This is a viewpoint from Kristian Valk, CEO and co-founder of Hotelchamp.
Is that the sky falling, or just a new era dawning? If you believe the fear-mongers, GDPR is game-over for contemporary marketing techniques.
The European Union’s new General Data Protection Regulation certainly means a significant recalibration for anyone who holds or uses customer data - from May 25, use of that data requires explicit consent, contractual permission, or vaguely defined “legitimate interest”.
Amid the reams written about GDPR, one thing I haven’t seen enough consideration of is the extent to which the hospitality industry is uniquely affected. Any company processing EU citizens’ data, whether it is in the EU or not, must comply with GDPR, or risk a fine of as much as 4% of their global turnover.
Hotel operators, by default, are more reliant on overseas purchases than vendors in other sectors, making it more likely that this legislation will capture hoteliers taking European bookings.
GDPR will affect now-accepted customer communication techniques they use, like cart abandonment responses, retargeting, mailing list management and staying in touch with returning guests.
But this is not a case of Apocalypse Now for the hospitality trade. Not only can popular tactics - like vouchers, mailing lists, personalised messaging and interest targeting - all remain in place for hospitality marketers who play by the rules; GDPR also offers an opportunity to emerge from the shadow cast by a powerful frenemy.
Today, hotel operators feel OTAs hold all the cards, that they have taken control of their marketing channels and customer relationships. But, while small individual operators may feel ill-equipped to tackle the GDPR challenge, I can promise you the large and powerful OTAs are also feeling the strain - probably, even more so.
You see, not only were the OTAs quicker to undertake many of the tactics now being challenged by GDPR, but they are also doing so at far greater scale than individual operators - multiplying the compound drag on the giants.
For OTAs, mailing lists are a massive traffic driver. If they need to re-obtain recipient consent at scale, it could drain their business, and shrink their recipient count. If they cannot find a way to make retargeting work, they will lose one of their crucial advertising channels.
For individual operators, this opens a window of opportunity, to regain more autonomy over how they get their bookings. GDPR hits the “reset” button on the OTA/operator relationship.
Opportunity in disguise
That intervention is fortunate because there are several ways in which GDPR is quite advantageous, not threatening, to smaller hospitality marketers.
It boils down to better quality data. From May 25, organisations can only send communications to recipients who have explicitly opted in to receive them. Pretty soon, it will seem ridiculous to imagine that we ever sent messages to people who didn’t want to receive them.
But, for a long time now, that is precisely what many marketers have done - gaming the system and encouraging the handing-over of email addresses by incentivising cheap mailing list additions by offering ancillary benefits like small discounts.
Starting now, mailing lists should only comprise addresses of recipients who want to receive the mailing list and nothing else. That doesn’t mean operators cannot continue to offer discounts, vouchers or benefits. But it does mean communication channels will now number more conscious recipients.
Wiping unwilling subscribers from mailing lists drives up the relevance and effectiveness of the remaining membership base because, suddenly, you have removed all those tyre-kickers who found their way on to your list without ever really intending to buy anything.
This will make conversions more effective. While a smaller recipient list may risk leading to fewer purchases, actual conversion rate may increase, because a more relevant audience is more likely to check out.
This refined dataset also provides new opportunities for hoteliers to test new messaging, offers and campaigns with a greater degree of accuracy.
Ultimately, this may help to fuel a return to some classical marketing techniques. Now hoteliers can’t simply incentivise a sign-up using an ancillary benefit; they must offer material worth signing up for. That is likely to place a high focus on content, bringing inspirational ideas and messages to customers’ inboxes, information that wants to see value from. And it could place a higher importance on the role of influencers in campaigns.
Get on board
While there is a lot of talk about May 25 as a hard line in the sand, a date that has taken on Y2K-like proportions of dread, hotel operators should stay calm and strategic.
GDPR should be complied with, indeed, but May 25 is not a one-time deal. If operators are not compliant on day one, they should strive for compliance in the next few months. Data protection is a process, not an event.
For operators now, it is not just about retrofitting their existing practices into a GDPR-compliant present tense. Now all their future marketing plans, too, must be conceived with compliance in mind.
With talk gathering that US legislators may seek to implement an equivalent law to Europe’s GDPR, there is every reason for operators to seize the opportunity today.
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