Definitely Doug 9/29/23: Experience Matters! (Part Two)

9.29.2023
by Doug Rice
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In my last blog, I introduced the topic of software that enables hotel guests to book local experiences. I cited potential key benefits, including commission revenue, guest satisfaction, reduced staff workload, and new direct bookings.

This week’s continuation provides information and questions you may want to ask when evaluating products to incorporate local experiences into the guest journey. It is a complex topic, so I will start with general questions, and then dive down into details in key areas. What matters to you will differ based on your objectives, types and locations of hotel(s), and existing technology stack.

There are dozens if not hundreds of vendors in this space, far more than the 22 with which I spoke (Alliants, Amadeus Discover, BookingWhizz, Crave, E-DestinAccess, FareHarbor, GettinLocal, GetYourGuide, Holibob, Houstr, iSeatz, iVeew, Lokalee, Mount, Neorcha, OccasionGenius, OwnOutdoors, Planaday, Restaurent, Runnr.ai, Travel Curious, and UrVenue). Their products are evolving quickly, so any attempt to provide a list of vendors offering specific capabilities would be incomplete and quickly outdated. If you want to offer experiences for your hotel, I recommend constructing a Request for Information that covers the factors below (and any others) that matter to you. Use that to narrow the field to a handful of products that best fit your specific requirements and existing technologies; then do a more detailed review of those.

This article builds on concepts and terminology introduced in the prior one, so if you have not already read it, I recommend doing so before you continue.

General Questions

You can narrow the field of products by identifying your key objectives. Some vendors are best positioned to deliver commissions, while others may focus on guest experience or loyalty; some do both. At least one is laser focused on driving bookings from major events, such as concert tours, festivals, and sporting events.

Do you need a full solution for experience bookings, or will you be incorporating it into an existing website and/or mobile app? While most of the vendors offer branded (white label) versions of their products, some of them can be tightly integrated into existing sites, while others are accessible only by links from the site. The latter approach is simpler but gives hotels less control over the user experience. It can also cause confusion when the user is taken to an external site.

To integrate a third-party site into your own website, the most common technical approach is an iframe (essentially a window or popup on your site that accesses another site). Iframes are typically invoked through a link or button that is easy to add to the existing site. Hotels can also access aggregator experience products directly via Application Programming Interfaces (APIs), and this may make sense in a few cases, but to offer a full range of experiences, you will need to integrate multiple aggregators. This approach also requires a longer-term resource commitment to add, update, or remove experiences they change. This might be viable for a midsized or large hotel group but challenging for smaller ones or independents.

Another key question is geographic diversity. While most of the products support multiple languages and currencies, many have built out experience inventory only in certain countries or even specific cities, and only in the relevant languages. You will want to focus on vendors that can support the locations where you have or plan to have hotels, and with a breadth of experiences in each one.

There are additional considerations if the vendor serves as the merchant of record for payments (as many of the more established ones do). Most of the payment platforms used by the experience platforms have geographical limitations, and you will need to verify their ability process payments in each country where you operate. Finally, the merchant of record will be responsible for tax reporting and compliance in each jurisdiction; this is complex in many countries, which is one reason why many smaller vendors use the aggregators as the merchant of record. A few vendors allow the hotel to serve as merchant of record and may also support folio charges, but most hotels avoid this because they then become responsible for refunds, chargebacks, and other issues for the experiences they sell.

What specific experiences are likely to be most appealing to your guests? Identify the top ten or so in key locations, and then explore exactly how the booking process works, noting that not every experience may have the same process. Real-time connectivity to the provider’s true inventory via Application Programming Interface (API), whether direct or through intermediaries, provides the ability to get instant confirmations. These are important to avoid losing sales opportunities for the many experiences that are booked at the last minute. The more direct the connection, the less the leakage of commissions and fees to third parties. While most integrators use aggregators to connect to lower-volume experiences, some support direct connections to key operators, applying the 80-20 rule to minimize costs and maximize performance.

Also, certain experiences that are complex to book (e.g., spa treatments and fishing charters) are often not available via API; in these cases, the best option may be to link to the operator’s website or, if possible, embed a white-label version of it in an iframe. Ultimately, you will always be limited by the automation used by each experience operator. If any key experiences are only bookable via manual processes, then you will need a platform that allows a guest to make a request, and for hotel or operator staff to receive, book, and confirm or reject it.

Most experience booking platforms who work with hotels offer a progressive web app, which does not require an app download. These apps are accessible via a hyperlink or can be embedded in a website or the hotel’s mobile app. I have not seen any experience platforms that support only native (downloaded) apps, but would avoid them; for most hotels, the friction of downloading an app will likely reduce sales by 75% or more, and native apps cannot be easily integrated into any existing guest-facing apps the hotel may have.

Getting The Right Experiences

Each solution in the marketplace partners with aggregators, but are they the right ones? While some aggregators have broad geographic coverage, most have significant regions where their options are limited, and many do not handle the full range of experiences. Some aggregators support ticketed events or restaurants, while others do not. What is important will depend on the location of your hotel(s), but look for deep coverage in each location across a variety experience types. Some vendors can also onboard experiences that may not be covered by any aggregator, which can be important especially if a hotel has popular experiences that may be free, such as local parks, running or cycling courses, or free museums. Find out if the vendor charges to add free experiences.

While the number is shrinking, many experiences today still do not support online bookings. If any of these are critical to your hotel, you have a few choices of how to incorporate them. Not every product supports every option, and those that do impose different operational requirements on the hotel staff. In increasing order of complexity, you can (a) list the experience and provide information, a phone number, and perhaps a link to the operator’s website (and you may be able to monetize that link); (b) accept a digital booking request and advise the guest that hotel staff will attempt to confirm it and respond; or (c) ask the guest to visit the concierge desk or front desk (or use the chat function if the app has one).

If you allow digital requests via app or chat, then make sure that hotel staff (or a third party) can monitor and respond to them, and not just during business hours. A lot of activities are booked only the night before, and if you accept requests but do not respond quickly enough, you can both lose the business opportunity and frustrate the guest. For experiences that are impractical to book at the last minute (either because the hotel lacks staff to respond off-hours, or because the experience operator itself is closed), a simple warning on the listing, such as “request no later than 5pm the day prior,” can help set expectations. Some platforms can shut down last-minute bookings for certain on-request experiences based on the anticipated response time.

Another key question is how much control you have over the display order of experiences. Ask the vendor if they accept fees from operators for biased positioning, and if so, to what extent you can override the ordering. If there are specific experiences you want to prioritize, can the vendor accommodate that?Hotels with on-site dining are often hesitant to offer local restaurant reservations, both for competitive reasons and because they are usually non-commissionable. This is a mistake, at least for any hotel that has other restaurants nearby. If a guest asked the concierge desk for a recommendation for a local restaurant outside the hotel, the answer will not be “the only restaurant I can recommend is the one in the hotel.” The same logic should apply when guests use the digital concierge.

If you include restaurants, you can list (and give preference to or even special deals for) your hotel’s own restaurants. But if you do not, and if the guest prefers to leave the hotel (which most do, at least some of the time), then you are giving up the guest to Google, Yelp, or OpenTable, whose recommendations are likely to be less relevant to the guest than your own.

Marketing Experiences to Guests

There is little value in having an experience booking platform if guests never hear about it. Look for a vendor that can target guests with the right offer at the right time. This will vary based on the hotel’s location, whether an experience is likely to be a critical part of the trip (and thus confirmed at or even before the hotel is selected), whether the experience is high-demand and likely to sell out, whether the experience is weather-dependent, and other factors. Ideally, it should be possible to offer certain high-demand experiences immediately after booking the room. Then it might make sense to send a link for booking other experiences a week before arrival, and others a day or two before arrival, and at or right after check-in or even during the stay. Ideally you would focus each message on the experiences most likely to be booked at that point in time. For experiences that only operate on certain days, timing can be adjusted to give the guest the necessary planning window.

While you can integrate experience bookings into the initial room reservation flow, most experts counsel waiting until after the guest has confirmed a room. This avoids over-complicating the booking process and thus reducing the conversion rate. However, if there are specific hard-to-book experiences where your hotel has arranged special access (such as VIP tickets to a high-demand concert), the reverse can be true. In this case, the best option may be to offer an inclusive package as one of the initial booking options. Some platforms support this natively, while others will require some manual workarounds.

The method of communication matters. Prior to arrival, you can passively make guests aware of experience options on the website or app, for example via a button on the booking confirmation page. Proactive options include email, outbound text messages, and interactive chat. Onsite, you have additional options through QR codes in public spaces or the guest room, or through direct access on a kiosk or business center computer.

One thing that vendors who supported both email and outbound text messages all agreed was that text messages were opened and responded to at much higher rates than email, and that email was good only if text messages were not possible or for guests who specifically prefer email. For text, the platform also matters: North Americans tend to use SMS text messages, while most of Europe, the Middle East, parts of Asia, and Australia use WhatsApp. China uses WeChat, South Korea uses KakaoTalk, and Line is most popular in Japan, Taiwan, and Thailand. Some solutions may support other text platforms like Facebook Messenger or Telegram, usually based on guest choice stored in a profile.

Outbound communications need to be in the right language for the guest (ideally) or at least provide the option to change it when they click the link or scan the QR code. Some texting apps support language discovery prior to sending the message, automated translation (but see the cautions noted below it the Content Curation and Development section), or both.

A final question is whether you want to market local experiences to non-guests as well as to guests. Some platforms work only for hotel guests. If your hotel offers in-house experiences that may be of interest to locals or to guests at other hotels or short-term rentals, you may want to ensure that appropriate parts of the site are accessible to the public. You may also want to consider whether there are opportunities to market your capabilities, perhaps through QR codes deployed through some of the experience operators with which you work. Commissions can be earned regardless of who books through your site.

Integrating Experiences with Other Upsells

Many hotels already have a platform for upselling hotel-provided services such as room upgrades, early check-in, and in-house experiences such as spa treatments. If you add external experiences, explore how you can coordinate guest communications. You do not want to send one text message about in-hotel add-ons and another two minutes later about local experiences, just because you are using different vendors. There is no single right way to do this, but vendors should be able to work with you to find the best option, perhaps having one system manage the communications but with links to both, or by moving certain experiences from one platform to the other.

A few experience platforms provide packaging capabilities, which can help market the hotel particularly to conference and meeting planners. For example, you can combine a walking tour with transportation, a box lunch, and branded amenities from the destination to appeal to plus-ones attending a conference or to provide a local option to encourage early arrivals or stayovers. Some select-service hotels and even hostels have done well by creating inexpensive “live like a local” packages, for example combining a bicycle rental, tickets to a couple of museums, and a stop at a local shop for specialty food. If this is important, look for a platform that allows you to pull inventory and tickets as needed from the suppliers at wholesale prices and sell it at a markup.

Consider also whether you want to be able to create your own experiences and market them through the platform. Many hotels offer mixology courses hosted by a bartender, yoga lessons, or food-related events, which can draw both guests and non-guests. Some platforms make it easy to create and sell such experiences, others do not – and some vendors will set them up for you at no cost, while others may charge or expect you to set them up yourself.

Finally, think about whether merchandise is relevant to the destination or to any of the experiences a guest might book. A few platforms integrate stores that can sell merchandise, whether directly from the hotel or by referral to an experience operator or local retailer. The family that took that fishing charter and forgot to get souvenir hats could order them through your website afterwards, or even after they return home, and earn the hotel a commission. This can be simple if the retailer has an online store and accepts referral links, but some experience platforms provide a more integrated process.

User Experience

As you evaluate the user experience, consider both the guest and staff: what will be relevant depends on whether staff will assist guests with experience bookings. If they will, then it should be easy for the guest to initiate staff assistance (via chat, with a button to call, or even by video chat) in the middle of the booking process, and the staff should be able to see everything they OR the guest have done so far (e.g., view their shopping cart and previously booked itinerary) and what they are looking at right now.

In some hotels, staff may be responsible for suggesting things to do. If this is done via chat, they should be able to “push” a booking button or link directly to the guest, or if in person they might provide a printed QR code. Of course, at some hotels, the concierge or front desk staff may offer to make the booking for the guest, in which case their view of the system needs to facilitate the process. However bookings are made, both the staff and guest should be able to see everything that has been done.

Artificial intelligence (AI) is used by some chat platforms to suggest local experiences. This may be the best option for hotels that lack a concierge or other staff to help, but there will be needs or questions that AI cannot fully address. AI does not have to be perfect, but if it does not have 24x7 human backup, then it should be at least as helpful as a front desk associate. At many hotels this is not a high bar, but at a five-star hotel with a concierge, expectations will be much higher. Look at whether and how chat can escalate to humans when it cannot answer a question or when the guest requests it.

Consider how your hotel will respond to escalations, and whether staff tasked with responding have the bandwidth to do so without delay. In most hotels you will not have someone just sitting, staring at a screen waiting for a message from a guest, so how can you be sure to get the staff’s attention when a guest needs it? Larger hotels might route requests to the switchboard operator, and hotel groups might have specialists located offsite in a contact center. Whatever your approach, assume that the guest will be searching at 1am for something to do the next day. If you simply cannot help in a situation, it is better to tell the guest that (and perhaps provide alternatives) than to promise assistance that comes too slowly or that is not good quality.

Personalization

Some platforms can personalize the experience offerings based on information in the hotel’s customer relationship management (CRM) or property management system (PMS); others cannot (and those that can may not have the specific interface you need). Where customer history is not available, they can sometimes use booking data to infer the trip purpose based on the number of people traveling, length of stay, weekend vs. midweek, season, and special rates or packages. These can be very useful capabilities but do require integrations with the CRM, PMS, or other booking system.

Experts agreed that the best practice is to limit the number of options presented. This is especially true for the limited real estate of mobile devices, where most experiences are booked. There was some consensus that the right number was somewhere around ten. But the “right” ten to offer first can depend on what you know about the guest and their party. A petting zoo might make the cut for a family with small children but not for anyone else. Rock climbing lessons might be a good option for a younger couple but less interesting for typical seniors. If someone has registered an interest in art, then obscure art museums or art fairs in the “top 10” may well be a hit.

Look at how well any package can use whatever information you already have about the guest, and whether it provides also filtering capabilities so that guests themselves can select the types of experience that most interest them.  Some platforms allow you to categorize experiences, for example whether they are good for couples, teens, or toddlers; levels of physical exertion; length of experience and time of day; distance and transportation options from the hotel; accessibility; and similar factors. If the user interface allows the guest to pick and choose what matters based on these types of things, personalization can be done even without CRM or PMS integration. Some common filters relate to proximity and transportation options from the hotel – and these are usually not readily available in other online experience platforms, so providing them can positively impact the guest experience.

Hotels have much more data about guests than other experience booking platforms; if they use it well, they can dramatically improve the personalization and conversion rates for experience bookings, compared with other channels.

Generating Rooms Revenue

If your hotel is located near major events that people travel overnight to attend, you may or may not be able to sell tickets for the event, but you can still do a better job of selling rooms. There are a few specific opportunities that many hotels never tap.

First, travelers coming to your hotel for other reasons might extend their stay a night or two if they find out about an event that interests them – and the hotel can tell them. A great example of this can be seen on this hotel website (click the Book Now button and select a date range to see it).

Travelers coming for a specific event, such as a major concert or sporting event, might find your hotel if you optimize your paid SEO for it. I am not aware of any experience integrators that offer an SEO optimization service around events, but hotels could do it manually based on key events that some of the offer. Chances are your marketing staff already does some of this, but probably not as much as they should! If your hotel is close to a major sports arena, buying the right keywords around games likely to draw out-of-town fans can generate a lot of room nights.

For certain events, hotels might want to buy a block of tickets and create a package with a room, tickets, and perhaps transportation. A few products support the fulfillment of this type of offer, while others do not. If you have good information in your CRM or PMS about guest interests, you can send promotional messages to past guests who might be enticed to take a trip that they had not even been considering.

Tracking short-term or one-day events is a lot of work. There are frequent cancellations and postponements, as well as one-time or first-time events that may not be widely publicized. A vendor that spread the cost over many hotels in a city can put more resources against it than a single hotel can, and make it feasible to look at every one to see if special marketing programs are warranted.

Content Curation and Development

The products I have seen take very different approaches to curating and developing content to describe experiences.

Curation is the process of selecting and prioritizing the experiences the hotel thinks are relevant for its guests. Some bias is good; you want guests to see the experiences you think they are most likely to enjoy, and not to see ones that will make them unhappy. Too much bias, however, can send the guest to another platform. You may well choose to always show your hotel restaurant first in a restaurant list, but if that is the only option, guests who want to eat elsewhere will leave your site. In cases like this it is better to have a few preferred partners, such as a concierge might recommend, and list them early in the display.

Most but not all platforms give the hotel at least some control over which experiences are shown and in which priority; a few provide no control, simply showing a citywide list of un-prioritized experiences (not very useful). Look for one where the hotel can make changes itself, or where the vendor will make changes at no cost. If the experience platform supports this and per-guest personalization, find out how the two interact. If you know that a guest will not want a particular experience, but it has been designated as preferred, will it still show at the top of the list?

If the platform uses tags to allow filtering of events (such as “good for couples,” “wheelchair accessible,” or “sporting event”), make sure you can update these easily based on changes or guest feedback over time.

If the vendor does the work of curating experiences, find out how they vet them. A local chain restaurant might not need much vetting, but experiences that have safety aspects (think fishing charters or scuba diving) need a process to ensure that the operators shown are properly licensed and trained. Ask how vendors review new experiences and operators and make sure you are satisfied with the answers. Also consider whether the vendor curates a single list per city, or a list specific to each hotel. Obviously, some experiences might be of interest to anyone visiting a city or area, while others will mostly attract those staying nearby.

Content development is where descriptions, photos, videos, and other descriptive material get created or selected. Some platforms simply extract content from aggregators and reuse it, and while this may be acceptable, it is less effective than rewriting it. Experience operators write content for a specific audience, which may differ substantially from your hotel guests. Their descriptions are designed to sell, not to help guests assess whether the experience fits their preferences. They will therefore not generally include information such as how convenient it is to get to from the hotel, whether hotel guests might get a special deal, or whether the experience is suitable for age or lifestyle preferences.  Look for a platform where either the hotel can edit or rewrite descriptions, or where the vendor does that for them (and if the vendor does it, evaluate the quality of their work).

Most platforms support content in multiple languages, but there are important differences. Some vendors employ marketing staff or contractors who are native speakers in multiple languages and who can optimize content for their own; others use machine translation or require the hotel to enter each language manually. Machine translation often works poorly with marketing messages because many marketing phrases cannot be translated literally, or (even if they can) may sound odd or stilted to a native speaker. If getting it right is important, you need human review.

For any copyrightable content, verify who owns the copyright and that you have the right to display it. Contractual indemnification by the vendor may provide some protection, but it only works while the company providing it is still in business. Vendors who use scraped content illegally (yes, they exist) may not be around when you need them to defend against allegations of misuse.Finally, if you have any expectation of negotiating special deals with experience operators, make sure the vendor can accommodate them. This may not be necessary for a simple back-end override commission based on volume, assuming it can be tracked from reports, but will be needed for special pricing, skip-the-line, buy-one-get-one, and similar offers.

Payment

There are three possible models for payment, and any given platform may support one, two, or all three. In some cases, an experience operator or aggregator may only allow one payment option, so it is not unusual for a single platform to have to accept payments in different ways for different experiences. But there will be less customer friction if can be as consistent as possible.

In the first option, the experience operator or an aggregator takes the payment and is the merchant of record. This is simplest for an experience integration software package to implement because it removes them from the payment process entirely. But it also means that the guest cannot load multiple experiences into a shopping cart and pay all at once, and that the payment process may be totally different for each experience. It may also result in confusion for the guest if currency conversion options differ from one experience to the next: some operators and aggregators may default to the guest’s currency, while others may use their own – and may or may not be able to show approximate amounts in other currencies.

The second option is for the experience integration software vendor to process payments natively. In this case they are the merchant of record, and any currency conversion and checkout process can be done consistently for all or most experiences. Many but not all providers who take this approach also support shopping carts, so guests can book several experiences but check out and pay just once, with payments split behind the scenes. If a vendor uses this option, they will normally be using a third-party service to process payments securely, without touching credit card data themselves. This should be transparent to the user, but it is important to verify and to document contractually to minimize the hotel’s payment card compliance requirements. The ability to charge in the user’s preferred currency can be both a convenience to the guest, and a source of revenue to the integration software provider that can potentially reduce the hotel’s cost.

The final option is for the hotel to be the merchant of record. This is most common for hotel-operated experiences booked through the platform, typically by connecting to the hotel’s point-of-sale system via API. From the integrator’s point of view, this is the same as the first option, since the hotel is the operator, but for the hotel it is different. Far less common is for the hotel to serve as the merchant of record for off-property experiences, paying for them directly and then posting the total to the guest’s folio or credit card. Most hotels prefer to avoid this because it forces them to have to deal with refunds and chargebacks, and because guest folios are usually not created until check-in, after some experiences may have been booked.

Whichever option(s) you use, ensure that all relevant payment methods are supported in all relevant countries. Since most bookings are likely to be made from mobile devices, mobile payments (Apple Pay, Google Pay, WeChat Pay, etc.) are important. Some platforms also support buy-now-pay-later options, which can help increase conversion.

Loyalty Integration

Many platforms support integration with loyalty programs, although this typically requires custom development. Integration may enable guests to earn loyalty points from experiences and/or to spend points to pay for them. A few vendors have implemented Single Sign-On (SSO) with loyalty platforms so that guests can easily move back and forth, even invisibly, between the loyalty and experience platforms. Some also support “points plus cash” pricing options, where a user lacks sufficient points to pay entirely in points but wants to use what’s available to reduce the cost.

Integrating experiences with loyalty can be very valuable to both the guest and to the loyalty program, but can be complex. It is important to understand how and when points are credited for experience bookings that might later be cancelled and refunded. To circumvent fraud, the better platforms verify that the service date has passed and that any fees are no longer refundable before crediting points. Platforms like iSeatz, which works with some major brand loyalty programs, are worth evaluating because they have had to deal with these complexities.

Security and Compliance

Experience bookings involve handling sensitive personally identifiable information (PII). If the experience integration software provider touches this information (whether received from the hotel or collected directly and passed along to aggregators or operators) then it is in scope for relevant privacy and data security regulations such as the European General Data Protection Regulation (GDPR); depending on the implementation, the hotel may be in scope as well. Smaller vendors often claim compliance but are later found to be otherwise, so it is wise to seek third-party validation for them.

Other compliance issues include payment card industry data security standards (mentioned above under Payments) and intellectual property rights on any displayed content (covered earlier under Content Curation and Development).

Reporting

While most reporting requirements are straightforward, what you need can depend on the volume of experiences you expect to be booked. Is a monthly summary report enough, or do you need a dashboard where you can interactively assess and measure the performance of different experiences? Query capabilities can help you correlate specific experiences with demographics, day of week, party composition, and other factors that can then be fed back into the curation process described earlier.

One important aspect to look at in advance is how compensation is tracked. This will vary depending on who the merchant of record is, which as noted earlier can vary from one type of experience to another. You may be able to live with one commission report for some of your experiences and another (perhaps on a different timing cycle) for others, or you may need a single consolidated report for everything.

Conclusion

There is no one best way to integrate experiences into the guest journey, but many options. An independent hotel or franchisee that wants to test the waters and that expects only modest uptake may choose the simplest solution, where the integration platform simply lists the experiences in some fashion and then redirects the guest to an aggregator or operator site when they click the “book” button. This approach requires a minimum of integration as well as easier-to-manage PII and payment card risk. Integration with your CRM or PMS to assist in curation and personalization may also be available “out of the box” for many common systems. A midsized or large brand may, on the other hand, want as integrated and branded an experience as possible, and may have the resources to better assess PII and payment risks.

There is nothing wrong with starting with the simplest approach that your hotel or group can support, measuring results, and then investing in upgrades over time once you see where the greatest benefits may lie.

Every hotel that attracts guests for more than just a “quick overnight” can earn what is basically free money by integrating experiences, and can also improve the guest experience and maybe even generate additional room revenue. As noted in Part One, many vendors have business models that entail no up-front or recurring costs. These can be a great way to start with minimal risk.

If you are unsure of the opportunity, start simple and cheap. You can always upgrade later (to a different business model, to more integration, or to a different vendor) once the opportunity has been quantified. But start somewhere, so you can control more of the guest’s wallet and experience!

Douglas Rice
Email: douglas.rice@hosptech.net
LinkedIn: www.linkedin.com/in/ricedouglas

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