May 2015, Singapore
How hotels in ‘mobile-loving Asia’ can apply ‘brilliant basics’ to help keep OTAs at bay
Hotel groups may not have marketing budgets like booking.com, Agoda or Expedia, but simple steps can yield important results. Pamela Whitby finds out how
Travellers are very much in love with their mobile devices, but even more so in the so-called BRIC nations. That’s backed up by data from EyeforTravel’s three recent mobile reports which find that:
- 54.7% of BRICs would welcome accommodation advice on their mobile device versus 42% in Europe and 33.7% in North America
- 47% of BRICs would like information on places to eat (35.4% in Europe; 38% in North America)
- 52.7% of BRICs are strongly or somewhat agree that they are comfortable purchasing travel products via mobile (38.9 in North America; 33.7% in Europe)
Intercontinental Hotels Group (IHG) is certainly experiencing rapid growth in the mobile channel. Globally 30% of web traffic is coming via this platform. While in Asia, Middle East and Africa (AMEA) that may be a bit lower, it’s growing rapidly, says Tarandeep Singh, Intercontinental Hotel Group’s director of revenue analytics in the region.
“In our region we have recently seen app downloads jump by three times,” he says, adding that mobile gross revenues for AMEA grew by over 25% year-on-year in the first half of 2014”
A driving force behind this success is the group’s application of ‘brilliant basics’ across its 250 hotels in the region. Even IHG, which has the advantage of scale of many hotel groups, recognises just how tough it is to compete with the marketing budgets of online travel agents like Expedia and booking.com.
“OTA's are investing billions of dollars in search engine marketing to drive traffic to their channels,” says Singh.
OTA's are investing billions of dollars in search engine marketing to drive traffic to their channels
Tarandeep Singh, IHG Director of Revenue Analytics, AMEA
What’s important to note, however, is not all the traffic the OTA's drive is incremental. There is definitely channel shift happening, says Singh, with guests who used traditional channels like the global distribution systems or calling the hotel direct now booking through the OTA's. And that comes at a higher cost to hotels. However all is not lost and he believes that hotels “have a fantastic opportunity”.
According to Tarandeep, whether the guest has come from an OTA, a travel agent or through direct channels, the real opportunity to drive loyalty and potentially fresh revenues happens when that guest walks through the door. The guest spends at best two to four hours on booking channels making a reservation. Yet they spend, on average ten to 20 hours in the hotel and room.
“So the real opportunity to drive loyalty and potentially fresh revenues happens when that guest walks through the door of our hotels,” he says.
First and foremost this happens at the front desk and simple ‘brilliant basics’ tactics can help.
1. At the most basic level this is about asking the guest for their email address at check in.
2. Checking whether the guest is willing to receive information about IHG products. If so this immediately becomes part of IHG’s ‘big data’. “We are very cautious with the personal data that we collect and ensure that we get consent to reach out to the consumer with any kind of engagement.”
3. Offering the first-time guest a QR code to download the IHG app at check-in, branded collaterals, in room TV videos – as mentioned above this has really paid off in mobile-loving Asia.
By taking these simple steps, guests become part of IHG’s ‘big data’.
As Scott Pusillo, VP Sales & Revenue Management at Viceroy Hotel Group points out, sometimes it’s hard to get hotels to buy into data-driven new ideas. But if you can prove that the effort impacts the bottom line, then most will willingly join in. Training to ensure the front desk knows the benefits is essential, he says.
That’s something that IHG buys into too. “For every ‘brilliant basic’ we introduce, we apply a dollar value to it,” explains Singh. “In other words, if every hotel in AMEA region implements these brilliant basics (and we’ve not one but 10 of these), we can be absolutely certain that hotels will see incremental dollar value uplift in revenues.”
It’s a virtuous circle: in the end hotels want to earn more money and if that little piece of data can lead to more upselling then everybody benefits.
Tarandeep Singh, IHG Director of Revenue Analytics, AMEA will be speaking in Singapore at the Travel Distribution Summit, Asia (May 20-21)