Originally published in AAHOA Lodging Business, April 2009
Don't Shoot the messenger
Understanding the importance of a hotel's Internet presence.
By Dan Marcec
One of the first reactions to a decline in business is to cut marketing efforts. Why should that be the case? Especially for a hotel, which thrives on long-term loyalty and repeat customers, keeping its name and face out in the public eye is of extreme importance to long-term value and success. Therefore, marketing should be a more central piece of the budgetary puzzle, especially with the onset of Internet usage by hotel guests.
The misconception hoteliers often have is how well their marketing works in other channels, and, to be fair to them, the marketplace is changing at breakneck speed. For example, the numbers of travel agencies has been cut in half since 1995, from 36,000 to 17,000, according to Max Starkov, chief eBusiness strategist at Hospitality eBusiness Strategies, Inc. On average, he says, there has been a 4 percent decline in agencies per year. That’s entire agencies, not individual agents.
“With all these major declines in travel — business, leisure and traditional booking methods — Internet bookings are expected to increased by 10.5 percent in 2009,” says -Starkov.
With that type of growth, ramping up Internet marketing seems a logical choice. Neil Salerno, the Hotel Marketing Coach, explains that 74 percent of all people searching for hotel rooms are looking first on the Internet. While all of those reservations aren’t necessarily made on the Internet — that number is closer to 54 percent — a hotel’s visibility upon first glance can make a large bit of difference.
“One of the biggest problems a hotelier faces today is the perception that a professionally done Web site is out of reach,” says Salerno. “It does take some research and due diligence, but a site doesn’t have to cost $5,000. Hoteliers just need to make sure that they hire someone who has hotel designing experience.”
The other point that both Salerno and Starkov noted is that oftentimes they will talk to hoteliers that are paying for AAA and Yellow Pages ads — channels that have no tracking ability. With an Internet site, no matter how much money is spent on it, the return is immediately apparent. If it doesn’t work, then a new direction can be forged. With print and radio ads, individual properties can be throwing their money to the wind. There may be palpable return from those channels; however, when marketing expenses need to be detailed, an outlet that can be tracked is much easier to monitor.
“The thing I love about the Internet is that everyone is equal — an independent property can be more powerful franchised property,” says Salerno.
Owning Internet Perception
One of the main reasons that some of the media channels such as print and radio advertisements are less effective for a hotel than an individual Web site is that, at least for franchised properties, their brands are doing macro marketing for them. Advertising is very much about brand recognition, and if a guest is looking for a particular hotel, they are going to pull up that brand’s Web site, or look for its sign off the highway, probably staying there no matter what.
Where a hotel’s Internet presence comes in handy is on the local level. In the case that, say, a business person is driving down the highway and needs to pull off for a night, rather than just stop at the first exit they see, they might search on their phone or laptop for the nearest hotel in a specific brand. So, someone might ask, if they’re going to stay at one brand anyway, why will it matter if the Web site is pretty?
At least one answer to that lies in one very telling statistic: hotel comments on the Internet have the highest credibility rating of any Web-based feedback for product comments at 88 percent.
“Say you’re researching a blender, maybe 70 or 75 percent of people believe the customer reviews,” says Renoir Milan, chief operating officer of Avalon Report. “That’s pretty significant, but when people look at a hotel review, 88 percent of them believe it and base their travel plans on it. In January of this year, 66 percent of people were reading travel reviews before they booked a hotel. If 66 percent of people are reading reviews, and 88 percent of them are believing what they read, imagine what that can do for a hotel."
57% of online travel searchers read reviews of hotel properties every time before booking, against only 0.3% that read them "rarely." (source: TripAdvisor)
The imagination runs wild, cutting both ways. If the first thing potential guests read is negative, then the likelihood of them staying at the hotel diminishes.
Luckily, there are tools available for hoteliers to track and respond to their customer reviews. Just like a dissatisfied guest at a hotel might come back if his or her complaint is rectified, if someone reads a bad review, and the owner him or herself responds positively, that can make an even better impression.
“We consistently hear that the way a property responds to a negative review says more about the property than the review itself,” says Brian Payea, trade relations manager for TripAdvisor. “If an owner gets on there and responds in a professional manner to address the problem and how he taking care of it — either by taking action or by explaining it’s not true — many people will book just based on the level that they can see the owner cares.”
As hoteliers don’t need to be told, hospitality is about relationships. If reviewers can feel like they know the staff at a hotel before they arrive, they’re much more likely to be comfortable the first time around, which ultimately will lead to return visits.
Coming back to the tracking features, both TripAdvisor and Avalon Report offer tools for hoteliers to take control of their reviews. Of course, the Internet being a public forum, no owner truly can control what people say about them, but by being involved in the dialogue about what works and what doesn’t at their hotels, they can improve their service and their overall perception.
“We’re going to be putting in the Owner Center on TripAdvisor, which can be used as a customer service monitor,” says Payea. “This allows owners to engage with their reviewing customers and control their image.”
“Fifteen years ago when I was working in the hotel franchising business, hoteliers had to know their brand, 500 key travel agents, and they had to have so many people in their back pocket; but now, they can have a personal relationship with each one of their customers, even if it’s just over the Web,” says Milan.
“Back then, as well — which isn’t really that long ago — it was terrible when a hotel got a bad letter, because supposedly the guest would tell 10 people, who would tell 10 people, and pretty soon, 200 people knew about the bad review. It’s funny to think about that now because TripAdvisor has 30 million unique visitors per month.”
And even with that, Milan says, TripAdvisor is where a vast minority of reviews are utilized. Primarily, he says, reviews are read at the point of sale on the third-party aggregators. Therefore, keeping tabs on as many of a hotels’ reviews as possible is of great value to individual properties.
“Customers’ focus on reviews is an amazing phenomenon, and a lot of hotels are worried about what’s being said about them everywhere on the Internet,” says Milan. “But we suggest hoteliers narrow their scope to the sites where transactions occur.”
On the Local Level
All of that said, the focus remains on having these channels available on an individual hotel Web site. According to Starkov, more than 76 percent of Internet reservations are direct, meaning that less than a quarter of actual bookings come from online travel agents. Therefore, the reviews are important, the visibility on third-party sites is important, but ultimately, an individual hotel’s site is the point of sale.
“The online travel agents and the major brands are trying very hard to deliver reservations to ALL their properties, including yours,” says Starkov. “But they can’t focus on individual properties, which is why a local Internet marketing strategy is the ONLY meaningful, viable and prudent strategy right now.”
For example, towns with military bases are always active in the hotel market, and so are college towns — when people stop visiting their families in the military, or when attending major college sporting events, lectures, and parents stop visiting their children, then the travel industry truly will be in trouble.
Thus, hotels in these types of markets can have their Web site optimized to come up first when people are searching for hotels in these specific areas. Furthermore, individual events and festivals are great revenue generators for local areas, so getting a leg up on the competition by having a better Internet presence for those is crucial. Families are still having reunions, and people are still getting married — these events don’t stop in an economic downturn. They just may be on a smaller scale closer to home.
“Here’s the main issue: let’s say you’re a property in Orlando, Florida, where there might be a 20 percent decline in travel,” says Starkov. “So, for example, say there were 200,000 people coming there and now there are 160,000. That is still more than enough to fill your hotel if you are the only one marketing it while other properties have cut all their expenses. What we’re talking about here is outsmarting the competition and taking market share from the property next door that’s asleep at the wheel.”
