The future of websites, booking engines
Technology will forever be a part of our industry, all of it promising improvements in one way, shape or form. It’s nauseating to keep up with it all, but the bottom line is that if you can’t get consumers onsite, then no upgrade you ever make in the tech department will matter.I was fortunate enough to interview John Hach, senior industry analyst at TravelClick, on he’s observed with regard to how websites and hotel booking engines are changing based upon the priority information afforded to a person in his position.
Overall, he proudly declared that when it comes to hotel websites, booking engines and all other digital processes, the technology has caught up with the ideation. This means that if you can think of something you want your web presence to capture or express, there is a technology that can now fulfill that need in order to keep people booking direct.
John explained that the industry has almost entirely moved to digital, both in terms of how customers are first introduced to hotel brands as well as the overall usage of e-commerce channels. Moreover, we are currently witnessing a split in user behavior whereby those people seeking a quick trip (less than a week) prefer a more transactional "one screen, one click" booking process. He’s observed that an additional click during the sales funnel can cost up to 50% of customers. On the other end of the spectrum, longer stays demand the creation of an experience and a ‘sense of discovery’ during the booking process.
As additional areas of differentiation, John touched on two lucrative opportunities. The first was the need for personalization of the travel experience via mobile app CRM software. And next was the near-future milestone of extreme localization. That is, with every building now mapped on cloud-based GPS mobile apps, properties can enhance their competitive advantages on a microscopic level.
For example, if you are located directly across the street from a convention center when your closest competitor is over one block away, reorienting your web appearance and SEO to clearly express this minor proximity advantage will allow you to moderately heighten your ADR. Other top localized differentiators include museums, retail destinations, beaches, top-rated restaurants on Yelp or TripAdvisor, airports, train stations and business hubs.
To reiterate, if you can think of a physical property advantage or have an idea to make your onsite product more unique, there is a technology that can reflect this and effectively tell this aspect of your story to consumers.
Addressing my two favorite industry culprits at the moment – Airbnb and the OTAs – John remained optimistic yet cautious. From his analysis, there appears to be enough business to accommodate alternative providers such as Airbnb without rampant erosion, except for compressions such as massive citywide events where there is a statistically substantial impact. We hoteliers must remain vigilant, however, as this erosion may drastically increase once the OTAs unveil their own alternate lodging booking engines.
And speaking of the OTAs, whereas I’m a believer in driving direct web sales by any means necessary – that is, converting business from third-party sites – it may be better to reach a symbiotic co-dependency with these companies as their marketing efforts can be a powerful force for hotels. Moreover, as John remarked, many customers will always opt for the convenience of a one-stop shop that also includes airfare and car rentals. These travelers are likely to never convert to booking direct or to becoming loyal to a specific brand. It would be better to focus your efforts on optimizing your property’s display within the OTA system to best attract consumers with this behavior.
To finish off, John shared with me some 2015 statistics to give a better picture of how the hospitality world performed and what market segments will present opportunities for 2016:
Committed occupancy for the full year of 2016 is up 3.1% compared to a year ago
New commitments added over the last month (pace) are up 5.3%
Nineteen of the top 25 (76%) of North American markets are showing committed occupancy increases compared to a month ago
The group segment is up 3.5% in committed room nights over the same time last year
New group business added over the last month (pace) is up 11.1% over the comparable period last year
Transient room nights booked are up 2.0% over the same time last year
Business demand, which includes weekday transient negotiated and transient retail segments, is down -3.6%
Leisure demand, which includes transient discount, transient qualified segments and transient wholesale, is up 6.1%
ADR is up 4% based on reservations currently on the books for 2016