With the explosion of the “digital way of life,” the traveler’s customer journey has become increasingly complex, which necessitates independent hoteliers to rethink and overhaul their marketing and technology stack strategies and investments.
Today’s online travel consumer is exposed to more than 38,983 micro-moments in any 60-day timeframe and visits an average of 18 websites via multiple devices across eight sessions before making a hotel booking (Google Research).
Google defines this customer journey as a fluid series of interconnected stages: Dreaming, Planning, Booking, Experiencing and Sharing Phases, in which every phase both influences and is being influenced by the other steps of the journey.
The OTAs have been investing heavily in digital marketing initiatives and technology solutions to engage the traveler throughout the customer journey, acquire them as OTA customers, and keep them engaged throughout their lifetimes.
As a result, the OTAs have de facto monopolized the guest relationships and left independent hoteliers in a tough position.
This investment by the OTAs is rewarding them well: over the past 6 years, the OTAs have increased their market share by over 40% at the expense of the hotel direct channel.
What should independent hoteliers do to reassert themselves in the customer journey to get in front of travel consumers and win the direct booking?
To begin with, independent hoteliers must understand that digital marketing consists of three distinct, but interconnected and interdependent categories:
- Guest Engagement Marketing
- Guest Acquisition Marketing
- Guest Retention Marketing
Second, independents must “play” in all of these three categories: Not in one or two, but in all three categories.
Only and only then they will be able to re-establish relationship with the digitally-savvy customer in all phases of the customer journey: Dreaming, Planning, Booking, Experiencing and Sharing and win the direct booking, resulting in decreased OTA dependency and lower distribution costs.
Let’s review the three categories of digital marketing:
Guest Engagement Marketing
This category includes brand marketing, social media, PR, influencer marketing, content marketing, etc.
These marketing initiatives help hoteliers connect with the online traveler in the Dreaming and Planning Phases and steer them “in the right direction” in the next phase – the Booking Phase.
Guest Acquisition Marketing
This category includes all Performance Marketing i.e. ROI-focused direct-response marketing formats, including: SEO, paid search/SEM, display advertising, retargeting, metasearch, email marketing, affiliate marketing, omni-marketing campaigns, etc., as well as all of the hotel website related marketing initiatives: promotional slides, special offers banners and promo tiles, limited time offers, personalization marketing offers, etc.
These initiatives build upon the successful customer engagements in the Dreaming and Planning Phases and help hoteliers “close the deal” i.e. convince the online traveler to choose the hotel and a direct booking at the hotel in the Booking Phase.
These performance marketing initiatives are ROI-centric, focusing on seasonal and ad hoc occupancy needs and acquiring first-time guests.
Guest Retention Marketing
This category includes all CRM marketing initiatives in the pre-, in- and post-stay marketing, loyalty marketing, drip campaigns and marketing automation initiatives aimed to turn the guest into a repeat guest and loyal customer.
Building upon the customer relationship established in the previous Dreaming, Planning and Booking phases, and utilizing CRM and loyalty marketing initiatives, hoteliers can win the guest loyalty in the Experiencing and Sharing Phases.
What is the situation today?
Most independent hoteliers focus only on a single digital marketing category: Guest Acquisition Marketing, and not even on all available marketing initiatives, while completely ignoring the other two marketing categories Guest Engagement and Guest Retention.
This lack of comprehensive marketing approach results in:
- Worsening ROIs from marketing campaigns due to severe competition by the OTAs in all performance marketing initiatives.
- Lack of “fresh supply” of engaged and intrigued potential guests coming down the Guest Acquisition pipeline from the Dreaming and Planning Phases.
- Shrinking number of repeat guests due to half-hearted or absence of any efforts in the Experiencing and Sharing Phases.
- Ever increasing dependence on the OTAs.
- Deteriorating hotel bottom line due to spiking distribution costs.
Focusing only on Acquisition Marketing is one of the main reasons why independent hotels have less than 10%-15% of room nights on any given night coming from repeat guests. Compare this to 50%-55% for the major hotel chains.
The difference comes from ignoring or underinvesting in the two main digital marketing categories: Guest Engagement and Guest Retention Marketing.
Here are the action steps independent hoteliers must undertake in order to win the direct booking of travel consumers...
1. Establish and maintain a robust presence in the Guest Engagement Marketing Category to connect with the online traveler in Dreaming and Planning Phases.
According to Google, in the Dreaming Phase, 82% of leisure travelers are undecided on the accommodation they will book, which provides independent hoteliers with ample opportunities to “grab the attention” of the traveler and “ignite interest” in the hotel location, product and value proposition.
Only by engaging and intriguing travelers in the Dreaming and Planning phases, hoteliers can ensure a “fresh supply” of potential bookers to the next stage in the customer journey: The Booking Phase.
The Engagement Marketing category employs practices and initiatives needed to identify and differentiate your hotel product from everybody else’s: your competitors, the OTAs, etc., and communicate your value proposition to potential guests.
The commoditization of the hotel product, in which hotels are forced to compete with the OTAs strictly based on rate, leaves the hotel little opportunity to communicate the value of the hotel product to potential guests.
The OTAs have mastered the “sell on rate” game, and hoteliers have little chance in winning this battle. To combat this, hoteliers need to re-learn how to “sell on value” as opposed to “sell on rate,” and need to adopt an effective website merchandising strategy.
The Guest Engagement Marketing category offers limitless opportunities for the hotelier to present the hotel product and value proposition directly to the online travel consumer: communicating via content marketing, PR and social media the unique features of the property such as hotel location, self-service guest services technology and amenities, mobile tech-friendly accommodations, streaming media hubs, award-winning F&B, up-to-date function space and amenities, news-worthy golf and spa amenities, etc.
How enticing are the property special offers, packages, and promotions play an important role in communicating the property’s value proposition.
Are promotions unique, seasonal, and outshining the competition? Enticing special offers and packages built around the property’s unique value proposition and hotel product aspects are a sure way to convert lookers into bookers, while capturing more direct bookings.
Here are some marketing initiatives in this category:
- Brand marketing: lifestyle editorial blogs
- Content marketing
- Performance marketing initiatives used for branding purposes: brand-focused display advertising and sponsorships, destination-focused SEO and SEM/paid search, etc.)
- Video marketing (destination and local experiences video content)
- PR
- Social Media
- Influencer marketing
Action item: Partner with an industry-specialized full-service digital marketing agency or PR agency to lead the efforts in this category.
2. Invest adequately in the Guest Acquisition Marketing category and take full advantage of all performance marketing formats in the Booking Phase: from SEO, SEM to display advertising, retargeting, metasearch, email marketing and omni-marketing campaigns.
This is the stage to convert the engaged travel consumer into a hotel guest by utilizing the full range of performance marketing (direct response) initiatives and advertising formats:
- SEO initiatives such as content marketing focused around hotel promotions, local time-sensitive events and happenings, schema markup to helping the search engines “understand” the content and intent of your website, especially dynamic content elements such as events and happenings, special offers, opening hours, star ratings, etc
- SEM (Paid Search) with marketing messages around your concrete offers, promotions and packages.
- Intent Data powered Display Ads featuring real-time rates and availability based on the travel consumer’s date of travel.
- Email marketing campaigns, focused on concrete promotions and occupancy needs.
- Targeting and retargeting display ads
- Facebook Travel Ads featuring real-time rates and availability, targeting Lookalike Audiences and key feeder markets
- Metasearch marketing campaigns via Google Hotel Ads.
- Multichannel marketing initiatives, featuring Limited Time Offers to fill seasonal or occupancy needs.
Action item: Partner with an industry-specialized full-service digital marketing agency to lead the efforts in this category.
3. Launch a robust presence in the Guest Retention Marketing Category to reinforce the brand values, enhance and deepen the customer relationships, and win the guest loyalty in the Experiencing and Sharing Phases to establish a steady “supply” of repeat guests and brand ambassadors.
Acquiring a new guest is 8-10 times more expensive than retaining an existing guest. Increasing the number of repeat guests from the current 10%-15% would bring enormous benefits to any hotel and help lowering marketing and distribution costs.
According to Phocuswright, 79% of hotel website bookings made by travelers who belonged to a guest recognition or loyalty program.
Here are some marketing initiatives in this category:
- CRM marketing initiatives with pre-, in- and post-stay messaging aiming to engage the customer, remind of booked services, inform of hotel location, local tours and activities during stay, recommend and upsell services, and make sure guest experience is at its best.
- Upselling and engagement marketing initiatives.
- Marketing automation with drip and event-triggered marketing initiatives.
- Guest recognition programs.
- Loyalty marketing initiatives.
Action item: Partner with a comprehensive CRM technology and consulting company to empower your property’s efforts and provide not only the technology tools, but consulting and best practices.