ATM Special: Getting ahead online

Getting to grips with technology is no easy task and often by the time you have managed to catch up, it races ahead again. No industry better illustrates this continual battle than hospitality.

Whether it is online review sites, mobile check-ins, internal revenue systems, GDS, social networking or gaming, there really is nowhere to hide for the hotelier.

With this in mind, Arabian Travel Market has made technology a major focus for this year’s instalment of the show — dedicating a whole theatre to the topic with a packed schedule of seminars and talks from tech experts.

Hotelier caught up with some of the technology leaders to find out how hoteliers can overcome the many challenges the sector presents and how to embrace the multitude of opportunities it offers.

What became immediately clear is that many companies have stood still while the environment in which they operate has moved on.

CEO of Evision Worldwide, Vikram Singh, who is heading the ‘Developing Your Hotel’s Online Revenue Optimisation Strategy’ session at ATM, believes hotels are “usually focused on the wrong things, putting short-term gains ahead of long-term strategy”.

“Guests are getting smarter about researching and buying travel, but hotels are not keeping up (Expedia is). Hotels need to stay educated on how the online travel industry and their own guests are evolving. If they can’t do this, getting direct bookings will become more difficult,” he asserts.

“Also, there are still a lot of hotel e-commerce managers that don’t pay enough attention to their own website stats — basic information that will help them determine their marketing performance, growth potential and new/emerging markets such as distribution and geographical markets.”

Singh believes that not enough effort is being made to understand how online marketing works, adding that North America has been online marketing for more than six years, but the companies there are still doing the same things they did six years ago, while consumers have changed their buying habits.

Considering he has worked with one client who saw an 800% increase in revenue, because he had been previously doing “the wrong things for a very long time”, it is clear those not paying attention need to be taking a closer look at online.

“Their understanding of search engines, social media and OTAs (online travel agencies) is flawed to a point where channels that should work closely together are being managed by different departments or vendors,” he continues.

“Hotels basically made the decision to give up 20% to 30% to OTAs instead of doing the work themselves. This mentality is what opened the doors for a wealth of companies to come in and grab a big slice of the travel industry pie — and it’s not just the OTAs.”

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Potential challenges
Frommers Unlimited director EMEA, Giles Longhurst, who is taking part in the social and mobile session, says you could suggest that filling your hotel has never been so easy in terms of routes to market, but managing yield while remaining competitive is key.

“The biggest challenges hoteliers face in marketing themselves online is the number of distribution channels they need to manage and optimise their business for,” he says.

“Hoteliers have always needed to juggle occupancy levels against room rate and this has only become harder with the combination of GDS distribution models, OTA demands, direct marketing via websites, mobile, newsletters etc. and now the group deals and flash sale sites.”

Google’s industry head travel for the Gulf, Marie de Ducla, who will be leading a session on Google at ATM, says the biggest challenge for hotels has been summarised in one sentence in the McKinsey study about the travel industry published in February 2012.

“Travel suppliers must understand that the customer experience not only begins before the time of sale — and even before the time of search — but extends after purchase and travel.”

De Ducla explains: “Travellers have online access to an abundance of information from any device at any time. Our studies have shown that users search heavily before making travel decisions.

“For example, users visit an average of 14 websites before booking a hotel room* and more than 36%** of travellers have visited social media sites prior to making a travel reservation.

This means that the search phase (which includes search engine results, browsing travel websites, visiting travel reviews sites and reading social recommendations) is a very strategic phase where hotel (chains/operators) can really make a difference in influencing choices for travellers who haven’t made their decision.”

De Ducla believes that for hotels to be efficient, they have to find the answers to two questions: how to make their offer more visible and relevant in the search phase, and how to provide travellers browsing online with the best possible user experience once people are on their website, or mobile site.

Welcoming websites
One person who is passionate about the user experience on travel websites is Paul Richer, senior partner of travel technology consultancy, Genesys, who will be running a session called ‘Winning Online’.

Richer follows de Ducla’s reasoning and adds that there are two main challenges when a potential customer reaches a hotel’s website.

“The first is to convey sufficiently compelling information about the hotel so that the potential customer is persuaded to book,” he explains.

“This should include all the text information, images — perhaps photographs and video — that the potential customer will wish to see. The second challenge is to implement a booking system that is easy-to-use and puts no obstacles in the way of the customer.”

While these challenges may sound simple to overcome, Richer warns “there is plenty that can go wrong”.

“I have seen hotel websites that have lacklustre images, for example, room shots that are yellow from tungsten lighting, so looking very old, videos that are amateurish and boring and a navigation structure that makes it difficult to work one’s way through the information.

“Booking processes can easily become too complex, for example, presenting a bewildering array of room types and board plans,” he adds.

Of course all of these lessons now need to be transferred onto mobile sites as the rise of internet usage on the go is quite simply meteoric.

“On average, 73% of business travellers and 52% of leisure travellers own a smartphone***,” de Ducla explains. “The mobile queries relative to the hotel industry are rising very fast and in some countries are already standing for 20%****of the queries.

“Mobiles are often used to book a hotel room especially for last minute bookings, so it’s important for hotel chains to provide them with the best user experience with a mobile-optimised site.”

She adds that those that don’t have a mobile version of their website, should at least have ‘click to call’ ads that allow potential customers to call the hotel or call centre directly.

“By 2014, it is predicted that there will be more users accessing the internet from their mobile device than on desktop, and with the progressive adoption of 4G, the speed of internet on mobile phones will be as fast as high-speed broadband internet is on a desktop computer today.”

Allowing customers to access hotels through map-based user journeys is one way for hoteliers to immediately make an impact on their online mobile presence.

“This now forms a substantial part of the research process across the whole of the travel industry, but especially within hotel booking,” Longhurst explains.

As well as providing local information and building social communities, Longhurst believes that hotels must constantly engage with their customers “to ensure they remain loyal”.

Furthermore, hoteliers should be monitoring the competition while delivering a unique personality through communications, he asserts.

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Getting it right
While the experts agree that there is still a great deal more hotel companies can be doing to embrace the opportunities offered by technology, there are some that are making strives forward.

“There are a few brands and individual properties that are starting to wake up and take matters into their own hands,” asserts Singh.

“Over the past five years, the major hotel brands have choked their individual properties by setting too many restrictive rules and regulations for online marketing.
Now they are starting to realise that each market is going to have to customise their strategy to meet the needs of their target consumer — so, they are starting to loosen the reins a little.”

Singh believes Starwood is a great example of a hotel group that gives individual properties some room to market themselves effectively, and cites IHG as a chain that is “starting to make some great moves for both the brand and individual properties”.

Starwood Hotels & Resorts vice president marketing Europe, Africa & Middle East (EAME), Steven Taylor, says the company is embracing the evolution of the online world: “Our branded online channels have seen fantastic growth over the last few years.”

“Social media has been placed at the very core of our organisation to ensure that we are delivering value to our guests,” he continues.

Starwood currently boasts an impressive 1.5 million Facebook fans and has recently launched the new ‘state-aware’ SPG iPhone and iPad application to enhance personalised guest experiences.

Taylor admits it is a challenge to keep on top of an online world that is constantly evolving; but that “huge opportunities” makes it worthwhile.

In fact Starwood has repositioned its marketing budget so that 75% of total spend is on digital media.

But he is quick to add that it is not just a case of throwing money at online to make it work.

“Engaging guests through social media isn’t simply a case of repositioning budgets. Social media has been placed at the very core of our organisation to ensure that we are delivering value to our guests throughout their stay,” he says.

“We continuously review our education and training structure, and internal communication to ensure we take advantage of the opportunity that social media represents.”

Starwood’s mobile revenue has increased by more than 300% year-over-year. It has also noted that the patterns of travellers using mobile devices to book are markedly different from traditional web bookers.

“For instance, two-thirds of mobile bookings are within 24 hours of the stay, triple that of web bookings. Mobile represents the next paradigm shift for marketing and consumer engagement and we plan to be at the forefront of this trend,” Taylor adds.

The future
By the time the ATM sessions are over, there will no doubt be a new technology trend that everyone has to get to grips with, but there are some issues that hoteliers must be addressing now to be relevant in the future.

Singh believes that websites will be getting smarter by beginning to segment the guests that visit and serve them more targeted content. “This is important because personalised search results will deliver much more targeted search traffic than ever before,” he adds.

Longhurst says the battle for customer retention is going to “really hot up” over the next 12 months.

“Hoteliers need to work even harder to win and retain customers, but now they have so many more tools at their disposal,” he says.

“They have always had personal contact with their customers during their stay but now they can engage with them before and after their trip. So mine your database of customers and communicate with them in the most relevant ways to build long-term brand loyalty.”

For Richer, the exciting trend that is being driven by the widespread consumer take-up of mobile is very last minute bookings.

“Hotels will increasingly have the opportunity to fill those last few empty rooms, maybe within minutes of the customer arriving,” he explains, and in doing so brings up the topic of mobile technology again.

Mobile technology appears to be the area set for the largest amount of growth and, while it is still in its infancy, those who are already testing and researching mobile capabilities will be ahead of the game.

After all, with technology, it’s the only place to be.

Singh’s top tips to increase revenue
1.Do strategy first, marketing later.
2.Make analytics your best friend.
3.Constantly improve your website’s usability.
4.Understand that good content is the key to driving the right traffic and then converting that traffic on your website.
5.Test often and fail quickly.
6.Less meetings… more action.