While 2010 was not quite the tough year the industry feared it would be, hoteliers still grappled with a number of challenging issues: a slowly recovering economy, the ever-changing world of social media and the mobile Web, mobile-obsessed consumers and customer review enthusiasts, and significant revenue leakage from hotels to OTAs in the form of abnormally high merchant commissions.

Published: 06 Jan 2011

While 2010 was not quite the tough year the industry feared it would be, hoteliers still grappled with a number of challenging issues: a slowly recovering economy, the ever-changing world of social media and the mobile Web, mobile-obsessed consumers and customer review enthusiasts, and significant revenue leakage from hotels to OTAs in the form of abnormally high merchant commissions.

By Max Starkov and Mariana Mechoso Safer

These challenges led to a fundamental shift in hotel Internet marketing tactics, including the need for multichannel marketing, engaging the new breed of on-the-go hyper-interactive travel consumers, and a smarter approach to analytics to determine what really works for hoteliers with limited marketing dollars available.

The hurdles presented by 2010 encouraged hotel Internet marketers to simply be smarter so they might achieve greater online successes in 2011.

The outlook for the industry in 2011 is the most optimistic it has been in years. PKF Hospitality Research predicts REVPAR to grow by 7.8%, a 3.4% increase in lodging demand and a 4.6% rise in ADR. In all of 2010, online travel distribution continued to dominate the hotel distribution space, and HeBS predicts this will continue throughout 2011.

How can hoteliers take advantage of increased travel demand this year? What smarter hotel Internet marketing formats should they focus their budgets on? Which new technologies and marketing formats and strategies will most efficiently and cost-effectively reach the on-the-go, hyper-interactive traveler?

The 2011 Top Ten New Year’s Internet Marketing Strategy Resolutions, presented by Hospitality eBusiness Strategies for the eleventh year in a row, offers some answers to these questions, as well as a sneak peek into what should be on the forefront of hoteliers’ minds next year.

Here are the Top Ten Internet Marketing Resolutions your hotel company should consider adopting in 2011:

1. I will adapt a new marketing approach around the Customer Engagement Channel and develop campaigns that fully align marketing efforts with the behavior of the hyper-interactive travel consumer.

Situation:
Today’s travel consumer is exposed to and engaged by so many snippets of information coming from all directions in a fast-paced, real-time 24/7 environment, that they live in a perpetual “hyper-interactive information cloud.” Consumers no longer keep track of where exactly they have been exposed to information or content, they no longer care what format the information or content they have been exposed to is in (email, tweet, Facebook post, SEM campaign, etc.), and they no longer differentiate between media channels and content formats (i.e. they have become channel- and format-agnostic). In other words, the convergence of marketing/media channels + the new hyper-interactive travel consumer = the emergence of one single Customer Engagement Channel.

Action Steps:
The Customer Engagement Channel demands a completely new approach to distribution and marketing. Hoteliers must find a way to convince consumers that the channel is theirs, that they are in full control of the content they receive and how they receive it.

What are some of the ways hoteliers can engage in this two-way conversation with current and potential guests? Provide multiple options on the hotel website for how consumers can hear from you (email, mobile, Facebook, Twitter, etc.). If they unsubscribe from one marketing format, give them the option to choose to hear from you in another way. Also, invest in eCRM in order to send more personalized marketing messages, keep your marketing plan dynamic (if people aren’t responding well to a campaign, move on quickly), stimulate website visitors constantly with fresh content, and implement contests and promotions on your website and through social media. Additionally, in 2011 it will be important to invest in technology needed for centralized content delivery. A good CMS can dynamically push content from the website Content Management System (CMS) to social media, the mobile site, email, Web 2.0 functionality on the site, etc. More on this below.

2. I understand that 2011 is going to be the ‘Year of Video’ and will continue to invest in videos for my hotel website, mobile website and other online marketing channels and efforts. Virtual tours are long out, and videos are definitely in.

Situation:
While online video was an important part of the hotelier’s strategy in 2010, this year it is even more essential that video marketing be in the hotelier’s arsenal. Videos excel at selling your hotel product and engaging consumers better than any other medium. Also important in 2011: consumers will be watching video even more while on the go, on their iPhones, Android devices, tablets, etc.

Action Steps:
Develop hotel videos presenting hotel services and amenities to your different customer segments, post them on the hotel website and YouTube, and send them out via MMS messaging. Due to the shortened attention span of today’s traveler plus mobile distribution restrictions, best practices require not a single 30-minute video, but shorter 30- to 60- second videos illustrating different aspects of the hotel product: weddings, spa, entertainment, etc. Consider the impact this would have: a guest is preparing for a stay at your property, and receives a short video on his or her phone via MMS of the latest entertainment option at the hotel (comedy show, music show, etc.) or a video of dining at the restaurant, or of the spa services. This, followed by an exclusive offer, will increase the likelihood of ancillary revenues while on property.

Additionally, advertise your videos on YouTube (an easy and cost-effective marketing tactic), and make sure your videos can easily be found on your hotel’s website, its Facebook page and from your email newsletters.

3. I will no longer operate in a “marketing silo.” I should not launch or run any marketing initiatives in silos (i.e. SEM, SEO, social media, mobile marketing, etc.), and I understand I will lose serious revenue opportunities and even market share if I send non-symbiotic or conflicting marketing messages about my hotel across various channels.

Situation:
Many hoteliers use separate arrangements, departments or agencies – some in-house, some outside – to manage the hotel’s SEO, SEM, email marketing, social media, mobile marketing, etc. A silo marketing approach goes against the mere nature of the new breed of consumers hoteliers are trying to reach, and often results in different, confusing, even contradicting messages on different channels. For example, you may run a contest on your Facebook page but not mention it anywhere on your website or in your SEM, text and email campaigns. This will result in lower levels of participation as well as confusion as to the legitimacy of the contest.

Action Steps:
Hoteliers need to work in a multichannel marketing environment - the antidote to the silo approach – with centralized content creation and delivery. In this environment, the hotel website, SEM campaigns, email marketing, social media presence, mobile, etc. have a symbiotic relationship. Your website content and marketing campaigns should be managed centrally and distributed via multiple platforms so that similar content across all channels engages consumers at multiple touch points.

4. I will continue to launch multichannel marketing campaigns and invest in technology needed to better execute these types of multi-platform and multi-format campaigns. I know that I need to reach my current and future guests via multiple touch-points, and that there is technology available today that can help me do this more efficiently.

Situation:
In last year’s Top Ten Internet Marketing Resolutions, HeBS accurately predicted that multichannel marketing would be the norm in 2010. Many marketing initiatives, on their own, cannot generate the high revenues that multichannel campaigns can produce. Hyper-interactive travel consumers’ need to receive and share fresh/relevant information and comment on experiences has blurred the boundaries between various distribution and marketing channels. These channel convergences exacerbate not only the need for multichannel marketing and distribution strategies, but also for centralized marketing content creation and multichannel distribution.

Action Steps:
Invest in technology that allows for smart and centralized content delivery. As mentioned above, your website CMS should enable you to create a special offer or new package that not only posts this new promotion on the Special Offers page and Featured Special promo tile on the hotel website, but also pushes this promotion to your social media profiles and populates your mobile website. Hoteliers must also consistently provide website visitors with fresh, engaging content such as contests and promotions concurrently on your website, SEM campaigns, email newsletters, mobile marketing campaigns, and through social media.

5. I will make room in the budget for smart investments in 2011 – and not rely on outdated business approaches or short term solutions.

Situation:
Many hoteliers are still investing in 1990 business approaches or quick fixes. Outdated CMS technology that does not allow for centralized content delivery, mobile websites that do not work across multiple devices (Blackberry, iPhone, Android), flash-heavy websites and websites that read like static online brochures are unacceptable in 2011. These investments may save you money in the short run, but in the long run can spell disaster for your business.

Action Steps:
This year, invest intelligently in technology and marketing approaches that enable customer engagement across all Internet marketing formats. Any investment by hoteliers should go through a litmus test:
a) Does this investment help me generate more engaging content?
b) Am I engaging the hyper-interactive travel consumer with this campaign?
c) Have I created tools that enable the hyper-interactive traveler to share this campaign and/or their experience on my hotel website?

6. I know that I may no longer delay serious time and efforts in mobile marketing & social media. It is not acceptable to provide my website visitors via their mobile device the desktop version of my website. I also know that if I do not make a significant time investment in social media that my competitors are going to leave me far behind. This year, I will work hard to integrate mobile and social marketing into my overall digital marketing strategy.

Situation:
In October of 2010, Google reported that year-over-year mobile searches for hotels had increased by a staggering 7,000%. Industry experts project that the mobile Web will surpass the traditional web in size by 2013, and HeBS’ own research and other industry sources show that between 1% – 1.5% of visitors to hotel websites already come from consumers accessing the hotel site via mobile devices.

It is also now evident that social media is not going anywhere – in 2010, Facebook’s traffic surpassed that of Google’s. Facebook users uploaded more than 2.7 million photos, shared 1 million links and “liked” 7.6 million pages every 20 minutes in 2010 (Mashable, Facebook). So how can hoteliers combine these two powerful marketing initiatives and integrate mobile into their social media strategy in 2011?

Action Steps:
People are utilizing the mobile channel to conduct searches as well as to share content, interact with friends, and browse the web. This year, consider these ideas to integrate mobile into your social media strategy: build your mobile list by featuring a mobile widget on a customized Facebook tab and on your website; run a mobile promotion on Facebook and Twitter to build your mobile list by prompting users to text a keyword to a short code to be entered to win a prize; cross-promote your mobile initiatives on your Facebook customized tab, in Facebook wall posts, and in Twitter tweets; and use mobile to increase visibility of your social media messages (asking people to ‘text to follow’ - Twitter allows non-account holders to follow specific accounts through SMS messaging).

7. I understand that the time has come to upgrade my hotel website, which has become the main face of my hotel to the rest of the world. I understand that my hotel website should offer the best visual and rich media content about the property on the Web and should become the most potent customer engagement tool via Web 2.0 optimizations and functionality.

Situation:
Over the past two years, many hoteliers who desperately needed website redesigns simply put Band-Aids on their existing sites to save precious budget dollars. Today’s hotel website has become the main revenue driver that carries the burden and responsibility of generating the bulk of bookings for the property.The hotel website is the first, (and in many cases) the only, and unfortunately for many hoteliers, the last point of contact with the travel consumer. The property website is the backbone of the hotel multichannel marketing mix and the main “engagement tool” with today’s hyper-interactive travel consumer.

In 2011, this approach needs to be rethought. The hotel website is the backbone of your Internet marketing strategy – the most important tool in your arsenal. Your outdated website allows your competitors to steal your market share.

Action Steps:
There have been so many changes in the past 24 months that it would be virtually impossible to have kept up with all of them – the emergence of the hyper-interactive traveler, social media, mobile marketing, Web 2.0 functionalities, and more. If your hotel website is over two years old, it’s time for a redesign. If your website is over a year old, keep it current with search engine optimization (SEO) strategies, a Web 2.0 optimization (interactive elements on your website) and ensuring you are fully addressing all your customer segments in your copy and navigation.

Make the hotel website redesign reflect 2011 industry’s best practices. A site redesign is a 90-120 day project (start planning now). Our experience shows that any website optimizations, enhancements or site re-designs pay for themselves within 3-4 months.

8. I will continue to make the Direct Online Channel the foundation of my hotel Internet marketing strategy and stop ‘leaking’ revenues to the OTAs. I know I need to reduce my reliance on the OTA channel and establish direct relationships with my guests. This will result in significant incremental revenues, increased loyalty and long-term competitive advantages.

Situation:
Revenue “leaked” from the hotel industry to the OTAs in the form of abnormally high merchant commissions of 25% and higher will have reached $5.4 billion in 2010. Hotel reservations are de facto financing the OTAs’ operations and allowing the OTAs to obtain billions of dollars of abnormally high merchant (wholesale) commissions and reap huge profits on Wall Street.

Action Steps:
The goal for the industry should be as follows:

• Major hotel brands: OTA contribution (including agency, merchant and opaque model) should be kept below 15%.
• Average for the hospitality industry: OTA contribution (including agency, merchant and opaque model) should be kept below 25% (the level the indirect channel has traditionally had for many years, even before the Internet).

Hoteliers should maintain strict rate parity across all channels, create unique product offerings on their own website, and engage guests directly through social media, mobile marketing, and Web 2.0 functionalities on the hotel website. Additionally, every single Internet marketing initiative (PPC, SEO, email marketing, etc.) should be planned and launched with the goal in mind of producing revenues directly on the hotel website.

9. I will no longer suffer through ‘information overload’ and will use smart analytics to make smart business decisions. From Adobe Online Marketing Suite powered by Omniture to DART, every report that I analyze must answer this important question: How can I use this data to improve my business and generate more revenue?

Situation:
Understanding business issues and decision-making are often made more difficult for hoteliers by the overwhelming amount of reports that are constantly made available to them. Also, many hoteliers are only focused on website analytics and are not taking advantage of new tools available to them such as offline conversion tracking (i.e. call tracking).

Action Steps:
Start requesting reports and analyzing them with specific questions and goals in mind. Also, start utilizing analytical tools to measure your offline efforts/channel contribution. By constructing private landing pages for print offers, enabling call tracking (especially to help you measure what percent of business is coming from the mobile channel), QR codes, and short codes that must be texted to redeem specials, hoteliers can get the bigger picture of what works and what does not work. In 2011, move beyond just using website analytical tools.

10. I will not be intimidated by the complexity of it all. I understand that with each passing day the whole digital space is becoming more and more convoluted with new media formats and marketing channels, with new “make-believe” and real revenue opportunities. I will make sure to stay on top of these dynamic developments by partnering with the best hospitality experts in Internet/digital marketing to a) learn it all, and b) work jointly on my hotel’s Internet, social and mobile marketing.

Situation:
Until recently, having a new hotel website and launching a few Internet marketing campaigns such as email and paid search were considered sufficient by many hoteliers. Today the above falls into the "It’s elementary, Watson" category, and constitutes only the initial step of a comprehensive “digital exposure” for your hotel. In the past two years a number of very important developments occurred that profoundly changed inventory distribution and marketing in hospitality: social media, mobile Web, cross-channel marketing, and the emergence of the hyper-interactive travel consumer. In 2011, hoteliers need to do much, much more to engage the new breed of hyper-interactive travel consumers in this new multichannel 24/7 environment: from social and mobile marketing, to Web 2.0 and interactive promotions and applications on the hotel website, and multichannel marketing to tie all of this together.

Action Steps:
Consider partnering with a hotel Internet/digital marketing firm with a proven track record in the industry. Partner with hospitality experts in Internet/digital marketing and direct online channel strategies who can help you acquire new core competencies and adopt best industry practices. Partner with those who can help you and your hotel stay competitive, preserve and increase market share, beat the industry averages and generate the highest direct online channel revenues and ROIs. Hire experts who will work with you in complete transparency and that are ROI-centric, yet innovative and will keep you in the know of the latest trends, including social media and mobile marketing.

Most importantly, this partner should make your hotel’s digital presence your hotel’s most productive and efficient revenue generating channel in 2011 and beyond.

About the Authors:
Max Starkov is Chief eBusiness Strategist and Mariana Mechoso Safer is Senior Director, Marketing at Hospitality eBusiness Strategies (HeBS), the industry’s leading full-service hotel Internet marketing and direct online channel strategy firm based in New York City (www.HospitalityeBusiness.com).

HeBS has pioneered many of the "best practices" in hotel Internet marketing, social and mobile marketing, and direct online channel distribution. The firm specializes in helping hoteliers build their direct Internet marketing and distribution strategy, boost the hotel’s Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ROIs.

A diverse client portfolio of over 500 top tier major hotel brands, luxury and boutique hotel brands, resorts and casinos, hotel management companies, franchisees and independents, and CVBs has sought and successfully taken advantage of the firm hospitality Internet marketing expertise offered at HeBS. Contact HeBS consultants at (212) 752-8186 or info@hospitalityebusiness.com.