Most hotels in the United States operate in relatively mature markets in which incremental demand is hard to find. The reality is that most hotels acquire demand in three ways: looking to other hotels in the same market to try to shift the market share to their hotels, trying to provide incentives to travelers already planning to come into a market to shift their stays from one time period to another, or by trying to shift demand that may come from a less profitable channel into a higher value channel.
The primary techniques to accomplish these shifts are in three main areas of focus, which we will explore here.
Improve Your Website Experience
Improving the website has been on most hotel’s agendas for several years, but there are some actions a hotel can take to improve its production. Consider conducting an evaluation of your current website.
- How good are the text descriptions?
- Do you have great photography available of guest rooms and public areas?
- How many clicks does it take for a site visitor to find room options and check availability?
- Do you feature special offers and other unique benefits on the home page?
- How effective is your booking engine?
A simple and inexpensive solution, you can examine your competitors’ websites by lining up screen shots of each major section side-by-side; this can go a long way to help you understand how your website visitors may compare you. Make a checklist: look at video, photos of rooms, photos of public areas, read the descriptions of packages or room types. Does the content seem appropriate for the customers you attract at your hotel? Is it merely functional to tell a site visitor the facts, or is it compelling, exciting and enticing?
There are tools that can be used at little or no cost to assess the consumer’s website experience. Short surveys are used to determine the purpose of the website visit and if the site visitor was able to accomplish his or her goal. (Check out 4Qsurvey.com for an example of this). No matter what management thinks of its website, there is no better feedback than that of your website visitors. If customers are bailing out before booking or abandoning the site because the navigation is difficult, the fix may be easy and the results will ring the cash register.
Develop an Engagement Plan
Of course, many hotels have launched Facebook pages, Twitter feeds and are active on consumer review sites, but do you have a well thought out plan for engagement?
That would mean you have a timetable and process for updating your social media content, or you may have a plan for embedding a booking widget on your Facebook business page to capture bookings for those ready while checking out your latest updates.
Think about the primary purpose of social media. It is all about getting your customers and prospects involved with you in an active way. How are you planning to get your site visitors and existing customers to participate with your content? This will vary by hotel but it may mean a call of photos or contests built around special events or rewarding loyal advocates for blogging about their experiences with you. Those who contribute original content to a social media platform may be few but many more are likely to read or watch this content. Is someone on staff keeping your social media venues dynamic and fresh? Are you giving your customers a good reason to check it out and are you sending the highlights by email or e-newsletter to those who have requested updates?
Besides the social media that you control, are you active on external social media sites where your customers go? Have you identified the websites where your site visitors go before they come to your site to look for opportunities to put out bread crumbs that may lead them to your site? Sometimes that may be providing the content they seem to be looking for on these other sites; other times it may be games, contests or ways to encourage dialogue between your customers.
If you are thinking about shifting customers from one time period to another, are you using social venues to talk about activities or special packages during your need periods? Have you created value-add incentives (not just discounted rates) to get the site visitors to book early or book into the time periods you want to fill? If you launch a booking widget on your social sites, are you giving your visitors a compelling reason to use it? The cost of acquisition for a booking on your Facebook business page is very low. Anything you can do to make it appealing can go a long way to bringing highly profitable business and it may divert bookings that could have booked into more expensive channels or into a competitor’s website.
Pay Attention to Conversion Rates
Hotel marketers spend so much time on acquisition that the efforts around conversion can take a back seat. The revenue potential from improving conversion by a few points can be greater than the cost of acquiring new business through a high cost channel, especially if that channel does not bring guests likely to repeat. The two major areas to examine closely in terms of conversion are the two most profitable channels: your own website and your call center or reservation department.
Many hotels think that the booking engine is merely a necessary technology to facilitate online bookings. That could not be further from the truth. It is a valuable merchandising tool and can make a significant difference to the revenue generated by a hotel website. Does the booking engine offer pre- and post-arrival options to extend a stay? Does it include the option to join the email list? Can it offer optional services such as fruit baskets or upgraded bath amenities for an upscale hotel or snack boxes or gift cards for a limited service? How many prospects abandon the site once they reach the booking engine? This data is available to track so a hotel can fine tune this tool and optimize revenue through this channel. Those customers who bail out of your website may well find a competitor’s website or come in through a channel that is easier to use. Shifting share into a hotel’s own website would be a preferred outcome in either scenario.
When examining the call center, the conversion rates are important metrics to track. If the sales scripts are compelling and if the offers are relevant to the callers, the conversion rates will be higher. If a call center has a 30 percent conversion rate, that means three out of 10 callers are booking. What happens to the inquiry information from the other 7 callers? Maybe some are calling for post-booking information to plan their visit, but there could be a few of those callers that were shopping around. Does anyone call them back? If you convert one more of those callers, try calculating how much revenue the hotel would receive.
On the topic of share shifting, many of those callers or website visitors who did not find what they wanted will often find another channel or another hotel. And if you are trying to shift from one time period to another that is more of a need period, making that offer clear on the booking engine and in the reservation center will go a long way to generating incremental revenue in highly profitable channels. It is expensive to acquire new customers. It is more efficient to convert those who have already raised their hands to say they are interested. When planning for ways to shift share look at prospects that are already on your sales path. Closing any holes in the revenue net can yield substantial revenue gains and engage customers who may come back many times in the future.
Cindy Estis Green is the co-author of the recently published Distribution Channel Analysis: A Guide for Hotels published by the HSMAI Foundation. She is CEO of Kalibri Labs, a new analytics company specializing in providing insights for hotels that improve marketing and distribution efforts. She can be reached at cindy@kalibrilabs.com.
©2012 Hospitality Upgrade
This work may not be reprinted, redistributed or repurposed without written consent.
For permission requests, call 678.802.5302 or email info@hospitalityupgrade.com.