Image Image Image Image Image Image Image Image Image

Tim Peter Thinks

Tim Peter

By

March 21, 2017

Hospitality Digital Marketing and Distribution: Is it Time to Give Up?

March 21, 2017 | By | No Comments

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


Hospitality Digital Marketing and Distribution: Is it Time to Give Up?

I had a discouraging discussion with an outstanding general manager recently who complained that her property’s struggles with rapidly shifting guest preferences, an evolving distribution landscape, and ever-rising distribution costs – particularly in the form of OTA margins and increased search spend – had made it almost impossible to compete. While running her hands through her hair – or possibly pulling it out by the roots – she pleaded, “Why do we even bother? How can we possibly be expected to keep up?”

While its hardly a welcoming thought, maybe it’s worth asking his question: Is it time to give up? Should we just outsource all our marketing activities to OTAs? After all, they are fantastic at marketing and merchandising hotels online, arguably better than many hotels will ever be. Should we simply hand over responsibility for filling our rooms and place our focus elsewhere?

Um… no. In fact, hell no.

Now, let’s be fair. OTA’s are undoubtedly very good at what they do. That’s a fact. But that doesn’t mean for a moment that you can’t drive profitable business on your own. What we need to do is stop behaving like OTAs are our only option. Direct channels and email and search and ratings and reviews and a host of other time-tested tactics and strategies play important roles in delivering strong business results. The key is focusing on those channels that do that most effectively.

First, though, hotels need to be clear about their distribution strategy. To paraphrase NYU professor Clay Shirky, distribution once was a career. Now it’s a button. Online, the distinction between marketing and distribution is essentially non-existent. Once you add a buy button to any marketing message – email, search, display, metasearch, etc. – you’re really just one click away from the sale. And at that point it’s not a marketing channel; it’s a distribution channel. There are certainly some in the industry who will try to confuse you with fancy marketing terms, but the simple fact remains that marketing and distribution are inextricably linked online. You can – and must – measure exactly which channels work best for your business.

The most effective way to ensure that you’re thinking about distribution correctly – and getting the greatest benefit for your property – is to ask three simple questions about your marketing and distribution channels:

  1. Where do your guests find you ?
  2. Where do guests choose to book you?
  3. How much profit do you make from each of those?

Notice I’m not talking about revenue from these channels. It’s time to look past revenue and instead focus on profit. Recent data shows that distribution costs have outpaced rate increases, putting heavy pressure on your properties’ profitability. If you focus solely on revenue, it’s easy to miss the underlying costs impacting your business – and give too much credit to channels that aren’t actually helping you grow.

You may find that for your property, OTAs play an incredibly valuable role in driving profitability particularly during shoulder or slow seasons. That’s OK. As I’ve said before, there’s no need to make OTAs the bad guys here. However, what we don’t want to do is become so dependent upon them – particularly during periods where we can drive more profitable revenue through other channels – that we neglect direct business completely. Understanding which channels work for your property represents the first step in creating a marketing and distribution strategy that actually increases your hotel’s overall profitability.

After spending time digging into the data with my GM friend, we discovered several underutilized tactics driving fantastic returns that simply required greater attention. We also found a few areas that consumed lots of her marketing team’s time for very little benefit. It’s much easier to keep up when you’re only focusing on the areas of greatest return.

Outsourcing your sales and marketing to an OTA is certainly one approach to fill your rooms. And they still will play a role. But realistically many other options exist that can help you grow. The key is focusing on profitable revenue. After looking at the data, I asked the GM, “Is it time to give up?” Her response: “Absolutely not. It’s time to get to work.”

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

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: