The Revinate Blog

What Makes a Hotel a Digital Genius?

Social media, mobile applications, and a strong web presence are foundations of success for hotels today according to a recent L2 report.  Hotel owners and GMs often ask ­- “how can investment in technology and social media drive revenue for my hotel?” and “how can I justify the expense and effort that it takes to become a digital genius?”

The Rewards of being a Genius

Our friends at L2 show that excellence in social, mobile, and web functionality clearly increases revenue.  Their report, Digital IQ Index, quantifies the digital competence of over 52 global hotel brands, giving each a digital IQ, and bestowing a few competent brands with the title of “genius.”  In the 22 hotel brands where revenue was tracked, there was a strong correlation between higher digital IQ and increased RevPAR.  Hotels that excelled at marketing in the digital space experienced a 5 to 15% increase in Revenue Per Available Room between 2010 and 2011.  Many hotels with less focus on digital experienced stagnant growth in RevPAR over the same period.  This proves that investment in social media, mobile applications, and web clearly pays dividends.  So what does being a digital genius hotel entail?  What best practices can you adopt to get the most out of your digital investment? 

Excellence in Social Media

To become a social media genius, the report highlighted the importance of content, engagement, size of community, and participation on varied social media platforms.  The goal of social media engagement is interaction from both sides, but many marketing teams feel as though they need to “pull teeth” to get customers to respond.  The L2 report discusses what followers most value and respond to on social networks.   Photos and video of hotel features had the highest interaction rate.  The next highest driver of interaction was contests.   Trailing contests on the interaction scale were company news, local tourism information, and special offers respectively.  This shows that visitor photo contests and investing in high quality images are great ways to increase interaction and enhance your social media strategy.  While many hotels focus heavily on special offers and fan deals on social networks, this report proves that this is not the most effective way to keep followers engaged.

The size of your community is an obvious factor in using social media to drive revenue.  Simply put, more followers = more revenue.  We have talked much in recent weeks about the Facebook Factor, or the likelihood of purchase by followers.  This report provides more evidence that growing the number of followers should be a key goal, assuming you are dedicating time and energy to keeping them engaged.  Integration of social media with online and offline communications is the most effective way to grow your numbers. 

The L2 report yielded some fascinating information about emerging social media channel adoption by hotels in the study.  Despite the hype surrounding Pinterest and Tumblr, hotels moved onto Google+ and foursquare in far greater numbers.  In fact, 63% of hotels began engaging with Google+, 58% adopted foursquare, and only 17% launched a Pinterest presence.  For hotels and restaurants that are active on foursquare, Revinate provides full support of the platform to see when guests check in and leave tips. You can even set up 'specials', all from within Revinate. Remember, your hotel does not need to engage with customers on every social media channel, but a varied and active presence will increase the ability for customers to interact with you in meaningful ways. 

For established social channels, hotels are expanding the functionality of their pages.  For example, 10% of hotels allow for full Facebook booking and another 54% start the booking on Facebook and then complete it on their hotel site.  This means that 64% of hotels directly seek bookings from their Facebook pages and customers respond. Many Revinate customers are using Social Buzz, a dynamically generated reviews widget, to share the hotel’s latest reviews on Facebook. Having reviews appear on a tab near the booking engine keeps prospects from linking out to view reviews on review sites or OTAs.

There is also a customer driven trend to discuss customer service on social channels.  According to L2, 77% of hotels using Twitter fielded tweets dealing with customer service inquires and concerns.  The good news is that the most damaging customer service concern is the one that you don’t know about.  Carefully monitoring social sites, especially Twitter, since it is completely public, is the best way to handle customer concerns and protect your reputation.  Revinate’s dashboard with real-time alerts can be an invaluable tool to keep up with customer service related tweets. To see some great examples of service recovery, check out this success story on Hyatt Regency Chicago.

Excellence in Mobile

Full adoption of mobile friendly browsing and booking is what separates genius hotels from the rest of the pack.  Travel Weekly just reported that mobile hotel booking is expected to jump from 1 to 4% in 2012.  In fact, Orbitz has reported that 9% of its 1^st quarter bookings this year took place on mobile devices.  Also of note is the 19% increase in travel spending by the 18 to 24 age group who are trendsetters and heavy mobile users.  With Smartphone sales up 58% last year according to Travel Weekly, the growing trend for customers to book via mobile should be on everyone’s radar.   

L2’s mobile geniuses offered full booking apps for both the Android and IPhone operating systems.  All geniuses have a mobile-optimized website for easy viewing on the go.   According to the report 66% of the hotels studied had full mobile booking functionality, which many view as critical to increasing direct bookings and limiting OTA expense.  Mobile concierge applications are proving to be very effective in driving revenue for food, beverage, and spas in high performing hotels. 

 Excellence in Web

The importance of a full featured website for your hotel is not new.  Reports by eMarketer state that 46% of active travelers visit the hotel’s branded website before booking.  However, the clear benefits of integration between hotel sites and social channels are beginning to be understood.  L2 reports that hotels who include a social sharing feature registered a 12% increase in page views.  Surprisingly, only 40% of hotels do this, showing slow adoption of this integration vs. other industries. 

Feature rich websites are critical to increasing traffic and keeping bookings direct.  Linking to your Facebook page via the “like” API is a wonderful way to drive engagement and create loyalty.  With live chat, customers can get questions answered quickly and easily which keeps them off OTA sites where you risk losing them to a competitor.  Hotels that offered integrated guest reviews sent 39% less traffic to OTAs, thus increasing the profitability per booking.      

Content rich websites helped hotels keep users on longer, thus increasing booking rates.  Photo galleries, guest testimonials, local attractions, curated itineraries, and concierge tips, add value to the browsing experience and keep customers loyal to your direct booking channel. 

Be a Digital Genius

Hotels have seen a shift in what constitutes genius in the world of digital marketing.  The revenue and traffic driven by SEO, Banner Ads, and Email marketing are still important business generators, but they now share the stage with social, mobile and, fully functional web.  One of the most critical elements of all digital marketing is ability to track revenue.  Many hotels make an investment in new technology without the ability to track revenue easily from that investment.  This is especially true with social media, a key area where Revinate can help.  Revinate tracks all your social media engagement and helps aggregate all your analytics into one simple dashboard. Do your best to build traceability and flexibility into your digital marketing plans, so you can learn what works for you.  This information gives an overview of what works for hotels in general, but every property is unique and can drive engagement, loyalty, and revenue in different ways.

How to Drive Customers to Book Direct

The commissions paid to Online Travel Agencies (OTAs) are often viewed as just “the cost of doing business” in the hospitality industry.  According to a recent L2 report, hotels forfeited $2.5 Billion to OTAs in 2010 which begs the question- are there ways to limit this expense?  In the Facebook Factor I talked about how fans and advocates are more likely to book directly with hotels.  This can reduce the influence of review sites and the commissions paid to OTAs such as Travelocity and Expedia.  How can savvy hotels increase this phenomenon?  How can hoteliers use social media and enhanced technology to incentivize customers to book directly?  In a slowly rebounding economy the cost savings between direct bookings ($2 to $6) and OTA bookings ($40 to $120) can mean the difference between thriving and simply surviving. 

Driving Direct Bookings

Consider why OTAs are so popular….they allow unparalleled browsing of properties by price point, location, user reviews, ratings, etc.  Customers use OTAs like the yellow pages of hotels- if your property is not listed customers are less likely to know that you exist.  An OTA or review site is usually the first stop when a traveler is considering a trip. Travelers often do not book during that first visit to Hotels.com, TripAdvisor, or Travelocity.  They browse to learn about pricing and availability before they move forward with booking both a hotel and transportation.  During an initial browsing session customers may view a few profiles, read reviews, and click through to a hotel’s website for more information.  This is the ideal time to start a social media relationship with that customer and hopefully drive a direct booking.  Consider some ways to convert travelers to your direct channel.

Integration with Hotel sites and Social Media

Above all, hotels should have direct access to their website from all review sites (TripAdvisor, Yelp, etc.) and OTAs where possible.  Additional investment in services like TripAdvisor’s Business Listings will lead to more direct reservations.  This will guide browsing customers not only to your website but also to your social channels where you can communicate with them in unique ways.  A website that is highly integrated with social channels can foster the following powerful social engagement….

• a shopper wants to remember your hotel, so they pin an image to their Pinterest trip planning pinboard 
• a potential customer “likes” you on Facebook to see if you offer any fan-based special promotions 
• a customer views your Twitter feed to learn about the atmosphere and mood at your hotel

When you captivate potential customers with social media you boost their interest in your property. This can prevent them from going back to the “yellow pages” (an OTA) to consider other options before they book.  If you have given them a “friends” rate or just made booking easy from social channels, you can avoid OTA fees.  Good social media engagement with all fans and followers will increase this effect.

It can also be effective to provide some functionality that the OTAs offer directly on your site.  Most travelers would agree that the most persuasive and valuable part of the OTA experience is user reviews.  By pulling in real-time user reviews from TripAdvisor or Yelp, you may give that shopper enough assurance that your property is the right choice.  This should be done in a transparent way, reporting both the good and the bad to ensure customers view the online reviews on your site as credible.   Revinate makes it really easy to share reviews with Social Buzz. Here is a great example from Distrikt Hotel in New York City.

Focus on Mobile

Same day bookings on mobile devices are the new “walk in” business for hotels.  In fact, Google reports that hotel bookings on mobile devices have grown by 3,000 percent between 2010 and 2011.  Many mobile bookings are made in close proximity to the hotel and often for same day check-in.  When mobile customers make a booking for that night, they often book direct due to a fear of reservation system delays.  Shoppers via mobile devices are also looking to make reservations more quickly.  Affinity to brands plays a large role in mobile booking, because customers want to book quickly and spend less time searching extensively for options.  In addition, same day reservations often involve a higher rate category, which makes mobile booking an especially profitable channel for hotels. 

Considering Rate Parity

Most hotels match their direct rates with the rates offered through Online Travel Agencies, which pleases customers.  However when rates are the same, hotels need to provide additional value to the booking process to incentivize direct booking.   This is also important in offline booking.  HotelMarketing.com recently reported that mystery shoppers were asked to call reservation agents to check on rates relative to OTAs.   Most agents did not motivate those shoppers to buy direct; in fact many of them supported and sometimes suggested OTA booking despite the fact that this is a less profitable channel. It is critical that all staff understand the benefits to having customers book directly.  If everyone understands the importance of channel conversion, then they will be motivated to close new bookings over the phone.  When customers are intent on booking online agents should drive customers to the hotel’s direct booking engine with information about benefits and ease of booking.  

Offer something unique

Hoteliers should remember that when rates are equal, the guest will book in the easiest possible way with the most benefit to them.  However, it is possible to offer something that the OTAs cannot.  On a recent trip I booked a room direct with a large hotel brand.  As I was moving through the reservation process, I was offered a low cost upgrade if a better room type was available on the day I checked in.  An upgrade, that might have been given to me anyway, became a chance for a guaranteed upsell. In essence, I was given the room I really wanted with much better views at a lower rate than the OTA offered.  In addition the hotel was able to move me out of the lower category room, allowing them to remain competitive on the OTA sites and sell that room to someone else.  Hilton also benefits from this because word of this type of direct booking benefit is the kind of thing that gets broadcasted quickly via social media.  

Streamline the booking process

It is easy to undo the benefit of these steps if your booking engine is more complicated than booking through an OTA.  Consider mimicking the look and feel of the OTA booking process so that customers are more likely to successfully complete a booking.  Audit your booking engine on multiple platforms and mobile devices to ensure that there are no barriers to booking.  Extra investment and focus here is critical when you want to make reservations more profitable.  You have worked hard to get those customers on the hook; don’t lose them while you are reeling them in.

Relationships with Booking Services

OTAs and review sites are excellent marketing alliance partners, but relationships must be managed carefully.   The benefits of working with OTAs outweigh the costs for most hotels.  However, the risk of losing a potential customer to another listing on an OTA makes the transition to direct booking a great idea when the opportunity exists.  Direct bookings also allow hotels to manage the customer relationship end to end.  I often read reviews where an unsatisfactory booking experience with an OTA tainted the customer’s view of their entire stay.   Funneling bookings to direct channels can make reservations more profitable, but also protect your reputation.  Following these steps can turn shoppers into loyal direct customers. 

Approved by TripAdvisor

Revinate clients will notice a cosmetic change to the service this week. We will now be displaying the 'Approved by TripAdvisor' logo to show that we are licensed by the company to use TripAdvisor content on our site.