flash sales sites because of their “open discount” business model need for steep 50%-60% discounts. Online travel consumers, disappointed by the lack of fresh hotel deals on the social buying sites, are reverting back to traditional booking channels: hotel direct, OTAs, GDS and voice.

Action Plan:

Some hoteliers participate in social buying and flash sales sites merely because their competition is doing so. Our advice? Don’t succumb to the devil. Stick to the fundamentals in hotel distribution and make sure you are covering all the bases in the Direct Online Channel.

Hoteliers should realize the existence of “The Law of Unintended Channel Share Loss” which stipulates the following: Any booking via the most discounted channel (i.e. Flash Sales Sites such as Groupon, LivingLocal.com or SniqueAway.com or an OTA) is one fewer booking for the same hotel via the hotel website, call center and GDS (in that order).

This is why we recommend that hoteliers focus on the direct online channel (the hotel branded website), which is by far the cheapest distribution channel. A booking via the property website of an independent hotel costs -, including all marketing and advertising expenses.

 

9. I will focus on determining the effectiveness and ROI of my digital marketing campaigns and make smarter use of analytics technology to determine true ROI and campaign effectiveness, as well as test, test, test to achieve better results.

Situation:

Is social media a hotel distribution channel? Is the mobile Web generating bookings? Do we still have to engage in the “old-fashioned” email marketing, which many hoteliers have branded “ineffective”? What are the ROAS (return on ad spend) from my search engine marketing (SEM)?

The explosion of social media and mobile marketing, along with channel convergence and multi-channel marketing, has made it more imperative for hoteliers to track the effectiveness of hotel digital marketing initiatives and optimize returns from their limited budget resources.  The available analytical technology tools today offer cost-effective yet powerful ways to track the results. They allow us to track conversions from the hotel website and all digital advertising campaigns such as SEM, banner advertising and re-targeting. Call analytics allows us to track the effectiveness of the voice channel, as well as the mobile Web and print ads.

In addition, we can retarget and behaviorally target website visitors and have more access than we have ever had to consumer’s browsing and purchasing habits. So why do we work so hard to get consumers to our website, yet fail to make the same effort in making sure our website meets the needs of these visitors? Making small tweaks to a hotel website may often result in significant increases in conversions.

Action Plan:

Invest in analytics technology in 2012 if you haven’t already! Having a full understanding of which initiatives work and which don’t will offset the cost of the investment.

For your website, utilize a web analytics tool like Adobe SiteCatalyst, powered by Omniture, the most advanced web analytics technology today, used by many major hotel brands and OTAs alike. For your paid search campaigns use Adobe SearchCenter, powered by Omniture, a sophisticated real-time paid search campaign management tool.

For your banner advertising and re-targeting campaigns, use a banner delivery and tracking tool like DART to track post-impressions and post-click activity and conversions and gain a deep understanding and knowledge of your banner campaigns’ returns.

Did you know that 7 of 10 hotel bookings from mobile devices actually happen via the voice channel? Track the contribution of mobile website and mobile marketing initiatives, as well as voice reservations from your desktop website, via call analytics to determine the true effectiveness of these media. Using call analytics and QR Codes in your offline print advertising has become the norm.

As discussed above, social media is not a distribution channel and social marketing initiatives should be reviewed with “sober eyes” and within the context of their impact on the multi-channel marketing strategy of the hotel. Instead of focusing on bookings and revenue when measuring results from social media, consider the quality and quantity of “customer engagements” such as “Likes”, initiated conversations, comments and questions on Facebook and @replies, and retweets on Twitter, as well as the impact of social marketing initiatives on customer service, customer relationship, buzz- and brand-building for the hotel, as well driving relevant, engaged traffic to the property website.

Invest in a tool like Adobe® Test&Target™, powered by Adobe Omniture®, to test multiple versions of a webpage to separate targeted populations. Track each version for key revenue metrics and visitor behavior in order to compare results. Suggested test projects include: testing locations of the booking engine widget on four different sections of a home page; rearranging the display of promotional tiles for greater usage and visibility; testing different marketing messages on the home page hero space; and comparing a rollover drop down navigation vs. static navigation on the main navigation. Dedicating some time and resources to tests such as these will give you insight into how best to structure the elements of your website for the highest conversion rates.

 

 10. I will partner with savvy digital marketers who know it all and can guide me through this process, so I can drive the most revenue ever through my most cost-efficient channel – my hotel website.

Situation:

Navigating the online marketplace can be confusing and overwhelming.  The pace of change in this industry, including technological advancements, updates to search engine algorithms, and new solutions for driving direct online revenues are almost impossible to keep up with.

Additionally, most hoteliers are already shuffling many different priorities each day and are not able to devote the majority of their time – if any time – to keeping up with industry trends and best practices.

Action Plan:

In this dynamic industry it is important to stay on top of quickly moving trends, prioritize initiatives that generate direct online bookings, and be flexible enough to continuously adjust hotel digital marketing campaigns for optimal results.

Partner with digital marketing experts who will make driving direct online revenues for your hotel their priority: Experts who will keep you up to date with best practices without you having to ask, who will proactively bring forth ideas to generate the highest website revenues and ROIs.

Work with a team of savvy digital marketers who will show you new ways to recoup lost opportunities, teach you how to stay on top of changes in the industry, and provide your hotel and team with real value, not just a service.

 

About the Authors

Max Starkov is President & CEO and Mariana Mechoso Safer is VP, Marketing of HeBS Digital, the industry’s leading full-service hotel digital marketing, website design and direct online channel strategy firm based in New York City (www.HeBS Digital.com).

HeBS Digital has pioneered many of the “best practices” in hotel digital marketing, social and mobile marketing, and direct online channel distribution. The firm specializes in helping hoteliers build their direct Internet marketing and distribution strategy, boost the hotel’s Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ROIs.

The firm has won over 160 prestigious industry awards for its digital marketing and website design services, including numerous Adrian Awards, Davey Awards, W3 Awards, WebAwards, Magellan Awards, Summit International Awards, Interactive Media Awards, IAC Awards, etc.

A diverse client portfolio of over 500 top tier major hotel brands, luxury and boutique hotel brands, resorts and casinos, hotel management companies, franchisees and independents, and CVBs has sought and successfully taken advantage of the firm hospitality Internet marketing expertise offered at HeBS. Contact HeBS Digital consultants at (212) 752-8186 or success@hebsdigital.com.

HeBS Internet Marketing Blog

HeBS Digital’s President & CEO Max Starkov presented during the recent HSMAI University Webinar titled “The Hotelier’s Action Plan to Meet 2012 Digital Marketing Challenges”. The HSMAI webinar covered hot industry topics, from integrating social media and mobile into hotelier’s 2012 marketing plans to avoiding the pitfalls of new discounted distribution channels such as social buying and flash sales sites.

The webinar was attended by hoteliers from all over the U.S. In his presentation, Starkov touched upon the crucial industry topic of Social Buying/Flash Sales Sites: The Future of Hotel Distribution or a Recessionary Phenomenon?

 

Why are there Social Buying and Flash Sales Sites?

What led to the emergence of sites like Groupon Getaways with Expedia, Living Social, BloomSpot, SniqueAway, Off and Away, etc.? What are the main reasons behind the emergence of these sites?

According to Starkov, the main reason for the explosion of social buying & flash sales sites is the recession, which has brought the industry to its knees. Desperate hoteliers = easy pickings for flash sales sites.

Starkov stands firm on his assessment that social buying & flash sales sites are a recessionary phenomenon, and not some kind of new, emerging distribution channel that is here to stay. There is no doubt that as the economy improves, some of these flash sales sites will go away, and the remaining players will have a severely diminished role in hospitality.

What should hoteliers know about social buying & flash sales sites?

• There is nothing “revolutionary” about the technology:
• This technology has been around for many years

• There is nothing special about the business model:
• Open discount model/not an opaque model
• Member-Only Travel Clubs have existed for 165 years
• Members loyal to “50% off rack rate” religion, not to a particular site

• Social Media:
• Is a mere enabler, not the cause for the emergence of these site

We have witnessed a similar “countercyclical” increase and decrease in OTA market share: the better the economy, the smaller the OTA market share:

 

Social buying and flash sales sites in travel and hospitality such as Groupon, LivingSocial.com, and SniqueAway.com are an integral part of the economy and the supply-demand market equilibrium. For social buying and flash sales sites to exist, there must be market equilibrium (price-quantity) between: the demand side (quantity of members/engaged social buyers) and the supply side (quantity of fresh, intriguing deals).

 

 

In 2012, the hospitality industry will continue its recovery mode. STR projects that all three of the key performance measurements (occupancy rate, ADR and RevPAR) will realize steady increases for the year as a whole.

As travel demand improves, hoteliers are becoming reluctant to participate in social buying/flash sales sites because of their “open discount” business model, and provide the supply side of the equation with fresh, intriguing deals. The result? Both sides of the equation suffer & shrink. Online travel consumers, disappointed by the lack of fresh/intriguing hotel deals, are already reverting back to the traditional booking channels: hotel direct, OTAs, GDS and voice.

 

So, To Flash or not to Flash?

The answer is NO!

The Social Buying/Flash Sales Sites’ economics do not work for the hospitality industry for the following reasons:

• Flawed “Open Discount” business model:
• Discounted rate is out in the open: against rate parity/Best Rate Guarantee principles
• Destroys rate integrity: against existing contracts (OTAs, corporate trvl)

• Lack of opaqueness establishes new lower market price:
• Hotel cannot charge rack rate: the customer has accepted the discount rate as the new market value

• Cannibalization of existing customer base:
• 65% of daily deal buyers are already Frequent (38%) or Infrequent (27%) Customers (ForeSee 06/11)

• Deal face value is artificially ballooned to show value:
• Puts off potential guests by positioning hotel as “too expensive”

The following case study clearly shows where the main focus of hoteliers should be: The Direct Online Channel:

 

When planning their distribution strategy for 2012, hoteliers should not forget the existence of “The Law of Unintended Channel Share Loss” which stipulates the following:

Any booking via a heavily discounted channel (i.e. Flash Sales Sites like Groupon, LivingLocal.com or SniqueAway.com or an OTA) is one less booking for the same hotel via the hotel website, call center and GDS (in that order).

Therefore, the main focus and priority for any hotelier should be to sell as much inventory via the most cost-effective distribution channel that can potentially generate the most bookings, while preserving rate parity and price erosion i.e. the hotel’s own website.

 

HeBS Internet Marketing Blog

By Max Starkov and Mariana Mechoso Safer

2012 is quickly approaching and budget-planning season is upon us. Whether you are just starting to think about where you are going to allocate your dollars, or are moving towards finalizing your budget for next year, this is the perfect time to take a step back, review the state of the industry as well as your property’s successes and failures in 2011, and prepare for a year of driving the most revenue ever through your most cost-efficient channel – the hotel website.

In an industry as dynamic as ours, it is important to stay on top of quickly moving trends, prioritize initiatives that generate direct online bookings, and be flexible enough to continuously adjust your hotel digital marketing campaigns for optimal results.

 

Recapping 2011 and Preparing for 2012

Despite the current rocky state of the economy, the hotel industry enjoys a relative robust travel demand.  The U.S. hotel industry reported increases in all three key performance metrics for second-quarter 2011 in year-over-year measurements, according to data from Smith Travel Research (STR). The industry’s occupancy increased 4.5 percent to 63.4 percent, average daily rate rose 3.5 percent, and revenue per available room was up 8.1 percent. STR projects that all three key performance measurements will realize increases for the year as a whole.

So what are the main criteria hoteliers should use when determining their 2012 digital marketing budgets?

Sources of Business:

The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace.  It should be a direct reflection of the sources of business:

• What are your main distribution channels?
• What are your property’s main feeder markets?
• What are your property’s main customer segments: transient corporate or leisure, corporate group, meetings, social events, family travelers, etc.

Here are the main distribution channels in hospitality in the U.S.

• Rapidly Growing Online Channel (+25% in 4 years)
• Decreasing GDS Travel Agent Channel (-25% in 4 years)
• Decreasing/Flat Voice Channel (-11.1% in 4 years)

CRS Hotel Bookings Top 46 Hotel Brands	Q2 2011	2010	2009	2008	2007
Internet  Bookings	54.0%	52.3%	50.4%	47.6%	42.0%
GDS Travel Agent Bookings	21.9%	22.1%	21.3%	27.3%	29.3%
Voice Bookings	24.1%	25.6%	28.3%	25.1%	28.8%

eTRAK, HeBS Digital 

What do these distribution trends mean for hoteliers? The hotelier’s 2012 marketing budget needs to focus on the online channel, the only growth channel in hospitality.

Not all online bookings are created equal

Online hotel bookings are on the rise, but are they coming from the property’s website or from the OTAs? Since 2008, the OTAs have increased their market share by 45%, measured as contribution to CRS bookings for the top 46 hotel brands! In 2010 alone, the true cost of OTA distribution to the industry was .5 Billion (STR).

CRS Hotel Bookings Top 46 Hotel Brands	Q2 2011	2010	2009	2008	2007
Internet  Bookings	54.0%	52.3%	50.4%	47.6%	42.0%
Including: Online Travel Agencies (OTAs)	31.8%	32.7%	29.1%	24.8%	24.1%
Brand Website Bookings	69.2%	67.3%	70.9%	75.2%	75.9%

eTRAK, HeBS Digital

What do these distribution trends mean for hoteliers? The 2012 digital marketing budget needs to focus on the Direct Online Channel to allow hoteliers to “Own the customer”, stay competitive and reverse the troubling trend of the OTA’s growing market share.

Return-On-Investment (ROI)

Of all hotel digital marketing initiatives in the HeBS Digital 5^th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices survey, hoteliers believe that website optimization produces the highest ROI. Social media however, introduced as its own category this year, was not far behind at 43%. This shows a dramatic change in the perception over the past few years of how much revenue Facebook, Twitter, etc. really generate.  While social media is not a distribution channel, it is increasingly becoming an important customer engagement channel. Whereas in the past hoteliers were skeptical as to whether social media should even play a role in their Internet marketing strategy, today it is one of the fundamentals.

What Internet marketing formats do you believe produce the best results and the highest returns on investment (ROI)?	2007	2008	2009	2010	2011
Website design/redesign	62.9%	70.19%	56.3%	61.7%	64.9%
Website optimization	71.9%	68.27%	81.6%	70%	71.9%
Strategic links to property website from online directories, portals	52.7%	41.35%	48.3%	48.3%	46.5%
Paid Search Engine Marketing: Pay-per-click (PPC)	40.7%	39.42%	56.3%	38.3%	47.4%
Search optimization – Organic search	68.3%	56.73%	60.9%	58.3%	65.8%
Display advertising (banners)	16.2%	12.5%	28.7%	21.7%	14%
Email marketing	58.7%	60.6%	51.7%	48.3%	59.6%
Email sponsorships	6.6%	26%	37.9%	10%	3.5%
Mobile marketing	N/A	N/A	N/A	15%	14.9%
Web 2.0/Social Media formats (e.g. TripAdvisor, Facebook, Twitter, blogs, etc)	16.8%	26%	37.9%	41.7%	N/A
Social Media**	N/A	N/A	N/A	N/A	43%
Online Video	N/A	N/A	N/A	N/A	17.5%

**In 2011 Social media was separated from Interactive/Web 2.0 for the first time. All years prior these initiatives were combined in this question.

Most respondents (34.5%) expect to achieve 11-15 times ROI from their Internet marketing campaigns in 2011, as they should if they are following best practices.

The hospitality industry is facing major challenges

It has been 16 years since the advent of the Internet distribution channel, the most cost-efficient hotel distribution and marketing channel ever. While we have come a long way, the many challenges of the past three years – such as the emergence of the hyper-interactive traveler, social media, and mobile marketing – have made it difficult for many hoteliers to keep up.

What are the main challenges facing the hospitality industry over the next 24 months?

• Continued Shift from Offline to Online
• Significant Increase in OTA Market Share
• Social Media: Mainstream Customer Engagement Channel
• Mobile Web: Exploding Distribution Channel
• Meet Your New Guest: the Hyper-Interactive Consumer
• Channel Convergence and Need for Multi-Channel Marketing

Here are some of the biggest developments of 2011 that should be kept in mind when preparing the 2012 hotel digital marketing budget:

• Multi-channel marketing has become the norm and the foundation for a smart direct online channel strategy. In this environment, the hotel website, SEM campaigns, email marketing, social media presence, mobile, etc. have a symbiotic relationship. Unleashing a marketing promotional campaign simultaneously across all available marketing channels produces a compound effect and far greater returns than each individual marketing format.

• Big Changes in SEO Best Practices: Google “Panda”, the next evolution in Google search algorithms, is more than ever based on relevancy and quality of web content. Hoteliers must take these updates into account and budget for in-depth website optimizations and redesigns for next year.

• Another Big Year for Mobile Marketing: The amount of users researching travel is expected to grow 51% next year, and by 2012 18% of mobile users will also book from their smart device (Google). Many hoteliers are still behind and have not invested in a mobile website or any mobile marketing efforts.

• Travel is Social: There are more Facebook profile pages than there are web pages (Facebook). As more and more hotels launch Facebook pages with custom tabs, twitter accounts, YouTube channels, etc., hoteliers need to focus more energy on differentiating themselves while also providing value to their audience. Also of note – social networks will capture 11% of online ad spending in 2011 (eMarketer), which further proves your hotel will need to be as creative as possible to cut through all the noise.

• Flash Sale & Group Buying Sites:  While popular in 2010 and the early part of 2011, flash sale and group buying sites have proven to be detrimental to the hotel industry from a pricing and branding perspective. Hoteliers must preserve rate parity and their brand by utilizing the most cost-effective distribution channels, instead of using desperate measures to sell inventory.

 

Listening to Your Peers: How Are They Allocating their Budgets?

In the 5^th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices, hoteliers responded that their 2011 Digital Marketing Budgets were Higher than 2010. Hoteliers increased their website re-design/design (20.2%) and website optimization (13.7%) budgets this year. Even so, over 73.4% of hoteliers reported that the economic environment and overall budget constraints continue to affect Internet marketing budget planning (30.3% and 43.1% respectively).  The good news is that for 74.5% of respondents, their 2011 Internet marketing budget was higher than in 2010.

 Here is how hoteliers spent their hotel digital marketing budgets over the past few years, and what they project to spend in 2011:

Of your total Internet marketing budget, where did you spend your money?	2006	2007	2008	2009	2010	2011 (projected)
Website re-design/design	18%	22%	19.6%	16%	16.34%	20.2%
Website optimization	9%	11.3%	12.8%	10%	10.1%	13.7%
Strategic links to property website from online directories, portals	6%	9.6%	7.5%	8%	7.7%	14.2%
Paid Search Engine Marketing: Pay-per-click (PPC)	14%	8.6%	17%	16%	17.7%	20.2%
Local search/Online Yellow Pages	3%	3.6%	4.2%	4%	3.4%	4.7%
Meta search (Kayak, etc.)	2%	2.6%	2.6%	3%	2.6%	4.3%
Search Engine Optimization (SEO)	10%	11.5%	8.7%	12%	10.5%	13.4%
Display advertising (banners)	6%	6.6%	7%	5%	7.6%	7.6%
Email marketing	10%	11.5%	8.7%	7%	11%	12.3%
Mobile marketing (mobile search, mobile websites, SMS messaging, etc.)	N/A	N/A	N/A	2%	4.5%	6.9%
Interactive/Web 2.0 /Social Media	1%	3.1%	3%	6%	2.9%	N/A
Social Media*	N/A	N/A	N/A	N/A	7.5%	11.7
Online Video	N/A	N/A	N/A	N/A	4.3%	7.9%
Outside Internet marketing agency	6%	7%	5.1%	7%	10.5%	9.6%

Overall this year, hoteliers made more room in their budget for website re-designs and optimizations, SEM/paid search and SEO, mobile marketing and social media initiatives. The numbers also showed that many hoteliers are seriously budgeting for hotel website redesign/designs.

 

Building Your 2012 Hotel Digital Marketing Budget 

While hotel distribution has changed quite dramatically over the past 16 years (since the advent of the “commercial” Internet), the fundamentals of hotel distribution have not changed. As HeBS Digital has been saying for years, hoteliers need to continue to focus on the distribution channels that are cost-effective, generate the most bookings, protect rate parity and price integrity, and reach their key customer segments.

What line items should you include in your 2012 hotel digital marketing budget in order to drive as many revenues as possible through the direct online channel?

Here is a quick snapshot of how you should allocate your 2012 budget:

Hotel Website Re-Design & Optimization

All hotel digital marketing starts and ends with the hotel website, the hub of your multichannel marketing efforts. What elements make up an effective website? Don’t scrimp when it comes to the essentials – saving ,000 upfront may lose you hundreds of thousands of dollars in revenue in the future. Poor decisions include websites with little content (15 pages or less), no RFP forms, no Best Rate Guarantee form, only half of the pages optimized for the search engines, etc.

As mentioned above, the new Google Panda update has raised the bar for hotel websites. This major update demands not only deep and relevant content on the hotel website, but unique and engaging content.  Your old and tired 2-3 year old website cannot possibly meet these new requirements and most probably has “fallen off the cliff“ i.e. has already experienced deteriorating search rankings.

Don’t underestimate the power of a hotel website that offers interactive elements (see examples below), optimized content, updated imagery and videos, and generally is up to date with 2011 best practices. You may have a highly creative social media strategy, the most targeted SEM strategy, and an email marketing strategy that is incredibly effective in driving traffic to your site – but are your website visitors converting once they arrive? If your website is over 2 years old, it is time for a redesign. If it is newer than that, include a website optimization and enhancements to the site in your budget this year.

Recommended share of the 2012 hotel digital marketing budget: 15%-25%

Video

While online video was an important part of the hotelier’s strategy in 2011 – Google even branded the year to be “The Year of Video” – for 2012 it is even more essential that video marketing be in the hotelier’s arsenal. Videos excel at selling your hotel product and engaging consumers better than any other medium.  Also important in 2012: consumers will be watching video even more while on the go, on their iPhones, Android devices, tablets, etc.

Develop hotel videos presenting hotel services and amenities to your different customer segments, post them on the hotel website and YouTube, and send them out via MMS messaging. Due to the shortened attention span of today’s traveler plus mobile distribution restrictions, best practices require not a single 30-minute video, but shorter 30- to 60- second videos illustrating different aspects of the hotel product: weddings, spa, entertainment, etc.

Additionally, advertise your videos on YouTube (an easy and cost-effective marketing tactic), and make sure your videos can easily be found on your hotel’s website, its Facebook page and from your email newsletters.

Recommended share of the 2012 hotel digital marketing budget: 3%-7%

Interactive Initiatives

The hyper-interactive, hyper-connective consumer has high expectations for a hotel website.  Hoteliers must align the interactivity of the hotel website with the behavior of today’s travel consumer – who will give your hotel website just a few minutes to capture and keep their attention once they arrive.

Interactive initiatives such as sweepstakes generate buzz, increase traffic to the site, encourage repeat visits, increase time spent on the hotel website, and ultimately increase bookings. Considering participating in a flash-sale or group-buying site? Don’t! Save thousands in lost revenues and conduct a coupon or a value-add sale on your own site or landing page, with a countdown ticker, sign up form, and forward-to-a-friend functionality. These initiatives also may serve to build your email and mobile-opt in lists for future marketing efforts.

It’s important that you allow your website visitors to share the content on your website. Additional examples of interactive initiatives include a calendar of events, blog on the hotel website, customer review form functionality, live chat, surveys, and Facebook Like/Tweet/Google +1 Buttons.

Recommended share of the 2012 hotel digital marketing budget: 4-6%

Search Engine Optimization (SEO)

In 2011, many hoteliers’ websites were hit hard by the Google Panda updates.  This, along with ever changing algorithms by search engines to improve the user experience, has been a change in the way that websites approach their keyword targets, content appearance, and site structure.

With SEO constantly evolving, it is more important than ever to benchmark and track SEO efforts and successes. In addition to maintaining a focus on on-page optimization techniques, it is important to review and improve the quality, uniqueness, and value of a hospitality website’s wealth of content. Now more than ever, hotel websites cannibalize each other’s search rankings because of similar content and non-differentiated message. Useful, shareable content is increasingly becoming king. This is why once a solid SEO-focused coding foundation is applied, the content must be of a high editorial quality and totally unique from page to page, focusing more on readability and value to the consumer than pure keyword-stuffing and link sculpting.

Recommended share of the 2012 hotel digital marketing budget: 8%-10%

Search Engine Marketing (SEM)

Search Engine Marketing (SEM) has long been a staple of hotel Internet marketing budgets for one main reason: it works. Smart SEM marketers typically find that their campaigns generate significant revenues for their property and upwards of 1,500% ROI.

Recently, Google released a study that addressed the question: “What percentage of paid clicks would be acquired organically if I pause my SEM campaigns?”  Results showed that 89% of paid clicks would not be recouped organically – only 11% would be covered by organic search results. A competitive market (especially in popular tourism destinations), increased focus on local search, retargeting/remarketing campaigns to target users who previously visited your site, the need to reach more travelers on the go through mobile search, and a heavy OTA presence means that hoteliers need to spend more to get their market share.

Recommended share of the 2012 hotel digital marketing budget: 25%-30%

Email Marketing

Email marketing is still an essential component of the hotelier’s direct online channel strategy, and an easy and affordable way to send messages to your key customer segments.  Email marketing campaigns still generate significant ROIs for hoteliers, keeping this initiative as a crucial line item in almost every hotelier’s budget.

Smarten up your email marketing strategy by performing more data-driven email marketing. Consider sending a ‘re-engagement’ email to those that have not opened or clicked on an email campaign for 90 days, enticing them with a special offer to get them interested again. Resend your emails to all bounces after three days. Send an email offer to people that have started but then abandoned the booking process. Pay attention to how you segment your list and make sure you are sending offers out to those who specify their interest in that topic. If you have been using the same exact email template for over a year, it’s time for a refresh.  Lastly, with so many people viewing your email newsletters on a mobile device, make sure you are providing a mobile-optimized version of your email.

Recommended share of the 2012 hotel digital marketing budget: 4%-5%

Online Media & Re-Targeting Advertising

Once you have budgeted for the revenue generating basics such as website re-design and optimizations, SEO, SEM, social, mobile and email marketing, consider adding online advertising initiatives.  Be sure to carefully analyze what websites you work with (that the site is part of your key customer segment’s travel purchasing process), and take advantage of retargeting and behavioral targeting options.

According to the Interactive Advertising Bureau (IAB), 38% of every online advertising dollar in the U.S. goes to display – related advertising (commonly called banner advertising). In 2010 alone, nearly billion were spent on display advertising, including all of its formats: banners, digital video ads, online sponsorships, rich media, retargeting, etc.

In 2012 consider launching a retargeting/remarketing campaign for your property. Retargeting is a form of display advertising in which you target users who have previously visited your website with banner ads or text ads on display networks. You can target users that went to a specific part of your site, or the whole site. In addition, you can customize messages based on which part of the site the user has visited. In its simplest form, retargeting gets previous visits back to your site.

Consider only high quality retargeting advertising networks, such as Google Display Network, Yahoo Network, etc. Avoid retargeting networks offered by some of the OTAs – typically these networks consist of low quality sites and affiliate sites. While the retargeting banners do link to the hotel website, these OTA-related networks manipulate the users to book via the OTA booking engine, which means merchant rates and revenue loss for the hotel.

Recommended share of the 2012 hotel digital marketing budget: 7%-10%

Mobile Websites & Marketing

By 2014, mobile Internet users will surpass the number of desktop Internet users. The most important statistic though is the number of smartphone users. Smartphones are changing how we do business in hospitality, how we market, how we service customers. There are nearly 75 million smartphone users in the U.S. alone; their number will exceed 100 million by 2014.

Did you know that 1 out of 5 hotel queries come from mobile devices (Google, May 2011)?  Additionally, Google revealed that 20 percent of searches across Google are local, but that number bumps up to 40 percent for mobile searches.

The mobile channel is already a reality and has become an important travel planning and transaction channel in the U.S. and worldwide. Hotel guests and travel consumers in general are already mobile-ready, and hoteliers and travel suppliers have to respond adequately to this growing demand for mobile travel services.

HeBS Digital’s own research and other industry sources show that in 2011 between 2.5% -5.0% of visitors to hotel websites came from consumers accessing the hotel site via mobile devices. This year we saw increases of 3-5 times in mobile bookings for many of our clients.

As consumers continue to embrace their phones for all types of activities, mobile devices play an increasingly important role in the travel sector, especially in last minute bookings.

Mobile is an excellent platform to reach your key customer segments anywhere, at anytime.  In 2012, independent or franchised hotels and resorts, as well as small and mid-size hotel chains and multi-property hotel companies, should focus on building and enhancing their mobile websites. The main focus should be:

• Creating mobile-friendly textual and visual content that presents the hotel product well.

• Enhancing the mobile user-experience via well-developed mobile site navigation, a mobile booking engine widget, mobile calendar of events, etc.

• Increasing website “discoverability” via mobile SEO and mobile SEM (e.g. Google mobile AdWords) and online media initiatives.

• Making the mobile website more interactive via mobile-social media initiatives, interactive sweepstakes and contests.

• Soliciting sign-ups to the mobile opt-in list via the traditional hotel website and the mobile website, via hotel email marketing campaigns and various sweepstakes and contests, such as interactive scavenger hunts, QR Code promotions, etc.
• Tracking conversions and user behavior via mobile analytics (e.g. Omniture) and special tracking phone functionality.

Recommended share of the 2012 hotel digital marketing budget: 9%-10%

Social Media

Let’s set the record straight: Social media is not a distribution channel in hospitality. Social media is a customer engagement channel, and an extremely important one at that.

There is no doubt that Social Media has changed how travel consumers research and plan travel, access travel information, and perceive credibility of information. There is no doubt that Internet users are increasingly influenced by social media sites and peer reviews. By utilizing a comprehensive social media strategy, hoteliers can create social media “buzz” around the hotel, target receptive audiences, and ultimately stimulate hotel website visits, interactions and conversions on the hotel website.

Social marketing should continue to be an important component of any hotel’s digital marketing mix in 2012 and part of the comprehensive direct online channel strategy for any hotel company. Naturally, it is important to use the right ROI metrics to measure the success of social marketing efforts of the hotel.

As discussed above, social media and social marketing initiatives should be reviewed with “sober eyes” and within the context of the impact of the multi-channel marketing strategy of the hotel. Instead of focusing on bookings and revenue when measuring results from social media marketing, remember that currently the best uses of social media are:

• An important component of the hotel’s multi-channel marketing efforts
• Buzz-building
• Brand-building
• Interacting with and engaging customers
• Keeping up with the times, making the hotel look current, cool and up-to-date
• Driving engaged and relevant traffic to the property’s own website

A strong presence on social media channels such as Facebook, Twitter, YouTube, Flickr, Foursquare, and LinkedIn must be budgeted for. Your hotel website is also a place where you can encourage social interaction – see the section above on ‘interactive initiatives.’ Now that hoteliers have started engaging their customers, now begin to monetize your presence. Including a Facebook custom tab that reveals an exclusive discount only to Facebook fans, promoting limited time offers via Twitter, and social media contests are great ways to turn social media into a revenue channel.

Recommended share of the 2012 hotel Internet marketing budget: 6% – 8%

Reputation Management

Every year it becomes more important to monitor (and respond when appropriate) your customer reviews, make sure consumer-generated content about your hotel is aligned with the content on your website, make sure your profiles on sites like TripAdvisor are complete and optimized, and to monitor your competitor’s reviews and response strategy. According to respondents of a recent TripAdvisor survey, 92 percent of travelers are more likely to book accommodations for a hotel that posts a detailed property description and photos.

In 2012 hoteliers should pay special attention to Google reviews, which are part of Google Places. Recently Google removed all third-party customer reviews, including TripAdvisor, from the Google Places pages, except for its own customer reviews. Enhancing the hotel content on the property’s Google Place page with photos and videos, as well as steering guests to comment on Google Reviews should become a priority for any hotelier.

In many cases, investing in a tool such as Revinate is well worth it in time-savings and insight into where you rank against your competitors that could not be gained by monitoring these sites manually.

In addition to allocating budget dollars to reputation management, consider participating in TripAdvisor’s Cost Per Click and Business Listing programs if your property has good reviews. These programs drive traffic directly to your website and divert bookings from the OTAs which have a heavy presence on TripAdvisor, and tend to covert well because people looking at reviews are closer to the purchase process.

Recommended share of the 2012 hotel Internet marketing budget: 3%-4%

Web Analytics & Tracking

Smart business decisions may not be made without investing in a web analytics and tracking tool. A tool like Adobe’s Online Marketing Suite Powered by Omniture will provide you with the information you need to stay competitive and continue (or halt) spending your budget dollars on campaigns that perform and drive revenue through the direct online channel. Make sure that you also budget for someone to analyze the data: the best analytical tool out there will do nothing for your hotel if you have not invested in resources (either staff or a hotel digital marketing firm) to slice and dice the data.

Recommended share of the 2012 hotel digital marketing budget: 1%-2%

Website Operations & Campaign Management Fees

Website hosting and maintenance should not exceed 5%-6% of your budget. Campaign management and direct online channel consulting by an experienced digital marketing firm that will deliver a high ROI should not exceed 11%-12% of your overall Internet marketing budget.

 

Conclusion

The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace.  It should be a direct reflection of the sources of business and the overarching focus on the direct online channel, expected ROIs from the various advertising formats, and solutions to the emerging challenges and trends that affect online revenues in the hospitality industry.

Following best practices means achieving the best ROIs. Once you have determined how you will allocate the 2012 budget, consider the know-how needed to make these campaigns perform.

The shift from the offline/traditional channel to the online channel is permanent, and the direct online channel is the only growth channel in the hospitality industry that makes economic sense and creates long-term benefits and competitive advantage. Therefore, mastering the direct online channel and all of its segments: traditional Web, SEM, SEO, email, social media, mobile Web, etc., should be a top priority for any hotelier in 2012.

In 2012 hoteliers need to employ multi-channel marketing and distribution strategies, supported by smart allocation of the 2012 digital marketing budget.

Partner with a digital marketing firm that understands the best practices in hotel digital marketing and direct online channel strategies, has proven results in multi-channel campaign management, generates above-industry ROIs and is accountable for every advertising dollar spent. 

HeBS Internet Marketing Blog