While some experts ponder whether Google is ready to make an even bigger splash in the travel industry, a recent eMarketer study highlighted a big reason why the search engine giant is content with its current role. Digital ad spending by the US travel industry will reach $4.15 billion in 2014, a sharp increase over 2013’s numbers ($3.42 billion) that reflects the improving health of the overall US economy and rising profits in the industry. Continue reading
State of Digital recently released a Travel 360 report after collating the viewpoints and analysis of experts, thought leaders and key commercial players of both the hospitality and travel industries. The report aims to act as a marker of the level of integration between travel brands and the various online channels within digital marketing.
The key trend throughout this report is the idea that companies must be able to adapt their business and marketing models in an attempt to future-proof their businesses. Facilitating ongoing relationships and interactions with travel consumers has now become critical to survival.
The following are seven key points highlighted in this report that you should keep in mind going forward. They address challenges facing businesses today, and the holistic approaches and angles that will provide real value, strategy and insight to your brand.
1) Communicating a holistic brand message, consistently across all channels, is now very important to a brand’s long-term prospects. Consistency is crucial when planning your marketing strategy. It is important that your message is the same whether consumers see it on your website, in e-mail blasts, on a mobile site or from a third party site (OTAs, vertical marketing sites, metasearch engines, etc.)
2) Brands need to install a startup culture and nurture a digital experience that runs through the business. Word of mouth is a great way of advertising to dozens of people, but those numbers will not sustain your business over the long haul. “Rewriting the rule book” should not be seen as a negative experience, but rather as growing with the always-changing digital landscape.
3) Storytelling helps the digital travel industry to get the right customers in the right way. Honest, authoritative and local content, infused with quality storytelling is the future of travel content. The millennial generation is looking for a unique experience when planning a getaway. Capturing that audience by telling your own unique story will be an important marketing tool going forward.
4) Storytelling, marketing, PR and outstanding content will inspire loyalty and provide long-term success to a brand. Brand loyalty has recently taken a step back to deals when consumers are planning to travel. Re-establishing brand loyalty with quality content and marketing is a key to survival in the future.
5) There is going to be an increasing trend towards personalization and the creation of more unique experiences. As noted earlier, this is precisely what a new generation of traveler is looking for. Millennials are willing to spend the money if they believe their experience will be unique
6) Mobile is the biggest growth area in terms of sales. Recent projections by PhoCusWright predict that U.S. mobile bookings will almost double in 2014 to $24.3 billion, up from $12.3 billion in 2013.
7) Mobile has led to the rise of the ‘always connected traveler’ and the possibility of in-experience interactions with brands. Social media allows guests to provide feedback and interact with a company in a way that has nearly usurped the role of the on-site concierge. Travelers use their mobile devices for everything from getting directions to their accommodations, to finding a restaurant or tourist attraction during their stay.
To download and read the full State of Digital Travel 360 report, click here.
Extensive online travel agencies (OTAs) have played a large role in the hospitality industry for the past decade, but the outcomes have not necessarily been positive for all parties involved. They are a costly distribution channel for hoteliers, and have become a direct siphon for traditional travel agents.
The ultimate question to ponder at this time is what the next distribution giant will look like in the travel space.
John Burns, president of Hospitality Technology Consulting, says that he does not see much change in hotel distribution in the near future. Burns notes that OTAs have evolved over the past decade, incorporating loyalty programs into their business model, but these agencies are now fighting to compete with metasearch engines like Kayak and TripAdvisor as well.
What happens when a larger force, or a bigger name enters the travel arena? How will this affect the traditional travel agent and OTAs?
The Big Names
Whereas Burns sees the current model remaining unchanged in the near future, Bonnie Buckhiester, president of Buckhiester Management, believes that OTAs could eventually become the “little guys” in the travel industry as larger companies emerge.
Buckhiester believes that OTAs like Orbitz, Hotels.com and Booking.com could struggle to keep with what are being called “metamediaries” – companies like Google, Facebook, Amazon and Apple – entering the landscape and creating their own category of intermediary.
Competition with these major names will be difficult because of one key factor: money.
Buckhiester points out some eye-opening numbers when talking about market capitalization of these companies. Marriott, a well-known name is the hospitality industry, capitalized at $13 billion, while Facebook is $60 billion, Google is $300 billion and Apple is $400 billion. If these companies enter travel in a serious way, their presence will be overwhelming.
Where do Traditional Agents Stand?
Traditional agencies still have a very good relationship with the managed business travel sector of the industry, with hotels working hard to maintain these relationships.
Complex travel arrangements will also cause consumers to turn to a trusted travel agent when planning a trip, but niche sites including One Fine Stay, which books lodgings like castles, private homes and apartments, are trying to capture their own unique segment of the travel population.
Predicting the Future
Ultimately, it is up to the travel agents, both online and traditional, to continue to reinvent themselves and show their value. Average commission costs that range from 15-25% across the market may require adjustment in order to keep pace when big names like Google, Apple and Amazon enter the travel space in a serious way.
Are you getting the most out of your marketing campaign? Do you have a portion of your marketing budget dedicated to mobile marketing? Is it making a difference or are there improvements you could make to increase your ROI?
A recent Marketing Land column takes a closer look at the difference between push and pull mobile techniques, and how push mobile marketing may be the answer in connecting with guests both on- and off-site.
Defining Pull Mobile Techniques
When customers or consumers are proactively trying to attain the goods or information they need, this refers to a pull mobile technique. Accessing a responsive mobile website or mobile application allows a traveler to compare availability and rates, but this is not the only way they can acquire this information.
Effective Push Mobile Marketing Techniques
If pull mobile techniques involve a user-driven model, than it makes sense that push mobile techniques originate on the business side of things. It is important for companies to develop a conversation with consumers, hopefully allowing this to blossom into full-blown brand loyalty.
Mobile applications are a great way to send push notifications to travelers who have already downloaded your app, and getting users to download your app successfully is the first step. App alerts are a great way for brands to inform consumers of any new app updates or features, as well as notifying users of promotions or other activities.
One thing to keep in mind with app alerts is that all push notifications can be turned off. Consumers with dozens of apps on their smartphones tend to avoid being inundated with annoying alerts by disabling one or two push notifications. Depending on the smartphone, push notifications could be disabled as a default setting. Unless consumers are enabling this feature on their own, your message may not reach them.
Another way to reach consumers is the use of mobile messaging. Here are three keys to building the right mobile message for your brand:
-Decide whether your message requires a short message service (SMS) involving just text or a rich message service (RMS), which also includes some type of media (photo, videos, etc.) as well.
-Make sure your message is timely (90% of text messages are read within three minutes of delivery)
-Include a strong call to action. If you are offering a deal or promotion, include a deadline to increase the urgency of the consumer.
Regardless of what type of push mobile marketing your business is using, the key to its effectiveness will be a continued development of a more personal relationship with potential buyers. This will help to increase brand loyalty, and should result in future business down the road.
Auctions are a great place to find amazing values on goods or an object being sold to the highest bidder, but what happens when this model transitions into the hospitality and travel industries? A new hotel booking site, Bidroom, is attempting to re-create the current Online Travel Agency (OTA) model by introducing the reverse auction model.
You may be asking yourself, what is a reverse auction model? Well, instead of a group of travelers bidding on a vacation accommodation, these individuals are asked to fill out the basic details of their stay (arrival/departure dates, number of rooms required, etc.). This information is passed along to local hotels in real time, inviting them to provide their best offer, essentially bidding against other properties for a customer.
A 24-hour countdown clock helps both the traveler and hotel stay focused on making a deal. Typically, these prices are lower than those offered by big booking sites and hotels are receiving direct bookings in the process without a commission charge.
As if the bidding process were not innovative enough, Bidroom is attempting to wipe the slate clean by being the first to offer this model to travelers FREE-OF-CHARGE.
How can the company expect to make any money it the service is free? Co-founder Mark Bradshaw explained that because Bidroom is a platform, rather than a typical travel or booking agency, the running costs are much lower than those of a traditional OTA.
In the future, Bradshaw hopes to consider following the lead services like Gmail, Skype or Facebook, whereby small advertisements run alongside the content or the webpages. Ultimately, he expects to keep the core service free of charge.
Why the New Business Model?
Over the past decade, the presence of OTAs has grown considerably. Many hoteliers recognize their marketing benefits and find them to be a great way to fill rooms. However, high commission rates and a lack of loyalty from direct bookings make it a challenge to compete in such a busy online marketplace.
Bradshaw believes that if hotel prices through Bidroom are 10% cheaper than a traditional OTA, both customers and hotels will be better off, and his independent platform will grow.
Have you heard of StubHub and EBay? These well-known sites provide a secondary marketplace for buyers and sellers of valuable products. What would happen if there were a secondary marketplace for hotel rooms bought in advance, that need to be sold because of unforeseen circumstances? Welcome to the idea behind Roomer Travel.
Richie Karaburun, Roomer Travel’s United States Managing Director, was recently on the Emerging Market Trends Panel at the Hotel Electronic Distribution Network Association (HEDNA) conference, and he discussed the business model behind the startup.
Here is how Roomer Travel works: travelers who have booked, and prepaid, for a non-refundable room can put their room up on the site, where they can re-sell it to another person.
On the surface, there is some fear from hoteliers and room suppliers that “hotel scalping” will become the norm, creating a potential disruption in the hotel supply chain. For example, what is stopping a person from buying a room at $100 six months in advance, and then selling in later when the Best Available Rate is higher than the price originally paid – thus making a profit? Shouldn’t this profit be going to the hotel whose inventory is being re-sold rather than the customer?
Karaburun pointed out, the average discount they have seen on their platform is 37%. He claims this is a far cry from scalping, and more of a way to help customers with not having to eat the cost of the pre-paid hotel room when plans change.
The main goal of the company is to connect sellers – traveler who can no longer use their hotel reservation, but do not want to pay the cancellation fee – with other travelers who are willing to buy the reservation for them. This creates value for the hotels – which do not need to re-market the room and sell it for less (the hotel still gets the full price for a reservation). Hotels also have the opportunity to capture the incremental revenues (WiFI, minibar, etc.) which would be lost if the room is not re-sold.
Four Immediate Challenges Facing Roomer Travel
1) The true size of the market remains uncertain. Although Karaburun estimated that there are 80,000 hotel daily no-shows in the United States in an NBC News interview, this may be a slightly exaggerated figure. The key here is that not all hotels are offering a resale market option, and some of these rooms may not be non-refundable.
2) Unlike airlines, hotels allow name changes on a reservation now. If a consumer finds himself or herself unable to use a prepaid reservation, he or she can reach out to others using social media to see if anyone is interested in using a room.
3) Hotels may resist using Roomer if they believe it will have a negative effect on their revenues.
4) Simple convincing hotels to participate in this new marketplace will be a tough sell. Roomer could find it difficult getting branded hotels to participate. An easier angle to work may be independent hotels, but this reaches a limited consumer base.
As you have seen in many of our recent posts, a number of key trends and tips in the hospitality and travel industry focus on the expansion of multi-channel travelers. Everyone is traveling with a smartphone or tablet, and hoteliers need to recognize how important a tool these devices can be throughout the travel process.
The recent boom of mobile websites and applications allows travelers to book rooms with the click of a button. Now, because of a growing demand from tech savvy travelers, properties need to incorporate mobile check-in options to help guests avoid the front desk lines.
A recent Business Travel News article took a deeper look at what some brands and individual hotels are doing to make checking in an easier and faster process for travelers worldwide.
While check-in kiosks and other methods of avoiding the front desk line in recent years have become the commonplace at hotels, there has been a slow integration of mobile technology into this sometimes tedious process. There has been a greater adoption of mobile technology across some major hotel brands.
At the same time, some third-party technology suppliers are providing tools for hotels and distributors to offer mobile check-in.
Major Brands Getting Involved
Marriott Hotels will offer mobile check-in at all 500 of its hotels globally during the first half of 2014. Guests who are members can check in via the Marriott Mobile App from 4 p.m. on the day before arrival. When these guests arrive, their key card is waiting for them at a designated mobile check-in desk.
Hyatt Hotels and Resorts has a similar process at select hotels, with kiosks available for incoming guests to retrieve keys.
Another big name, Starwood Hotels and Resorts Worldwide, has taken a slightly different approach with nine properties currently piloting the Smart Check-In program. Guests receive a Starwood Preferred Guest Card and, on the day of their arrival, receive a text message telling them their room number. From this point, they can head straight to their room and use the SPG card as their key.
To learn more about third party technology suppliers that are providing mobile check-in options, and to read the full Business Travel News article, click here.
The third space describes the place where people meet outside of the home (first space) and office (second space). Engineering parts of your hotel as flourishing third spaces will play to your advantage for higher occupancy levels and hotel cache.
Whether you have heard the term “third space” before or not, it is something that should be given some thought going forward. Recent shifts in consumer behavior dictate that you fully understand this concept and its potential to enhance your property’s atmosphere.
The term third space was originally coined by the sociologist Ray Oldenburg in his book “The Great Good Place” to describe a public or neutral center for community building, civic engagement, intellectual discourse, peer encouragement and group validation.
Some examples of third spaces in your community may include cafes, markets, bazaars, pubs, bars, clubs shopping malls, barber shops, recreation halls and even post offices as long as they are designed correctly. Third spaces, in essence, are places where people can unleash their inner social animals by exchanging opinions, stories and theories to the benefit of everyone present.
Starbucks provides an excellent example of a third space. Over the past two decades, the franchise has experienced exponential growth thanks to superb products, but also because of the atmosphere the store exudes.
The vibe surrounding this java haven is not one of “grab and get out as quickly as possible.” Instead, Starbucks uses warmly colored furnishings and humble décor to encourage customers to sit and enjoy their beverages and snacks.
You may be asking yourself, why should I care about promoting a part of my property as a third space? Third spaces are almost as important as the home and the offices because they are the places that individuals frequent to enrich their lifestyles.
Working in the hospitality industry has to mean more than just looking at the numbers. Property owners and hoteliers should aim to nurture guests and offer them a common area to develop their own identities. This quality is not captured in accounting ledgers, but will certainly have an emotional impact on your guests. You will see this impact with increased loyalty and positive word of mouth.
Because more people are working from home – thus combining the first and second places – there is a developing desire to offset the monotony of a single space. Visiting a local hotspot, for example, can service the need for the external, novel stimulation. People want to be where the action is.
In addition to this tech-dependent trend (as digital communications have accelerated the merger of first and second spaces), neutral third spaces such as cafes, bars and restaurants are now much more likely to double as hosts for casual business meetings and interviews.
You have probably already seen some sort of shift in consumer behavior that corresponds to the rise in buying power of the Gen X and millennial generations. More surplus cash equals increased spending and more time allotted for public gathering, and both of these outcomes make these two demographics key proponents of the third space, especially as they continue to mature.
These groups are also most associated with Internet fluency, electronic communications and social media usage. All of these digital interactions are forms of social discourse and provide numerous platforms to speak out in this ever-increasing social world.
Smartphones and other mobile devices play a significant role in our collective culture. Any individual who is accessing the Internet for social discourse in a neutral setting is, in today’s standards, a third-space participant. They could be on their device anywhere, but they choose to be in, and contribute to, a social ambiance. With greater smartphone proliferation comes a greater need for third spaces.
It is your job to ensure that different parts of your property are optimized for a third space. It is not necessary to meet all of these standards, but the more you can check off, the better your chances will be or creating a hotspot in your hotel.
- Accessibility – Consumers must be able to find your neutral space, and that means making your restaurant, bar or lounge convenient for everyone. A spot in the lobby, within sight of the front desk and elevators provides maximum visibility, and appropriate signage helps consumers identify your space. Extended hours and a reduction of barriers (cover charges, membership requirements, dress codes, etc.) help promote belonging and equality of conversation.
- Ambiance – It is important to strive for an informal, unassuming manner in your overall décor. Excessively dim lighting and loud music do not allow guests to gather for work or casual purposes. Try to aim for a playlist that inspires a lighthearted spirit. Additionally, you can consult an interior designer to learn some more clever ways to induce a steady flow of conversation.
- Stylish yet Ergonomic Seating – Try to give your patrons comfortable, upright chairs positioned around tables large enough to spread out a few papers or laptops. An abundance of these set-ups allows a large group to congregate. It is also important to allow for a reasonable amount of people watching.
- Quality Food and Beverage – Good dialogue and a great experience can be enhanced by quality food, coffee, craft beers and mixology. The third-space lubricants of yesteryear were pints of ale. Today, you must weigh the positives and negatives or libations in your third space. Alcohol and food are not mandatory, but it can certainly help set the tone for a great atmosphere. Fascinating cuisine and cocktail choices can also make great conversation starters.
- Tech Support – People are not hanging out “alone” in the 21st century. Everyone has a device they are traveling with whether it is a smartphone, tablet or laptop. Power outlets should not be sparse or hidden, even if that means running a few extra wires around the place. If you are really looking to create a bustling area, make Wi-Fi free!
- Savvy Staff – The final main characteristic of a modern third space is the presence of regular patrons. Just like the hit TV show “Cheers” pointed out, sometime you just want to go “where everybody knows your name.” The wait staff at your third space provides the connective glue to nurture stead guests and convert first-timers into long-standing “regulars”. You cannot just hire anyone for this role. Staff members need to be socially smart, remember who regulars are, be thoroughly knowledgeable on all menu items and receptive to inducting newcomers by opening conversation.