Thought-provoking new research by Ecole Hôtelière de Lausanne and RateTiger suggests hotels are looking beyond the marketing channels of the online ecosystem towards more traditional paths to direct bookings.
The study involved 3- and 4-star hotels evenly distributed in France, Germany, Spain, United Kingdom and USA, altogether representing 72 total hotel properties (65% were chain and 35% individual properties, with total room count between 25 and 392 rooms).
As far as digital marketing strategy, a whopping 32% had no online marketing or digital strategy whatsoever.
Even the hotels with significant digital strategies remained unconvinced as to digital's actual impact on revenue, and many do not plan on investing in social media whatsoever in the coming year.
In fact, only 12% of the surveyed properties used social media in their channel management strategies. This points to a continued skepticism of social media's utility in boosting actual revenue per available room (revPAR), that many hotels use as one of their key metrics.
One 4-star hotel in Paris with 82 rooms put it this way:
“We’re not at a point where we can track social media. There must be a point of sale to really become a valuable resource, but even then we need to master it, so there is no need for sales here at this time.”
It seems that the majority of the pushback regarding online distribution surrounds the iron grip of the OTAs.
The surveyed revenue managers were concerned about increasing rate parity so guests are offered the same price across channels, while also increasing direct bookings to offset lost top-line revenue due to OTA commissions.
Another Parisian hotel with multiple properties commented:
“OTAs are getting bigger and bigger and they have such a power that we cannot fight against them, so we are trying to find some other ways of communicating and being exposed on the web. Of course we need to be present and we need to have some availability and rate parity with the OTAs.”
Despite this desire to beat the OTAs, and drive bookings on their own sites, some hotels are either ignoring the potential inbound traffic from social media, or are not quite understanding how a content-rich social media strategy can actually convert online visitors before they have a chance to search on an OTA's website.
By creating content that is valued by potential guests prior or during a decision-making cycle, hotels have the opportunity to leverage reviews, photos, videos and destination-related content to attract guests into their own booking engine.
Social media might not be always be a direct driver of booking - ie. people may not want to book hotels on a brand's Facebook page - but providing content that informs potential guests during their research
To us here at Tnooz, these results seem slightly skewed from the sorts of online results that we report on every day here - including this recent infographic that demonstrates how vital an integrated web presence can be to travel companies. Take these revealing stats, for example:
- 50% of travel companies surveyed agreed that direct bookings were generated by social media
- 33% of people surveyed changed their hotels after using social media
- 10% switched resorts after using social media
So it seems that the 33% of the hotels surveyed in the EHL study are likely not among the 50% of travel companies that generated direct bookings via social. It basically comes down to who your target customers are, and where they make their decisions.
Hotels looking to stabilize revenues via corporate bookings need to pursue offline channels to capture these larger accounts; hotels focused on a B2C strategy must go where those customers are - namely, social media.
And all of the above need to be hyper-aware of the travel customer's lifecycle, and determine how their particular property and/or brand can participate in each one of these phases.
Most tellingly, perhaps, is that many of the very same skeptical survey respondents see a robust future for digital marketing - even if they have yet to embrace the future.
It would have been especially interesting to see comparisons between the 32% of respondents without any digital marketing strategies and the 72% that see a future in some aspect of digital marketing - whether mobile, social media or the Internet in general.
A balanced strategy is one that streamlines communication between the sales and marketing departments, allowing each department to share expertise and strategies to most effectively increase revPAR, exposure, and rate parity.
By continuing to invest in the future solutions, properties can actually realize future gains now, by fundamentally rethinking the way that they approach their increasingly complex distribution challenges.
NB: Rotary Phones image from Shutterstock.