A study has indicated that while hoteliers have not fully put poor economic conditions behind them in their planning, they continue to move budget dollars to the direct online channel and to important digital marketing initiatives that reach the hyper-interactive traveller, such as mobile, social media and video.

Published: 26 Jul 2011

A study has indicated that while hoteliers have not fully put poor economic conditions behind them in their planning, they continue to move budget dollars to the direct online channel and to important digital marketing initiatives that reach the hyper-interactive traveller, such as mobile, social media and video.

There is no doubt that hoteliers need to invest their marketing efforts and budgets in the direct online channel, according to HeBS Digital 5th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices. Especially today, with hotel distribution ideas and channels entering the picture such as flash sale sites. These are not only detrimental to the hotel industry from a pricing and branding perspective; they also do not make any economic sense.

Hoteliers need a robust direct online channel strategy accompanied by adequate marketing funds to be able to take advantage of the steady growth in the Internet channel and the shift from offline to online bookings in hospitality due to declining GDS and voice channels. Hoteliers must carefully employ ROI-centric initiatives including website redesign, website optimisation and SEO, SEM, email marketing, online media and sponsorships, mobile marketing and proven social media initiatives.

Furthermore, due to the fact that today’s travel consumers live in a perpetual “digital information cloud,” hoteliers need to employ multi-channel marketing and distribution strategies. Multi-channel marketing has become the foundation for a smart direct online channel strategy. In this environment, the hotel website, SEM campaigns, email marketing, social media presence, mobile, etc. have a symbiotic relationship. Hoteliers should not attribute all revenue to the last click, and should understand that unleashing a marketing promotional campaign simultaneously across all available marketing channels produces far greater returns than each individual marketing format alone.

Mobile marketing has quickly become a very important tool in the hotelier’s digital marketing arsenal. More hoteliers fit a mobile site into their 2011 planning (37.5 percent) and a mobile booking engine (37.5 percent) this year.

Over the past two years, the mobile channel has become an important travel planning and transaction channel in the U.S. and worldwide. Hotel guests and travel consumers in general are mobile-ready, and hoteliers and travel suppliers have to respond adequately to this growing demand for mobile travel services.

By 2014, mobile Internet users will surpass the number of desktop Internet users. The most important statistic though is the number of smartphone users. Smartphones are changing how we do business in hospitality, how we market, how we service customers. There are nearly 75 million smartphone users in the U.S. alone; their number will exceed 100 million by 2014.

Key Findings from the 5th Annual Benchmark Survey

• Hotel Website Revenues: There is still a way to go before survey respondents get to where they should be with their websites. Hoteliers responded that 25.6 percent of business at their hotel comes from their hotel website, 16 percent from the property pages/mini-site on the major hotel brand website, and 17.8 percent from the OTA’s.

• More than 36 percent of CRS bookings for the top 30 hotel brands currently come from the brand websites (eTRAK), so the industry as a whole has room for improvement.

• 2011 Digital Marketing Budgets Are Higher: Hoteliers increased their website re-design/design (20.2 percent) and website optimisation (13.7 percent) budgets this year. Even so, over 73.4 percent of hoteliers reported that the economic environment and overall budget constraints continue to affect Internet marketing budget planning (30.3 percent and 43.1 percent respectively). The good news is that for 74.5 percent of respondents, their 2011 Internet marketing budget was higher than in 2010.

• Shift from Offline to Online: Of the respondents that increased their 2011 budget, 49.1 percent shifted money from offline marketing budgets. This is most likely because hoteliers believe that Internet marketing (40.5 percent) produces better results than traditional and offline marketing (9.5 percent). This is a smart move considering the online channel is still the only growth channel in hospitality and the most measureable marketing channel.

• Social Media is an Industry Favorite: Perceptions toward social media have changed over the years, with 43 percent of hoteliers saying they believe social media is one of the Internet marketing formats that produces the best results and the highest ROIs. This is a dramatic change from the first benchmark survey (2007), when only 16.8 percent of hoteliers believed social media produced results.

• Hoteliers Realise the Importance of the Mobile Web: More hoteliers are planning for a mobile site this year (37.5 percent vs. 25.9 percent last year) and a mobile booking engine (37 percent this year vs. 22.4 percent last year). Also of note, only 8.9 percent of hoteliers are budgeting for a mobile app vs. 24.1 percent last year.

• Conformity to Best Practices: Hoteliers believe they have hotel Internet marketing under control. Seventy-eight percent responded that they believe their hotel conforms to the latest best practices in terms of Internet marketing, compared to 76 percent last year. As the industry matures, hoteliers continue to professionally develop in this area.

• What Was the Most Common Objective Hoteliers Did Not Achieve in 2010? Most survey respondents (41.7 percent) said they did not achieve their mobile marketing objectives last year. With 1.5 percent – 3 percent of visitors to hotel websites accessing the hotel site via mobile devices, as well as a 3,000 percent increase in mobile hotel searches year-over-year (Google), hoteliers cannot afford to lag behind in the mobile space.

Where is the ROI?

Of all hotel digital marketing initiatives in the survey, hoteliers believe that website optimization produces the highest ROI. Social media however, introduced as its own category this year – was not far behind at 43 percent. This shows a dramatic change in the perception over the past few years of how much revenue Facebook, Twitter, etc. really generate. While social media is not a distribution channel, it is increasingly becoming an important customer engagement channel. Whereas in the past hoteliers were skeptical as to whether social media should even play a role in their Internet marketing strategy, today it is one of the fundamentals.

(Click here for detailed findings of the study).