Disruptors in the global hotel industry – everything from home-sharing sites like Airbnb, Tujia, HomeAway, BnB Hero and Roomorama, to OTAs and other new sets of investors, have been rapidly carrying out acquisitions. They have been able to successfully create a torment in travel and hospitality landscape.
But instead of focusing on how to battle disruptors through legislation and PR, hoteliers, chain executives and operators should start thinking about doing some disruption of their own!
It is time to should stop worrying about the effects of disruptions and instead focus on how to outdo these upstarts. Here are five simple steps to disrupt the disruptions in the rapidly changing hospitality industry.
#1 The debate about who owns the guest occupies center stage!
Hotels have a limited choice now regarding whether or not to distribute to OTAs. However, the ownership of the guest has become a challenge. A couple of OTAs announced last year that they would cease to provide hotels with the guest’s email when it sends guest confirmation. When a hotel fails to access guest data readily, the OTA “owns” the guest. This hampers a hotel’s ability to capture new as well as repeat guests with the highest value.
Although we can’t ignore the OTAs too for source specific markets unless our own Brand.com is strong enough to pull direct business, hotels require data for effective marketing so as to past guests and access data to churn this further. Train front desk staff to collect data from guests at check in, and concentrate on growing all direct channels along with OTA contribution. This will ensure that the guests are owned by the hotel too.
#2 Mobile marketing and mobile commerce are set to revolutionize the industry.
In 2016, 51.8% of travelers who book trips via digital means will do so using a mobile device, according to eMarketer’s latest estimates of digital and travel research and booking. That will be up from 43.8% this year. Clearly, a robust mobile marketing plan is in order. This means responsive design, one-click booking, and location technology. Some hotels are surprised to hear that a comprehensive mobile marketing plan calls for integrating click-to-call campaigns.
According to Google’s “The Role of Click to Call in the Path to Purchase,” 68% of hotel guests report that it is extremely/very important to be able to call a hotel during the purchase phase, and 58% are very likely to call a hotel if the capability is available in a smartphone search. Of those who are likely to call directly from search, 40% will call to make a purchase, and 50% will call to ask about promotions or incentives. Like other segments of the online marketplace, mobile is playing an increasingly important role in online travel. Guests typically take a cross-platform approach, so it is essential that hotels offer a seamless Omni-channel experience before, during and after their stay.
#3 Market share shifts mean more competition.
From 2014 to 2015 ADR grew 5.2%, RevPAR grew 7.2%, and occupancy grew 2%, according to a June 2015 PKF Hospitality Research report. However, supply in the top 59 metropolitan markets is projected to increase 3.1%, and hotels are beginning to see more competition from private accommodations, especially as vacation rentals and alternative accommodations become widely available across traditional OTA channels. The increasingly competitive market requires hotels to craft strategies around capturing more market share. Strategies include:
- Actively monitoring rates and crafting hotel revenue management strategies that include alternative accommodations in your competitive set.
- Creating last-minute mobile promotions and tracking the same for competition and respective market.
- Marketing especially to locals to encourage staycations and generate word-of-mouth awareness.
- Honing pre-stay service levels which can set your property apart from the comp set. A well-trained staff can increase conversions substantially, while pre-stay email blasts reduce the likelihood of cancellation.
#4 Guest acquisition costs continue to rise!
OTAs are capturing an increasing market share, and commissions are rising at twice the rate of revenue growth, according to the Hotel Asset Managers Association, and recently there has been concern
that the Billboard Effect no longer exists. To offset rising commissions, hotels must shore up reservation sales to ensure that valuable phone channel reservations are maximized to the fullest.
“Based on an average of stay values, phone reservations bring in 38% more revenue than OTA’s and almost 9% more than web reservations.”
To make sure that a voice channel reservation value is maintained, hotels need to implement call tracking, regular coaching, and reward reservation alongside the usual performance-based incentives.
#5 Understand how travelers are changing to use data to put their needs first.
Know your travelers. Last-minute trips are on the rise, and more people are planning on a last-minute trip in the coming year. The short local getaway and mini-vacations will continue to trend. Leisure will continue to grow, according to Fortune, and we predict that multi-generational and multi-family travel will experience growth, as well.
By looking at historical booking data, we can see that bookings are tied to keywords and search queries that drove the bookings. This is a goldmine of data in the CRM itself which can integrate data from a plethora of online and offline sources. This information helps us to dig deep into a channel of guests, their behavior as well as their reservation department, where the revenue is present for the development of a plan that is informed by real guests, so as to weed out unnecessary steps driven by what the hotel identifies as profitable.
Using these key techniques, industry leaders can wrest back control of their destiny in the travel and hospitality hemisphere.