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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