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Top 3 Reasons Why Hotels Fail to Compete Online

22 July 2019

By:

It has been a reflective few weeks for me. By preparing talks on hotel marketing and through our increased focus on marketing innovation at Umi, I have been steadily been clarifying some key trends that seem to be appearing in the world of hotel and travel marketing. These trends are pretty much synonymous with why some hotels are now being left behind against the OTAs.

While all three reasons are on the technical side of things, it is essential for hotels to be on top of them to avoid being left behind against the Online Travel Agents. These points should have an enormous impact on Agency selection for marketing as they will ultimately govern the success of the direct channel.

Project-based marketing is killing innovation.

New relationships should operate a GDD methodology (Growth-Driven Design) and the hotel/agency relationship needs to be restructured accordingly.

Online Travel Agents don’t have a plan to renew a website every three years or to improve SEO once a year. For them, it is about constant innovation and measurable incremental gains, something the standard hotel marketing model does not cater for.

The traditional hotel/agency process is starting to be less and less appropriate for modern hotel marketing funnels. Let’s quickly look at how it works now and then I’ll explain why it’s broken:

Traditional Approach:

Make assumptions about what we think we’ll need

  1. Design the correct materials and gain approval
  2. Build and launch a campaign/website

Here is why it is broken and needs restructuring:

  1. It entirely relies on assumptions made at the start of the process. At no point are these assumptions rigorously tested.
  2. Falls into the HIPPO trap (Highest Paid Person’s Opinion) where usually non-marketers are signing things off
  3. Project stakeholders derive value from their input, not the outcome. This means that you regularly work through excessive feedback that slows the process significantly
  4. If it turns out the assumptions are incorrect, the entire process needs to be repeated through new assumptions, design, sign off, build etc.
  5. Creates a non-agile frame of mind in both agency and hotel

Suggested approach:

  1. Leave campaign or website as-is or create a fast and flexible alternative called a launchpad site. This should showcase all key revenue streams shown clearly to users
  2. Hypothesise improvements and run this list through a P.I.E analysis to order improvements by Potential, Impact and Ease
  3. On a monthly basis, incrementally deploy changes and re-prioritise in line with commercial goals

Why GDD is a more appropriate methodology:

  1. The reality is that most people don’t know what they need. They assume they need something different but usually lack the data to back it up with specific reasons or objectives. This GDD approach allows for changes to be tested against each other before being made permanent so that there is always an opportunity to do what is right and not what the HIPPO or other stakeholders assume.
  2. It creates a shift in mindset from project-based optimisation to process based optimisation. Marketing development isn’t just a one-off task that is done every so often, it should be a constant and ongoing process. If GDD is adopted (and understood) all the way up the hotel chain of command then the hotel will typically see far higher levels of evolution and better results.
  3. Hotels can react a lot quicker with this methodology. It allows the hotel to simply reprioritise the hypotheses month on month rather than making assumptions, planning, quoting, designing, building and deploying a complete sprint. 

This is not to say that sometimes launching a new website isn’t important – If the hotel is using a website where you can’t control the code, a templated solution and even various drag-and-drop page builder then the implementation of GDD will be pretty tricky. Even seemingly flexible templates like Divi or Avada will leave you very limited in the long run and we seen them having half the shelf-life of a bespoke site. The art of launching a successful new website is not in spending months getting pixel perfect design, it is ensuring all your sales funnels/revenue streams are correctly implemented and tracked and that you have a robust technical foundation on which you can innovate. The biggest restriction to implementing effective Growth-Driven Design is in the inflexibility of some modern website frameworks.

Hotels are ‘flying blind’ when it comes to cross-platform marketing.

Cross-platform data flow will allow humans to drop out of digital advertising.

The best advertising is done when marketers have the best quality data and insights. Hotels regularly keep booking data, advertising data, website analytics and other data silos completely separate, whereas we need to ensure all systems talk to each other effectively.

Simple retargeting and manual advert creation is becoming less and less effective when against the OTAs and larger e-commerce platforms. This is down to the OTA approach of blending marketing and technology better than the hotel; In essence, digital advertising is no longer just a marketers game, it is a developer’s game too. The amazing tools that are now available for marketers that facilitate data flow between different platforms require development capabilities and also a deep understanding of the wider hospitality stack. There is so much value left on the table at the moment, simply because marketing agencies are not connecting the dots between systems. Most marketing channels still continue to operate relatively independent of each other in data silos and will always not be the most effective use of budget.

By bringing data from wider hotel systems into our digital advertising (and wider marketing efforts) we can be so much more personalised and targeted without having to create separate campaigns; this can drastically reduce the hours required on campaign management. Cross-platform data flow allows us to work a lot smarter rather than harder. 

Here are just a few things that are possible by effectively connecting platforms:

Feeding data into advertising is conveniently in line with the surge in uptake for Google Hotel Ads as another form of Metasearch. Google Maps is now becoming the next super-app like WeChat, where we can discover, search, review, book and more through one single app. Wising up to the advanced use cases of Google’s distribution would be a very handy investment to make at this time.

Hotels are failing to consolidate the wider travel experience

This wider travel industry will leverage distribution systems to consolidate the booking experience.

Every week we see new advancements in Google Travel as they consolidate the leisure booking experience and we keep seeing Expedia and booking.com increasingly span the purchase journey by offering, flights, tours, hotels etc. It’s time for independent hotels to compete in this space.

We live in an API economy where technically everyone has access to the same data with regards to distribution. Distribution of rooms, flights, tickets, experiences etc. can all be done with a moderate understanding of APIs and aggregating things. Over the last couple of years, Umi has been working on a number of projects to span the different verticals of travel and we are seeing this pick up as the months go by.

Room distribution systems like Channex can be combined with distribution systems in other areas to allow hotels to actually deliver the full travel experience through one purchase journey. We can distribute Tours via the likes of GAdventures, Contiki and Livn, we can use the Skyscanner API to allow people to book flights to our hotel when selecting their room, we might want to add theatre tickets via London Theatre Direct? 

All of these are possible NOW through some clever booking engine implementation. The various hotel conferences around the country and focussing a lot on experiential marketing; we can now offer the full experience at the booking phase!

As a pre-requisite to this, perhaps ask yourself (or on behalf of clients), what do most of my guests do when they come here and how can I bring the purchase journey within my remit”. The chances are you will be able to earn a commission off these experiences and it will also be a great value-add to your guests.

Conclusions

These insights are more to whet the appetite on what can be achieved and where I think the industry is going. If you would like to discuss any of these points in more detail, then I would be delighted to talk further – simply reach out through Linked In or head on over to the Umi Digital website.

 

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