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Tim Peter

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May 10, 2019

The Hotel Marketing and Distribution Trend You Care About Most This Year

May 10, 2019 | By | No Comments

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


Hotel marketing and distribution: Why Google matters

Let’s talk distribution for a minute. Yeah, I know, distribution is one of the least sexy aspects of the hotel industry. It’s also one of the most important, especially for hotel owners and independent hotel operators. Hotel owners, operators, and brands looking for ways to reduce costs and increase profitability need to continue thinking about how they’re going to acquire guests in a cost-effective manner. Also, hotel marketing and distribution are joined at the hip. And the whole topic is about about to get much, much more interesting.

Why? What’s going on here?

In a word, it’s Google. Google is what’s going on here.

The Beast That Scares the 800-lb. Gorillas in Hotel Marketing and Distribution

Google isn’t the 800-lb. gorilla of the hotel industry. No, Google is a much larger and more ferocious beast that has all the industry’s 800-lb. gorillas running for cover. Google is stealing mindshare — and potential margins — from OTA’s and other intermediaries every single day. No less an observer than Expedia CEO Mark Okerstrom plainly stated that Google represents his company’s biggest competitor. In his words, “The internet has been littered with the bodies of companies put out of business by Google.” Okerstrom’s job is to make sure Expedia isn’t one of them.

Okerstrom is right. It’s no secret guests increasingly use Google as the first stop in their decision-making journey. And with recent integrations of Google’s artificial intelligence-powered, travel booking capable Assistant into Google Maps on Android and iPhones alike, expect even greater use of the search giant when guests plan their stay. There are over 3 million searches on Google every minute, with more than half of those on mobile and roughly 20% of those using voice. That’s at least 300,000 voices searches every minute, many of them targeted towards travel. Everyone’s scrambling for share, further driving up the cost of acquiring guests.

For example, Expedia, Booking.com, and others — OK, Expedia and Booking’s subsidiary brands and metasearch channels — recognize this shift, spending more on marketing and advertising with Google to drive more traffic to their direct channels. That’s a switch, huh? But it’s a fact. To drive traffic to its sites, Booking.com paid Google in Q3 alone last year somewhere in the neighborhood of $1 billion.

Nice neighborhood, eh?

At the same time, as Google increases the amount of metasearch and paid inventory in its search results page, it’s also driving up costs for individual hotel owners and operators. Worse, without solid connectivity solutions — which far too many independent hotels lack — hotels can be shut out of Google’s latest product offerings and miss out on direct revenue opportunities altogether.

How to Deal With Google’s Domination of Hotel Marketing and Distribution

So how can you ensure you earn your rightful place at the table and gain booking share without significantly increasing your cost of guest acquisition? Here’s how:

  • Develop a comprehensive distribution strategy that includes both search and metasearch. Search is a distribution channel. And the search landscape gets more and more challenging every day. SEO, paid search, voice search, metasearch, AI, schemas, and whatever else Google rolls out next can’t be considered in isolation. Each plays a role in driving guests towards your direct booking channels and in delivering flow-through — positive or negative — towards your bottom line. Similar thinking should shape your OTA agreements. Do your internal team, website development firm, and marketing agency understand how to best make these work together to deliver the lowest total cost of distribution for your property? This is critical question that your property must get right. Otherwise, you risk continuing to fund OTA’s bidding against you in search, driving up the costs of your hotel marketing and distribution, and further risking your property’s distinct value proposition.
  • Offer destination content to gain guests earlier in their decision-making journey. Data shows that guests who start their research on OTA’s book on OTA’s. I strongly suspect the same will be true for Google before long, most likely in the form of metasearch and partnerships. Already, Google displays a remarkable number of paid listings and metasearch results before getting to organic results. This is a huge problem for hotel marketers. Why? Well, to put it bluntly, guests who don’t come to your website never get the chance to book direct. It’s critical you use content about your destination to move deeper into the long tail of search, getting guests to your site early in the journey and for terms that aren’t flooded with paid/metasearch offerings already. Google’s AI-driven search results place significant value on quality content. Give them — and your guests — something worth finding.
  • Focus on increasing conversion rates on direct channels. Here’s a simple truth: It’s always going to cost you something to get guests to contact you. You’d damn well better make sure they convert when they do. It doesn’t matter whether guests come to your website or call your reservations line; every lost opportunity increases your cost. Take a close look at where your reservations come from, how effective your direct channels are at turning interest into action, and how to improve those results to get the best return on your spend.
  • Ensure your connectivity options support Google — and potential future competitors. Do your direct channels appear in Google’s metasearch results today? Or does your property only appear via intermediaries? The latter is a clear sign you’re paying more for reservations than you should — likely much more. Make sure your team is working towards placing your property’s direct channels front and center in metasearch on Google, as well as on other metasearch partners who offer the opportunity to challenge Google in the future. Or accept the fact that you’re always going to pay more for bookings than you should. But that doesn’t seem like a good long-term plan to me.

Conclusion

Distribution funnels through a limited number of chokepoints and gatekeepers. And, at least for the foreseeable future, the number of gatekeepers continues to shrink towards just one: Google. If Expedia worries about Google eating its lunch, you might want to given the search giant some thought too. And then you want to put those thoughts into action.

Google may be the beast that 800-lb. gorillas fear. That doesn’t mean it should scare you. Individual property owners and operators may not be 800-lb. gorillas. But unlike the big guys, they can run through the jungle much faster. Think about your hotel marketing and distribution strategically and you’ll be able to outrun the big guys for a long time to come.

Past Insights from Tim Peter Thinks

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:

A version of this article originally appeared on Hotel News Now as "The Distribution Trend You Care About Most in 2019"

Tim Peter

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January 8, 2019

5 Key Insights into 2019’s Hotel Marketing Tech Trends

January 8, 2019 | By | No Comments

Guest using mobile phone to book, one of 2019's hotel marketing tech trendsLooking to drive results for your business? Click here to learn more.


A client recently asked for some high-level insights into the hotel marketing tech trends available to drive more direct business this year. While this is a bit of a laundry list, the following offers a number of significant opportunities to help you increase your hotel direct business. Check out the list below and let me know your thoughts:

Make your website work. Obviously, most hoteliers at the chain and property level are making a big push for more direct business. Four areas worth investing in to help drive that direct business include:

  1. Improve your website's speed. Google increasingly pays attention to speed in its ranking algorithms. They've explicitly stated that in a blog post. The key takeaway: Slows sites simply won't rank. Guest behaviors show the same thing, with bounce rates climbing as page load times increase. We've reached a world where instant gratification isn't fast enough. Look at investing in a proper CDN and getting your tech team to improve your website's code to lower load times and improve the guest experience.
  2. Switch to HTTPS. Security represents another critical aspect improving ranking within search engines. Google Chrome now highlights insecure sites and data suggests that if you're site isn't using HTTPS today, you're hurting your ranking — and your opportunity for sales along with it.
  3. Ensure an outstanding mobile experience. Mobile accounts for more than half of all pageviews online. And Google split its index into two this year, ranking your site's mobile and desktop experiences separately. Given how many guests use mobile as their primary device when browsing and booking hotels, a poor mobile experience tells Google and guests alike that you're not interested in their business.
  4. Invest in content. Finally, when it comes to the web, content is, was, and always shall be king. A fast, secure, mobile-friendly web experience won't matter if your content doesn't help guests understand what makes your hotel the right choice for their next stay. Talk with your guest-facing personnel to understand the questions your guests ask most frequently, then invest in text, images, and video to answer those questions for your site visitors too.

Continue improving connectivity. Metasearch continues to grow as an option for attracting guests and driving direct bookings. Do your connectivity partners help you reach the right guests, not only on Kayak, TripAdvisor, and Trivago, but also on Google Hotel Ads too?

Don't just preach rate parity, practice it. Your guests often know more about your products, services, and, crucially, prices than many of your employees. They have more incentive to. After all, they're the ones taking — and paying for — the trip. And metasearch makes it even easier for your guests to find the information they need. Rate parity ensures your direct channels have an equal shot at converting visits to revenue. By the same token, rate disparity causes two problems:

  1. Guest might find a lower price for your property through a more expensive channel, and, even worse…
  2. They might find a different hotel altogether while shopping around.

Don't teach guests to shop around for a better rate. Provide clear and consistent pricing across your channels to connect with the guest and convert them to a long-term advocate for your property.

Become best friends with your data. Your guests provide you enormous amounts of data before and during their stay. Spend some time next year on getting that data into shape so that you can deploy AI, predictive analytics, and personalization more readily as those tools mature. OTA's and intermediaries such as Google have invested in learning all they can about your guests. It's time you do the same. Relatively low-cost tools like Google BigQuery and its competitors can help you get your data in one place and use it to better understand your guests. Make some time this year to get to know your data better so that you can spend next year getting to know your guests better. Obviously, you'll need to pay attention to privacy too — as Facebook's struggles over the past year illustrate. But, in either case, data matters this year and demands your attention.

Don't forget the on-property mobile experience. Many guests today would rather leave home without deodorant than leave their phones behind. Think about how you can help them put those devices to use to improve the guest experience and grow your business to boot. Already Expedia has taken steps to get deeper into the guest journey, such as with its investment in Alice. We're already fighting to keep bookings; don't cede the on-property experience to OTA's too. Whether through on-property messaging, mobile keys, or simply improved Wifi, look to integrate the mobile experience and the on-property experience for guests during each stay — and help them remember why you should be their first choice for their next stay too.

Now these are just of few of the hotel marketing tech trends you want to watch in the coming year. Of course, you need to remember that even the best marketing technology won’t save you from a bad hotel marketing strategy. But these should point you in the right direction and give you a great place to start.


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

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 we 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

By

July 24, 2018

6 Insights Into How Technology is Changing the Hotel Industry: Hospitality Marketing Link Digest

July 24, 2018 | By | No Comments

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


How is technology changing the hotel industry? Abstract view of hotel and tech

Late last year, we took a look at 10 tremendous insights into the trends driving hotel digital marketing in 2018. An overarching theme of the piece was the critical role that technology plays in driving changes in guest behaviors and hotel revenues, especially revenues of the direct booking kind. I suspect that’s a topic still near and dear to your heart and especially important as you start gearing up for next year. Given that, it seems fair to ask, how is technology changing the hotel industry? And how can you use those changes to benefit your hotel?

Over the next few weeks, I’m going to take a look at these questions in detail. But here are a few thoughts to get you started:

  1. Key Hotel Technology Stats Worth Watching. Obviously, there’s lots of change going on. How much change? Well, this set of 15 mind-blowing stats about digital trends in travel and hospitality from CMO.com offers critical insights. Among the most interesting?
    • Some 43% of guests use smartphones to research their hotel/accommodations — underscoring why it’s time to stop calling mobile a trend. To be fair, only 25% use their smartphone to book, which signals that the guest experience during booking still needs help. But let’s not forget: With most guests carrying one or more smartphones, tablets, and laptops during their journey, you host more devices each night than guests — and that’s shaping the way they plan, book and experience travel every single day
    • J.D. Power says that hotel mobile apps don’t get downloaded very often, and get used even less for check-ins/checkouts; but guests that use those apps are more satisfied — and more loyal
    • Data from Adobe suggests that half “…of travel and hospitality companies today are gathering and using real-time data”
    • Another Adobe stat says that fewer than one in five “…executives at travel and hospitality brands said they believe their company is a digitally mature organization.” That’s a huge benefit, because it suggests you’ve got plenty of runway to improve relative to your competition — at least if you choose to take advantage of it.
  2. It Ain’t Just About Technology. Sure, technology is important. But it’s secondary. It shouldn’t be a secret that great marketing technology won’t save you from a bad hotel marketing strategy. Your success depends not only on having the right tech, but on having an excellent strategy and effectively executing that strategy. It’s fair to ask, “how important is technology to hospitality marketing?” but if you’re focused solely on the tech, you’ve got your carts and horses the wrong way ’round.
  3. Guests Continue to Take Ownership of their Experience. PhocusWire put together a must-read piece that explains why hotel rooms belong to guests, not hoteliers . As you might imagine, guests have clear expectations of the experience they’re looking for each time they step into “their” room. The technology that they encounter — whether hands-on or through a front-desk agent or concierge — influences their overall guest experience. Guest will remember waiting to check-in, order room service, or schedule a spa treatment because your system is too slow. Similarly, Amazon launched a version of its Alexa system for hotels at HITEC this year, which is particularly interesting given that Booking.com says business travelers are ‘warming’ to chatbots. Your guests are getting accustomed to technology serving their needs. Is your service growing along with them?
  4. Want to Get There Fast? Plenty of Potential Partners Exist. Does all this talk of tech leave you terrified? Well, you don’t have to go it alone. For starters, Skift put together a great round-up of its top travel startups to watch, which can help you figure out the tools and tech to help you excel. While some aren’t yet ready for prime-time, entrants like the (somewhat) more mature Fornova, Journera, and MisterFly might fit nicely into your overall strategy and help your properties get ahead of the curve next year. And, of course, there are plenty of exceptional hotel marketing/distribution consultants and agencies out there who can help you put the pieces of the puzzle together to grow your business.
  5. Troubling Trend: Too Many Hotels Continue to Sit on the Sidelines. You’d think given the facts outlined above that hotel marketers would be racing to assemble that puzzle for themselves. But SiteMinder offers a very thoughtful report showing many hoteliers remain in a ‘holding stage’ assessing the best tech trends. That’s a shame, given how important technology is to your overall hotel marketing and distribution strategy. What are you waiting for? Don’t forget, the OTA’s surely aren’t in a holding pattern. Booking.com went shopping for more metasearch capabilities and landed HotelsCombined to go along with its earlier pickup of Momondo, Cheapflights, and Mundi last year, as well as FareHarbor this April. And Expedia has made a huge move into packages in just the past few weeks with its Add-On Advantage offering. This isn’t about the future. This is about what your guests experience — and expect — right now.
  6. Even More Change is Coming. Finally, don’t forget that the changes in hotel technology we’re all dealing with are just the beginning. Whether it’s virtual reality, augmented reality, blockchain, AI or something else altogether, the next major disruption is right around the corner. For instance, there are all kinds of reasons why AI will change hospitality marketing forever and why voice, VR, and AR might be more hope than hype in the next few years. Keeping on top of these trends matters. What’s most important is for hoteliers to stay focused on the benefits of digital marketing for their property, and to stay in touch with how digital changes guest expectations and behaviors. Because no matter how much technology changes the hotel industry, your guests will continue to expect a great experience. And that will never change.

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

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