Hotel Internet Marketing Budget Planning and Best Practices in Hospitality: A Benchmark Survey by the HeBS Team

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

The above three top solutions show the (correct) acknowledgement that no matter what you do – the most important thing is to get the fundamentals right on your website. And the rule of thumb is that your website needs to be CUSTOMER CENTRIC. It needs to serve the customer with deep and relevant content. It needs to be structured and designed so that people can easily navigate through the site, find the information easily and have a wonderful experience as they do so.

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.

Benchmark Hospitality’s Top 10 Meeting Trends for 2007

This is a useful and easy to read checklist for hotels with Meeting and Conference facilities.

This benchmark was conducted on hotels in the US and Asia – but are relevant for our local market – and there are some ‘cool’ ideas. For example, how about culinary team building – now that’s different, and after watching Gordon Ramsay in Hells Kitchen the mind does rather boggle. Not every team event needs to be about scaling cliffs or forging rivers in home-made rafts or other life threatening physical feats, though I could imagine the kitchen becoming quite a devilish environment too!

And then there is the constant quest by meeting planners (who are they – see the article) for new venues. And hey – in South Africa we have a diversity of places to knock the socks off any one!

Starwood Hotels Gives Insider Access to Exclusive Events with New Auction Website

Starwood Hotels & Resorts Worldwide, Inc. and its Starwood Preferred Guest program, the award-winning hotel loyalty program, has introduced a new online auction website where members can use their Starpoints to bid on exclusive, once-in-a-lifetime experiences.

Moments by Starwood Preferred Guest lets members transform their Starpoints into extraordinary lifestyle events - giving them insider access to red carpet movie premieres, closed rehearsals with today's top music artists, private dinners with world-renowned chefs, rounds of golf with PGA TOUR pros and more. Members can visit Moments and bid on a full range of specially created experiences not available anywhere else.

It's Better on the Inside...

Sit in on a private pre-show sound-check with Justin Timberlake or watch Gwen Stefani rehearse unscripted before taking a front row VIP seat at their concerts. Attend the premiere of Showtime's original series The Tudors and mingle with the cast on the red carpet, tour renowned artist Georgia O'Keeffe's private residence or sit ringside at the upcoming Oscar de La Hoya/Floyd Mayweather fight and celebrate at the private post-fight party. These are just a few of the exciting happenings that are now available for bidding. The auction site will be updated regularly and upcoming events include a private dinner with Jean-Georges Vongerichten at his signature, namesake restaurant in New York City, red carpet access to upcoming Hollywood premieres and more.

According to Robin Korman, Vice President of Loyalty Marketing for Starwood, during a three month pilot for the new auction site several events created a bidding war among members. A Justin Timberlake private sound-check session and VIP concert tickets started with a minimum bid of 20,000 Starpoints and was auctioned for more than 120,000 - the equivalent of a 12 night stay at The Westin St. Maarten or Le Meridien Cancun. A Superbowl package, including tickets to the game and access to several private pre-game events, started bidding at 250,000 Starpoints and ultimately sold for more than 500,000.

"Moments by Starwood Preferred Guest give our members access to once-in-a-lifetime events that go beyond just offering tickets to a concert or sporting event," said Korman. "We want to make an emotional connection with our members that extends outside of our hotel doors by providing them with rich experiences that go beyond the world of upgrades and free flights. Moments is designed to play to people's passions with amazing events that are available only to our members."

To make sure members don't miss out on the experience of a lifetime, Moments will introduce a cash and points option to the site shortly - allowing bidders to use a combination of cash and Starpoints for auction events. For more information about Moments by Starwood Preferred Guest please visit Moments.

Hilton Re-launches Two Web Sites and announces Spanish version of the Booking portal.

Hilton Hotels announced the re-launch of two of the brand's online channels - HiltonJourneys.com and HiltonToHome.com. In addition to the two refreshed sites, the brand recently completed the translation of its Hilton.com booking portal into Spanish, and is in the process of completing a French version of the site.

'The explosive and global growth of the Hilton brand has led us to rethink the way we use the internet to connect with our guests,' said Jeff Diskin, senior vice president, brand marketing and management - Hilton Hotels. 'With these refreshed sites we have three unique touch points that allow our guests to connect with Hilton in ways that are most relevant to them.'

HiltonJourneys.com

As demonstrated by its sponsorship of the Grammy Awards and the launch of its award-winning 'Travel Should Take You Places' advertising campaign featuring emerging musicians, Hilton's marketing initiatives use music to connect with consumers at an emotional level. At the new HiltonJourneys.com visitors will be able to follow the personal journeys of the six emerging artists featured in the ads. In addition to videos of the six ads, interviews with the artists and an acoustic performance from each, the web site also features 'Behind the Scenes' interviews with each musician discussing their favourite things to do while travelling.

Also featured on HiltonJourneys.com are many of Hilton's new products and services, including Hilton On Time, a system allowing guests to pre-order items - such as extra towels or pillows, snacks and drinks - for delivery in room upon check in.

HiltonToHome.com

This e-commerce site offers consumers the opportunity to buy 'for home versions' of the same products they enjoy in Hilton hotel rooms. Crabtree and Evelyn(R) La Source bath products, the Hilton Family Exclusive Clock Radio, and Cuisinart Two to Go Coffeemakers are just a few of the items found on this site.

In its upgraded version, Hilton leverages its relationships with strategic partners. The Hilton Serenity Bed Collection, including mattress/box spring and linens, are now branded with 'As Seen on Extreme Makeover: Home Edition,' promoting Hilton's relationship with ABC's TV hit program. To further enhance Hilton's sponsorship of the Grammy Awards, visitors to HiltonToHome.com can purchase the 2007 Grammy Nominees CD.

Global Hyatt Launches Bold New Brand - Hyatt Place™ - Designed Around Travellers’ Integrated Mindset

On March 26, Global Hyatt Corporation unveiled its new brand Hyatt Place™, an innovative hotel concept with strong appeal to the “24/7” lifestyle customer.

For this group of sophisticated travellers, personal and professional activities have intermingled. “Hyatt Place is the first hotel of its kind to cater to both the functional and emotional aspects of today’s business and leisure travellers,” said Tom O’Toole, senior vice president of strategy and systems, Global Hyatt Corporation. “For many, the separation between professional and personal life is obsolete, but unfortunately, hotels have not successfully evolved with this trend – until now. Demonstrating that we know what matters most to our guests, we’ve created a hotel brand defined by a mindset of a whole person who is combining personal fulfilment with professional growth while travelling.”

Hyatt Place is designed to meet the needs of this new customer segment and offers travellers a balanced mix of comfortable and functional guestroom amenities such as: 42-inch high-definition televisions with next generation entertainment content; free Wi-Fi access; a comfortable, eight-foot sectional sofa-sleeper, all within an oversized, suite-like room with 20 percent more space than the average hotel room. In addition guests can buy hot breakfast entrées along with Starbucks® specialty coffees or enjoy a free continental breakfast. Hyatt also offers a variety of freshly prepared, café quality items, including made-to-order entrées, sandwiches, soups, salads and pizza which guests can order 24 hours a day, seven days a week via a touch screen menu in the Guest Kitchen or from the Gallery Host.

more about Hyatt Place
press release

Starwood Hotels Brings a New Twist in Travel to Europe

aloha! Starwood Hotels & Resorts Worldwide and its much-anticipated new lifestyle brand, aloft hotels, announced it has signed an agreement with Thornsett Group Ltd, an Irish property development company, to develop the first aloft hotel in Europe, the aloft Brussels, Belgium. The deal was signed at the 10th International Hotel Investment Forum in Berlin last week, when Starwood and its stylish W Hotels division introduced their aloft brand into the Europe, Middle East & Africa regions.

The 150 room aloft Brussels will be located on Rue Belliard, Leopold, in the 'European' quarter of Brussels. The property is conveniently located approximately 800 feet from the European Commission and European Parliament buildings, and just minutes away from the Council of Ministers building.

The site has full planning permission for a mixed-use development with a gross development value of approximately U.S. $105 million. In addition to the aloft hotel, the 74,000 square foot development will also include 108 one- and two-bedroom apartments and approximately 5,000 square feet of retail space with parking. Construction will begin in the Fall of this year, with completion scheduled for Fall 2009.

"We say aloha to Europe with the introduction of aloft hotels, a new lifestyle brand that will redefine travel, delivering style with substance and a fun new way to play and stay," said Ross Klein, President of Starwood's Luxury Brands Group and aloft hotels. "From Brussels to Beijing and beyond, aloft brings a sassy, refreshing oasis to a global market."

"With aloft we are reinventing the select service category, and are thrilled to be working with Thornsett Group to bring the first aloft hotel into Europe," said Roeland Vos, President Europe, Middle East & Africa, Starwood Hotels & Resorts Worldwide, Inc. "Brussels is a great city for aloft's first exposure to Europe, and the hotel will deliver great style, comfort, design and functionality to travellers. We look forward to this development being the start of a long term relationship with Thornsett Group."

As a division of W Hotels, aloft is shaking up the lodging industry with urban-influenced design, accessible technology, style and a social atmosphere. aloft offers a total sensory experience, with guest lofts featuring loft-like nine-foot ceilings and oversized windows to create a bright, airy environment. The centrepiece of the loft room is the ultra-comfortable signature bed, and large stylish bathrooms complement the guest experience with oversized walk-in showers and amenities created by bliss spa. Each guest loft is also a combination high-tech office and entertainment centre, featuring wireless internet access and plug & play, a one-stop connectivity solution for multiple electronic gadgetry such as PDAs, cell phones, mp3 players and laptops - all linked to a large flat panel HDTV ready television for optimal sound and viewing.

Designed in conjunction with world-renowned David Rockwell and the Rockwell Group, aloft stays true to W's heritage, offering atmospheric public spaces designed to draw guests from their rooms to socialize and make friends. Guests can read the paper, work on their laptops via hotel-wide wireless internet access, play a game of pool or grab a drink with friends at the re:mix communal lobby area and bar w xyz. The re:charge fitness centre and splash, the indoor or outdoor pool, give travellers options to de-stress and re-energize; while re:fuel, a one-stop food and beverage area, offers sweet, savoury and healthy food, snacks and beverages to grab & go, 24-hours a day.

The first aloft hotels are targeted to open in first quarter, 2008. For more information on aloft, please visit www.alofthotels.com.

To date, announced locations for aloft hotels are:
ALOFT BEIJING – CHINA - Opening in 2009, the 200-room aloft Beijing will be located in Haidian district, a major information technology hub in Beijing, as well as the Haidian government district and site of major universities and research institutes.

ALOFT CHANTILLY, VIRGINIA – USA - aloft Chantilly, a 131-room property featuring aloft's loft-inspired design, accessible technology and stylish, urban attitude is scheduled to open in Virginia in 2008.

ALOFT CHARLESTON AIRPORT, SOUTH CAROLINA – USA - Located in the historic coastal city of Charleston, South Carolina, aloft Charleston is just minutes from Charleston International Airport, and is scheduled to open in 2008.

ALOFT DORVAL, MONTREAL AIRPORT, QUEBEC – CANADA - The 136-room aloft Dorval will offer travellers a refreshing new place to stay in Montreal, right at the entrance to the Pierre Elliot Trudeau International Airport. Construction is scheduled to start in 2007, with a projected opening in 2008.

ALOFT RANCHO CUCAMONGA, CALIFORNIA – USA - The world's first franchised aloft hotel, aloft Rancho Cucamonga broke ground in Southern California in January 2007 and will open in early 2008. The 136-room aloft is the hotel component of HavenPark, a $60 million master-planned, mixed-use development.

ALOFT TORONTO, ONTARIO – CANADA - Featuring 250 rooms, the aloft Toronto is slated to open in 2008. The hotel is located adjacent to Victoria Memorial Square Park, an area known for its lifestyle offerings, including some of the city's best restaurants and residential projects.

2007 US Business Travel Awards

The 2007 Business Travel Awards aren't based on a reader poll or an empirical ranking a la Consumer Reports. Instead, it's chooses companies that do a great job of serving the "road warrior" --and the CFO. Take a look at these award winners and the stories behind them:

• Best Airline Value: JetBlue Airways
• Best Budget Hotel Value: Microtel
• Best Midprice Hotel Value: Hilton Garden Inn
• Best Upscale Hotel Value: W Hotels
• Best New Hotel Brand: Hotel Indigo
• Best Car Rental Value: Enterprise Rent-a-Car
• Best Site: Booking Buddy
• Best Blog: Ellipses
• Best Rewards: Rapid Rewards

Sun International to buy stake in Chilean firm

Sun International has agreed to buy a 40% stake in a Chilean firm that holds a 15-year casino licence covering the capital Santiago, it said today.

You can read the article on Business Day

Protea Hotels sold to Australian group

Australian travel services and hospitality company Stella Group has bought Protea Hotels, Africa’s largest hotel management company, for R1,48bn, or A$255m.

You can read the article on Business Day.

Why ‘Care’ for Your Customers when You Can ‘Love’ Them?

This is a delightful and refreshing article that renews one’s faith in leadership and in leaders who dare to think beyond motherhood, who dare to have passion, emotion, and who dare to dream.

I don’t know how many times in my corporate life that I have been told that I’m too emotional and that I care too much. The body corporate doesn’t like these characteristics – and if you have any hope of climbing the corporate ladder or navigating the corporate politics, these emotions (in their eyes, ‘weaknesses’) must be banished for more acceptable corporate behaviour.

Reaching for the stars and aiming beyond the horizon are viewed as silly. The hospitality industry knows it is selling and providing an experience to its customers. And I suppose you can describe an experience in cold and calculating terms like – we aim to exceed customers expectations. Duh! If that’s all you are doing then perhaps you should be selling railway sleepers to the department of transport!

It is precisely this dreaming that spells the difference between being mediocre and being special. Isn’t it time to take out the dusty mission and vision documents and to breath life into them and create a strategy that takes you, your staff and your guests on a magic carpet ride?

Top 10 Trends in the Hospitality Industry

Ernst & Young released a report on February 15, 2007 where they identify ten key trends that will influence the hospitality industry in the US and major hospitality markets internationally.

Top trends that will influence the global hotel industry in the year ahead include the stabilizing of the U.S. lodging market, increasing capital flows into the hospitality sector from a broad range of investors, including offshore funds, and superior performance among luxury hotel brands, according to a report released today by Ernst & Young LLP.

“In this report we’ve identified ten key macro trends that, taken together, we believe will shape the hospitality sector this year and for years to come in the U.S. and in major hospitality markets around the world,” said Michael Fishbin, national director, Hospitality & Leisure, Ernst & Young LLP.

The ten key trends identified in the report are:

#1 Supply and Demand in Balance — Perhaps the biggest positive trend for the industry in 2007 is that supply growth is relatively low with a 2.5 percent increase projected this year. This, combined with last year’s 1.8 percent growth gives owners a chance to upwardly reposition existing hotels and grow revenue per daily room (RevPAR) and average daily room rate (ADR). Stability is good for the industry’s short term profitability and, as a result, the outlook for 2007 is positive.

#2 More Good News for Luxury — The hotel sector generally is experiencing positive growth, but the performance is particularly strong in the upscale sector. With no sign of a drop-off in the primary demographics populating upscale hotels, more stellar performance is expected.

#3 Construction Costs — Developers will have to be more creative in planning and building new hotels due to high construction costs. Look for more mixed-use developments incorporating hotels, especially in the upscale segment, more creative financing strategies and maximizing of project density to make the numbers work in a more expensive development environment.

#4 Operating Costs — For hotel operators, better control of energy and other major operating costs will be a key objective in 2007. For the last two years, costs such as labor, energy and insurance have skyrocketed. While automation has historically helped manufacturing, it has played a very limited role in reducing costs in service-based industries, such as hotels. Yet hotels’ use of web-based systems is increasingly helping the bottom line.

#5 All the World’s a Stage for Hotel Investors — One aspect of the phenomenal influx of capital into the hotel sector is that the sources of this capital wave are truly global, creating a worldwide investment market with growing cross-border transaction activity. In an increasingly complex business environment, investors are likely to seek out deals in all corners of the globe. However, the U.S. hotel sector, as the most transparent market in the world, will continue to garner more than its share of foreign capital.

#6 Will New Passport Rules Dampen Tourism? — The U.S. Western Hemisphere Travel Initiative may cause a short-term drop-off in travel to the Caribbean and Mexico as U.S. tourists balk at the almost $100 passport fee or get caught in a lengthy application process. Some hotels are proactively moving to offset the passport cost by offering discounts to first time passport holders. The passport impact is likely to be short term and may even help U.S. domestic tourism.

#7 Pricing Issues May Cloud Sector’s Future — The last few years have seen solid market fundamentals, limited construction of new product and low interest rates, the combination of which has driven pricing on some deals into the stratosphere. With more construction ahead, hotels’ operating growth levels are unlikely to be sustained. We’ll begin to see this year what return on investment these top premiums will yield.

#8 Private Equity’s Love Affair with Hotels — Private equity players were the biggest single buyers of existing hotels in 2006, and they are expected to continue to buy in 2007. Since many do not have significant lodging industry experience, the question remains, how will they perform as owners? And when and how will they execute their exit strategy? We’ll begin to learn the answers to such questions this year.

#9 Growing pains for condominium hotels — With the U.S. building boom of 2005-2006 now over, there may be headaches on the horizon for developers and owners who jumped into this market with both feet. An estimated 8,000 new units are expected to become operational in the next 12 months in the U.S. despite last year’s cooling of the development market. By 2008, developers and owners will have a good idea of what worked and what didn’t in the condo hotel craze. Meanwhile, the hotel condo craze has hit the Caribbean, Mexico, the Middle East and Europe’s resort vacation spots.

#10 The hotel market as an engine of economic recovery — In Mississippi’s Gulf Coast region, the inventory of hotel rooms leaped 23 percent between March and September 2006, contributing significantly to the area’s tourism and gaming recovery and boosting its struggling economy. Communities around the world have a growing awareness of the impact hotels can have on their economies and will move quickly to support rebuilding of this critical sector in the event of natural disasters or human conflicts.

“In general, the hotel sector continues to perform well and has been especially adept at attracting new investment,” said Fishbin. “But continued growth within the sector depends on many of these factors.”

Ernst & Young offers a range of services for every major hospitality segment, from lodging to travel and from tourism to attractions – including hotels, resorts, mixed use developments, convention and conference centers, stadiums, amusement parks, golf courses, and other leisure-related assets.

For a complete copy of the Ernst & Young Report ‘Top Ten Thoughts for the Hospitality Industry in 2007’ please visit www.ey.com/us/realestate.

Hotel Websites Are Tops in Customer Satisfaction

Recent studies in the US show that hotels' web sites have finally overtaken online agency portals in terms of customer satisfaction. This has been accomplished with a lot of hard work on their websites by the hotels, who can now enjoy a level of independence from the online travel agencies to develop their services for customers and increase their customer loyalty.

The Market Metrix Hospitality Index (MMHI) is a quarterly study that is the largest and most in-depth measure in the US of hospitality company performance. What the data reveals is the increasing popularity of hotel website usage and satisfaction with the online experience. More people are researching their trips online and more people are booking online.

Another significant trend is that people who book online in the US are looking to make their booking directly on the hotel’s website rather than a travel portal. In 2004 and 2005, travel portal sites like Yahoo Travel outstripped hotels sites for satisfaction with the online booking experience. Since then hotels in the US have worked hard on improving their navigation, design, usefulness of information, ease of booking and other critical components of the online experience. As a result of this, hotels are less dependent on the travel site portals, are paying them less and are establishing a relationship directly with their guests.

The message for South Africa is that international customers expect an online experience that is of international standards. If a site doesn’t meet their expectations, they can (and do) quite easily move on to the ones that do - all with the click of a mouse. Online customers expect that they can book easily, safely and securely online, and the US experience shows that customers would prefer to deal directly with hotels for their bookings. They may research, shop around and compare prices and packages in multiple places on the web, but when they come to book, their preference is to book with you directly.

And the reasons are multi-fold. Customers prefer hotel websites because:

• they can earn rewards points in the loyalty program
• there are no additional/hidden fees
• it’s easier to cancel and change the booking
• they already have an account with the site
• the hotel site provides true availability
• they get better customer service
• they feel hotel websites are more trustworthy

Online travel agencies have the edge when it comes to the selection of hotels on offer, they frequently offer cheaper hotels and the customer can get the best rate guaranteed, and they offer bookings for flights, cars and other activities.

The 5 most important factors that would most influence a US consumer to make a booking on a hotel’s website would be:

• if hotels offered best rate guaranteed
• offers of specials and promotions
• the ability to earn points and rewards
• making it easy to make, change or cancel reservations
• to provide better descriptions of rooms on the sites

Loyalty is the big buzzword at the moment. Everyone is trying to develop relationships with the customers and this is more so online than anywhere else. Studies show that certainly in the US, customer loyalty is on the rise. Guest loyalty is important because satisfying and retaining customers helps companies grow revenues, reduce costs, generate referrals, and enjoy price premiums. But loyalty is not rising for all hotels. People tend to be more loyal to the higher priced hotels and less loyal to the lower priced. This is because higher-priced hotels generally offer more attractive loyalty programs, and have a better online booking experience. People booking lower priced hotels tend to be price sensitive bargain hunters who are therefore less loyal to a specific brand.

For more on the above, check out the following links:
Loyalty is the Key to Online Travel Market
Are Online Customers Less Loyal?
Hotel Web sites scroll to the top in customer satisfaction
Hotel Web Sites Now Score Higher In Satisfaction Than Popular Travel Sites

South Africa in E-marketing Drive

In its ongoing commitment towards implementing world-class international tourism strategies in order to increase awareness and grow arrivals to destination South Africa, South African Tourism has kicked off 2007 by sealing a landmark deal with BBC World.

The deal is an e-marketing campaign that comprises online advertising and commercial presentations and will be aired on BBC World across Europe, Africa and North America from February to July this year.

If one asks the age old question –– what’s in it for me (WIIFM) – then I would suggest a lot! This campaign is a great opportunity for all hotels in South Africa who target countries like the UK, Netherlands, France, Germany, Italy, the US and the African states to leverage the South Africa marketing exposure to with their own individual campaigns.

Finding out more about the schedule from the South African Tourism campaign and using it would give individual organisations synergy and publicity that is difficult for one organisation to achieve alone. Indeed a concerted effort by several organisations for the benefit of South Africa Incorporated would bring extraordinary gains for everyone.

Under-developed Business Travel Could Offer Opportunities

In his address to the African Business Tourism Conference in Sandton, Minister Marthinus van Schalkwyk said that business travel is lagging considerably behind the leisure market, accounting for 5% of the total tourism market.

When you bear in mind that on average business travelers spend three times more than leisure travelers and return to a destination within 5 years, this must surely be an opportunity area. Of course this relies on the fact that business travelers need to, or want to come to South Africa. They will need to come to South Africa if they are doing business with South Africa – so in this sense the hospitality industry is a support or secondary industry to the real driver of businessmen and women to South Africa – business and investment in or with South Africa.

The other side of business travelers coming to South Africa is if they see it as a place to host their meetings and conferences, and in that area we have much to offer as long as we stay competitive with other international destinations. And yes, there’s a lot of competition out there so we need to be able to provide outstanding services at competitive prices.

And of course we can’t hide away from the security issue in our country. These are things we need to address face on to become players in the international economy and to bring benefits, wealth and opportunity to everyone in our country. I refer to the recent survey done by South African Tourism Update (free registration needed for access), an independent monthly trade magazine, in conjunction with the South African Tourism Services Association and other tourism organisations where the results are overwhelmingly conclusive – over a million travelers decided not to come to South Africa because of crime.

The survey conclusion is that crime is holding back the growth of the tourism sector and its ability to create jobs. Natalia Thomson, editor of the magazine asks the thought-provoking question – “where would tourism in South Africa be without crime?” Where indeed! And let’s face it – there are other places in the world to go. But if we get our act together, the tourists and business travelers would come over and over again to our beautiful country with all that it has to offer that is indeed special!

Tourism to South Africa

The tourism industry in South Africa is a significant player in the country’s economy. It brings in money from abroad and is a valued source of employment. Everyone is getting hyped for the opportunities that 2010 will or should bring to the industry. Tourist arrivals are up by 14.5% and from Jan – Sept 2006 over 6 million people visited South Africa.

Tourism Minister Marthinus van Schalkwyk gave 2006 data for SA Tourism in an address to the African Business Tourism Conference in Sandton where he said that Africa had achieved the fastest growth rate of any region worldwide.

A summary of the numbers is:

• There was a 14.5% increase in 2006 from 2005 in tourism arrivals
• Over 6 million (6,055,726) people visited South Africa between Jan – Sept 2006.
• The largest source of arrivals are from Africa – 18.3% are from the African continent.
• The Number of Visitors from specific regions/countries changes as follows:

• North America grew by 9.7%
• Russia grew by 42.4%
• Hungary grew by 24.1%
• Finland grew by 17.4%
• India grew by 17.5%
• Asia grew by 4.5% (“excellent growth” in arrivals from Japan, Thailand, Singapore, but China, Malaysia and Philippines declined)

The Internet Audience Keeps on Growing

Data released today by comScore for January shows that the internet audience worldwide just keeps growing. The numbers are mind-numbing.

There are 747 million people worldwide using the Internet (some sources have it at over a billion), which is up by 10% from the previous year. The largest country is still the US which grew by 2% to 153,447,000. With seven out of ten people in North America accessing the web that market is already saturated with internet users. The same is true for countries like Germany, UK, France and Spain, where the percentage growth is less than 5%.

But look at China and India. They are both growing at phenomenal rates. China is the second largest country after the US in terms of number of people accessing the Internet (86,757,000). Chinese internet users grew by 20% over the year, yet the penetration of the internet in China is still less than 10%. The story about India is similar though less radical. The total internet user population in India is 21,107,000 and it’s growing at 33%.

Africa is a blip on the radar – in the entire continent of Africa there are 33 million users of the internet, which accounts for only 3% of world internet users. (The total number of people who have access to the internet in South Africa is 5 million of which 2.5 million access it monthly. Yet approximately 7.5 million people access South African internet sites each month, which shows strong foreign interest).