Thought-provoking new research by Ecole Hôtelière de Lausanne and RateTiger suggests hotels are looking beyond the marketing channels of the online ecosystem towards more traditional paths to direct bookings.
The study involved 3- and 4-star hotels evenly distributed in France, Germany, Spain, United Kingdom and USA, altogether representing 72 total hotel properties (65% were chain and 35% individual properties, with total room count between 25 and 392 rooms).
As far as digital marketing strategy, a whopping 32% had no online marketing or digital strategy whatsoever.
Even the hotels with significant digital strategies remained unconvinced as to digital’s actual impact on revenue, and many do not plan on investing in social media whatsoever in the coming year.
In fact, only 12% of the surveyed properties used social media in their channel management strategies. This points to a continued skepticism of social media’s utility in boosting actual revenue per available room (revPAR), that many hotels use as one of their key metrics.
One 4-star hotel in Paris with 82 rooms put it this way:
“We’re not at a point where we can track social media. There must be a point of sale to really become a valuable resource, but even then we need to master it, so there is no need for sales here at this time.”
It seems that the majority of the pushback regarding online distribution surrounds the iron grip of the OTAs.
The surveyed revenue managers were concerned about increasing rate parity so guests are offered the same price across channels, while also increasing direct bookings to offset lost top-line revenue due to OTA commissions.
Another Parisian hotel with multiple properties commented:
“OTAs are getting bigger and bigger and they have such a power that we cannot fight against them, so we are trying to find some other ways of communicating and being exposed on the web. Of course we need to be present and we need to have some availability and rate parity with the OTAs.”
Despite this desire to beat the OTAs, and drive bookings on their own sites, some hotels are either ignoring the potential inbound traffic from social media, or are not quite understanding how a content-rich social media strategy can actually convert online visitors before they have a chance to search on an OTA’s website.
By creating content that is valued by potential guests prior or during a decision-making cycle, hotels have the opportunity to leverage reviews, photos, videos and destination-related content to attract guests into their own booking engine.
Social media might not be always be a direct driver of booking – ie. people may not want to book hotels on a brand’s Facebook page – but providing content that informs potential guests during their research
To us here at Tnooz, these results seem slightly skewed from the sorts of online results that we report on every day here – including this recent infographic that demonstrates how vital an integrated web presence can be to travel companies. Take these revealing stats, for example:
- 50% of travel companies surveyed agreed that direct bookings were generated by social media
- 33% of people surveyed changed their hotels after using social media
- 10% switched resorts after using social media
So it seems that the 33% of the hotels surveyed in the EHL study are likely not among the 50% of travel companies that generated direct bookings via social. It basically comes down to who your target customers are, and where they make their decisions.
Hotels looking to stabilize revenues via corporate bookings need to pursue offline channels to capture these larger accounts; hotels focused on a B2C strategy must go where those customers are – namely, social media.
And all of the above need to be hyper-aware of the travel customer’s lifecycle, and determine how their particular property and/or brand can participate in each one of these phases.
Most tellingly, perhaps, is that many of the very same skeptical survey respondents see a robust future for digital marketing – even if they have yet to embrace the future.
It would have been especially interesting to see comparisons between the 32% of respondents without any digital marketing strategies and the 72% that see a future in some aspect of digital marketing – whether mobile, social media or the Internet in general.
A balanced strategy is one that streamlines communication between the sales and marketing departments, allowing each department to share expertise and strategies to most effectively increase revPAR, exposure, and rate parity.
By continuing to invest in the future solutions, properties can actually realize future gains now, by fundamentally rethinking the way that they approach their increasingly complex distribution challenges.
NB: Rotary Phones image from Shutterstock.
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About Nick Vivion
This article by Ecole represents very accurately the realities I’m experiencing in the UK hotel market.
Far from
50% of travel companies surveyed agreed that direct bookings were generated by social media
33% of people surveyed changed their hotels after using social media
10% switched resorts after using social media
especially ’33% of people surveyed changed their hotels after using social media’ – can you remind me where i can find the detail for this, its just not remotely squaring with our hotel client’s real time experience gained from guest relationship management.. Often what people say on social media and what they do are entirely different matters. The bad news for the hotels is that negative recommendations on social media eg Facebook are no worse or better, in concept and outcome, than negative reviews on Trip Advisor.. SO I’M ASSUMING TRIP ADVISOR IS INCLUDED IN THESE STATS, yet Trip Advisor was only ‘renamed’ a travel social media site fairly recently, presumably to boost the weight of opinion and stats behind social media in travel – it is a review site (in fact it is an online travel company dressed up as a review site) and totally conceptually different in usability and scope to sites like Facebook. The use of blindingly obvious yet attempter subtle semantics is rife in social media speak – if its Trip Advisor, then tell us its Trip Advisor, if not, then tell us who it is.
What seems to hit a nerve with social media evangelists is any suggestion that social media is not cutting it in hotels and travel. If you dare do such a thing, you have a new title – a ‘naysayer’. Another publication entitles the Ecole article – Hotels Don’t See Social Media as a Priority, says Ecole Hoteliere de Lausanne (EHL) Research – I really on empirical evidence have to totally agree with this, but would be delighted to be proved wrong.
I guess the inevitable retort will be – are the hotels right in doing this? – well in terms of the priorities currently spotlighted by Ecole, i think they are.
The hard fact is social media, including or not including Trip Advisor, has been around fro a long time especially if you include TA – and has in all that time made very few real strides forward commercially – it is pertyy well out for B2B with a few exceptions – and no one can agree if you can measure ROI, and if so, how.
How long do we give them?
Thanks for your perspective Robert. When I entered this study I went in knowing I would be speaking to some hoteliers who had yet to get a grip of selling online, let alone marketing online. I love social media, in fact there are very few channels where you will not find my presence. Yet, when I speak to many hotels I feel I am talking to my Grandma about her Blackberry – she knows how to make calls, send texts but that’s it. Ask her to logon to the internet and she is lost.
In reality hotels are being shown shiny gadgets, without knowing how to use them. Here we are seeing a huge gap widen between internet savvy hoteliers and those just trying to deliver top customer service.
Reminds me of a recent conversation I had with a tech journo of the biggest UK hotel publication – he said – ‘someone just needs to talk layman terms to me, there are too many talking about the future and not the here and now’.
Ryan, it’s definitely hard to speak in layman’s terms when the future is now and the consumer is more sophisticated than the purveyor. This is just me personally, but sometimes I get frustrated when folks want it to “be more simple” when the consumer has already blazed past them.
At what point do we start blaming those who choose not to work to catch up?
The statement that the hotel customer is more sophisticated than the hotel is simply not true. In many cases, hotels are highly sophisticated when it comes to guest relationship management reputation management and the productive use of the right technology, and the same can be said of many online agents and travel companies.
I really don’t understand the foundation for that statement I’m afraid, and its certainly not a game changer..
For most of these surveyed hotel managers the future only seems to be of interest to them when it has become the past! Using the timetable for their adoption of “new” trends, they will likely start using social around 2020. In the meantime they rather hire a sales person for cold calling and personal contact without realizing the likely cost disadvantage of this approach and its ROI. But, hey it’s what we have been doing all along so why not continue. In the meantime the strangle hold of OTAs on their distribution continues as are their complaints about it.
They will use social media when there’s concrete commercial evidence that its viable, cost/benefit wise with positive sustainable measurable ROI
I think you forget that for many, if not most hotels and hotel businesses, banks and investors require to be satisfied big time, as well as customers and joe public these days (who doesn’t want to pay a decent rate fro the job – i can’t get a plumber for an hour , or even to come out, for the price of a hotel room these days so lest get real. if social media has all the overhyped potential its evangelist rave about ad nauseam – don’t you think we hoteliers and hotel consultants would all be using it commercially. We’re not stupid you know.
If hotels are being mismanaged as you seem to suggest, they won’t surrvive these days, it is predicted that 20% of UK hotels today will not be around in a years’ time
No, I large number won’t use social media even if the positive ROI evidence gathered over the past two years across all different industries is staring them in the face. This has nothing to do with stupidity but the lack of willingness to embrace new ways of marketing their business. In my forty years in the travel industry as a travel agent, tour operator and destination marketers I have come across this myopic attitude hundreds of times trying to generate business for hotels. The innovators have been in the minority but eventually the more successful ones. The reluctance of the majority was in evidence when it came to having a website fifteen years ago which was received with the same criticism that the social web is greeted today and by some tomorrow and the day after. They will continue to use the ROI issue as justification for not taking the step to doing business the way today’s customers expect. I wish them good luck. There are enough others out there who embrace innovation to keep the industry moving forward.
And, totally outside of the “this is a business” conversation, isn’t it just so much more fun and invigorating to innovate, try new things and be different? Travel should be all about discovery, uniqueness and excitement – and brands that just do the same thing all the time aren’t quite hitting that high note for a particular segment of the traveling population that seeks that sort of travel joy.
That’s just a completely personal perspective about how I like to see brands approach travel. We’re not selling widgets here – it’s the best profession and industry on the planet, so let’s have some fun and show people why travel is so transformative!
Love it – where do I “Like” this comment
Totally with you Nick…! Inspiring!
Here is an article in CNN Money for the critics to ponder: http://bit.ly/SelnXu
It’s obviously about much more than just social media – as in having a Twitter or Facebook account and then complaining that it’s only a time waster!
Ryan, sorry i don’t really see much evidence of your standpoint at all, its laboured ad nauseam, hoteliers are naive, stupid, old fashioned, don’t know what they’re doing, in a time warp, deserve crap reviews, know nothing (about reputation management &c &c &c) &c &c – yet social media (which has totally underdelivered commercially in travel and hotels, and that doesn’t look like changing anytime soon) is raved about like the Messiah – its a total joke. Its those who criticise the hotels that are the joke in the main, not the hotels, if there are so many smart asses out there then lets get them into then hotels and get them delivering commercially using the great Facebook &c -(which seems the only way the think they know)
Perhaps you should direct your criticisms of hotels and hoteliers at the hotels themselves, become a consultant if you aren’t already, and sort them out, as i have to do every day in life!! Its simply not good enough to keep saying that hotels don’t know how to/when to/if they should use social media commercially. I would never insult my many clients like that, and to an extent I’d be failing them.
Robert
Those figures came from an infographic we posted earlier in the week: http://www.tnooz.com/2012/08/09/news/how-social-media-and-the-web-slam-dunked-the-travel-industry-infographic/
There’s definitely a disconnect – not at all unique to social media – between what people say and do. Social media can lead to hyper-constructed profiles, crafted to deliver a particular image of an individual. Hotels really just need to look at their particular demographics, and go where they are and do what works to get them in the doors.
For many, social media is the most convenient place to do that – it just comes with its own set of thorns. And you’re right in saying that social has always been around – word-of-mouth was the original marketing.
As far as social media ROI is concerned, I think it’s a bit of a red herring. How can you measure the impact of a billboard, or a newspaper ad, or a television ad? Beyond a unique booking code or asking a customer directly, those sorts of mass mediums were much more amorphous. And expensive!
The age of the social web has allowed specific demographic targeting – and measuring – that was never available before – there’s data everywhere! It has also allowed smaller players the ability to compete with larger ones in ways that sheer marketing spend prevented previously.
Marketing is becoming more complex than it’s ever been, and I personally think it’s more about creating a multi-platform brand experience that resonates with a particular demographic. Rather than trying to force people to patronize a business via advertising, it’s about creating something that people want to be a part of. Back to our tribal basics, if you will!
Again, these are all my own perspectives and my views are constantly evolving. It’s a fun, interesting and ultimately useful conversation that we are all having.
Thanks for reading!
Nick Vivion
Nick, the comment that ROI is a red herring will just not wash, I’m sorry. Hotels more than ever before are under stringent financial pressure in the main, its a very difficult game out there, and financial people and directors will give an emphatic no to any marketing or engagement spend that doesn’t have a visible or determinable ROI, that’s life
There is no room in the real world of hotel commerce today for expenditure on activity which does not produce a measurable ROI, and social media is unfortunately one of them., that’s also life. You’re right, people will use voucher codes &c for these other forms of advertising you mention,.
Do you feel that there is a difference between short-term ROI and long-term ROI? What would you consider the ROI of investing in a hotel’s brand position within a particular demographic?
Hotels – heck, businesses in general – are often focused on the short-term pressures of the financial markets, making them especially vulnerable to long-term industry shifts. With such short-sightedness, it’s nearly impossible to look into the future and attempt to build something that will make it through the natural S-curve that most businesses have.
With hotels, much of that S-curve is determined by the age of the clientele. If you have a hotel that appeals mostly to the older half of the baby-boomer set, you need to be looking forward and getting the business ready for that next group that will be walking through the doors. That’s also ROI – it’s just not ROI that is going to be reported in next quarter’s financial results, but something that is demonstrated by a robust and healthy business over decades.
I agree that ROI is essential – this is a business after all, and you can’t control what you can’t measure. However, ROI comes in many shapes, sizes and lengths, and the ability to balance competing short- and long-term initiatives is an essential step towards long-term success and stability.
Long-term ROI is obviously harder to measure, thus making it more risky and a harder sell to short-term focused management teams. Nonetheless, taking some carefully considered risks can not only boost the bottom line, but reinvigorate a hotel brand, management team, and on-the-ground staff.
Excellent comment, Nick. For more on my own thinking on this topic read my comment above.
I agree with Nick’s view that these “results seem slightly skewed”. Quoting from the PDF – “Among the 20 interviewees (representing 72 hotel properties) that have participated in the qualitative survey”
Hold on, 20 interviewees – are we all **really** going to decide our hotel’s future usage of social media based on a 20 people survey? And, this huge discussion is based on this?? The first chart offers a good idea about the whole thing, where digital marketing is… Google, Social Media, Travelzoo or NONE!! With all respect, I would not buy into these survey results.
Any hotel in dilemma should know this –
Your customers are out there on social media(name your target channels) discussing / praising / criticizing / recommending your hotel – whether you chose to join the conversation or not.
Absolutely. Hotels are being talked about and need to get in there. We have seen ROI from managing social media/guest reviews, but it really is about educating hotels on the hard facts, and showing them. But while they battle social media, their key focus remains to be channel selection for sales and bookings.
Hotels know the importance of social media, as in their personal lives they use it, but finding the time in a working day to make it a priority just isn’t as ‘there’ as it should be. (but we have to remember that hotels are large chains and brands vs small groups and independents). I just launched a campaign with hotels to help them understand better how to manage this mix.
Are they are serious at EHL and Rate Tiger about survey methodology ???
>> Research methodology: The intention of the review was to collect feedback from three and four hotels evenly distributed in five geographical markets – France, Germany, Spain, UK and the USA. Among the 72 hotels participating in the survey ….
ONLY 72 hotels participating in the survey !!!!!!!
Another boring PR stuff.