Its The Marketing Stupid!
Over the last 15 years from our helicopter vantage point hovvering over 350 customers worldwide, we have seen Hotels and Guesthouses consistently struggle to get to grips with the marketing of their property, and have watched as the Online Travel Agents (OTA's) have moved into this gap, effectively taken over the hotels marketing of the hotel and providing their room bookings......at a cost..... fast approaching 18% of the properties turnover in commission. 5 years ago it may only have been 18% of the properties 'online' business. which in turn may have only been a manageable 20% of their turnover, but nowadays very few people book by telephone or fax, so we are heading towards a situation where OTA’s are getting a sizable chunk of a properties turnover.
The common view is that it is impossible to compete with the OTA's, however we do see (from our helicopter!) SOME customers who are very capable of doing it, a few 'desirable' properties in high demand areas have been so successful they have actually 'decontracted' with the OTA's, and they all have one thing in common...they invest in their own marketing.
In December we watched one of our hotels get the ‘marketing bug’, working together with a Digital Marketing Agency they launched a promotion via e mail and social media on December 1st, 6th and 13th. Each time they did a promotion the website traffic and bookings went up. When they stopped bookings dropped. But why should we be surprised? In any industry marketing is the fuel that powers the engine. Overall their revenue went up from 8000£ to 30,0000£ for the same period.
As a general rule of thumb however accommodation providers seem to have a different understanding of what constitutes marketing. If we did a rough analysis of the last 1000 e mails from hotels we would pretty much guarantee that 900 of them would be web design changes, with very little interest in the marketing of the hotel or the Booking process. The OTA’s of course do understand what is important to bookers and invest their hard earned commission in marketing to bring the bookers onto a page that contains all the info they require (Location. Reviews, Rates and Availability) and give them a quick and simple booking process. By contrast It is not unusual for us to meet Hotel Marketing Staff who invest more time in the website ‘look and feel’ than they do in marketing. (See Diagram attached)
There is no doubt about it that if you can afford to pay 18% of your turnover to an OTA, and dont have the time or inclination to do the marketing yourself, the OTA's do an excellent job of marketing your property. But consider this; Let us imagine for example that across all OTA's there is 50,000 searches for a ‘Hotel in Bath’, they will take this 50,000 and generously split it up across their hotels. In winter this figure could drop to 10,000 searches per day. If you are a hotel in Bath and want to reach out to customers with winter deals and offers to interest and entice people who may NOT have been planning a trip to Bath, you need to have your own marketing in place to do this ie Email, Print, Radio, FaceBook etc etc . Although the OTA's are spreading existing demand across hotels they are not INCREASING the demand.
Time to go and refuel the helicopter. If you want to disagree with us, or take part on a debate, join us on www.facebook.com/accubook