Win big in the distribution landscape

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Mobile, search and social offer revenue opportunities. But revenue managers must devise the best strategy to win the ROI race. - See more at: HOTEL NEWS NOW

By Susan Spencer
HNN contributor

Imagine a very fit athlete running down the track. Legs burning, breathless, tired, with a strong competitor at his or her heels, jumping every hurdle that appears, fighting the urge to slow down, but not giving in because he or she wants to win. Somewhere within, the athlete digs deeper and finds the energy to push through to the finish line first.

As hotel revenue managers, we must strive to be fit distribution athletes—understanding and optimizing the landscape, including digging deeper into the mobile, search and social models that have become part of it. Revenue managers know the roles of mobile, search and social in distribution. But how can we better work with and through these channels and increase conversions? And above all, how can we manage these distribution channels in the most efficient way, jumping every distribution hurdle and making that win or booking over our competitors?

In the recent article from HSMAI’s Revenue Management Advisory Board, “The Ever Evolving Distribution Landscape – A Focus on Emerging Channels,” Chris Anderson and Jay Hubbs introduced us to several new companies in each of four relatively new distribution categories: search, mobile, discounted target and social channels. This article will take a closer look at three of those models that seem to be changing every day in terms of how they are perceived by both consumers and suppliers—mobile, search and social—with a focus on ideas for how to work these channels into your overall revenue strategy.

Mobile
Google is projecting mobile devices (including smartphones and tablets) will overtake PCs as the most common Web device for research and bookings by 2013. With that in mind, it is not only crucial to work with the various mobile online travel agency sites, but also to optimize the hotel website for efficient mobile usage to capture bookings. We need to rethink mobile—it’s not just a last-minute option for deep discounts—and treat mobile as a technology tool that is a regular mode of booking, such as PCs and laptops have been for the last decade.

There are many different takes on the mobile channel. Some see it as primarily an opaque sub-segment, yet others view it as an opportunity to expand Web rates. With the rise of the “gated” mobile channel (where only members gain access to “special” offers), it can be viewed as a pseudo-opaque model. So which is it?

Is mobile a subset of the Web or is it a new Internet, separate and apart from the old Internet? The answer may lie in how you see rate parity and whether you believe it should extend to mobile. Your view is likely eminently tied to whether you are benefitting from rate parity or losing because of it. But the issue is more complex than that. Generally, rate parity comes with a mutual capacity for partners to help police each other. Such a capacity could help catch egregious and accidental failures to honor rate parity. Rate parity is a goal all partners work toward together, helping each other smooth out wrinkles in the marketplace.

“Mobile is at a crossroads. How can we evaluate the value of rate parity on the mobile channel? The answer is simple: Hotel revenue managers need to have a mobile rate strategy just as they have with their OTA partners,” said Rabi Royan, owner of HCloo, an interactive online community geared toward revenue managers.

Consider the following ideas:

  • Never run a promotion on mobile you are not running with your OTA partners.
  • Create a separate tracking code for your OTA mobile bookings.
  • Develop a strategy for your front-desk agents to identify and target mobile bookers.
  • Use Google Analytics to identify mobile booker geography. Once identified, concentrate on location-based advertising.
  • Consider value adds such as loyalty points, upgrades, breakfast, etc., instead of discounting.
  • Stay away from treating mobile as a “discount” channel.
  • Promote your mobile app via banner ads (including on your own website).
  • Add your mobile app download button to your email signature line.
  • Email your own database about your hotel mobile app.

Work to build the consumer’s confidence that they will find the same consistent pricing on your hotel website, OTAs and mobile channels. Technology tools are available to shop mobile applications that can even better improve the overall revenue strategy.

Search
Four billion searches a year on Google are for hotels, and 32% of all hotel bookings begin with a search on Google. With the recent announcement of Google purchasing Frommer’s, giving Google the Frommers.com travel planning website and 350 travel guides, it’s obvious the company has a continued interest in growing in the travel space. Google’s share is likely to grow as its travel products evolve and move from “experimental” to full market launch.

At the same time, “Google Hotel Finder, whose search results are at the top of Google’s organic search, seems to be dominating among the newer meta-search sites,” wrote Chris Anderson and Jay Hubbs in their HSMAI article.

So how can the hotel revenue manager work with Google Hotel Finder as part of their overall revenue strategy?

  • In addition to your hotel listings via OTAs, consider adding a direct connection from Google Hotel Finder to your hotel landing page.
  • Explore all models. They vary from pure cost-per-click to transaction and commission-type pricing.
  • Look at available tools to land Google visitors onto your hotel website and assist you in managing the reservations, including interfaces with your existing property management systems, central reservation system or channel management software.
  • Maintain parity for all OTAs as Google Hotel Finder displays your OTA partners side by side in the search display.
  • View Google impression and click data reports for measurement of return on investment.
  • Make sure to search your property’s city via Google and view the locations, rates and availability that are being displayed.

Continuing to include the OTAs in your overall revenue strategy is extremely important as the Google Hotel Finder search displays those partners’ rates to the customer.

"It's very exciting to put the hotels on equal footing with the OTAs through Google Hotel Finder, driving Google users to book direct on the hotel's website. Hoteliers have been struggling and waiting impatiently for the vehicle to take back their direct online relationship with their customers, and Google's initiative is rapidly gaining marketplace momentum," said Craig Wingate, CEO of Woodcrick Ventures, a company specializing in identifying, leveraging and commercializing breakthrough technology and intellectual property.

 

Social
Social media is a key ingredient of search engine results page algorithms. Facebook posts are integrated into Bing search, and Google+ emerged with native integration into Google search. Social media is necessary for driving traffic and booking conversion. Projections show that by 2016, half of the travel industry will be using social media to generate revenue and bookings.

In the social channel, reviews pull quite a bit of weight in consumer buying decisions. A number of studies have examined the role of reviews in the buying process and their impact on sales and revenue.

According to PhoCusWright, OTA shoppers who visit hotel review pages in OTAs are twice as likely to convert. A study from Cornell University showed travelers spend an enormous amount of time researching hotels online—on average making 12 visits to an OTA’s website, requesting 7.5 pages per visit and spending almost five minutes on each page before booking.

According to Brian Ferguson, VP of supply strategy and analytics at Expedia, reviews are a particularly important factor in what hotels will be able to charge through a third-party site. “A one-point increase in a review score equates to a 9% increase in average daily rate,” according to Expedia.

Josiah Mackenzie, director of business development for ReviewPro, said “one of the most revolutionary trends happening in hotel technology right now is the use of social-media data and customer review analytics in optimizing distribution and maximizing revenue growth.”

Because we recognize the link between experience, satisfaction and financial performance, how can the hotel revenue manager analyze reviews and strategically make an impact in the overall revenue strategy?

  • Increase sales effectiveness by creating a unique value proposition that resonates with your target market through social-media listening and competitive benchmarking.
  • Maximize pricing with online reputation benchmarking scores—people are willing to pay more for excellent service.
  • Optimize channel distribution by encouraging reviews and building a positive reputation on a diverse group of websites.
  • Increase on-site conversion rates by using positive social-media feedback to encourage visitors to book direct.
  • Build loyalty and positive word of mouth by providing remarkable service through social-media networks.

Along with managing mobile and search as distribution channels, hotel revenue managers often are tasked with managing reviews. A common challenge is compiling the data from many social sites in order to review, respond and strategize on improvements. Explore the many technology solutions on the market that can assist with this process, leaving more time for strategy development and implementation.

Mobile, search and social present enormous new opportunities to capture revenue. With the ever-changing technology options available for the consumer to search and book travel, it’s imperative for the revenue manager to jump over the distribution hurdle by reviewing trend reports, having a full knowledge of all distribution portals available for each channel, and devising the best strategy to win by moving market share from competitors with the best return on investment per channel for the property.

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