2016, We’re On To You
What Hotels Need to Know to Prepare for the Year Ahead in Digital Marketing
The past year was a wild and successful ride for the hotel industry. A banner year in terms of occupancy, 2015 was also a year of big consolidation and continued increases in guest acquisition costs. When it comes to reviews, it was the year that “wondering if you were doing enough to manage online reviews” became “trying to determine how to do it better than anyone else” in order to gain a competitive edge. And competition is the name of the game in 2016.
Here are five trends for hotels to keep close tabs on in the coming year, and a few suggestions about how to do it.
Mobile Takes Over Travel Bookings
According to eMarketer, 2016 is the year we will see the shift from desktop bookings to mobile bookings with over half of online bookings coming from mobile. This shift means that hotels have to up their mobile marketing game and follow that with mobile interfaces that are conducive to closing the deal. (Psst, travelers are also reading reviews on mobile. If you host visually appealing, succinct Meta-Reviews, they are more likely to engage with your content.)
Converging Third Parties = Rising Cost of Acquisition + More Competition
Expedia and Priceline already dominated headlines in 2015 with acquisitions of smaller OTAs that had hotels concerned about a decrease in competition that would lead to higher commissions—or at least less of an ability to negotiate. Then Expedia announced its purchase of HomeAway, and there were mumblings about Airbnb’s potential interest in integrating hotels to their platform. The OTA mergers combined with the way that two distinct markets—hotels and alternative accommodations—have basically converged have created a situation for hotels where guest acquisition costs are rising alongside increases in competition. Staying ahead of the curve in this muddled market will require understanding your guests thoroughly, differentiating from the competition, and creating savvy promotions that don’t violate rate parity.
So Long Billboard Effect
And once upon a time, hoteliers could say that commissions were a part of the cost of taking advantage of the marketing power of the OTAs. That a sizable portion of the OTA traffic eventually booked direct to the property. OTAs themselves have long promoted their platforms as a kind of free advertising for hotels. However, Kalibri Labs reports in their “Distribution Channel Analysis Report” due out in early 2016 that the Billboard Effect is on the decline, and PhocusWright predicts that OTAs will account for 48% of online hotel bookings in 2016, up 2% (Travel Weekly). The emphasis on driving direct bookings just got a little (maybe a lot) more urgent.
Google Wants More (And How to Get Some of It)
According to Google, Hotel Finder clicks increased 260% last year, and the search engine is putting substantial effort behind Book on Google, the Hotel Ads Commission Program, and vacation-destination search. Search is the starting point for approximately 60% of travel planning, and Google has expressed the desire to be the go-to for even more travelers. But the standard SERP results to which we’ve all become so accustomed are changing, and Google is shifting the focus away from old-school organic search and toward other more user-friendly tools. According to Oliver Heckmann, Google’s VP of Travel, “If someone is searching for hotels, a lot of text is not the answer. Clicking through 10 or 20 blue links… that’s just simply not going to cut it anymore. It’s even worse in the mobile environment” (Skift).
Heckmann’s point is that the emphasis in coming years will be on creating travel-booking experiences that require less work of the traveler and have more visual appeal.
With renewed energy around hotels, Google will no doubt succeed at winning over more travelers to a more elegant planning process. TrustYou clients have the opportunity to take advantage of Google’s push for more market share. With the recent launch of TrustYou Stars, our hotel partners can elect to have guest survey feedback, which studies have found tends to produce more positive reviews than unsolicited reviews, delivered directly to Google. This means an increase in not just the volume of Google reviews but also higher review scores.
ORM: Hotels Benefit from Big Data
Reviews are here to stay. Ninety-five percent of travelers use them to make travel decisions, and increasingly hotels are putting their own reviews front and center. Some are going so far as to feature reviews directly next to the booking button, to which we say a resounding YES!
This isn’t news, but reviews aren’t just useful for travelers. Many hotels have used them to remedy hotel issues for some time, but the industry is evolving to offer savvier tools. Hotels are finding that with tools such as TrustYou Impact Scores, they can quickly ascertain what repairs—whether facility or service related—are most important to their guests. Impact Scores show hotels which complaints or praises have the greatest impact on their review scores, meaning that when guests write a negative comment about a category with the greatest “negative impact,” they tend to give lower scores. The same goes for “positive impact” categories and positive comments. There are several ways to use the information, but suffice it to say that hotels have a new way of prioritizing projects to give emphasis to those that will increase guest satisfaction—and review scores.