Another day, another set of "Akkeron" hotels go into administration.
We just sit here and shake our heads saying "That's appalling" and then watch it happen all over again. Swallow Hotels, London and Edinburgh Inns, Akkeron Hotels - same hotels different contracts. A decade of wheeling and dealing? Who owns what? Who manages what? Who has freehold? Who has leasehold? Multiple limited company names. Into administration; out of administration. Who really cares?
And we all know it's not just Akkeron. There are hotels being shifted around on paper on a daily basis but what is the consequence for our industry. Is Scottish tourism going to be driven by property speculation and clever management contracts?
You know it may make great financial and economic sense for the property speculators and management companies but it does diddly squat for team building and personal development or for indeed quality of experience or the investment in the fabric of the buildings for the future good of the destination.
Where is the incentive in the management contract to invest?
I remember way back in the day when Grant Sword and Laurence Young were respectively in charge of their family chains; you knew that standards and reinvestment were absolutely key to their longevity and indeed their repeat business.
Hitting fifty must have made much more nostalgic but I'm sure we had a better tourism product when more hotels were in safe hands.
Great article again, republished below, from Des O'Mahony at Bookassist on the need to look at all aspects of distribution for hotels. It's something we have been pushing with all of our clients with our SiteBuilder, ConversionBuilder and RelationshipBuilder Cogs each driving one another.
Online Travel Agents (OTAs) do a really good job at shifting hotel rooms, albeit at a high commission. Hotels need OTAs for exposure and additional sales, but a balance must be struck between brand-direct bookings and those on OTAs.
Is it ultimately worth the effort to keep pushing for direct business, once all the real costs associated with direct bookings are taken into account? Our answer is a resounding yes. But you need to spend wisely. WHAT’S ACHIEVABLE?
Take for example a hotel group that Bookassist operates with in Europe. When Bookassist partnered with them in 2009, just 4% of their online business was coming directly through their website. Their website was a secondary concern, their booking engine was just a PMS web module, they had no digital marketing presence. Today, at the beginning of 2014, that group does almost 38% of its entire online business direct, a factor of ten improvement, and rising. Direct booking revenue has gone from a few hundred thousand Euro per year to almost €6M.
This is not new business - this is redistributed business moved from OTAs to direct. On that redistributed business, they would have paid well in excess of €1M in OTA commission annually, but they now pocket the majority of that margin and can afford to reinvest significantly to continue direct growth.
Same occupancy, same general ADR, but a whopping margin difference in their favour.
The reason for their success is that they put direct booking strategy at the front and centre of their entire business strategy and stopped treating it as a peripheral issue. It's the focus.
IT’S ABOUT MARGIN, NOT REVENUE
Bookassist Account Managers are also trained Revenue Managers and they are well versed in issues of ADR and RevPAR that hotels obsess about. However, as they point out, these metrics viewed in isolation tend to focus hotels on the revenue issue alone, while the real issue today is arguably margin. With the capability of OTAs today, achieving high occupancy is no longer so difficult if you’re prepared to pay. Achieving it with a good margin Per Available Room is another matter.
Successful hotels employ a very unified and integrated approach across the spectrum of online visibility, conversion and growth. Let’s look briefly at some key points in these areas. (I’ll discuss this in the context of websites only, but mobile is increasingly relevant to the discussion.)
VISIBILITY
The primary route to your hotel is still Search, and the path to purchase here has grown extremely complex. People are moving seamlessly from desktop to laptop to tablet to mobile while considering purchase. Additionally Google continually redefines its algorithms, so playing games is pointless. To get good organic search results positioning, you need real and dynamic content, lots of relevant connecting referrers, and you need to understand how web crawling works. In short, you have todeserve your position through relevance. This is a continually moving target. It takes work.
Brand is an important aspect that you can cultivate to drive recognition online, and PPC campaigns for your hotel name are critically important. But by contrast OTAs have significant brand recognition. Even if your search result or advert successfully appeals, a click through gives your website just one chance to impress. By contrast, OTAs get multiple chances per click - they may use your name in advertising or organic positioning to deliver the click, but then the other hotels in the list with yours may look more appealing to the customer.
This is why disallowing the use of your name in OTA advertising is so critical - its not that failing to do so might cost you more commission, it might actually hand the entire booking to your competitor hotel.
It’s estimated that the top OTAs spend in excess of €100,000 each per day PPC advertising. How can you compete with that? Well, since they carry hundreds of thousands of accommodation providers, their average spend per hotel is quite low. So you can actually compete if you know how, without breaking the bank. This takes expertise and industry knowledge. The key to PPC success is to analyse, iterate, optimise - for all segments and all languages. It takes work.
With the rise of Metasearch, hotels now have an additional opportunity to pitch for brand-direct bookings. It’s wise to take advantage of this avenue, particularly since it is being merged with online reputation and social media via TripAdvisor’s TripConnect metasearch and Google’s Hotel Finder, which is heavily influenced by the hotel’s Google+ page.
Social Media and Reputation in the form of ratings continue to be critical in the formation of a positive brand. Both relate to a measure of engagement with your guest in one way or another. Good old fashioned customer service is the key to a successful online reputation, and all staff in your establishment need to be aware of and buy into the level of influence they exert on guest's feelings about their stay.
CONVERSION
All the work put into getting a customer to your website can unfortunately be quickly nullified. Your website must visually appeal instantly, with high quality photography, and the offer presented has to directly relate to the ad or link that generated the click-through. Apart from high quality responsivewebsites and mobile design to cater for the multi-device path to purchase, at Bookassist we employdeep linking in advertising and search results so that the exact attraction that tickled the customer in the advert or search is what is presented to the customer immediately on landing on the site. This coordinated approach requires dynamic website design and seamless data flow from booking engine, to website to online advertising. But operated correctly, it works effectively to eliminate barriers to booking. This is especially important on mobile where each additional tap is tedious and a real barrier.
The days of just sending people from an ad to your website’s front page are long gone. The days of the booking engine just being an isolated page on your website is last century. Integration of all the elements is the key so that live booking engine data is available throughout your site creating dynamic information feeds and dynamic landing pages, and is actively feeding your advertising with live information.
Conscious of credit card fraud, the pontential online customer must also be given a strong sense ofsecurity if they are to convert. Systems must not just be secure, but must advertise their security to engender confidence. Payment Card Industry Digital Security Standards (PCI-DSS) are an absolute must for your hotel's booking engine provider, and, like Bookassist, a provider should be able to provide certification documentation on request.
Differentiation of product is also a conversion winner. Being able to offer better and more attractive deals than the OTAs is critical, notwithstanding price parity. For example, with Bookassist’s Booking Engine you can set up dynamic pricing that gives structured discounts based on length of stay, or day of arrival etc., resulting in overall pricing that beats the OTAs. The engine can also advertise the potential best available deal to a viewer, for example “stay one more night and get 30% off”, all of which not only encourage conversion but also improve the average booking value achieved.
Also, using Bookassist’s meal plans feature allows the base rate for the room to be highlighted, while achieving up-selling for individual breakfast or meal plans once a room is actually chosen. Again, customer uptake on this is very successful, showing that while the low price generates the initial appeal, the relatively low additional price of the upgrade or add-on is also regularly achieved.
GROWTH
Success with direct booking is great. But now you must grow it. One of the primary advantages is that the guest details are now yours, not the OTA’s. And they have already stayed with you so you should now know their profile behaviour. Maybe they book cheap but splurge on F&B. Maybe they always love midweek special offers. Follow up with them, personalise the relationship - is there anything you could have done better? Segment them, categorise, and market to them appropriately and with relevance. Not just blanket email shots that annoy everyone, but infrequent targeted offers with content that builds your brand appeal with them, triggers good memories and encourages future business. It takes work, and many hotels are not doing this well.
As direct booking success grows, you can use tools like Bookassist's Distribution Manager to actively redistribute more availability back towards your own website, where margin is best. Preferentially shutting down high cost channels as your availability drops is a good strategy to maximise your margin. The idea that you would have 100% of your inventory available on all distribution channels at all times is not a good strategy, since it encourages take-up from high-cost OTAs and limits your capability to yield for margin optimisation.
And again, the use of a good CRM strategy in-house to ensure you market to those guests who previously arrived via OTAs is critical. To use OTAs to get the guest once is fine, but if they go the OTA route again to book you then only you can take the blame for throwing away potential margin by not engaging appropriately with them.
360° INTEGRATED APPROACH
There is no doubt that there is a lot for hotels to do in order to succeed in building direct revenue and enjoy improved booking margin. The thoughts above only scratch the surface. And it’s daunting, because the goalposts keep shifting. While there is for sure a cost associated with all the elements discussed above, the overall cost per direct booking should still comfortably undercut OTA charges, with the added benefit of improved customer ownership for the hotel.
The key to real success is a highly integrated approach across all fronts, not just a series of individual uncoordinated attacks in each area from different individuals or companies. Partners like Bookassist and others can bring unity of approach and economy of scale to bear, while individual hotels are rarely in a position to handle all the required elements themselves in a cost-effective way.
Hoteliers, you should seek external expertise if you can’t cover everything in-house. After all, your focus should be elsewhere - you still have a hotel to run.
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Dr Des O’Mahony is CEO and founder at Bookassist (bookassist.org), the award-winning technology and online strategy partner for hotels worldwide.
Ciaran Rowe is Senior Search Strategist, and Dr Des O’Mahony is CEO and founder at Bookassist (bookassist.org), the award-winning technology and online strategy partner for hotels worldwide.
The demands of the online consumer for a more efficient way to assess multiple sources of information, for example comparing lots of sites for the best price for a specific hotel on a specific date, has directly led to the recent rapid rise in meta search websites and technologies of late.
Meta search for travel has actually been around in various formats for quite some time, particularly for flights, though airlines like Ryanair have taken considerable steps to thwart them. Recent news shows that Skyscanner, for example, is expected to massively grow and also expand into hotels.
The first model in the meta search arena was introduced by Sidestep in 1999, in the format of a downloadable widget. The basic comparison principle has remained much the same since then, but the model is becoming ever more sophisticated as technology develops and meta search presence is now becoming an integral part of customer acquisition strategy for hotels.
The most popular sites for accommodation at the moment include Google Hotel Finder, TripAdvisor, Kayak & Trivago, all of whom offer real time availability and pricing from multiple sources to their users, thereby allowing the user to make an informed decision with minimal effort. Consolidation in this space has been rife recently, with smaller sites being acquired by some of the bigger players, and new entrants to the market quickly grabbing a huge presence in the consumers’ decision making process.
The Third Way Online for Hotels
For consumers, the development of meta search was clearly a useful tool in their search process, but for hotels the advantages weren't initially so clear. The rates and availability being displayed were usually taken from OTA sites, so although the hotels might be getting bookings through meta search, they were coming at a high price - up to 25% commission in some instances.
This all changed recently as the meta search providers allowed for integration with the hotel’s own inventory, thus enabling direct contact between hotels and consumers. The introduction of this integration changed the meta search model from being just another distribution channel to becoming a key marketing channel for hotels. Note that hotels can’t directly integrate themselves with most meta search sites - they need to be using a hotel representation service, such as Bookassist, that can manage the data and integration for them in a structured and automated way.
Hotel representation companies such as Bookassist have integrated with Google Hotel Finder, TripAdvisor, Trivago and others to allow Bookassist client hotels’ inventory and rates to be fed automatically and dynamically to the meta search sites, allowing hotels to compete head to head with the OTA pricing on those sites.
For hotels, meta search can therefore be viewed as the “third way” online, sitting right in the middle between the direct model on the one hand, where the customer books directly on the hotel’s own website, and the indirect online travel agent (OTA) model on the other hand, where the customer browses and books on a single branded OTA platform such as Expedia or Lastminute.com. Game-Changing Marketing Opportunity
As a marketing channel, meta search interacts with users at most stages of their research and decision making process. So whether a user goes directly to a site such as Trivago, or if they are doing a general search in Google, or even if they are looking at reviews in TripAdvisor, there is an opportunity for hoteliers to be directly present with their live rates, and the chance to bring the user directly to the hotel website booking page.
Once a hotel is working with a company such as Bookassist, pages on TripAdvisor where they can expect their rates to appear include their own hotel page. They will also appear on generic location pages on TripAdvisor, for example ‘Paris Hotels’, but the level of exposure on these type of pages will depend on how highly ranked the hotel is in within TripAdvisor itself. Ranking is always king on TripAdvisor.
Google offers a bewildering array of placement opportunities once your hotel is using an integrated service like Bookassist. Rates can appear on Google’s Hotel Finder, on Google Maps, on Google+ Local, and in Google Universal searches. In this case the ranking of the placement relative to the OTA offerings will specifically depend on the price of a double room for the dates chosen by the customer, and on the bid placed for the potential click by the representation company managing the listing on the hotel’s behalf.
This has the potential to be a game-changer for hotels - why would a user go to an individual OTA website when they can check multiple OTA offerings in one place using meta search?
Hotels can now compete on an equal footing with OTAs, particularly when it comes to users specifically researching the hotel brand, but they need to understand the medium first and partner with an experienced provider such as Bookassist.
Practical Details
Getting set up to appear on meta search sites is relatively straightforward, but as mentioned, needs to be done via a representation company that has established a trusted integration with the meta search site. The system generally works on a pay per click model, with the hotel charged every time a user clicks through to their booking page, similar to the Google Adwords PPC model. If a user does not click then there is no charge for the exposure. So it’s still valuable free advertising.
Managing these campaigns is a skill that requires experience in the online marketing area, in particular with meta search marketing, so we would advise partnering with a provider that offers a robust integration as well as marketing expertise to get the most from your marketing budget.
Budgets for meta search marketing vary significantly by property, but the costs are not prohibitive. A budget of €500 each per month usually provides good exposure on Google Hotel Finder and on Tripadvisor. However, participating in meta search marketing is not something you should set up and forget about. In order to generate a good return you need to ensure good availability and rate parity or better, as well as a good user experience when they arrive at your booking page or landing page. The click delivery is the meta searchers’ job, but conversion of the customer is still yours.
TABLE 1: Try your hotel's numbers in this calculation.
When looking at the return on investment, it is also critical to factor in the commission costs that were saved by diverting a user from booking through an OTA to booking direct on the hotel site. For example, through an OTA your booking may have been at 20%, while through your website it may be at 3% or less, plus the click charges. As an example, enter your own figures in Table 1 and see what can be achieved. The savings of course need to also contribute to website costs and management fees, but it still is significant. Getting this right on a regular and consistent basis means that there is a considerable ongoing benefit to be had.
What’s more, since the customer converted has booked on your own website, you now have their details for future marketing. This customer is now your customer, not an OTAs customer, which presents further opportunities for brand building and re-marketing in order to capitalise on life-time value. Bottom Line
Meta Search marketing is a great opportunity for hotels. To ensure you get clicks, you need to be focused on pushing the best rates and always having last room availability. Remember that a click is wasted unless you can work hard on ensuring conversion through proper website design, specific targeted landing pages, and a booking engine layout designed to convert.
Meta search is one of so many online marketing approaches, all of which need to be tackled and optimized. It is important to partner with an experienced provider, with a proven track record in online marketing and strategy, in order to really maximise the returns on your investment and to be kept informed of the latest trends and opportunities in the area.
What’s more, since the customer converted has booked on your own website, you now have their details for future marketing. This customer is now your customer, not an OTAs customer, which presents further opportunities for brand building and re-marketing in order to capitalise on life-time value.
Bottom Line
Meta Search marketing is a great opportunity for hotels. To ensure you get clicks, you need to be focused on pushing the best rates and always having last room availability. Remember that a click is wasted unless you can work hard on ensuring conversion through proper website design, specific targeted landing pages, and a booking engine layout designed to convert.
Meta search is one of so many online marketing approaches, all of which need to be tackled and optimized. It is important to partner with an experienced provider, with a proven track record in online marketing and strategy, in order to really maximise the returns on your investment and to be kept informed of the latest trends and opportunities in the area.
Leading hotel strategy partner Bookassist (bookassist.org) today announced the release of their certified interface to Google Hotel Finder.The interface, built by Google engineers and Bookassist's development team, enables live room availability and best rates to be displayed to hotel customers searching on Google, boosting direct bookings.
Up to now, only large travel sites (OTAs) were able to reach customers early in the decision-making process online, but now meta-search technologies like Google’s allow the hotel website to also position itself directly in front of potential guests as they begin their search.Hotels can compete head on with OTAs in Google Hotel Price Ads, on Google Maps, Google+ Local and Google Hotel Finder.
"By being part of meta-search on websites like Google Hotel Finder we are levelling the playing field with OTAs, giving guests the opportunity to book directly with our hotel. Meta-search marketing generates incremental revenues for us, produces excellent return on our ad spend, and is managed stress-free for us by Bookassist", comments Valerie Steinbeck, Group Revenue & Ecommerce Manager, Destination Killarney Group.
"This is a real opportunity for hotels to position their own websites right where their customers are considering options and making decisions", says Mary Collins, Head of Internet Marketing at Bookassist.
With this integration, live hotel rates will now display next to those of the OTAs in Google’s Hotel Finder, on Google Maps, in Google+ Local, and Google Universal searches. Now when a potential customer enters dates in a hotel's destination or for a particular hotel, the hotel's own rates and availability can compete with the OTAs for the direct sale.
While many hotels are taking advantage of this growing direct online revenue opportunity and are adding meta-search marketing to their core marketing budgets the concluding message for hotels must, however, be one of caution. Even though this new technology gives them a new opportunity to compete with OTAs they must be mindful that the technology is simply an enabler. With the increased online visibility it will give to a critical audience, careful monitoring and management of online rates and availability has never been more critical.
For further information for Scottish hotels email Neil or call on 01294 233713
Along with another 99 delegates I'm heading expectantly towards Perth tomorrow to hear about the first combined golf strategy developed for Scotland's golf industry. Ah the first?
Yes well maybe it is technically the first but mischievously (clearly) I couldn't resist looking through the files for the other first combined strategy developed in 2000 as support for the subsequently doomed Ryder Cup bid for 2009. A ten year strategy that came out of pressure applied at the time by the very vociferous and articulate golf tourism group SIGTOA.
So anyway to tomorrow. A new direction? New ideas? New communication frameworks? New ways to reduce duplication between regional golf groups? A new organisational structure? New economic targets? Infrastructure improvements? Support for developing the customer experience? New tournaments? Improved transition between amateur and professional ranks? A new online tee time reservation system? A joint industry website selling tour packages?
There would be absolutely no chance that the speech and the press release would ever include any of the following then?
"Golf is worth nearly £100 million to the Scottish economy every year and is a vital part of our tourist industry.
"As the home of golf, Scotland boasts some of the finest and most famous courses in the world. We have over 500 courses and clubs in convenient city or stunning rural locations that cater for every taste and price range.
"In the past our first class assets have been underused and their potential to attract tourists has not been fully developed. One of the key aims of the Tourist Strategy, which I launched in February, was to address the under performance of tourism by developing 'niche marketing', particularly in areas such as golf and genealogy.
"The launch of the golf strategy today opens a new chapter in Scottish tourism. From now on we will be aggressively marketing our world class facilities and aiming to secure more prestigious events like The Open and Ryder Cup.
"We will also be looking to improve the quality of the typical golf holiday through training initiatives and new investment in the infrastructure.
"I am delighted that Europe's number one golfer, Colin Montgomerie is backing the strategy and I'm sure with his continued support we can raise the profile of Scottish golf to new levels.
"A great golf course with a priceless history must no longer be accompanied by second rate service and sub-standard off-course amenities. That is a package tour to failure. A world class welcome must back our world class golf. To fail on this is to squander a priceless asset and consign our tourism industry to the second division.
"I am confident that the initiatives outlined in the Golf Strategy will have a major impact on tourist numbers, bring more jobs and prosperity to the Scottish economy and ultimately help secure the long-term future of the game".
A New Strategy for Scottish Golf Tourism aims to:
Develop new marketing campaigns for Scottish golf involving spending of up to £500,000 by the Scottish Tourist Board;
Invest in business development through a further £400,000 from Scottish Enterprise and £250,000 from Highlands and Islands Enterprise;
Appoint a new National Golf Tourism Development Manager to lead the implementation of the Strategy;
Focus on attracting more women and children to the courses in Scotland;
Implement training packages to assist golf clubs with marketing, business planning and service;
Establish regional golf development groups to improve the service to visiting golfers throughout Scotland;
Develop the network of 'golf classic' events to improve access for visitors to attractive golf packages;
Provide support for the development of infrastructure and facilities for visitors in Scotland's golf clubs;
Improve the industry's market intelligence by researching golf markets and golf consumer;
Introduce new research methods to monitor the way golf tourism is measured and therefore the progress of the Strategy.
The launch of the Golf Strategy was also welcomed by Deputy Minister for Culture and Sport, Rhona Brankin. She said:
"Today's announcement is a landmark for Scottish golf and presents the sport with an excellent opportunity to grow and prosper in the future.
"By aiming to attract more golf tourists the strategy will strengthen the game nationally, help develop facilities and give more young people the chance to make a career from the sport.
"I am delighted that the strategy also makes a clear commitment to bringing more world class events like The Open and Ryder Cup to Scotland. These prestigious competitions will build on the high profile which Scottish golf currently enjoys, mainly thanks to the success of Colin Montgomerie.
"When the golf strategy begins to pay dividends I think we can look forward to a stronger game in Scotland and a new generation of young people enthusiastically taking up the game".
