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Tim Peter

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January 9, 2018

Why AI Will Change Hospitality Marketing Forever

January 9, 2018 | By | 2 Comments

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Why AI Will Change Hospitality Marketing Forever: Representative image of AI

Bill Gates once wrote, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” And when it comes to new technologies, many folks ignore both sides of Gates’ statement, only to end up looking silly later. Having said that, let me be clear: artificial intelligence — AI — is going to radically reshape hospitality marketing and our industry at large. Forever. And the companies that use AI effectively are closer to two years away from success than ten.

But to understand why AI will change hospitality marketing forever, we need a bit of context in more detail.

For many of us, our first exposure to AI in the real-world came when IBM’s Watson won “Jeopardy.” That was all the way back in 2011 and the Watson-powered travel startup WayBlazer followed in 2014. That puts us at least three to six years along Bill Gates’ 2 to 10-year curve. And, as with most technology, things speed up the longer they’ve been around. AI isn’t the future. It’s happening all around you right now.

For example, an insurance-industry startup called Lemonade just used AI to set a record for customer service, resolving and paying a claim mere seconds after their customer submitted that claim for consideration. According to Airnguru, Singapore Airlines is already applying AI to its marketing and customer service campaigns to improve profitability and performance. And like Singapore Air, Priceline and Expedia have both announced they’re testing AI-driven solutions to improve their customer service offerings too.

None of this is science fiction. I’m not talking about the “Star Trek” computer or the ship’s android, Data, answering every possible question and solving every possible problem. Those types of AI are called “artificial general intelligence” (AGI), and are probably quite a long ways away, if they’re even possible at all. I’m talking about AI used to solve very specific problems, called “narrow” or “weak” AI. Narrow AI is real. It exists today. In addition to Lemonade and Singapore Airlines, Apple’s Siri and Amazon’s Alexa represent real-world examples of narrow AI in practice.

More importantly, narrow AI represents to businesses today what the Internet represented in the late 1990’s: A green field of opportunity to reinvent how business works and how you’ll interact with customers in the coming years. As I see it, there are at least four categories where AI will impact your property in the next few years that you must watch:

  1. Search. Google has begun to use AI to determine the highest-quality pages within its search results and will increasingly depend on AI when choosing “the best page” to answer customer questions, especially on voice-driven searches where the search giant can only offer one or two responses.
  2. Analytics and measurement. Data is what makes artificial intelligence, um, intelligent. Machines can’t learn without a healthy diet of data to help them understand how to answer the questions their users pose. But AI’s natural affinity for data also makes it a powerful tool to interpret that information. As I once heard Ed St.Onge from Flip.to remark, “AI makes big data little.” Sophisticated technology players are using AI to comb through massive amounts of data and gain understanding about customers and their journeys that once simply would have been impossible to discover.
  3. Guest experience/personalization. Of course, that measurement then enables better, more personalized experiences to customers. That’s what WayBlazer is working to do, using AI to simplify complicated itineraries for guests. Priceline and Expedia have each announced they’re looking to use AI to improve customer experience. And since better customer experience usually drives greater revenues, that’s something we all should care about.
  4. Pricing. Finally, pricing information represents a very particular form of data that must account for seasonality, competitive pressures, macroeconomic effects, and guest preferences, among others. Today, ill-fitting algorithms may leave money on the table or sacrifice lifetime customer value in favor of a short-term perceived “win.” Over time, AI will enable smarter algorithms that account for all the variables – as well as those we don’t even recognize as factors today – and will present improved pricing alternatives to increase property revenues in both the short and longer-term.

Of course, most hoteliers aren’t going to run right out and start building their very own version of HAL. Instead, here’s what you can do to put AI to work for your property in the near-term:

  • Ensure you’re continuing to develop quality content for your property. One of the most common places you’ll encounter AI over the next few years is within search results on Google and others. As mentioned previously, Google is slowly introducing AI into its algorithm to determine the best answers in search. Over time, its AI won’t have to rely on links and keywords to determine the right answer to searchers’ questions; it will simply know. And, in this case, “the right answer” means a page with high-quality, highly-relevant content that answers guest questions effectively. Imagine asking Siri or Alexa where you should stay tonight, knowing it can only provide a single answer. Does your content help present you in the best possible light? Or does it leave your customers wanting more? If people can’t agree on the best possible answer, no machine ever will. Help make that machine’s job easier by providing all the information necessary to answer guest questions. Even better, this will help with how you perform in search today while also setting you up for the future.
  • Ask your vendors about their plans for using AI. Airbnb, Expedia, Priceline and others are already looking at how to use AI to improve customer experience and drive more business. Your vendors need to help you compete with those experiences and deliver on guest needs. While your vendors don’t need to have fully-baked solutions today, they must prepare for the future. If AI isn’t on their radar at all they’re creating problems for their business down the road – and for yours.
  • Stay on the lookout for potential threats from new entrants. Most hotel companies failed to recognize how new players would leverage the Internet fifteen years ago to attract, convert, and retain guests, an oversight whose effects we continue to feel today. AI represents a similar situation. While it’s far too soon to predict who will emerge as the dominant players – in the Internet era, Travelocity and Yahoo predated Expedia and Google for instance – it’s not too soon to keep an eye for who’s shaping the dialogue and direction AI will take. Pay attention to how AI continues to evolve to protect your property’s position in the longer-term.

Again, it’s easy to overestimate how much change we’ll see in the next two years here. But it’s far more dangerous for your business to underestimate changes over the next ten. AI isn’t science-fiction or fantasy. It’s reality. Companies have started to use AI to connect with customers and create memorable experiences. And, ultimately, isn’t that what we’re supposed to do as hoteliers? The machines won’t win. But the people who use those machines most effectively will. And that’s a prediction that’s always been true.

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:

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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October 4, 2016

Is Travel Marketing More Frustrating Than Ever? (Travel Tuesday)

October 4, 2016 | By | No Comments

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Is Travel Marketing More Frustrating Than Ever? Group of travel marketers staring in frustration at computer

The other day, I got into a conversation with Matthew Barker from I&ITravelMedia about his post over on Tnooz that says “Travel Marketing Is More Frustrating Than Ever” (or, as originally written over on Medium, his post “Travel Marketing is a Bitch”). When I tweeted a link to Matthew’s article, I added, “Yes and no, tbh,” which prompted Matthew to ask: “Curious. Which one of my three observations do you disagree with?”

The short answer to Matthew’s question is “None of those observations.” Every point that Matthew makes is spot-on and worth considering as you market your hotel or travel service. The long answer? Well that took an 8 tweet mini-tweetstorm to explain and you might find it interesting. So, without further ado, here’s my reply to the question, “Is Travel Marketing More Frustrating Than Ever?” Enjoy:

What do you think? Is travel marketing more frustrating than ever? Or is this just good old-fashioned competition? I’d love to hear from you. Drop me an email or add something to the comments and let’s keep the conversation going.

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

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July 26, 2016

3 Myths About Hotel Direct Revenue You Must Stop Believing (Travel Tuesday)

July 26, 2016 | By | No Comments

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


3 myths about hotel direct revenue that you must stop believingMy latest column for Hotel News Now, “The Most Capable Revenue Generator Is You,” looks at 3 myths about hotel direct revenue you must stop believing.

I’ve talked about one of the myths,

“OTA’s are evil,”

a number of times.

But I haven’t talked as much about the other two. As the column points out,

“…competing on price is a losing proposition. Full stop. Lowering rates should be your last resort. It hurts your ability to provide a better experience for guests and, in most cases, doesn’t work at actually driving demand.

For a 150-room property selling at $200 per night, every 5% discount — just $10 a night — away from your target ADR represents a topline loss of around $300,000 per year. And if you’re offering that $10 discount through OTA channels, you’re leaving even more money on the table once you’ve accounted for commissions and net rates. Which then makes it that much harder to surprise and delight guests with an amazing experience when you’re leaving yourself a few hundred thousand dollars less to work with.”

Additionally,

“…there are no “white knights” waiting to ride in and save the day. At least not the way most people think about it. Not metasearch (many of whom are owned by OTAs anyway), nor Google, nor Facebook, nor Apple, nor anyone else is going to solve your problem. They may each help solve for a piece of it, mind you. But ultimately, your success depends on doing a number of things well.”

Happily, the piece doesn’t just talk about myths; it also talks about how to win in this environment. These include:

  • Telling a great story about your property and your brand.
  • Focusing on guest experience at every point in the customer journey.
  • Improving your content to convey that story and that experience.
  • And others…

You can read the whole list here — and I hope that you do.

Winning direct revenue for your hotel matters. It’s critical to building your brand and your business for the long haul. It’s not easy, but it’s possible. All you need to do is stop putting your faith in these myths and focus on the needs of your guests for the long-term.

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:

Tim Peter

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April 19, 2016

Key Insights into Hospitality Digital Marketing (Travel Tuesday)

April 19, 2016 | By | No Comments

Key Insights into Hospitality Digital Marketing (Travel Tuesday): Hotel guest pushing book now button

As a follow-up to our four key elements of modern hospitality marketing from last week, you might enjoy the video from HSMAI’s This Week in Hospitality Digital Marketing featuring Loren Gray, Robert Cole, and our own Tim Peter from a couple weeks ago. The video covers a variety of mobile, social, and distribution trends and offers key insights into hospitality digital marketing for hoteliers all around the globe.

Be sure to check out the links to the various news items discussed during the video to learn even more about the trends shaping digital marketing for hotels. And enjoy:

As promised, here are the links from the video:

And if you’re looking to learn even more about how changing guest behavior shapes hospitality marketing, e-commerce, and distribution, 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 take a moment to review the slides from my recent webinar, “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

March 22, 2016

Why Hotel Marketing Depends on Personalization (Travel Tuesday)

March 22, 2016 | By | No Comments

Why Hotel Marketing Depends on Personalization

Why Hotel Marketing Depends on Personalization

When do you suppose your guests last had difficulty finding a place to stay when traveling? I don’t mean difficulty choosing a place to stay (though with all the options available to travelers today, that’s not always easy). Instead I’m just talking about finding an available room that met their needs for a given trip. It probably wasn’t that recently, right?

After all, the single greatest benefit the Internet offers travelers — whether using desktop, mobile, social, apps, what-have-you to plan their trip — is essentially unlimited inventory. OTA’s kicked off this new reality back in the early days of the web, providing a diverse store shelf stocked with every available option a guest could possibly desire. AirBnB and its fellow alternative accommodations providers have only accelerated the problem.

Sure, special cases exist — major events such as the Super Bowl, key industry conferences, that sort of thing. But by definition, these “special cases” hardly represent everyday occurrence.

Put simply, your potential guests can choose from more hotels and more destinations than they’ll ever have the opportunity to visit in reality. Guests face no real risk that they’ll ever not be able to book a stay that meets their needs. That’s good for guests, but not so good for you, making it harder and harder to separate yourself from the pack — to stand out on the shelf — and attract attention and action among your target guests.

Putting Your Data To Work

Here’s a significant statistic that underscores the challenge: according to Google’s Traveler’s Road to Decision study [PDF link], 85% of leisure travelers have no specific brand in mind when beginning to shop for travel.

We’ve taught guests for years to be comfortable with choosing whatever property meets their needs for that particular trip. And they’re taking advantage of the situation. As recently pointed out at the HSMAI Digital Marketing Strategy Conference, there are almost 3 billion loyalty memberships in the United States spread among its 350 million citizens. With almost 9 reward and recognition programs available to every man, woman, and child in the country, that’s really stretching the definition of “loyal” past the point of absurdity.

When confronted with this rapidly evolving, ridiculously competitive marketplace, the question you should be asking is “How can I cut through the clutter effectively and efficiently to show potential guests that my property is the perfect choice for their next stay?”

The answer? Put your data to work; use you hotel’s guest data to provide a more personalized experience to guests at every opportunity throughout their journey, pre-stay, on property, and post-stay.

OTA’s and intermediaries have embraced this approach in a huge way. The Wall Street Journal recently quoted Priceline CEO Darren Huston as saying, “…younger travelers don’t want to be bombarded with choices but prefer hotel searches closely tailored to their profiles.” A regional Expedia executive claims the company has invested more than £500 million researching how to apply data to guest experiences. And I strongly suspect at least one of the reasons behind AirBnB’s rapid rise has less to do with the quality of the experiences the reservations platform offers, and much more to do with the fact that guests can choose precisely the style of accommodation that suits their specific stay.

Make Your Business Stand Out

Put simply, you need to embrace this approach, too. Data-driven personalization is no longer a “nice to have;” it’s a need. And right now. It’s time for you to take a look at whether your people, platforms, and processes are ready to provide a more custom, personalized experience for your guests — or risk losing guests to those that do.

Though it may seem daunting, you can definitely start small. In fact, that’s almost certainly the smartest approach. It’s more important to actually start moving in this direction than sitting on the sidelines until it’s too late. Not sure where to begin? Here are a few ideas to set you up for success:

  • Take a good look at how you, your team, and your vendors currently collect and use guest data. What data do you already have, how are you using it, and what data do you still need to present a more personalized experience to your guests at the various steps in their pre-stay, post-stay, and on-property experiences?
  • Explore options for improved use of your data to enhance the guest experience. Using data you’ve already got, run a simple test, providing a more personalized experience at just one step along their journey.
  • Measure the results from your test then incorporate learnings into your next campaign or customer touchpoint.
  • And perhaps most importantly, start training staff on the appropriate use of guest data. Guest privacy and data protection really matters. Your team needs to know how to treat guest information as the critical business asset it represents — and to respect guest privacy as they should.

Your guests have lots of options for where to stay. That’s clear. What’s also clear is that you need to begin offering a more personalized experience if you’re going to stand apart and compete in an overcrowded marketplace. Your guests have many options here. You have just this one. And that makes your choice pretty clear too. Embrace the choice and employ your data to improve your guests’ experience — and to improve your business results.

Learn More About Hospitality Marketing, E-Commerce, and Distribution

If you’re looking to learn even more about how changing guest behavior shapes hospitality marketing, e-commerce, and distribution, 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 take a moment to review the slides from my recent presentation, “Maximizing Data to Put Personalization to Work for Your Property” 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:

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