Monday, September 28, 2009

Travel Discounting - The New Norm?


Virgin Mary -- DiscountedImage by elmada via Flickr

If there's one thing I learned as a revenue manager, it's that discounting doesn't increase demand!

With discounting, you may be able to shift some share, but when demand is down you need to resist the temptation to discount. Your best strategy is to make sure that your are priced right and you are going after the business that is there. Make sure that you have enough base business that you can put pressure on group and transient business to leverage both occupancy and rate.

So why do so many hoteliers not get it. To often, you see hotels immediately start discounting and that just leads to a downward spiral. This article from the AZ Central talks about the change from hotel discounting as being a "special" to making it the "norm" because it happens so much now, even at luxury hotels. Discounting may get people in the door now, but when you try to get the rate back to where it belongs once everything is rosey again. . .

It can take years to fix what you did in months. Don't do it. Just resist the urge to discount!

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Thursday, September 24, 2009

Consumers Use of Travel Web Sites for Booking Still Strong


monopoly-e-commerceImage by danielbroche via Flickr

Great news for those of us in the hotel eCommerce business. There is no report of our early death yet.

In fact, according for PhoCusWright monthly visits to supplier and OTA sites were up 13% in Q2 2009 vs. same time last year. The PhoCusWright Online Traffic and Conversion Report just released tells a tale of the continuing importance of the internet channel to supplier performance. Additionally, hotel suppliers are also doing a better job than the OTAs of converting those visits to reservations.

The reality is that people are spending more time online researching and shopping for their travel. According to Carroll Rheem, Director of Research at PhoCusWright,
"We found that visitation to planning and review sites drives dramatic differences in hotel conversion rates. Understanding the intricate relationships that connect all travel sites is essential to setting the right strategic path."
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Placing a Value on Your Fans


Image by Getty Images via Daylife
In the hospitality world, we measure the effectiveness of what we do daily through RevPAR (revenue per available room), CPOR (cost per occupied room) and a lot of other metrics. In the online marketing world we are used to measuring CPA (cost per acquisition), conversion, commission, etc. We like to have numbers to operate by. After all, isn't that the promise of doing business on the internet the ultimate channel to track performance and tie it back to our marketing activity via analytics, log files, heat map studies, and more. But we often get stuck when it comes to tracking what our activity in social media is getting us.

You can have thousands of followers on Twitter. How many of those are real people and how many are bots just sending out tweets, but not looking at what you have to say? Fans on your Facebook page may just be following friends. What value are they providing to you if they don't interact?

There was a good post over at Search Engine Land today about measuring the value of Fans and Followers. So this made me dive deeper to see if there was any commonality to what people were using to measure effectiveness of social media. Here are my conclusions -
  1. Start with an objective in mind - if your goal is to spread the word about a promotion or package at your hotel. Then you'll want to track how often the goal is retweeted, or mentioned on Facebook pages. If you are trying to improve customer service, then track the performance of your overall satisfaction scores on guest surveys or online review sites after you place the social media campaign in to place. This makes it easy to see if they are getting to your About Us page or downloading the floor plans for meeting space.
  2. Look at both Quality and Quantity of Fans and Followers - Quality is important because a true fan spreads the word and gives you feedback. They are also usually more able to influence their friends. Also, it is less expensive to keep an existing customer than to find new ones. Quantity is important as it helps with reach. Did you know that the average person's newsfeed reaches 164 people on Facebook? Consider that there is a CPM value to having fans on Facebook because of the "Suggestion" function.
  3. Try an outside reporting service - Many companies specialize in tracking what is being said about companies online. They measure sentiment, guest reviews, mentions and things of that nature. There is some value to companies like this as they can help you look at the data from a broad perspective and can actually give you some data for comparison. Some examples of reporting services that exist are: ChatterGuard from Lodging Interactive, eBuzz Connect from Milestone Internet Marketing and Radian6.
I'd be interested in hearing your thoughts on tracking Fan / Follower benefits and overall social media impact. Also, what if any service are you using to measure impact or compare hotel against your comp set?

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Monday, October 13, 2008

Now's the Time to Start Your Blogger Fam Program


If you've been in the hospitality business for any length of time, you're familiar with travel agent familiarization programs.  If you're not, then here's a quick summary. 

Travel agents help to direct customers to your service (airline, hotel, rental car, etc.).  You as a supplier want the travel agent to refer guests more often to your service than that of your competitor.  To do this you offer perks to travel agents.  One of the most popular travel agent perks was the familiarization trip or FAM trip.  The supplier drastically discounts the service, or comps it, when the travel agent uses the service for himself.  The idea being to attract them to stay at their property.  While there, some suppliers required the travel agent to take a tour and/or fill out some type of questionnaire to show that they could better sell their property.  Occassionally, CVB's or clusters of hotels would arrange these tours for groups of travel agents.

Fam trips haved declined in popularity and effectiveness over time as travel agents do less research for clients and have less of an impact on the actual decision making process.  Additionally, hotels and travel suppliers are looking to cut costs and reduce these marketing expenses that have no proven ROI.

Well the idea for familiarization trips may be making a come back.  Actually, it may be more of a familiarization meeting.  Bloggers have more influence and power than ever.  As more people look the internet for recommendations, reviews and resources on booking their travel.  Bloggers in the travel field are putting their mark of approval on hotels, airline seat placement and rental car programs.  More importantly, Jane Q. Consumer is listening.

This post from Chris Brogan about his recent visit to St. Louis and why local tourism agencies should be building relationships with bloggers highlights a program being started by VisitPittsburgh to reach out to influential people coming in for conventions to educate them about the city.  What struck me about this is that in the hotel industry, we often look at guest reviews as the holy grail of what's happening online, but we tend to lose focus on the influencers that are out there in our industry.

To that end, I am advocating that hotels start up their own "Blogger Outreach" program.  Here is my formula for getting this started at your property or organization:
  • Start by tracking what is being said about your hotel and your competition using tools like Google Alerts(Let me know if you have other tools you use to track buzz on your company.  I'll talk about them in future posts.)
  • Participate in online forums and leave comments on web sites that mention your hotel.
  • Identify the bloggers that have influence and forumulate a plan to educate them about your service.
  • Reach out to the bloggers and ask for more information about their stay and for additional feedback.
  • Next time the blogger is coming to town invite her to lunch.  Don't expect a review from it, but you never know.  Just opening up the door for conversation is what is important here.
Before long, you'll be ahead of the competition in using social media to make a difference to your bottom line.

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The Next "Hotel Evolution" in Increasing Ancillary Revenues

A new software company, Runtriz,
hopes to use the iPhone and iPod Touch to make it hip to carry these
gadgets when you stay at your next hotel.  An article in the Washington
Post highlights the test of the "Hotel Revolution" product from Runtriz at the Malibu Beach Inn in Malibu, CA.  The "Hotel Evolution"
application can either be loaded onto a guests existing iPhone or iPod
Touch, or in the case of the Malibu Beach Inn, the guest is loaned an
iPod Touch if they don't own their own.  The software makes it possible
for the guest to order room service, book spa treatments, retreive
their message and set wake up calls.  There are other options as well.  This could turn into a gold mine for hoteliers, especially those in the upscale and above categories.

is what I call bringing convenience to your hotel stay.  Runtriz says
that since the application is web based it will eventually be released
for Blackberries and other cell phone platforms, like Google's Android.  Imagine not being tied to making a call from your guest room when you want to have room service in the room when you arrive from a business trip.  How about being able to schedule spa treatments while out shopping.  Really, you can put the convenience and power of the hotel's concierge staff at the finger tips of your guest.

The cost can be a bit pricey.  The first month is around $20/room with subsequent months around $10/room.  The price does vary by hotel.

This is the first application of it's kind that I have seen.  How about you?  Any exciting mobile technology we should be talking about on eComm Insights?

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Monday, October 6, 2008

Is the Effectiveness of Travelzoo Declining?

If you are in the travel marketing business, you have heard of Travelzoo. If you haven't you should look into it. Travelzoo is at it's heart an email list of over 12 million subscribers worldwide. Travelzoo uses this list to market travel deals for airfare, hotel rooms, cruises, Broadway show tickets and more.

Advertisers submit their deal to Travelzoo for approval and addition to their weekly email blast the Top 20. It can take weeks or months for a supplier to get an open space in a Top 20 Newsletter. Travelzoo's team of producers will evaluate the offer to determine if they believe that it will be successful. If they don't like the offer, they'll tell you what it takes to get in the newsletter and if you don't make the changes they can deny putting the offer in the email blast. By doing this they insure the success of the offer and the value to their customer.

When they create the newsletter, they also offer the participating travel supplier a landing page that is created by Travelzoo. The landing page is where most of the work happens as Travelzoo then editorializes the offer. They really try to sell the offer by providing their readers value and a comparison of other offers they have seen, like this landing page fore Playa del Carmen:

If the person is interested in booking they are then sent direct to the supplier web site. Which as we all know is the holy grail to online promotions we are running.

Travelzoo also offers cost per click advertising and placement in their Super Search product. These are relatively new services for them.

A recent post on the Compete TravelTrends Blog talks about the growth in site traffic for Travelzoo. Compete estimates that Travelzoo's site traffic increased 95% over one year from 2007 to 2008. Additionally, they are saying that Travelzoo was able to grow volume by 33% since the beginning of the year. This isn't too shocking to me. The current economic downturn has hit the leisure traveler the most and what most of us are looking for is a way to stretch our own dollar to get more out of our vacations. Travelzoo is the channel in which to do this.

They are agressive in growing their email list by only allowing users who have signed up for their emails access to their online deals. Additionally, they run promotions with existing users to submit email addresses of friends for solicitation in Travelzoo's Top 20 with the offer of sweepstakes entries. One such offer last year offered the winning entrant every special that was listed on the Top 20 during the week. Not too shabby.

The bigger issue in my mind is that with all of this growth, the demographic of the Travelzoo customer is changing as are the economic times. The post goes on to say that the visitors to Travelzoo have spent consistently less time on the site over the last 13 months. People have less money to spend on luxuries like travel. More often than not, people are traveling only when they have to so when they go to Travelzoo, they know exactly what they are looking for.

(Graphic courtesy of Compete Inc.)

No longer is Travelzoo being used as a place to find a quick getaway. It is being used more often to find deals for the trip you were already going to take. Additionally, with more suppliers offering discounts now, you don't have to just go to the Travelzoo site to get the best deals. You can find them just about everywhere.

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Friday, October 3, 2008

Bring on the Mashups - Merging Hospitality and Technology

Quick - define the term "mashup". No I am not talking about mashing up the potatoes for Thanksgiving dinner or what happens when you leave free pieces of paper floating around in your laptop bag for a couple of days. I am talking about mash-up in terms of the internet. Here is how mashup is defined in wikipedia:
a web application that combines data from more than one source into a single integrated tool; an example is the use of cartographic data from Google Maps
to add location information to real-estate data, thereby creating a new
and distinct web service that was not originally provided by either
You've seen mashups before, like this one that shows YouTube videos on a map from the upload location as they happen or some hotel booking sights combine maps with hotel locations on them or this one where you input a domain name and it pulls information from various sources to give you a report about the domain. Most of the mashups, like those above, are based in a web browser.

Now, IHG is taking a step to move the mashup out of the browser and into Google Earth. The new IHG Trip Planner makes it easy for guests to plan and make their reservations for all IHG branded hotels, InterContinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®. At the same time, they can see the weather, find out about the traffic, identify places that they would like to visit and see the hotel in 3-D. This truly is thinking ahead of the pack. By creating this mashup, IHG is giving travelers one place to go to make reservations, and since the icon can reside on their desktop, they don't have to go other places to comparison shop - this is there hope. Look for a review of this new offering here on Hotel Ecomm Insights next week.

I wonder how long it will be before other companies follow suit. Are you planning anything like this for your hotel? If you are please pass it along and I will review it here on the site.

Check out the link to download the IHG Google Earth Mashup here.

Lodging Interactive: TripAdvisor Launched a Hotel Mashup Tool in October, 2006
GoogleMapsMania: Other Hotel Mashups out there.
iGuide: Interactive Travel Guide

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Monday, September 29, 2008

A-Ha Stories for Personal Inspiration: Achievement IQ Moments

I have been. . . am. . . and always will be looking for ways to improve myself.

In both my professional and personal life, I have been able to achieve beyond my expectations because of this desire. My wife asks me why I feel the need to read self help books. I think that the desire comes from my grandfather telling me that he always wanted to learn something new everyday. He loved doing crossword puzzles for this very fact and did at least one every day until he passed away last December. I now have so many self improvement books that they have moved out of our home library to the work bookshelf. I guess that I am a serial self-improver. If I am struggling with an issue or problem, I want to get better at it. I only wish that there were as many how to be a better husband and father books as there are business improvement books.

Luckily enough for me, I had the chance to get an advance copy of Acheivement IQ (A. IQ) Moments a book written by Stanley Bronstein. I discovered Mr. Bronstein via Twitter,as MrAchievement, again one of those channels to learn and grow through people you may never otherwise get the chance to meet up with. He frequently sent out links to his blogs posts. I had read of few of his "Laws of Positioning" posts and really liked them. Then I saw this tweet:

Looking for another learning experience and a way to provide a service to my readers, I jumped at the offer. A week later, the book arrived in the mail. With all that out of the way, read on further for my review of A. IQ Moments

The book Achievement IG Moments is really a supplement to two other books Mr. Bronstein had previously written about success in life and success at work through Achievement IQ, but taken alone what you have is book that is a source of inspiration through the stories of others. Life's epiphanies don't always show us the true beauty of their occurrance until some time later. The stories range from. . .
Artist Peggy Chun who has found a way to keep expressing her artistic needs despite loosing the use of her hands, feet and mouth. She now uses her nose and the assitance of others to paint.
To. . .
Professor Luis von Ahn who is using the scourge of the internet, spam, to help decipher writing in old scanned documents through the reCaptcha software so common today.
I seem to remember a line about necessity and invention coming to mind here.

Overall, I really liked Achievement IQ Moments. The stories were told in a simple manner and could easily be picked up and read in any order you'd like. In fact most of the stories are 4 to 5 pages in length, perfect for that 10 minutes you have between meetings. The book builds up steam and inspiration as you move through it, sort of like Mr. Bronstein's trek to get the stories down on paper which you can learn about more in the book. I think that the other benefit you get from the book is being able to go back through your own life and identify your own a-ha moments and reflect on what those have meant to you.

Each chapter or Achievement IQ moment starts off with a relevant quote, tells the story of the interviewee, points out the A. IQ Moment(s) and then gives you the web site addresses or contact information to learn more about the subject individual(s). The author compiled these stories in a 50 day journey traveling over 10,000 miles. I can imagine he must of filled up many notebooks, audio tapes and hard drives with the great experiences and stories his subjects had to tell. Occasionally, I felt like I was sitting at the table with the author and the subject as they were having a long dinner and just kept talking into the night.

My only desire for the book is that Mr. Bronstein would have grouped the stories into related themes and provided a grouping in the Table of Contents or an Index for related themes. For example "relationships", "problem solving" and "goal setting" are a few that come to mind.

The book Achievement IQ Moments has definitely given me my next journey. . . to read Mr. Bronstein's two other books.

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Monday, September 8, 2008

Get Me There, but Don't Hurt the Environment

The economy is in a downturn, that not news, but what matters most to travelers during this time period is. A recent study from eMarketer uncovers the incentives that can turn lookers in to bookers. At the top of the list in these troubled times, getting a rebate on gas expenses (47.6% of respondents said this would provide them the incentive to book). That is followed by discount offers by hotels (30.8% of respondents).

We have several hotels who have benefited from these gas packages. You may also often see them framed as "staycations". This year's hot term in travel. However, travelers are also looking at the environmental policies of the hotels, and while this alone isn't influencing the decision, the amount of work you are putting into minimizing the impact of the hotel and guests on the environment is a contributing factor in their decision.

What incentives are you offering to getting lookers to book at your property?

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Thursday, September 4, 2008

Booking Channels are Changing - GDSs Left to Compete with Internet

It's no longer news that there is a major move on for people to now book from the internet. Travel agent and voice bookings have been in a steady decline for many years now and hoteliers have been happy because the cost of taking a reservation via the internet is usually at least half of what it cost via GDS and more via phone.

One has to ask, when do the GDSs start charging more for the connectivity to there systems and Travel Management Companies start charging more to cover their bookings costs to make up the short fall in revenues. This article from Business Travel News Online highlights the inducements that the GDSs are making to Travel Management Companies and airlines to keep them booking. The article goes on to talk about the Sabre Expedia relationship and how that has reduced GDS margins and set the new market price point for services. Ironically, this parallels what has happened to Expedia as suppliers have taken back control of pricing and inventory.
"There is more risk related to GDS economics than there has been in the past," said Carlson Wagonlit Travel executive vice president of global supplier management Mike Koetting. "TMC margins are small enough that almost any disruption to our revenues ultimately impacts our ability to service, or requires a cost increase to, our customers."
The potential for a price increase and level of service change is emminent in my mind.

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