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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

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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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August 1, 2017

8 Insights into OTA’s, Personalization and Your Overall Digital Strategy: Hospitality Marketing Link Digest

August 1, 2017 | By | No Comments

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8 insights into OTA's, personalization and your overall digital strategy: Man reading the latest OTA and hospitality digital strategy insightsHey, Big Thinkers! Hope you’re having a fantastic day. Don’t miss these 8 insights into OTA’s, personalization and your overall digital strategy as you gear up for the rest of the week, OK? Enjoy:

  1. There’s been a lot of discussion the last couple of weeks around the current OTA vs. hotel brand dust-ups. First, Hotel Marketing published a pair of pieces that claim “New Research Shows OTA Consolidation Harms Consumers” and “OTA Bookings Linked to Lower Guest Satisfaction.”
  2. Tnooz followed that up with “OTA Or Hotel Direct – Putting The OTAs View.” (Full disclosure: That Tnooz headlines continues to bug me. I thought about rewriting it a few times, but it’s general incoherence mirrors the incoherence of the OTA’s argument on this so it felt appropriate to leave it as is.)
  3. Speaking of the incoherence of the OTA’s argument, I took a long look at OTA claims in detail in this post, “OTA’s vs. Brands: OTA’s Say Hotel Companies Are Just As Bad for Consumers as… OTA’s?” This kind of griping and sniping between OTA’s and brands is nothing new—see OTA’s vs. Chain Brands: Expedia Comes Out Swinging and Expedia’s Accelerator Program: A Wolf in Wolf’s Clothing for just two examples—and aren’t likely to end anytime soon. But I still argue in favor of a “fair and balanced approach” to managing your OTA relationships—and expect I’ll continue to do that until someone gives me a good reason to switch. The only thing I would argue is that you should approach OTA’s the way male black widow spiders approach their potential mates: carefully.
  4. All that said, there’s a lot you can learn from OTA’s, as BookAssist points out in “Learning from the Giants: How Booking and Expedia Build Their Traffic Online.”
  5. Shifting gears a bit, eConsultancy has a fantastic piece that explains “How Six Travel & Hospitality Brands Use Personalization to Enhance the Customer Experience.”
  6. Personalization for hotels remains near and dear to my heart, as you can read all about in “6 Stellar Insights into Personalization for Hotel Marketing” from the Hospitality Marketing Link Digest series and in
    “Why Hotel Marketing Depends on Personalization.”
  7. With all the changes hotel marketers have to cope with every day, it’s fair to ask “Hospitality Digital Marketing and Distribution: Is it Time to Give Up?” As you might expect, I’d argue “no.” Be sure to read the whole article though to see why.
  8. And, finally, since you’re not likely to give up (and good for you!), check out these 7 Must-See Posts Highlighting How to Market Your Hotel in the Future also from the Hospitality Marketing Link Digest series as a way to round out your knowledge of OTA’s, personalization and your overall digital strategy. You’ll be glad you did.

If you’re looking for even more hospitality marketing goodness, you might also want to take a moment to review the slides from Tim’s recent seminar, “Digital Marketing Directions 2016: The Key Trends Driving Your Hotel Marketing Next Year” here:

Finally, you will definitely want to check out some of our past coverage of the mobile, local, social web and how to make it work for your hotel, including:

Tim Peter

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July 20, 2017

OTA’s vs. Brands: OTA’s Say Hotel Companies Are Just As Bad for Consumers as… OTA’s?

July 20, 2017 | By | No Comments

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OTA's vs. Brands: Booking.com and Expedia So the battle of OTA’s vs. brands just keeps getting weirder. The Travel Trade Association (TTA), which represents Expedia, Priceline, and TripAdvisor (as well as Sabre, Amadeus, Travelport and others[1]) responded to the recent AHLA report claiming OTA’s harm consumers by suggesting—and, honest to God, I’m not making this up—that hotel companies are just as bad as they are.

The AHLA report claims that Expedia and Priceline control about 95% of “the online travel market” and that these travel search giants mislead consumers about pricing, availability and a host of other relevant information. The biggest problem from AHLA’s point of view is that most guests don’t realize how much consolidation has limited the actual number of options available to guests when booking hotels online. The TTA’s Stephen Shur acknowledges the point when he tells Tnooz,

“The Federal Trade Commission in a hearing last year testified to Congress that they have no records of consumer complaints on these issues. We checked with the major consumer groups here in the United States, such as Consumers Union, National Consumers League and others, and these issues don’t even fall on their radar. The only place you’re hearing about hotel booking scams is from the hotel lobby.”

Tough to complain about something you don’t know exists, though, amirite? (Also, Is it just me or do you love the “hotel lobby” double entendre there? Just me? OK. Moving on…)

Odder still was Shur’s choice to highlight the number of brands held by six major hotel chains in the US (Choice, Hilton, Hyatt, IHG, Marriott, and Wyndham) noting that they own 10 or more brands each, with Marriott carrying a whopping 31 brands in its portfolio. Except, here’s the thing. They’re comparing apples to orangutans. Brands does not equal market share.

So, yes, those 6 chains do each own a whole bunch of brands. But their collective share of global room inventory is less than 30%. Even with consolidation, Marriott’s marriage to Starwood granted the combined hotel powerhouse only 8.3% of global room supply. Big, sure. But not outrageously so. And if you add in major players like Accor, Best Western, and Carlson Rezidor to the Big 6 named by Shur, total combined share of rooms climbs all the way up to… 34.8%. Again, that’s hardly an anticompetitive distribution when spread across nine separate companies. This data shows the full story:

ChainRoom CountRoom ShareProperty CountProperty ShareOwned Properties% of Properties Owned
Marriott1,200,0008.3%6,1613.9%220.36%
Hilton812,0005.6%5,4003.5%1412.61%
IHG767,0005.3%5,0283.2%80.16%
Wyndham697,6074.8%7,9235.1%20.03%
Choice516,1223.6%6,5144.2%00.00%
Hyatt171,0001.2%6570.4%436.54%
STR Hotel Industry Totals14,500,000100.0%156,000100%N/AN/A
Source: All data retrieved from their respective company’s 2016 annual report or, when not available, from publicly-stated information. STR data retrieved from STR Hotel Census Database. All data as of July 19, 2017.

Now let’s not forget that the two major OTAs also sell pretty much all of these companies’ inventory, as well as a hefty chunk of the remaining 65% too. So I don’t think they’re making the argument they claim to be when criticizing the hotel companies.

The OTA’s make a much stronger argument by the way when they cite Phocuswright data showing they outsell hotel brands by only a few billion dollars, controlling 54% of the market compared to suppliers’ 46%. Except if two companies really do control 95% of that 54% (or, more simply, 51% of the total), as AHLA claims, that’s a big frickin’ deal. Here’s why.

The vast majority of the hotels within each of these chains are franchised. They don’t have to stick with the chain if they don’t want to.[2] If you’re a hotel owner carrying a flag from one of those 6 large hotel chains and aren’t happy with the value you receive from said chain, you have a ton of options available to you. You could dump your current flag and instead:

  1. Switch to your original chains’ soft brand(s)
  2. Go to one of the other 5 chains the TTA calls out, either carrying one of their flags or using one of their soft brands
  3. Go to another chain outside that original set of six (Accor, BW, Carlson Rezidor, Magnuson, etc.)
  4. Go to one of their soft brands, or, finally,
  5. Skip the whole thing and fly independent (potentially affiliating with still other soft brands like The Leading Hotels of the World, Preferred, Small Luxury, etc.—or not—as you see fit)

I don’t know about you, but that feels like a pretty good set of options for today’s hotelier.

On the other hand, if you’re unhappy with Expedia, you could sell your inventory on Travelocity instead. Oh… wait. Expedia owns them. OK, how about Orbitz? Nope, Expedia owns them too. Hotels.com? Also Expedia. And so on. The landscape on the Priceline side isn’t any better, with Booking.com, Agoda, Kayak, Momondo, and the company’s flagship Priceline brand among its guest-facing presence. And these two represent probably 51% of all reservations made online if AHLA’s numbers are right.

Hmm… remind me again who’s better positioned to harm consumers and hotel operators?

Does any of this automatically prove that the OTA’s are evil? Of course not. As I’ve argued repeatedly, OTA’s can represent a reasonable option for reaching guests you’re not able to reach on your own.

What it does prove is that the OTA’s aren’t so great at making an argument about who’s the big bad wolf here. Just like your mom probably told you as a kid, the OTA’s may find that when they’re pointing a finger at the evils of industry consolidation, the rest of their fingers end up pointing right back at themselves.


  1. I’d be curious to know how Sabre and Amadeus feel about this approach, given the amount of effort they’re putting into wooing major hotel chains as clients for their CRS products. ^Back to article
  2. To be fair, this ignores the challenge of getting out of any existing franchise agreement, which can be onerous. ^Back to article

If you’re looking for even more hospitality marketing goodness, you might also want to take a moment to review the slides from Tim’s recent seminar, “Digital Marketing Directions: The Key Trends Driving Your Hotel Marketing Next Year” here:

Finally, you will definitely want to check out some of our past coverage of the mobile, local, social web and how to make it work for your hotel, including:

Tim Peter

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August 28, 2016

7 Surprising Hotel Marketing Insights: Hospitality Marketing Link Digest

August 28, 2016 | By | No Comments

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7 Surprising Hotel Marketing Insights: Hospitality Marketing Link DigestHey, Big Thinkers! Hope you’re having a fantastic late summer weekend, enjoying some quality time with friends and family. As you get ready for a big week ahead, be sure to check out these 7 surprising hotel marketing insights from the past week. Enjoy:

  1. Tnooz talks with the founders of ALICE, who think hotel operations could learn from innovation in other industries. (I’ve met with company founder Alex Shashou and agree they’re onto something here).This exchange highlights their point of view on why service matters brilliantly:

    “Alex: Have you ever given a TripAdvisor review?
    Tnooz: Yup.
    Alex: Did you write about your booking experience?
    Tnooz: No, I wrote about the service at the property.”

  2. Fox News makes its first appearance here in the Link Digest, asking “Are Travelers Losing the Hotel Booking Wars?” Um… yes. Yes, they are.
  3. Why are travelers losing the hotel booking wars? Well, for starters check out “OTA’s vs. Chain Brands: Expedia Comes Out Swinging.”
  4. If you want to help travelers win instead — to say nothing of your property — be sure to check out these “3 Myths About Hotel Direct Revenue You Must Stop Believing.”
  5. You’re not just competing with OTA’s anymore, of course. According to HotelMarketing.com, “Airbnb Is On Pace to Become World’s 4th Largest Online Travel Company.” That’s worth paying attention to as we go forward.
  6. Speaking of Airbnb, this recent post asks “What Business Is Airbnb In? Hotels? Or Hospitality?” Check it out when you get a chance to see why that matters for your property.
  7. Finally, don’t miss these “8 Outstanding Insights: the Top Travel Marketing Posts of Summer, 2016” and these “21 Can’t Miss Travel Marketing Insights: The Top Posts of 2016 (So Far)” for more insights to help you manage your business heading into fall.

If you’re looking for even more hospitality marketing goodness, you might also want to take a moment to review the slides from my recent seminar, “Digital Marketing Directions 2016: The Key Trends Driving Your Hotel Marketing Next Year” here:

Finally, you will definitely want to check out some of our past coverage of the mobile, local, social web and how to make it work for your hotel, including:

Tim Peter

By

August 14, 2016

10 Great Hotel Direct and OTA Distribution Posts: Hospitality Marketing Link Digest

August 14, 2016 | By | No Comments

Want to drive more direct bookings to your hotel? Click here to learn more


10 Great Hotel Direct and OTA Distribution Posts: Hospitality Marketing Link DigestHowdy, Big Thinkers! Super hot here in the wilds of New Jersey today, so I’m going to skip the setup and get you straight to this collection of these 10 great hotel direct and OTA distribution posts from the past week. Enjoy:

  1. Leading off, we’ve got these “3 Myths About Hotel Direct Revenue You Must Stop Believing” for you. Great stuff.
  2. You also won’t want to miss these “8 Outstanding Insights: the Top Travel Marketing Posts of Summer, 2016.” Definitely worth your time.
  3. One of the reasons you’ll want to pay attention to the tips outlined above comes from Business Travel News, who report that “Hotel Occupancy Flattens Across Global Regions.” It seems like the good ol’ days are starting to come to an end. Most of the RevPAR growth in the past year has come more from rate than occupancy. While that’s a good way to gain growth, it’s also a sign that demand for rooms is beginning to fall, the supply of rooms is increasing, or, most likely, a bit of both. Definitely time to get ready for a tougher market ahead.
  4. Inc. Magazine looks at “3 Travel Hacks Millennials Use and You Should Too.” Interesting insight into how millennials — and many consumers, really — actually shop for travel and well worth your time.
  5. In other less-welcome news, HotelMarketing says that “In Search of Hotels, More Travelers Turn To OTAs Than Hotel Websites.” That’s not great, really.
  6. EyeForTravel looks at “OTAs vs Hotels: Why ‘An Old and Tired Story’ Keeps Running.” Well, for starters, there’s things like this: “OTA’s vs. Chain Brands: Expedia Comes Out Swinging.” Though, I suppose, we also ought to consider “A Fair and Balanced Look at Balancing Direct and OTA Business” too. OTA’s have their role to play in your distribution strategy. It’s your job to ensure you use them correctly.
  7. Before moving on, Director in the UK explains how “Booking.com Envisions the Future of Travel.” Absolutely something you should check out, if for no other reason than “know your competition.”
  8. And on a highly related note, TheStreet says “Here’s Why TripAdvisor Is Becoming the Facebook of Online Travel” that you should take a look at too.
  9. If you’re looking to grow your direct business, these “5 Helpful Hospitality Marketing Stories for You” from our Hospitality Marketing Link Digest are worth a look.
  10. And, finally, pay attention to these “Four Key Elements of Modern Hospitality Marketing” to help you reach and attract more guests to your hotel. You’ll be glad you did.

If you’re looking for even more travel marketing goodness, you might also want to take a moment to review the slides from my recent seminar, “Digital Marketing Directions 2016: The Key Trends Driving Your Hotel Marketing Next Year” here:

Finally, you will definitely want to check out some of our past coverage of the mobile, local, social web and how to make it work for your hotel, including: