Travel is Changing. Here’s How Your Hotel Can Compete
Travel distribution, according to the London School of Economics, is about to enter a period of “unprecedented change.”
Their report cited 5 major disruptive factors: consumer expectations, mobile, big data and AI, regulation and travel risk. Obviously, some of these changes are coming sooner than others – mobile is ahead of AI, for example. However, they are unarguably changing things, and changing them fast.
As an industry, what can hotels do to take advantage of these changes? Here, we’re covering what we see as a few of the most important things to be aware of: The way users interact with OTAs, changes to Google tha affect hotel’s search engine rankings, and changes OTAs are making to their operations (Expedia’s doing big things).
We also highlight how hotels can start addressing these trends. For example, the research shows that OTA customers are tech savvy, comfortable with booking on mobile, and value convenience when they shop. Hotels that are prepared to meet these needs on their own sites will see huge lifts in direct bookings.
Here’s the details:
While it is “impossible” to tell how long it will take for things like artificial intelligence (AI), virtual reality and augmented reality to affect travel distributors, those technologies will inevitably change the landscape, according to a report released Tuesday.
“Now is an opportune time for the travel industry to reflect on alternative pathways and examine new approaches that are more innovative and collaborative,” the report states.
Consumers will increasingly want “more choice, frictionless purchasing, inspirational shopping and personalized services” in the retail sector, the report states, which will bleed into the travel industry. The use of mobile devices is increasing rapidly, as well.
There are many in the travel industry who look back fondly on the Glory Days of SEO – the era beforeGoogle starting making changes to its search pages.
The apparent golden age of digital marketing let travel brands focus solely on two things: optimising pages based on their content, and bidding against competitors on keywords so that their text ads would appear on the right-hand side of the organic results.
However, Google’s search results pages have changed dramatically (albeit gradually) from how they looked half a decade ago.
EMEA marketing director, Lars Hartkopf, says:
“Today, marketers must also plan their strategies to include opportunities around a variety of Universal and Extended Search boxes, understanding how to create and optimise content which Google will consider useful for each.”
So, what can digital marketers do about it?
Understanding how travellers behave is critical to our business, and this insight ensures our hotel partners can connect and engage with travellers today and in the future.
The $1.4 trillion global travel market is growing rapidly, is highly fragmented and highly competitive.
According to a recently released Phocuswright White Paper, just under three quarters of Australian hotel shoppers booked their travel online via OTAs, compared with just 21% who went direct to the hotel. So what differentiates an OTA booker versus someone booking direct with the hotel?
If your direct bookings are losing ground in the battle against online travel agencies, here are some more tried-and-true strategies for a bigger payoff.
The best thing a brand can do to retain direct bookings is to create incentives. If there’s a tangible benefit to booking directly, the decision is a no-brainer. It’s why Marriott offers lower booking rates to Marriott (and now Starwood) rewards members who book direct, in addition to perks like mobile check-in, free Wi-Fi and the ability to earn points toward free stays. Other brands offer loyalty members travel benefits like Uber discounts or Amazon credits.
Offering incentives can also mean leveraging some of your brand’s natural advantages over the competition. OTAs are great at selling hotel rooms, but they can’t compete when it comes to local expertise. Immerse the consumer in your destination through customized content: expert insights on the area, unique restaurant experiences or luxury lifestyle amenities. This goes a long way toward establishing trust and, ultimately, booking confidence. If you sell the experience and not just the room, your brand will get a significant leg up on the OTAs.
In the hotel room booking wars, online travel agencies (OTAs) seem to be giving up a little ground, and it’s a great opportunity for small, boutique and independent hotels.
Hotels that sell rooms through OTAs must pay a commission, so direct bookings mean higher profit margins. For many years, hotels gave up that extra profit in order to reach a wider audience.
However, that tide is changing.
The true cause of this shift is hard to nail down, though experts think a combination of a couple key factors are leading to cheaper direct bookings, including effective regulation against rate parity clauses.
It’s time for small and independent hotels to educate potential guests by marketing these cheaper direct booking rates to them. How can hoteliers do that, along with supplying valuable incentives for customers to book direct? Here’s 5 ways.