Here is how hoteliers replied to our question regarding their ecrm programs:

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1 August 2007 What Ht Internet Marketing Tpics are n the Minds f Hteliers? A Mid-Year 2007 Review as Hteliers Enter int Budget Planning Seasn By Max Starkv and Jasn Price Midway thrugh 2007, hteliers are already planning their marketing budgets fr In the past few mnths, HeBS has been bmbarded by hteliers requesting infrmatin n sme f ur favrite tpics, including the latest trends in Web 2.0, paid search marketing, ecrm, web analytics and ROI tracking, marketing strategies, technlgy acquisitin, and ther tpics that influence nline marketing budgets. We have cllected and summarized these cmmentaries belw. Refer t this article as yu prepare yur wn marketing plan and budget fr H s p i t a l i t y e B u s i n e s s S t r a t e g i e s, I n c. 1 4 E a s t 6 0 t h S t r e e t, S u i t e N e w Y r k, N Y P h n e : F a x : W e b : w w w. h s p i t a l i t y e b u s i n e s s. c m

2 Backgrund: 2007 has been a year f cntinuing grwth in the nline hspitality industry. Onging technlgical advances (including mbile technlgy, analytics and cnvergence technlgies), Web 2.0 initiatives, custmer lyalty, website design, cnsumer generated media, web analytics, and the pwer f custmer reviews in the travel planning prcess, are just sme f the tpics that have dminated articles and discussins in nline marketing in hspitality. Hteliers are quickly entering the 2008 budget planning seasn. What ht tpics d yu, the htelier, need t take int accunt when cnstructing a cmpetitive nline marketing budget and strategy? Are yu keeping up with yur peers? The Rle f ecrm in Online Marketing The Internet has transfrmed Custmer Relatinship Management (CRM) in hspitality. A large majrity f yur custmers are planning and bking their htel stay nline. In fact mre than tw-thirds f them will d that this year. Hw d yu nurture, grw and retain yur custmer base when the cmpetitin is just a click away? Hw d yu prepare fr the future in this very dynamic and transparent nline envirnment? Hw d yu beat the cmpetitin fr the mst lucrative custmer segments? By building a cmprehensive ecrm strategy and creating interactive mutually beneficial relatinships with yur custmer, any htel cmpany can ensure its survival in this new envirnment. On average apprximately 2% f htel website visitrs will make a bking while the ther 98% will read, scan, and then leave yur site. Withut a cmprehensive CRM strategy in place hteliers will never knw much abut their website visitrs, bkers r lkers. Even if Internet users bk n the htel website and hteliers draw sme infrmatin ut f them, the blending f business and leisure custmers makes it hard fr htels t differentiate wh they are and fllw up with apprpriate marketing messages. Many hteliers knw next t nthing abut their custmers and their travel planning and purchasing behavir. A Custmer Relatinship Management strategy and the rise f lw cst ecrm tls t help supprt this strategy have helped many hteliers address the questin Knw yur custmer. Many f these lw cst tls can interface with the PMS, and when dne right they allw fr high quality data gathering either nline r at check in. D nt underestimate the value that a CRM strategy can prvide. Have yur strategy in place and then find a technlgy that will fit this strategy. Rewarding lyalty is ne way t knw yur custmer. A lyalty prgram need nt be cmplicated, expensive, r labr intensive. A few small brands and wnership grups have intrduced such prgrams in the past few years and mst are used t cmbat the use f third-party intermediaries. The lyalty mvement in hspitality cntinues and when perfrmed effectively can prduce meaningful results fr yur htel, the brand, and mst imprtantly yur custmer. Here is hw hteliers replied t ur questin regarding their ecrm prgrams: HeBS Pll Results: D yu have an ecrm Prgram in place at the htel? 56% - Yes 22% - N 0% - Planning t implement in % - Planning t implement in 2008 If this tpic interests yu, please read ur article: H e B S 2

3 Building an ecrm Strategy in Hspitality: Hw t Establish Mutually Beneficial Interactive Relatinships with Yur Custmers. Cnsumer Generated Media Strategy in Hspitality Cnsumer generated media (CGM): blgs, discussin bards, review sites, scial netwrk sites, etc., has remained a prevalent subject in htel marketing discussins in the past year. Hw can htel and travel marketers use this new medium t their advantage? Shuld CGM be cnsidered an pprtunity t prmte the htel prduct and be part f the marketing strategy, r is it a threat that needs t be cntained? Can a CGM initiative help hteliers differentiate their services and de-cmmditize their prduct? There are three appraches t building the Cnsumer Generated Media (CGM) strategy. Which apprach t use depends n yur situatin and needs. If the gal is t prtect and mnitr the chatter n the web abut yur htel fr whatever reasn, then a Brand Defensive Strategy shuld be entertained first. If the gal is t leverage the expert knwledge that currently exists at yur prperty ut there n the web, then cnsider a crprate spnsred CGM initiative. Lastly, if the gal is t simply cmmunicate t readers n high traffic CGM sites, then yu can advertise n them. CGM and a Brand Defensive Strategy: Identify CGM sites that cver yur industry and segment e.g. HtelChatter, TripAdvisr, TravelBlg Mnitr the CGM Universe fr CGM pstings abut yur cmpany (e.g. via technrati.cm, blgpulse.cm, etc.) Nurture satisfied custmers t express themselves via ppular CGM sites Implement CGM suggestins, address criticism, and cntact critical CGM-ers t discuss imprvements and results Crprate- Spnsred CGM Initiatives: Determine if yur cmpany needs a CGM initiative in the first place Identify the type f CGM that best suits yur rganizatin e.g. Crprate-spnsred blg, custmer trip planning and advice, experience sharing, etc. Leverage the internal, in-huse expert knwledge frm spa gurus, glf prs, famus chefs, fitness prs, wedding planners, etc. Clearly delegate respnsibility and wnership f the blg Budget fr the new crprate-spnsred CGM initiative CGM as an Advertising & Marketing Medium in Hspitality Many high-trafficked CGM sites (e.g. review sites, blg search engines) nw accept display ads and spnsrships, cver yur industry and segment e.g. HtelChatter Identify all CGM sites and initiatives that matter Advertise nly n CGM sites that are highly relevant t yur prduct/services and the destinatins yu serve, e.g. reginal glf r spa blgs, destinatin CGM initiatives, etc. HeBS Pll Results: Fr hteliers, d yu think that Cnsumer/User Generated Media is a threat r an pprtunity? 0% - CGM is a threat H e B S 3

4 43% - CGM is an pprtunity 57% - CGM is bth a threat and an pprtunity If this tpic interests yu, please read ur article: Cnsumer Generated Media (CGM) a Threat r an Opprtunity? Blgs and the Htel Website D blgs wrk in hspitality and if yes, what blgs wrk best fr the htel website? In ur view, blgs are yet t play an imprtant rle as a marketing tl in hspitality. But blgs are already playing a vital rle in wrd-f-muth custmer prperty reviews and peer-t-peer recmmendatins. Here are tw imprtant aspects f blgs that affect hspitality tday and hteliers shuld be aware f: Blgs as part f the htel defensive strategy Blgs as an interactive cmmunicatin tl in hspitality Blgs as a marketing tl in hspitality HeBS has been invlved in cnceptualizing and develping blgs fr many f ur clients. Over the years we have fund the fllwing types f blgs wrk in hspitality and travel: Travel cmmunity blgs fr members f travel clubs r htel reward prgrams Affinity blgs that serve as discussin frums fr peple with cmmn interests r strng pinins abut a subject matter (e.g. wedding planning, traveling with pets, family travel, etc.) Expert blgs by the htel/resrt s spa, glf, tennis, fishing r culinary prs Destinatin blgs maintained by travel writers r destinatin experts Fr example fr beach/glf/spa resrts and destinatin experiential sites we have fund that the fllwing apprach prduces the best results: Create an experience sharing blg (wh did what in the destinatin and recmmends it t his/her peers) Create a pht sharing blg with a mnthly "Best Pht Award" Create peer-vted Tp Ten lists: Tp Ten Things t see in the destinatin Tp Ten best restaurants Tp Ten clest bars Tp Ten family activities Etc the sky is the limit HeBS Pll Results: D yu have a blg n yur htel website? 21% - Yes 79% - N If this tpic interests yu, please read ur article: Building a Blg Strategy in Hspitality Best Practices fr Managing the Indirect Online Channel What are the mst imprtant trends in the indirect nline channel in 2007? The direct nline channel will cntinue t be the main fcus fr hteliers. The industry as a whle has realized that nt nly has the Internet becme the preferred channel fr travel cnsumers t plan and bk ldging, but the direct H e B S 4

5 nline channel is the cheapest frm f distributin. The shift frm indirect t direct nline distributin will cntinue t be a majr trend in the next several years. The winners in the Direct vs. Indirect Online Distributin in hspitality were decisively determined in 2006: Direct Indirect 2006 Majr Brands: 81.4% 18.6% Hiltn: 90% 10% Marritt: 85% 15% Mandarin Oriental: 88% 12% Overall fr the industry, this year ver 60% f nline htel bkings in the U.S. will be direct t cnsumers (65% by 2010) vs. 40% via third-party nline intermediaries/otas (35% by 2010) (Merrill Lynch, HeBS). S what are the mst imprtant trends in the indirect nline channel? T begin with, nw is the time t start wrking with fewer third party intermediaries (TPI s), and at drastically lwer margins (e.g. 15%- 18%). Smart hteliers deal nly with TPI s that can access the htel inventry electrnically (thrugh the htel PMS, brand CRS, Pegasus r the GDS), and nt via manual extranets. These hteliers wrk in strict rate parity, use dynamic TPI margins (higher when yu need the TPI s, lwer when yu dn t), and prhibit TPI s frm using trademarked prperty names fr their PPC and search engine marketing campaigns. Other ways t shift cnsumers frm TPI s t the htel website include unique prduct fferings fund nly n the htel site and launching r enhancing the htel lyalty prgram. HeBS Pll Results: Five years frm nw, what percentage f Internet bkings in hspitality will be direct with cnsumers (as ppsed t indirect via nline third-party intermediaries/travel agencies TPI/OTA)? % f Internet Bkings % respndents 60% 16% 70% 32% 75% 11% 80% 11% 85% 16% 90% 16% If this tpic interests yu, please read ur blg article n Best Practices fr Wrking with Online TPIs/OTAs in Best Practices in Website Design: Balance the Visual Appeal with the Search Engines The htel website has becme the first, ften the nly and in many cases the last pint f cntact with htel custmers. High-Speed Internet access is already part f daily life and has enabled cnsumers t experience the Internet like never befre. 75% f active Internet users in the US use bradband at hme and almst 100% f Internet users access bradband at wrk. This means faster dwnlad times, faster searches, mre sites and pages viewed, and mre rich media and applicatins pssible. Htel websites can nw ffer better imagery, higher display reslutins, rich media and visual experiences like never befre. 80% f Internet users have 1024x768 r higher displays H e B S 5

6 In the first half f 2007 we have nticed that mre htel websites are becming hijacked by design shps ignrant f nline user behavir and key search engine traits. The sites r whle sectins and pages are cmpletely in Flash withut any HTML cpy, the navigatin map has pr usability, and the cntents n the site are nt search-engine friendly. As ne htelier burnt by the experience pinted ut, website design has created a gap between marketing peple and web designers. It is a push and pull between Cntent is King and cnfrmance t the search engines with Ww and Clness by techies/designers lking t win a design award. A htel website must be a 24/7 sales and marketing tl. It has t cnfrm t sund business practices and this will result in a htel website that is: User-Friendly Search Engine-Friendly Bker-Friendly Interactive Relatinship-Friendly It is true that in many cases web designers feel the need t cmprmise n these best practices in rder t have a beautiful website. The gal in website design in hspitality is t build sites that incrprate these factrs and a) are nt expensive websites t start with and b) d nt have t be re-designed every year r tw because the site was nt built prperly. If this tpic interests yu, please read ur blg article n Flash vs. HTML website design. Measuring Results frm Htel Internet Marketing Campaigns Marketing is all abut results. Unlike ffline marketing, state-f-the-art website analytical and campaign tracking technlgy can track and analyze ROIs frm the htel nline marketing campaigns quickly and accurately ver the Internet. Web analytics and cnversin tracking has becme a necessity rather than a luxury. All majr htel brands and TPIs/OTAs utilize cutting edge analytical tls. Yu dn t have t be a majr brand r an OTA t benefit frm the technlgy. Fr example, all HeBS clients can enjy the same state-f-the-art analytical tl as the majr htel brands and nline intermediaries at a fractin f the cst. Such tls allw client access t full website analytics: visitr sessins and unique visitrs, entry/exit pages, page views, referrers, cnversins, keywrd analysis, etc. The tl allws fr tracking f banner campaigns alng with the tracking f pst-click activity (what happened after the user clicked n yur PPC listing and did nt bk right then did they bk 2 days later r 2 weeks later?) and mst f all, measuring the ROI n every dllar yu spend n marketing the website. If this tpic interests yu, please read ur article: Measuring Results frm Marketing Spend in Hspitality: Using Metrics and Analytics fr Quantifiable Results. Guidance n 2008 Internet Marketing Budget Planning By 2008, as much as 37%-38% f all htel bkings will be transacted ver the web, which represents 15%-16% grwth ver Use this as a benchmark t increase yur verall marketing budget. Nw H e B S 6

7 mre than ever, billbards alng the highway, htel print brchures, and ther traditinal means f advertising htels have shifted tward the web. The tp areas t devte yur 2008 marketing budget include: Search Engine Marketing (rganic, paid search, lcal search, meta search) Banner Advertising Newsletter Spnsrships Marketing Website Optimizatin and Redesign Strategic Linking Website Analytics and Cnversin Tracking Click here t review tips n creating an Internet marketing budget: Budgeting fr a Rbust Internet Marketing Strategy A Best Practices Guide t Aid in Develping the Htel Online Marketing Budget Mbile Technlgy in Hspitality What will happen t traditinal and nline distributin channels in hspitality in the next few years as mbile further penetrates this market? 1 billin new mbile devices were shipped in 2006 alne. Nearly 70% f U.S. husehlds have at least ne active cell phne subscriber. Nearly 85% f the mbile devices n the market are web enabled and nearly 100% are text-enabled. Marketing ver mbile will gain mre attentin in Many f the search engines and phne prviders with their wn search engines are enabling advertisers t market using mbile search. Naturally speed, minutes/data csts, and supprt will determine the level f adptin. Withut making any predictins, the amunt f ad dllars necessary t devte t mbile search may be less than expected. We are still years away frm truly meaningful advances. In the shrt run, make sure yur website is website friendly r as we describe n client websites, as PDA ready! In the years ahead, mbile grwth will nly cntinue t grw in ppularity and imprtance. If this tpic interests yu, please read ur article: Internet Marketing and Distributin Trends Impacting the Hspitality Industry frm Cnclusin As we rapidly apprach the last quarter f 2007 and start planning fr 2008, it is imprtant fr hteliers t lk back at the successes and failures f the past year in nline marketing. As certain tpics grw in ppularity and imprtance: Web 2.0 and cnsumer generated media, cnvergence technlgies, mbile technlgy and web analytics, hteliers shuld nt abandn the mre traditinal Internet marketing frmats. In ur view, hteliers shuld cnsider ht new tpics and initiatives such as Web 2.0 and CGM initiatives nly as part f a cmprehensive Direct Internet Marketing Strategy, tgether with ther imprtant aspects such as search marketing, marketing, website ptimizatin, strategic linking and link ppularity, nline spnsrships and display ads. These shuld cntinue t be essential line times in htel Internet marketing budgets. Hteliers need t take these ht tpics and the latest trends in nline hspitality marketing int accunt when cnstructing a cmpetitive nline marketing budget and strategy. As yu prepare fr the year H e B S 7

8 ahead, wrk with an experienced, strategy-riented, ROI-centric and accuntable hspitality Internet marketing firm and keep in mind that the htel website is yur mst cst-effective revenue channel. Nte: Mariana Mechs, Directr, emarketing Services at HeBS, als cntributed t this article. Abut the Authrs and HeBS: Max Starkv is Chief ebusiness Strategist and Jasn Price is EVP at Hspitality ebusiness Strategies (HeBS), the industry s leading Internet marketing strategy cnsulting firm fr the hspitality vertical, is based in New Yrk City ( HeBS has pineered many f the "best practices" in htel Internet marketing and direct nline distributin. The firm specializes in helping hteliers build their direct Internet marketing and distributin strategy, bst the htel Internet marketing presence, establish interactive relatinships with their custmers, and significantly increase direct nline bkings and ROIs. A diverse client prtfli f ver 450 tp tier majr htel brands, multinatinal hspitality crpratins, htel management and representatin cmpanies, franchisees and independents, resrts, casins and CVBs and has sught and successfully taken advantage f the firm hspitality Internet marketing expertise. Cntact HeBS cnsultants at (212) r mailt:inf@hspitalityebusiness.cm H e B S 8