Web 2.0, Travel 2.0 – What is it and why does it matter Part 1 - Customer Reviews

Web 2.0 was born out of the Web 2.0 Conference and is now in its fourth year. So what is it and why the ‘hype’? In 2001 we saw the famous ‘dot-com bubble burst’ in the USA and with it the cynics concluded that the web was over hyped. Certainly many got burned at that time and lots of people and businesses lost money. But it was pioneers like Tim O’Reilly and Dale Dougherty that observed that what survived the collapse was more important than ever and out of this turning point emerged a call to action and concept called Web 2.0 and with it the first Web 2.0 Conference in 2004.

There is still a lot of debate about what Web 2.0 is. Some people call it a meaningless marketing buzzword and others accept it as the new conventional wisdom. I will give a short definition of Web 2.0 but the intention of this article is to put Web 2.0 (and Travel 2.0) in context, and then to examine one aspect that is of huge importance and relevance to the hotel industry and which we should ignore at our peril, and that is consumer generated content.

So let’s start by taking a look at some definitions. Some people acclaim Web 2.0 as the next revolution on the Web! The common notion is that it’s all about social networking, user-generated content, glowing drop-shadowed logos, blogs, AJAX, mashups, and tagging.

Tim O’Reilly provides a compact definition as follows - Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences.

In the Britefire Glossary we define Web 2.0 as follows - The term used to describe the evolution of the web from a series of more or less centralised silos of information to the web as a high-speed platform for distributed services, especially social networking and collaboration. User generated content is a key characteristic of web 2.0, which is also known as the read-write web.

While the definitions are important, the appreciation of what these definitions means comes from an understanding of the context of Web 2.0. Web 2.0 is the result of some fundamental changes and a mind shift with regard to how we use the web. If one does not understand this, then the whole value of web 2.0 is lost and it is relegated by those that don’t appreciate this change to a buzzword or hype. Yes, Web 2.0 is real but let’s not get caught in the euphoria of the buzz but rather understand this evolution and the change that has brought it about.

Timing is everything and the constellation of events and thinking in 2004 was what gelled Web 2.0 into what it is today. I don’t believe that Web 2.0 would have been a reality were it not for the specific point in time when it was born. The other emerging trend that importantly collided with Web 2.0 was the whole thinking about the new consumer and the way the web has democratised the new consumer. At last – after years of saying the ‘Consumer is King’, and the ‘customer is always right’ – we have arrived at a point where one can actually begin to see this becoming a reality with the emergence of the truly democratised consumer. The Cluetrain Manifesto – written by Levine, Locke, Searls, Weinberger in April 1999 (essential reading - read the book for free online) was also revolutionary, un-corporate and confronted the establishment. It’s a great read and contains 95 theses and some of my favourites are

• “We are not seats or eyeballs or end users or consumers. We are human beings – and our reach exceeds your grasp. Deal with it.”
• “Companies need to come down from their Ivory Towers and talk to the people with whom they hope to create relationships”
• “Markets are conversations. “
• “Markets consist of human beings, not demographic sectors. “
• “Conversations among human beings sound human. They are conducted in a human voice.”

So, the stars aligned, the constellation of timing, events, people and thinking take the evolution of the web (whether you call it Web 2.0 or not – and I personally like the definition, and even more the concept as it has been developed) and put it together with the rise of the new consumer and you have a powerhouse deluxe!

How does this apply to the travel and hospitality industry? I just want to look at one aspect of this, and that is consumer-generated content in the form of hotel reviews.

There is quite a lot of buzz about hotel reviews too. The point is that consumers research their travel. In the ‘old’ days we bought travel guidebooks, read articles and magazines, spoke to friends, friends of friends, and asked travel agents. Today the medium has just become much more powerful. Travellers now research their holidays online (a study in the US by Burst shows that 79% of people will research their personal travel on the internet) and seek advice, opinions and reviews by connecting with people all over the world. Consumers can now relate their stories - both good and bad. Cynics will find multiple ways to discredit this and indeed there are potential issues that we need to deal with. And we can deal with the inherent problems.

Amazon.com has featured reviews on its site since 1995. People have been able to write reviews and consumer guides in a form of self-publishing actually long before Web 2.0 was even defined. Five years ago, you might read the comments at TripAdvisor.com or IGoUGo.com or ask a question at BootsnAll.com or Lonely Planet’s Thorn Tree forum. Just last week, Priceline.com added reader-generated Zagat reviews — and, for better or worse, it shows no sign of dying down any time soon.

“Surveys show people are more influenced by Web sites than traditional media,” says Jeffrey Grau, senior analyst with eMarketer.com. “They’re making [travel] decisions based on peer reviews more than magazines and TV shows.”

Today, everybody and their dog is a guidebook writer. On sites like Gusto.com or Yahoo! Travel you can search for destinations and pick up ideas. Or there are sites where you can find something more personal - people with similar interests, a sense of community, or even someone with whom you can share an upcoming adventure. Sites like TripUp.com and Eons.com are essentially social networks with a travel twist. Defined by the ages and interests of their members, the vibe is either Match.com or Modern Maturity.

Gusto.com’s CEO Jeff Wasson says “We’re not necessarily competing with Frommer’s and Fodor’s. We’re providing another source of information.” And, yes, sometimes that information is invaluable. Even the best guidebook can’t cover time-sensitive issues such as menu changes and the latest renovations.

About two months ago I was helping some American friends plan a safari. It’s been a long time since I have been to the Kruger Park and Mpumalanga. So here’s what I did. I went to the bookshop to see what books I could buy on safaris. That wasn’t very successful – the choice of books is abysmal. I did buy a map… and that too was rather disappointing. I sent the book, Getaway magazine and the map via mail (at some extortionate price) to my friends – hoping that it would arrive safely and intact. In the meantime I turned to the web and spent quite some rewarding time searching and reading. The most valuable resource for this trip was SAN Parks forum.

It was there that I found the most amazing community of people talking about what to do, what they had seen and sharing information and experiences with generosity, passion and enthusiasm. I posted a simple question on the forum. Quite a boring question, I thought, and most certainly a very frequently asked one – what to do in 3 days with American visitors. The response was astounding! From this simple question I learned so much – I learned about the latest camps in the Kruger Park – which ones are best for certain experiences, all about the new concessions in the Park, and was recommended some incredible online resources that eventually led to my booking the most wonderful 4 days.

I could not have done this without the help of others – without the community on the SAN website. No book contains this information. The information I got was UNIQUE – there was no other way that I could have got this information and made the booking. And it didn’t take me that long either! And furthermore, I now have newly made friends in KZN and Mpumalanga that I know I can contact in the future. And I hope I can reciprocate the generosity some time in the future too.

Yes – there is also the downside of reviews – there are bogus reviews, there are people who write attacking and damaging reviews too – and there’s everything in between. But websites are getting much smarter about ensuring reviews are genuine. For example, on Priceline.com you can only enter a review if you can prove that you have stayed at a hotel.

Also, the consumer has some intelligence – people make judgments when they read reviews – they consider the message and also the messenger. I once observed some user testing where a traveller was looking through reviews on TripAdvisor. The traveller was going to a city he had never visited. Part (by no means not ‘ALL’) of his research was to check reviews on TripAdvisor. There were several good reviews and a few bad ones. He read them all, and it was interesting to see how he made judgments about the credibility of each of the reviewers as he went through them. I was even interested to see that he was sophisticated enough to look at even the nationality of each of the reviewers. Some nationalities are far more fussy than others – and he was taking that into consideration too!

For marketers social networking is important because by encouraging people to share information, the marketers can monitor and ‘listen’ in on these communities and learn more about consumers and their behaviour, and can determine their likes and dislikes. It helps marketers position advertising better. For example if you position advertising to reach brand advocates early in their research process, it is likely that the consumer will then help to spread awareness by telling twice as many people as you could reach. A ‘personal recommendation’ from an empowered consumer is much more powerful than you pushing adverts in the traditional way on traditional media.

Take a look at this interview with European MD of TripAdvisor where he is asked about fake reviews, and plans for the site.

While on the subject of TripAdvisor – in a move to embrace the openness of the web, hoteliers can now publish TripAdvisor reviews directly on their own hotel web sites. TripAdvisor provides a web page that automatically generates html code, allowing the property to instantly publish TripAdvisor reviews on their own sites. Find out more here.

Priceline.com has announced an agreement with Zagat Survey under which Zagat will create exclusive online hotel reviews for priceline.com customers to access for free. Brett Keller, priceline.com's Chief Marketing Officer said 'We believe that Zagat's survey-based hotel reviews, combined with priceline.com's proprietary hotel star rating system and our growing database of reviews written by priceline.com customers who also have stayed at these properties, make priceline.com a premier destination for shopping and comparing top-brand hotels and prices.'

Web 2.0 (or Travel 2.0 - the travel industry’s collective application of Web 2.0) holds great promise and potential for the tourist and hospitality industry. Travellers are keen to take control of creating the perfect trip, not just the cheapest trip. And companies need to embrace this trend and use it to differentiate themselves in this vast travel marketplace. A good starting place is ‘listening’ to and learning from the customer…

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.

World Travel & Tourism Climbs to US$ 7 Trillion in 2007

World Travel & Tourism is expected to generate in excess of US$7 trillion in 2007, rising to over US$13 trillion over the coming decade according to the World Travel & Tourism Council's (WTTC) Tourism Satellite Account (TSA) research, sponsored by Accenture and prepared by Oxford Economics.

The new TSA results show strong performance for Travel & Tourism Demand in 2007, growing at a rate of 3.9 per cent. This forecast points to a mature but steady phase of growth for World Travel & Tourism in the short and medium term, averaging 4.3 per cent per annum, between 2008 and 2017.

Some findings summarised from the report are:

• The US is still in number one position accounting for US$1,689,3 billion this year
• China is going to gain ground and grow at almost 10% per annum over the next 10 years
• By 2017 the Russian Federation will enter the top 10 countries
• The world’s highest performers are Montenegro, China and India
• Other high performers are Croatia, Romania, Namibia

No mention of South Africa… we ought to be there!

Social networks for KLM passengers and business travellers

Loyalty programmes are invariably about a company trying to create a relationship with a customer, with the primary motivations being to secure repeat business and cross-sell services. That’s so web 1.0. These days, the objective is not so much to form a company-customer relationship as to facilitate customer-customer networking relationships with the company providing the context.

There is probably no industry in which loyalty programmes are so widespread as travel, so when a major airline starts trying to get social networks working for its frequent flyers, it may be the first sign of a significant evolution. Not surprisingly it is the Dutch, who gave us the compact cassette and the CD, who were the first to move in this innovative direction.

KLM is the first airline in the world to build online social networking communities for its customers. Aimed primarily at frequent business travelers, and currently centered on specific destinations and activities, KLM’s communities connect people with common travel interests. Its first two destination communities, KLM Club Africa and KLM Club China, and its first activity community, Flying Blue Golf Club, are at the moment available only by invitation.





The benefit of belonging is that members of the networks can get to meet and share experiences with people working in similar markets, facilitating connections that might otherwise never happen. Members also get access to services such as translation, travel advice, or legal assistance provided by KLM business partners. And the networks are not exclusively online: face-to-face networking events take place regularly in he destination zones, as well as back home in the Netherlands.

Members of the golfing network (ever meet anyone from the Netherlands who doesn’t love golf?) can use the community to create profiles of their playing ability, arrange to play with other members who are going to be in the same place, and even use frequent flyer miles to pay for games or buy golf equipment.

It is a fairly bold move by KLM to try to unite its customers. Most airlines prefer to keep customers at bay with a divide-and-conquer mentality. But KLM has a good product and an already very loyal customer base. What KLM has done is leverage and lock in that loyalty not by offering “me-too” benefits like more comfortable seats or better in-flight entertainment, but by offering a unique service of potentially great personal value which other airlines might find harder to mimic.

In a similar vein, a new company called PairUp is offering to help travelers (on any airline) to connect face-to-face with fellow travelers with whom they may already have an online connection. PairUp members uploading their contacts list (from Outlook, or whatever their e-mail or contact management tool is). When they schedule a flight or participation in a conference, they put their flight and accommodation information in the system.

The system shows them people in their list whose uploaded travel details coincide with theirs, and lets them pick the contacts that they are interested in getting together with. The system is not exclusively for use by vaguely connected people – it can be used as a coordination tool by colleagues who need to share travel plans.



PairUp also provides a version of its tool to event managers, allowing convention organizers to offer a pairing-up service directly to people who register for their event. Anyone who has participated in major conferences where you struggle to find out who is attending, then battle to track down the people you want to talk with, can see the benefits of such a tool.

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.

2010 – Help for Small Businesses

South African Tourism CEO, Moeketsi Mosola South Africa was speaking at a business forum hosted by the University of the Free State in Bloemfontein when he announced that for the first time in its history, Fifa will be contracting non-hotel accommodation (eg national parks, B&B’s, lodges, guest houses) during 2010.

However, in order to qualify to be contracted the establishment needs to obtain a grading rating from the Tourism Grading Council of South Africa. Establishments can apply to TEP for assistance to partly cover these costs. TEP (Tourism Enterprise Programme) is a R170-million investment by the Environment Affairs and Tourism department to stimulate small, medium and micro enterprise (SMME) development in the tourism sector.

Mosola pointed out to that accommodation is not the only area where people should be looking as there are many other opportunities for 2010 – for example in the support services like housekeeping, food and beverage supply and laundry services.

In writing this, I took a look at the Tourism Grading Council website. The grading process looks time-consuming and bureaucratic, not to mention expensive. The process is still very much document driven but the instructions are reasonably clear and the criteria documents are available to be downloaded directly from the website. The cost is not inconsiderable – if you have a 3-room establishment the cost is R1,292 (R1,236 + R56) and if you have a 30-room establishment the cost is R3,373 (R3,148 +R225) and if you have anything over 151 rooms, the cost is (R5,279 + R225) R5,504.

But the establishment of standards and having a grading system which serves as a communication tool to customers is great. Of course such a system is only as good as the high (world class) standards that are set, the frequency that those standards are revisited and updated, and the organisation and people who manage and enforce them. Gearing up to 2010 and putting in place these systems could indeed help move South Africa towards one of the world’s top destinations of which Mosola talks!

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!