2013 was a year full of tremendous growth within online distribution in the travel industry with meta-search engines, mobile bookings and social media all taking significant steps forward. However, hoteliers expecting similarly massive changes in 2014 may be in for a surprise.
While new technology and platforms of distribution may emerge suddenly, the overall distribution strategies should still be based on the channels that offer measurable ROI. Understanding the intricacies of each of the following channels is essential in developing a strategy that will be unique to your hotel.
Mobile and Same-Day Bookings
In the multi-channel travel space, mobile has become a major player. Mobile bookings doubled from 2012 ($6 billion) to 2013 ($12.3 billion), and that trend is expected to continue in 2014 with experts at PhoCusWright forecasting $24.3 billion in bookings made from these devices. In all, about $1 out of every $12 in travel bookings will be generated via mobile.
A rise in mobile users appears to be influencing business strategy and changing customer behavior. A recent Hotel Business Review infographic showed that 65% of travelers choose their mobile phone for same day hotel bookings.
Mobile applications will allow you to engage a greater number of potential customers and may allow you to increase your same day booking potential without falling pretty to heavy discounting in an attempt to garner these “spur of the moment” travelers.
Whether you hate them, or love them, Online Travel Agencies appear to be here to stay. These oversized companies have seemingly limitless resources that make them effective in reaching out to customers, often times in markets that hoteliers may find difficult to penetrate. Along with these positives, third party channels and other travel intermediaries are quick to adopt emerging opportunities to stay ahead of the market.
Although these channels may be among your least profitable thanks to outrageous commission fees (market averages range from 15 to 25%), they offer visibility and exposure like no other platform. The key in using OTAs is maximizing your revenue potential with room rates (i.e. selling lower rates to OTAs with lower commission rates, thus making these rooms more desirable).
On the surface, meta-search engines appear to be the perfect channel for distribution of your available rooms. The concept is simple – meta-search sites neutrally compare various travel sites and other sources to give travelers the best overview results of their requested search.
However, meta-search engines add an additional level of complexity to the system with a keyword bidding system. Essentially, these sites control the ranking of OTA and hotel websites within the hotel search results based on the value of bids each website has paid for the search keywords.
Larger OTAs have an advantage in this particular arena thanks to larger marketing budgets that allow them to outbid independent hotels and other properties. If you want to go the meta-search path, it will be important to invest time and resources in understanding the bid management process, or finding an intermediary that can do the keyword bidding for you.
Because of this modified pay-per-click model, you must evaluate the strength of meta-search sites as a traffic source and monitor the click-to-book ratio generated from it. If not used properly, these meta-search engines could be more costly than helpful to your site.
Direct Online Booking
In a perfect world, you would be generating all of your bookings and filling all of your availability through your brand.com website. Flashing back to reality, there is only one way to increase bookings on your own site: driving traffic to (YourBrandHere).com.
How do you drive traffic to your website? Try the following techniques.
1) Make sure your site layout is simple and user-friendly with logical navigation that allows guests to make bookings in just a few clicks.
2) Visual content is always a plus. Highlight your unique accommodations and use images to share a story of what a traveler can experience when they stay with you.
3) SEO management is a key to showing up on results pages for major search engines like Google, Yahoo and Bing! A picture may be worth a thousand words, but keyword-heavy content is king when gaining customers on the internet.
4) Using Google Analytics, or other analytics software, allows you to see where your site traffic is coming from. This will help you to develop customized marketing plans to attract these guests.
By effectively using some combination of these distribution channels, or all four of them if your property can afford it, you can optimize your online distribution strategy and fill your availability in 2014.