As the next year’s budgeting process approaches, hotels will be considering how much budget to devote to the online marketing channel. The dynamic nature of the Internet doesn’t help things much with its constantly changing environment, new media formats, new competitors and new tools, and methods. It is not necessarily the size of the budget that is most important but rather how it is used and allocated. What is clear though is that if you are not planning to spend some budget in the online channel you are making a huge mistake. If this is your first year with an online marketing budget – then what is important is that you make a small start, and learn as much as you can.
Some things that should be taken into consideration are
- Direct online distribution is the way to go. More hotels in the US and Europe are selling online than ever before. In South Africa the majority of hotels still do not sell directly online. This is a massive opportunity and an area that deserves serious consideration. Indeed it should be a ‘no-brainer’ as the evidence is compelling – greater amounts of room inventory are being sold, at higher ADR’s directly from hotels’ websites and at lower cost per transaction. The Internet is by far the largest distribution channel – far exceeding the GDS and traditional channels. In the US, the cost to sell directly via your hotel website can be as low as $3 - $5 per booking – compared with the cost of the GDS at $27 (for a 2 night stay at $100/night). And TPI such as Expedia and Travelocity charge $50+ (for a 2 night stay for $100/night). These figures apply to the SA market.
- Elsewhere in the world customers are opting to buy directly from hotels rather than third party intermediaries (TPI’s) and the negative impacts of TPI’s is being felt to a lesser degree than before.
This is the first international survey of its kind and offers some invaluable insights and pointers as to how the hospitality industry in aggregate is planning to allocate marketing budgets. Some hotels have been working hard on growing their online revenues, others have yet to climb on to the bandwagon. But regardless of where you are now – the outcome of this survey will be of relevance to you.
The conclusions of the survey show that online marketing for hotels is growing at an incredible rate. What is important for South Africa is that hotels gain the skills and know how of all the techniques so that they can more fully participate in and enjoy the benefits and increased ROI from online marketing.
A short overview of these are below, with some definitions:
Website development – creating your own hotel website (see website redesign for details)
Website redesign – there are a lot of hotels, large and small, that need to take their websites to a new level of sophistication and in doing so take advantage of the opportunity to redesign and/or relaunch their website and brand. Typically a hotel website should be re-designed every 2-3 years. This doesn’t have to mean a major redesign, but it should be revisited at least to ensure that it is still meeting its objectives and takes advantage of any new developments that would benefit your hotel.
Redesign involves redesign of the site structure and navigation, review and renewal of the content (text and images), review and renewal of the graphic design (look & feel) of the site, redesign of transactional processes (e.g. online booking, site search). When redesigning the site, one needs make sure that the new design is ‘search-engine friendly.
Website Maintenance - Your website is like your hotel – it needs to be maintained on an ongoing basis. You cannot create a website and then walk away from it and expect it to work for you or expect customers to beat a path to your online door. You need to ensure that you allocate resources (time and money) to maintain your website on an ongoing basis. As with you hotel, you need to ensure that your site is all in working order, that the content (text and images) is accurate, current and constantly refreshed and enhanced.
Creating a website is the start of a ongoing journey – it is not an end in itself. This is a mistake many people make – they sit back having developed their website, heave a huge sigh of relief and turn to the next project. Not good! Your website investment is only as good as your ongoing effort to keep it alive. So, allocate time and money in your budget to update it regularly – for example have a budget for images, get in a photographer to take some professional pictures of your hotel.
Search Engine Marketing (SEM) – All of the tactics and tools used to market a site through search engines. These include:
- Search Engine Optimisation (SEO)- The practice of designing and writing web pages to be attractive to the search engines. SEO attempts to place pages highly within the “natural” or “organic” listings on search engines, as opposed to paid ads. An optimised site improves the website usability and performance, improves its visibility in search engine rankings, and increases conversion rates. At the very minimum one should allocate funds to optimise content and keywords.
- Pay per Click (PPC) - In pay-per-click advertising, the advertiser pays a certain amount for each click through to the advertiser's website. The amount paid per click varies considerably. Your budget should make provision for buying keywords on a monthly basis (Google, Yahoo, MSN, Local search). The search engines provide tools that enable you to control this easily – you can specify how much, at what time, and geo-target your efforts.
- Linking strategies – the creation of relevant and quality links from external sites to your site, and the creation of internal links within your site for the purposes of increasing credibility with search engines that results in higher rankings in search engine results
E-mail marketing – marketing your products through e-mails. Your email strategy should include customer email capture initiatives (online and offline), email marketing to the hotel's own opt-in list (monthly promotions, local news, game sightings reports, seasonal emails), email marketing to key market segments and in key feeder markets.
Local search - is a query that includes not only information about "what" the site visitor is searching for but also "where" or geolocation information.
(Web 2.0/Travel 2.0 channels) Consumer-generated content / Consumer generated media – Any of the many kinds of online content/media which are generated or influenced primarily at the user level. Personal web pages, such as those found on MySpace are rudimentary examples; blogs and podcasts are more evolved ones. Creating the facilities and framework for consumers to publish their own content (e.g. hotel reviews) in prominent places (e.g. on www.TripAdvisor.com).
Banner ads and display advertising – Banners are advertising images that appear on websites. Originally static billboards about an inch and a half high and about four inches long, banners now come in a range of standard shapes and sizes, and are frequently animated. Typically, a banner is also a link—click on the banner and you are taken to the product or page it is promoting.
From this survey you can see that the results suggest the continued importance of search engine techniques through
- website optimisation (i.e. customer centric website design to improve the user experience, to provide rich and relevant content)
- search engine optimization and organic search (i.e. higher ranking derived from better website design and richer deeper content)
- website re-design
A summary of the conclusions of the survey are:
- marketing budgets will continue to shift online
- the results suggest a stronger emphasis on search engines (see the above list of search engine techniques ranked highest)
- linking strategies will be important
- budgets will go into specialised searches like local search
- email marketing is still a popular tool for building one-on-one relationships with customers, especially for international properties
- web 2.0 stuff like consumer generated media will grow in popularity and the early adopters will determine the model for the industry. Interestingly this survey indicates that international hotels will spend more on new media formats than the US.
- display advertising will take the biggest cut – this may be true for US and Europe – but within South Africa banner display and advertising is still in its infancy. For hotels this is important – if your market is overseas visitors then you need to know that users in Europe and the US are much more sceptical of banners than in South Africa.
