Time to shape up: why independent hotels need to raise their game

It is a cutthroat and competitive business in the online world of travel. Independent hotels are much desired but to be visible they have to work much harder. Pamela Whitby reports

You don’t have to like the big online travel agents and rate comparison sites, but today it is impossible to live without them.

From Kayak to Expedia, TripAdvisor and Trivago, the choice is endless for travellers who will search on a multitude of websites before making a decision about where to stay, how to get there and what to do while there.

In August there were 1.4 million hotel-related keyword searches, according to consumer research agency Greenlight. It finds that generic hotel-related terms were the most popular, accounting for 38% of queries, while the word ‘hotels’ accounted for 11% of searches followed by ‘cheap hotels’ and then ‘hotels in London’. But as EyeforTravel’s recent consumer report finds, not all consumers search for and book their accommodation in the same way. For example 58% of Americans prefer using online travel agents but the Dutch still love going direct to book their travel with the travel supplier.

In this complicated, and sometimes cutthroat world, it is really important that hoteliers stay on top of online trends to ensure their brand is seen. While Phillip Patzel, GM of the Viennese luxury boutique hotel Hollmann Beletage and a speaker at EyeforTravel’s recent Amsterdam conference, acknowledges that OTAs probably hold way too much power, he also understands the importance of being visible across all distribution channels. He is also magnanimous enough to say that some have done a “great job”, citing TripAdvisor as an example of one player that has successfully addressed the four phases of travel. It does this by using augmented reality to let people view the street and property, shows the number of rooms available and rates, allows you to book online and then write a review afterwards. Perhaps he would say that as his hotel is ranked number two out of 355 Viennese hotels featured on TripAdvisor, but Hollmann Beletage didn’t get there by accident. Rather it has a clear, measurable online strategy, which also includes a strong focus on mobile, which you can read more about on EyeforTravel.

While many independent hotels (like Hollmann Belletage) in major cities, have recognised the need to embrace the online space, in further flung areas many are still dragging their feet, says Martin Soler, marketing director for the hotel marketing firm, WIHP Hotels. “These hotels could be losing out because if your presence is not seen and felt across the web travellers will book elsewhere.”

For Soler, however, there is much more to marketing your hotel online than simply having a website and using Google adwords. “That is what everybody does,” he says.

Measurable returns

Among the challenges is that many of these hotels are still ‘mom & pop’ shops with websites designed by a family member, budgets are tight and quite often there are egos involved which are holding the business back.

There are many marketing agencies like WIHP (or World Independent Hotel Promotion) that can help such as Buuteeq, Ignite, Orourke Hospitality.

When choosing an agency hoteliers need to consider several things:

1.   What are they hoping to achieve, how can an agency deliver that and how will they do it?

2.   Is what the agency can do for you doing measurable – and are they able to deliver a return on investment in a clearly defined period. They should have hard evidence to back this up.

According Soler it is important and possible to deliver an ROI to clients. Before using an OTA or comparison, his firm tests its advertising platform for months to establish exactly how profitable it can be for hoteliers. Right now he says TripAdvisor is the benchmark delivering the greatest ROI at around 13 to 16%. While Google Hotel Apps delivers a higher return the volumes, for the moment at least, are not as high as TripAdvisor.

Most recently WIHP tested its new system with meta-search engine Trivago for 50 of its hotel clients and found that it could deliver a 10x return on investment.

One of the problems, that WIHP aims to address, is that quite often independent hotels have unique booking engines and it is not worthwhile for the likes of TripAdvisor and Trivago to develop an application programme interface for each. Enter WIHP which says it has solved this problem by developed such an interface which allows independents to still deliver pay-per-click campaigns via their own websites that can be tracked right down to the booking. This is something that independents often struggle with. Another issue to solve is pricing. For example, TripAdvisor does not show prices until consumers click which is something a hotel has to pay for. So if their prices are not configured correctly (ie lower than the OTAs) they simply do not stand a chance, says Soler. Because TripAdvisor is used by consumers late in the buying cycle, it is essential to ensure at this point that pricing is correct as this is what will secure that all-important booking.

While TripAdvisor is clearly a useful platform, it is not perfect. Today is that it doesn’t allow for budget capping. So when it sends out it’s monthly ‘traveller’s choice’, hotels can quickly find they have spent their monthly marketing budget on the clicks from people who are only shopping but not buying.

Because WIHP ended up having to carry the cost of this for some of it clients, it has developed a system of budget capping. This has even proved desirable for the some of the big hotel groups, which on TripAdvisor can budget cap at the chain but not individual hotel level.

Dealing with fragmentation

Another issue that really needs addressing is the question of branding. This is important for hotels that have been selected to appear on, for example, a well-known corporate affiliation site like Relais Chateau. The hotels have to be of a certain standard to be selected, says Soler, but quite often when consumers arrive at the local hotel’s website from there  “it is a disaster”. He can’t stress enough that independent hotels need to level up on their online marketing in terms of both image and efficiency.

Admittedly many independents have small budgets, but they need to look at ways to appear bigger and more professional in this highly fragmented space. The big hotel chains have become much more corporate in their approach but the independents still have a way to go.

Independent are a great asset to the hotel industry but this will need to change if they want to survive. To do this they need to “stop being emotional and level up” on their marketing and advertising strategy, says Soler.


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