Social Media and Marketing

Hospitality eBusiness Strategies, Inc. (HeBS) has emphasised on the significance of ROI‐centric Internet marketing strategy, terming it as one of the perfect “survival tools” for hoteliers in the current economic environment.

Published: 16 Mar 2009

Hospitality eBusiness Strategies, Inc. (HeBS) has emphasised on the significance of ROI‐centric Internet marketing strategy, terming it as one of the perfect “survival tools” for hoteliers in the current economic environment.

The online travel channel will be the only growth channel in the hospitality industry this year and many hoteliers clearly understand that, as per the findings of HeBS’ 3rd Benchmark Survey on hotel Internet marketing budget planning and best practices in hospitality.

Where is Hotel Business coming from?

In 2009, more than 55 percent of all travel bookings and up to 40 percent of all hotel bookings in North America will be generated from the Internet (eMarketer, HeBS), which represents a double‐digit growth over 2008. At least another third of hotel bookings will be directly influenced by online research, but booked offline. Over 65 percent of online hotel bookings will come from the direct online channel (76 percent for the major hotel brands).

However, 2009 survey results also show that bookings made via Online Travel Agencies (OTAs) have increased for hoteliers – from 19 percent in 2008 to 21 percent in 2009. This is in large part due to the dire economic situation many hoteliers are going through. Hoteliers seem to be worried about lower occupancy rates and are providing more and more inventory to the OTAs. What hoteliers are not realising however is that the OTAs are also affected by the overall decline in travel demand (Expedia reported 7 percent decline in revenue in Q4 2008) and can help only so much. Therefore the only real growth channel in 2009‐2010 is the direct online channel which allows savvy hoteliers to outsmart the competition and gain market share.

Main findings from the survey

The survey experienced global participation, with almost half of respondents from the US and Western Europe. Hospitality executives included general managers (20.6 percent), sales and marketing directors (49.6 percent), e‐commerce managers (13 percent), and revenue managers (29.8 percent). Key findings are as follows:

Hoteliers strongly believe that Internet marketing produces the best results. Hoteliers were asked whether they thought Internet marketing, traditional marketing, or a mix of both produces better results and 55.7 percent said Internet marketing (up from 49.2 percent in the 08 survey and 37.7 percent in the 07 survey). Hoteliers are right on target as the online channel will be the only growth channel in hospitality in 2009‐2010.

Even in this current economic environment, 63 percent plan to increase their Internet marketing budget in 09 ‐ and a majority of hoteliers are planning on raising their online budget more than 15 percent.

Around 82 percent of respondents said that the economy will affect their budget planning for 09.

The types of web 2.0 marketing initiatives planned for 09 vary greatly from the last two years. In previous years, hoteliers selected Surveys and Comment cards as the Web 2.0 initiatives they were planning. This year, hoteliers selected advertising on Social Media sites (i.e. TripAdvisor), creating profiles on social networks and a blog on the hotel website.

Almost half of all respondents believe their property does not conform to industry’s best practices in terms of Internet marketing. While hoteliers are getting more educated about the direct online channel, many of them do not have the internal resources, bandwidth or knowledge.

This year, hoteliers overwhelmingly responded that they thought website optimisation produced the best results and the highest ROIs (81.6 percent). Search optimisation – organic search was next at 60.9 percent. Indeed, both website and search optimizations are the most cost effective initiatives for hoteliers in this economy.

This year, 85.6 percent of franchise/major brand hoteliers respondents said they did not find there to be major restrictions in online marketing due to brand restrictions. This percentage is increasing over the years (81.8 percent in 2008 and 76.2 percent in 2006) as more and more franchisees embrace best practices and launch local Internet marketing initiatives that complement their brand efforts.

The percentage of hoteliers who are participating in Paid Search increased from 50 percent in 2008 to 59.8 percent in 2009. The use of Meta search and local search is also increasing year after year. Also, Web 2.0 Paid Search (e.g. TripAdvisor) was big this year as 32 percent of respondents are spending marketing dollars on this initiative. These responses are in par with industry practices and show that hoteliers are aware that as much as 60 percent‐80 percent of traffic and bookings on hotel websites originate from the search engines.

For full version, click here: Assessing hoteliers’ 2009 Internet marketing priorities and strategies

Ends