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Tim Peter Thinks

Tim Peter

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July 31, 2018

There Are Two Ways To Grow Hotel Direct Business. One Of Them Has A Future

July 31, 2018 | By | No Comments

Grow Hotel Direct Business: Guest searching for hotel reservations Looking to drive results for your business? Click here to learn more.


Here where are in mid-2018, gearing up for our 2019 budget season, and once again everyone’s talking about how important it is to grow hotel direct business and get guests to book direct. Brands are putting increased emphasis on loyalty — or at least on offering heavily discounted rates to guests willing to sign up for their loyalty program. Individual hotels are touting their best rate guarantees — or offering heavily discounted rates… Are you sensing a theme here?

In truth, all this is great. Seriously. I’m absolutely in favor of driving direct business. But too often it’s focused on the booking. And on discounting. We’re spending money to buy the booking. Why aren’t we willing to invest to buy interest earlier in the process? We’ve become so focused on the booking, we sometimes forget how to talk to guests before they’re ready to book.

It’s time to change that reality.

Why OTA’s are Winning

One study shows that guests who start their booking journey on an OTA reserve through OTA’s around 93% of the time. Meaning that guests who start on an OTA will choose to book direct only about 7 times out of 100. By contrast, guests who start on a branded website book direct about 60% of the time (though, admittedly, they may not always choose your property to book direct).

To put it more plainly, guests can’t book direct, ever, if they don’t come to your property or brand website at some point while shopping for travel. Period.

So where’s the investment in attracting guests to visit early in their decision-making process — the dream and plan phases, not just when they’re ready to book.

Think of it this way. A 150-room property selling for $130/night and running at 64% occupancy with an 18% OTA margin — all roughly average in the current market — typically surrenders about $100,000 in topline revenue to OTA’s. How many have demonstrated the willingness to invest a healthy share of that amount in content creation to attract guests early in their browsing, shopping, buying activity? We’ve said for years that content is king; shouldn’t we be more willing to invest in it?

By contrast, that same representative property will generate roughly $900,000 in revenue through its website (assuming industry-average 20% website revenue and giving no credit to web for voice or walk-in). If you include voice and property-direct, those numbers roughly double. How much are you willing to invest to drive that number higher? Would $50k sound too expensive? Remember, that’s still half what you’re already paying OTA’s.

Content Marketing Matters for Hotels

Does this sound crazy to you? Well, here’s a crazy idea for you: Google has announced a new program that brings a professional video director to your business to shoot a video advertisement. The price tag? $350 in YouTube advertising. That’s it. The search giant clearly understands what customers want; those customers literally tell Google what’s important to them millions of times every single day. Do you think Google might know something useful here about customer behavior?

Guests are starved for content about your property, your destination — the attractions, events, shops, festivals, concerts, entertainment and businesses near to you. And the first rule of selling travel to consumers remains “sell the destination first.” Research from Google shows that travelers tend to start their travel planning by searching destination-related terms. This is a huge opportunity to attract guests to you early in their planning, place your property at the center of their consideration set, and then turn them into reservations. But only if you’re willing to make the investment.

Growing Direct Business — Conclusion

Budget season is right around the corner. It’s time to start thinking about where to put your money, where to invest to grow your business next year. This isn’t about building a new website or finding a new booking engine or — heaven help us — planning for a new “closed user group” you can sell your property to more cheaply. This is about investing in “the painting” — your property’s content — not just “the frame.” It’s about telling a story designed to attract and capture interest from potential guests. It’s about getting them to start their journey with your hotel in mind.

Or you could just continue to pay “loyalty” programs and OTA’s and intermediaries to do that for you — to you — again. But I wouldn’t recommend it.

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:

Note: A version of this post originally appeared on Hotel News Now, where Tim Peter writes a regular column for the magazine’s Digital Tech Impact Report.

Tim Peter

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May 22, 2018

Forget Mobile First; It’s Guest First

May 22, 2018 | By | No Comments

Roughly 20 years ago, investors placed their bets on a variety of technology providers, expecting them to reshape the travel industry. And in the years since, Expedia, Priceline, TripAdvisor and others have done just that. As a hotel executive, you live in an environment largely shaped by these travel giants. The challenges hospitality leaders routinely recount in conversations with peers and the press — the increasing cost of distribution, the tyranny of guest reviews, the rapid pace of technological change — can be attributed directly first to activities driven by guests but also actively enabled by online travel providers.

That was then. Now, we’re living through the next phase of upheaval in the industry. Mobile continues to transform the guest’s experience much as the Internet has over the last 20-odd years. And yet I often hear from hoteliers who feel that these changes are at best a distraction, and, at worst, a complete waste of time.

Santayana’s famous adage, “Those who cannot remember the past are doomed to repeat it” feels terribly appropriate. Because if you think mobile won’t affect your business, here’s a quote you might want to keep in mind:

“The reason why we invested in a company that does hotel operations… [is]it also optimizes the relationship with the guest. Then we can plug that into our own apps and provide a completely seamless consumer experience, from the search, to the booking, to the on-property experience, to the post-stay review”

Who said it? Cyril Ranque, president of Expedia Lodging Partner Services in a discussion on Tnooz. He’s talking about Expedia’s investment in ALICE, a tool that allows guests to connect with your staff to address issues while on-property. But note again why they’re doing this: To “…provide a completely seamless consumer experience, from the search, to the booking, to the on-property experience, to the post stay review.” [Emphasis added]

I’m sorry, but isn’t that our job as hotel executives?

Over the last 15 years, we’ve found new and innovative ways to let OTA’s connect with our guests. And they’re quite happily providing us the tools to do it all over again.

It’s not just Expedia, of course. Priceline and TripAdvisor and the rest of the usual suspects have announced plans with similar objectives, if not similar approaches. And of course, these ignore “new” entrants such as Google and Facebook and Airbnb — and ignores the fact that Airbnb is already celebrating its tenth anniversary.

Even worse, we seem to want to do this during a historically great period for travel. At least 15 years ago, we had the economy and the tragedy of 9/11 to provide some justification for these decisions.

Why do we keep doing this to ourselves? Where does this end? And, most importantly, how can we get off this merry-go-round of self-defeating outsourcing to the OTA’s? How can we leverage the benefits of mobile specifically, and digital more broadly, to provide the seamless experience for our guests?

Mobile Drives Guest Experience

Notwithstanding the above, OTA’s are not the bad guys here. They simply recognize that today’s guests expect to connect with the information and services they want, whenever and wherever they happen to be. And they’re responding to those expectations by creating tools that allow guests to do just that.

We need to do the same.

It’s become a mantra among many early adopters that we must be “mobile-first” in our dealings with guests. And while that’s somewhat true, it misses the broader point. Because the key isn’t to be “mobile-first;” it’s to be “guest-first.” Mobile happens to hold the lead position in the market because it’s the device your guests use most often today. But digital leaders focus first on what guests truly need, then choose the appropriate platforms to answer guest questions and meet those needs. Guests could easily gravitate towards technologies such as wearables, smart speakers (e.g., Amazon Echo/Alexa), artificial intelligence (AI), the Internet of Things (IoT), virtual reality (VR), or augmented reality (AR) in the next few years. You don’t want to put a specific technology — not even mobile — at the center of your efforts. You want to make your guests the center of your attention.

Digital leaders don’t make “technology“ decisions; they make guest experience decisions. The OTA’s have made wise technology and innovation investments by listening to customers and placing their bets on how best to help them throughout their journey. Today it’s mobile; tomorrow it could be something else. They’re not developing a technology strategy. They’re developing a business strategy that recognizes how guests’ needs have changed and developing what’s necessary to meets those needs.

It’s time you do the same. In fact, thinking about investments in terms of their benefit to guest experience often helps improve net operating income (NOI) while also keeping pace with competitors. More on that in a moment…

The Rating Game

It’s no secret that your hotel depends on receiving a healthy volume of quality reviews and ratings on TripAdvisor and OTA sites to drive business to your property. Given that most guests check your property’s reputation before making a booking decision, it’s safe to say that your brand is only as good as your last review.

Mobile only amplifies this reality. First, potential guests use mobile to check ratings and reviews whenever they want during their trip-planning process. Even walk-ins and last-minute bookers have the information they want at their fingertips to choose the right property for their stay. The days where you could succeed based on information asymmetry — you knew more than the guest about not only your property’s strengths and weaknesses, but everyone else’s in the marketplace — are long behind us. Guests today know more about our properties than most of our staff does — they have greater incentive to do so.

But guests aren’t just information consumers. They’re information creators as well. They carry the equivalent of a printing press, high-definition video and still photography camera equipment, publishing house, and broadcast network in their pocket. TripAdvisor’s users alone publish over 280 reviews on the site every single minute. Guests also post tens of thousands of photos and comments per minute on social media channels such as Facebook, Instagram, and Snapchat. The Internet handed every one of your guests a platform to say whatever they want about your property. Mobile made that platform omni-present.

Some New Rules of the Game

In their landmark book Information Rules: A Strategic Guide to the Network Economy, Carl Shapiro and Hal Varian — now Google’s Chief Economist — explained that digital only provides two avenues for success:

  1. Dominant firms
  2. Differentiated products

OTA’s represent the dominant firms, aggregating data about every property, vacation rental, and alternative accommodation in each market and providing guests choice and insights into the “best” options for their next trip. Marriott’s acquisition of Starwood and Accor’s expanded e-commerce efforts represent two attempts to counter that dominant position. However, that ship may have sailed.

On the other hand, differentiating your product from the competition, providing your guests a great experience that they’re eager to share with their friends, family, fans, and followers, and focusing your energies on continual improvement of that experience, is well within your reach.

And taking this approach can help improve your net operating income. First, by investing only in areas that improve guest experience, you can reduce expenses. This focus helps your team prevent “shiny object syndrome,” continually chasing “the next big thing” and consuming a fair bit of your expense budget along the way.

Additionally, greater focus on guest experience typically improves the quantity and quality of ratings and reviews your properties receive, both on formal review sites and through your guests’ social connections. This can help reduce marketing expense by your properties reaching more potential guests in a more cost-effective manner. Even better, improvement of your ratings and reviews often leads to increased bookings and revenue. And a differentiated offering often provides the opportunity to raise rates to boot. All together, these actions lead to a virtuous cycle of lower costs of guest acquisition, higher rates, increased occupancy, and improved net operating income for your properties.

The Plan

Of course, delivering on this virtuous cycle isn’t as easy as wishing it were so. But you can focus on a few key questions to help begin the process.

First, what do you know about your guests today? What data do you have about their preferred shopping and booking channels? How are they using digital to make their decisions? And how successful are you at helping them at each touchpoint they have during their journey? The better you understand your guests’ needs, the more effective you will be at anticipating the right way to help them choose you.

Next, what are your capabilities to support guests at each step in their journey? Does your team have the knowledge, skills, and incentives to address guest needs appropriately? Have you created and curated the right content to answer guest questions and is that content easily accessible to guests regardless of device or channel? Do your existing tools make the guest experience more pleasant — or more painful? Take the time to conduct a thorough review of where you are today so you can best identify the gaps in the overall guest experience. Then prioritize closing the highest-impact gaps right away.

Finally, what vendors, partners, and products exist to help you get to market quickly and easily? Assess not only your existing partners, but also new entrants who may have a fresh approach to the situation. You may end up partnering with OTA’s or partners they’ve invested in. Despite my earlier warnings, that’s not tragic if you understand how you’re going to work with them in the near term and further into the future. Use them to solve the problems that you can’t solve on your own more efficiently or effectively. But also look for others who can minimize your dependency on any one provider.

Continually ask yourself how you’re doing in terms of creating a better, more differentiated experience for your guests. Evaluate new tools for their effect on driving an improved guest experience. And assess your team’s success at driving increased ratings and reviews, greater website or mobile app traffic, increased conversions and revenue, and improved net operating income. Remember that this isn’t about the technology; it’s about the business and how you can move it forward.

Conclusion

You can compete with OTA’s using mobile and other emerging technologies. The key is not get sucked into “shiny object syndrome” or to attack them head-on, but to focus your efforts on improving your guests’ experience at every step of their journey. These enhanced experiences encourage guests to share your story with their friends and followers on social media, leading to a lower cost of guest interest and acquisition. And, this continual focus from your team can reduce your operating costs due to fewer delayed or failed projects, further improving NOI for your properties.

Roughly 20 years from now, some future hotel executive may look back at the investments hotel companies, OTA’s, and new entrants made today that changed the industry even further. They’ll live in an environment shaped largely by the decisions you make today. Of course, challenges will still exist. But the leaders that best understand and adapt to how guests’ needs have evolved, who put the guest first and help them use the tools they prefer, will be the ones who write that future. Why not have it be you?

A version of this column originally appeared on Hotel Executive. Reprinted from the Hotel Business Review with permission from www.HotelExecutive.com

Tim Peter

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April 24, 2018

Great Marketing Technology Won’t Save You From a Bad Hotel Marketing Strategy

April 24, 2018 | By | One Comment

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Great hotel marketing tech won't save you from a bad hotel marketing strategy: Team planning hotel marketing strategy

I don’t know about you, but I’m so done hearing about the tech that will save the day for hoteliers. Another topic enters our lexicon of trending terms that will undoubtedly “…break the backs of intermediaries and upstarts” virtually every single day. You could call them the ABC’s of disappointment: AI, blockchain, chatbots and a host of other technological marvels that claim they’ll completely upend the status quo and return hotel marketers to their rightful place at the top of the mountain. Just recently, Airbnb announced it will now accept — for a modest fee — hotel listings alongside your nephew’s spare air mattress and those undersold condos down the block.

Whoop-dee-doo.

Now, don’t let my snark suggest that these are all bad ideas. I believe most of these platforms and technologies offer opportunities to improve how we connect with guests. AI already plays an enormous role in shaping how we find, attract, and convert customers not just in the future, but today. Blockchain represents an exciting foundational technology that may disrupt business every bit as much as the internet has. Chatbots offer the potential for guests to access information they need in simple spoken language while reducing the heavy overhead associated with contact centers (though, admittedly, not without introducing some substantial overhead of its own). Even the Airbnb announcement likely represents an effective, low-cost distribution channel for your unused hotel inventory.

Those all are positive developments, ones you should put to work for your property. But only when and where appropriate.

The reality is that we’ve got to stop pretending that some mythical, magical event exists — can exist — that will disrupt OTA’s, restore sanity to inventory and yield management, and return hotel owners and operators to their rightful place atop the distribution landscape. There’s no silver bullet here. As stated so eloquently in a recent television commercial, “That’s not how it works. That’s not how any of this works.”

The only way you regain control of your distribution and marketing is to, y’know, take control of your distribution and marketing. It’s to take the time to understand the changing needs and behaviors of guests, to uncover the best sources of revenue and profitability for your property, to focus on providing guests differentiated service, and to develop a comprehensive hotel marketing strategy that connects those with effective processes for finding, attracting and converting customers to loyal, repeat business for your hotel.

You’ll see any number of sources out there selling FUD — Fear, Uncertainty, Doubt — around whatever the sexy tech du jour happens to be. “You’re not using [insert their propriety platform or process]?!?” they’ll say, aghast at your lack of knowledge (or, more likely, aghast at the fact you’ve yet to cut them a check). “Oh, no. Well, I guess you can survive in this environment without it, but, I’d hate to see where you end up if not.”

That’s not helpful. It increases confusion, decreases understanding, and only really helps those selling services that way. More importantly, it diverts you from building and following an effective plan. Don’t listen to that. Instead, listen to your guests. Learn what matters to them throughout their journey. Then use only the technologies that help you improve their overall experience.

Yes, it can be fun to play with new tech. And your plan should accommodate testing new ideas, new channels, and new opportunities. But if you’re constantly chasing the, quote-unquote, latest and greatest, without integrating those into a thoughtful, holistic hotel marketing strategy, you’re really just chasing your own tail.

So, sure, listen to what’s happening with technology. Understand how it affects guests throughout their journey and how it can help you create a positive experience for your guests. But keep your carts and horses in the right order; use technology to support your overall strategy, not in place of that strategy. After all, when you take care of your guests, helping them throughout their journey, meeting their needs, that’s where the real magic happens.

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:

Note: A version of this post originally appeared on Hotel News Now, where Tim Peter writes a regular column for the magazine’s Digital Tech Impact Report.

Tim Peter

By

April 20, 2018

9 Necessary Insights for Hotel Marketers and Revenue Managers from the Past Week: Hospitality Marketing Link Digest

April 20, 2018 | By | No Comments

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9 Necessary Insights for Hotel Marketers and Revenue Managers from the Past Week

Howdy, Big Thinkers! It’s a crazy, crazy week here at Thinks Central, so hope you don’t mind if we skip any setup and just jump straight into this amazing list of 9 necessary insights for hotel marketers and revenue managers from the past week. Enjoy:

  1. Let’s lead off with these 7 social media marketing tips to promote your hotel from the fine folks at Revfine.com, which makes an outstanding companion piece to this look at whether social media is a waste of time for hotel marketers.
  2. Speaking of some fine folks in travel marketing, don’t miss these top 10 ways to drive direct bookings in 2018 from the equally fine folks — and friends of Thinks — over at Fuel Travel.
  3. Google offers a look at how the travel industry is shifting to assistance as part of its “Think With Google” series. They say imitation is the sincerest form of flattery, so we’re fairly flattered by the name of that Google series.
  4. Sabre released its annual “Emerging Tech in Travel” report for 2018, which you definitely will want to download and digest.
  5. Artificial intelligence is one big trend Sabre calls out and that we’re watching closely here at Thinks Central. In fact, it’s well worth your time to take a long at why AI will change hospitality marketing forever.
  6. Another major hotel marketing trend you’ll want to watch is the increasing integration of digital marketing and revenue management. That’s just one reason why Duetto says revenue management requires a team, not a hierarchy. Great stuff, not to be missed.
  7. This is from a few weeks ago, but you absolutely want to check out this Hotel News NowQ&A on what hoteliers must know about digital marketing with our own Tim Peter.
  8. You’ll also want to spend some time with these 10 tremendous insights into the trends driving hotel digital marketing in 2018 from the Hospitality Marketing Link Digest series here on Thinks.
  9. Obviously, it can be overwhelming for hoteliers to keep up with all these trends and changes in the industry. And it’s fair for marketers, revenue managers and distribution folks to ask“is it time to give up?” Clearly, we’re confident the answer is “no.” But take a look at the full post to see just why that is — and how you can make digital marketing work for you in 2018 and beyond.

Have a great weekend, Big Thinkers. See you next time!

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:

Tim Peter

By

March 6, 2018

9 Airbnb, AI, and Additional Insights into Travel Marketing Trends This Week: Hospitality Marketing Link Digest

March 6, 2018 | By | No Comments

Looking to drive results for your business? Click here to learn more.


9 Airbnb, AI, and Additional Insights into Travel Marketing Trends This Week: Traveler booking on his mobile phone

Hey, Big Thinkers! Welcome to another edition of the Hospitality Marketing Link Digest. We’ve got an amazing round-up of 9 Airbnb, AI, and additional insights into travel marketing trends this week for you in this edition. Enjoy:

  1. Skift has a great article about Airbnb Plus in their look at Airbnb Plus and everything CEO Brian Chesky announced the other day.
  2. Derek Thompson at The Atlantic also offers up a thought-provoking article that explores Airbnb and the unintended consequences of disruption that’s really worth reading. Thompson’s piece goes deeper than just a look at Airbnb and instead questions, well, everything related to startup culture and how businesses often disrupt in ways we may never be able to foresee.
  3. Mario Gavira wrote a great piece over on Linked about Airbnb vs. Booking.com: who will win the online accomodation battle the next decade? and, though I can’t believe he misspelled “accommodation,” it’s still a very worthwhile read. (Just kidding, Mario. Great stuff!)
  4. Of course, we’ve put together our share of Airbnb coverage over the years, including this post that asks, ”What Business is Airbnb In? Hotels? Or Hospitality?” and its follow up that look at ”Why Airbnb Keeps Winning at Hospitality.” Both are well-worth your time as you seek to market your hotel more effectively.
  5. Shifting gears a bit, Marisa Garcia wrote a great breakdown of how the rise of “bleisure” among Millennials is shaping travel technology for Tnooz. While we’re no fans of the term “bleisure,” it’s clearly a trend worth watching as we go forward – and as Millennials begin to play a larger role in travel sales overall.
  6. Speaking of “trends worth watching,” you won’t want to miss these 10 tremendous insights into the trends driving hotel digital marketing in 2018 from the Hospitality Marketing Link Digest series.
  7. Another great post, this one from Hotel Online, also looked at marketing trends in hospitality, from technology to niches that’s worth your time.
  8. Ever since our founder and president Tim Peter was named among HSMAI’s 2017 Top 25 Extraordinary Minds, he’s been making the rounds. First there was this amazing Q&A about what hoteliers must know about digital marketing from Hotel News Now. And he followed it up with a great guest editorial for Hotel Executive that explained why it's not mobile first, it's guest first. All good stuff that you won’t want to miss.
  9. And let’s round-out our look at Airbnb, AI, and additional insights into travel marketing trends with a collection of 8 amazing posts that explore how AI will affect the travel industry and these 9 posts featuring chatbots, AI and all the hospitality digital marketing trends of 2018 for you.

If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success: