Insights by ehotelier: Winning strategies that can bring in new customers to hotels

Α Decrease font Enlarge font
Insights by ehotelier: Winning strategies that can bring in new customers to hotelsHotels should deploy strategies with the right mix of information to allow potential customers to make informed choices

When it comes to distribution channels, the discussion should never just be limited to the hotel’s relationship with online travel agencies or OTAs, Elisa Chan and Meng-Mai (Maggie) Chen point out in the following article posted at ehotelier.com.

In the authors' view, hotels should deploy strategies with the right mix of information to allow potential customers to make informed choices. In addition, hoteliers should leverage services offered by indirect channels to win over business from their competitors.

For many hotels, managing distribution channels is currently more of an administrative task than a strategic necessity. Most hotels add distribution channels opportunistically, as and when they come along. Once a distribution channel is up and running whether it be through an OTA or a global distribution system (GDS) hoteliers allocate the number of rooms and manage pricing, plus monitor bookings and pay commissions. However, given the evolving nature of the distribution landscape, smart hoteliers need to switch from an administrative function to leverage channels actively to maximize online visibility and expand market share. Here are some suggestions:

1. Distribution channels connect hoteliers to markets

Smart hoteliers see distribution channels as a means to connect to markets they can’t reach on their own. By offering a large selection of accommodation choices and technology infrastructure, GDSs create markets consisting of travel agents and travel managers, while OTAs attract individual travelers. For instance, Trivago attracts travelers who focus on price comparisons and HotelTonight attracts last-minute mobile travelers, while CTrip is the largest Chinese OTA. Hoteliers could strategically expand target segments by working with indirect channels such as these.

Cost is a significant factor when it comes to selecting distribution channels, but it should not be the only criterion. Hoteliers must also consider the distribution channels’ own markets, their ability to bring in business within high-need periods, and their ability to provide information about markets and competitors.

2. Leverage services offered by indirect channels

Some indirect channels provide market intelligence as part of their services. For example, Expedia Partner Central (EPC) provides performance indicators, such as revenue booked and earned, the tracking of bookings which went to competitors, and benchmarking of performance against competitors and the market in general, etc. Such market intelligence reports are available in real-time and free up hoteliers from laborious data collection so they can spend more time on decision-making.

Furthermore, Expedia also provides back-of-house technology support to hoteliers. EPC already offers mobile solutions to connect customers to hoteliers before, during, and after their stays. This March, EPC announced it would offer a sentiment analysis tool, Guest Review Insights, to hotel partners. More importantly, EPC also offers a revenue management tool, Rev+, which allows hoteliers to set prices based on their competitors’ pricing as well as market demand, according to Ait Voncke, Vice President of Expedia EMEA. Rev+ features a "market demand score" so that hoteliers can estimate demand based on data from the Expedia network, with a "price calendar" for hoteliers to benchmark their prices against those of their competitors. These services require no capital investment and could potentially reduce the level of technology investment for independent hotels.

3. Expand market share by winning over customers from competitors on indirect channels

Taking EPC’s report as an example, hoteliers could track the amount of business lost to competitors. When hoteliers are equipped with this level of insight, they could carry out case-by-case and trend analyses and, over time, improve their products by enhancing their value proposition. Hoteliers may find different competitive sets on a range of channels and would need to develop strategies for each channel to win business from their competitors.

Some hoteliers may wonder if winning over their competitors’ business is a good idea, due to the commissions involved. Yet, the alternative is to lose business to your competitors. Since hotel customers are price sensitive, to increase hotel revenues hoteliers prefer building up strong demand before raising prices. When hotels continuously win over customers on indirect channels, they will be more confident about raising room prices and improving revenues.

In this regard, indirect channels which offer hotels greater flexibility in promoting their properties on their platforms have added value for hoteliers. Channels which enable hotels to tailor their offerings whether featuring different amenities and facilities, according to market trends and target segment, as well as different room types and packages,  can help hoteliers differentiate their product from those of their competitors on the same platforms.

4. Don’t forget local demand generators

Most hotels rely on search engine optimization (SEO), pay-per-click internet advertising, emails, and retargeting to boost demand because many travelers use search engines and social media to find hotels. But the big spenders in branding and advertising a destination are really local companies, universities, government, non-governmental organizations, as well as tourist attractions. These tourism demand generators take a long-term perspective in their marketing efforts and could provide referrals for potential customers who come to the destination or the surrounding neighborhood for business or leisure activities.

5. Make sure your direct channels are always ready for business

When designing and implementing a distribution strategy, hoteliers should bear two issues in mind:

Firstly, the cost of customer acquisition is part of the nature of this business. Prior to the advent of the internet, hotel distribution channel choices included tour operators, travel agencies, GDSs, reservation services and, to some extent, franchises. Hoteliers use distribution channels to reach potential customers, and pay commissions in return. With the introduction of the internet, hoteliers still leverage distribution channels, but are also able to use new channels such as brand.com, OTAs, and search engines. When new channels refer customers to brand.com or process bookings, they demand compensation just like traditional channels. The cost of customer acquisition will remain a cost of doing business.

Secondly, attributing the right credits to the right channels is still work-in-progress. Travelers use a variety of information sources to search, compare, and book accommodation. Identifying the information sources used by those looking for a hotel during the buying process and granting the right credits to these channels are critical for marketers to deploy their distribution strategies effectively and allocate marketing resources accordingly. However, the data required to develop the attribution model are spread among different channels as outlined below.

Property management systems (PMSs) track reservations made through brand.com, phone calls, OTAs, GDSs, etc. Nevertheless, this information does not reveal the sources used by travelers. For example, most hoteliers would agree on the influence of Tripadvisor reviews on their hotel businesses, but the platform does not appear on most hotel PMSs as a source of bookings. Focusing on the current measured booking contributors may neglect other important channels used by potential customers.

On the other hand, Google Analytics assists hoteliers track the sites that sent most of their web traffic, as well as the sites their visitors went on to. Nevertheless, Google Analytics does not have information of the search volumes of a hotel and its competitors on indirect channels, such as OTAs or GDSs. Relying only on Google Analytics without referring to search data on indirect channels may ignore the contribution they have made.

To develop an attribution model, hoteliers need data from PMSs, Google Analytics, along with indirect channels. Although there are many discussions about attribution models, the perfect model is still work-in-progress. Hoteliers need to be aware of the potential bias caused by incomplete data and of the risk of not paying enough attention to some distribution channels.

RELATED TOPICS: GreeceGreek tourism newsTourism in GreeceGreek islandsHotels in GreeceTravel to GreeceGreek destinationsGreek travel marketGreek tourism statisticsGreek tourism report

Photo Source: pixabay.com

 

Tornos
  1. 14/10 22:16

    5th Pan-Hellenic Congress of Thermal Medicine organized in Kamena Vourla

  2. 14/10 21:55

    First micro-brewery Athens Craft Beer Festival between October 18-20

  3. 14/10 21:49

    Draft bill for Greek Diaspora abroad vote heading for Parliament in Athens

  4. 14/10 19:39

    Greek PM talks investments with Deutsche Telekoms and Enel Green Power

  5. 14/10 16:41

    Explore oldest underwater “lost city” in the Mediterranean off Greek island of Pavlopetri (video)

  6. 14/10 14:54

    Alien fish species from Red Sea the focus of study in Aegean Sea of Greece

  7. 14/10 10:24

    Sunshine and high temperatures in Greece on Tuesday

  8. 13/10 17:44

    Greek-American Massachusetts student wins “Philotimo” competition in US

  9. 13/10 17:34

    Port Jefferson AHEPA Chapter 319 hosts second successful annual fishing trip

  10. 13/10 12:22

    Annual meeting of Visitor International organized in Athens for the first time

  11. 13/10 11:36

    Culture Tourism: The Minotaur of Crete moved Greece, Rome, art, literature, and myth

  12. 13/10 11:29

    Greek government bill to regulate “red” loans by end of October

  13. 13/10 10:57

    Greece plans to promote manufacturing in Attica through industrial and business parks

  14. 13/10 10:48

    Commissioner Moscovici interview: Greece is regaining its credibility (video)

  15. 13/10 10:25

    First crematorium in Greece operational 70 kilometers northeast of Athens

  16. 13/10 10:15

    SETE President: Full extent of problems from Thomas Cook collapse 'not yet apparent'

  17. 12/10 17:38

    Greece-based firm takes part in $249 million USMC contract for night-vision goggles

  18. 12/10 17:27

    National Historical Museum in Athens pays tribute to Greek Revolution

  19. 12/10 17:22

    Cypriot and Jordanian enterprises jointly explore investment opportunities

  20. 12/10 17:16

    Fall in fish farming output will trigger price rebound in Greece

  21. 12/10 14:07

    October 12, 1944: The date of Athens' liberation from Nazi forces

  22. 12/10 14:00

    Greek Tourism: Canada and Australia become top source markets

  23. 12/10 13:52

    New development bill to encourage investments in Greek mass media

  24. 12/10 13:46

    Greek Freak NBA star Giannis Antetokounmpo set to become a dad

  25. 12/10 13:42

    Athens Declaration adopted by EU heads of states at Arraiolos Group Meeting

  26. 12/10 13:39

    Record 60,000 athletes to compete in Athens Marathon

  27. 12/10 13:34

    Greek Education Minister meets new Israeli Ambassador Yossi Amrani

  28. 12/10 13:30

    Global city leaders adopt ‘Nur-Sultan Declaration’ on Smart Cities

  29. 12/10 13:16

    27 new affiliate members greenlighted at 23rd UNWTO General Assembly

  30. 12/10 11:46

    Flag raised on Acropolis to celebrate 75th anniversary of Athens' liberation

  31. 12/10 11:25

    Greek tennis star Tsitsipas' bid for Shanghai Masters final blocked by Medvedev

  32. 12/10 10:52

    Draft bill envisions e-voting for approving strikes in Greece

  33. 12/10 10:30

    Property auctions in Greece growing in numbers by the month

  34. 11/10 22:54

    Greek tennis star Tsitsipas beats Djokovic and qualifies for Shanghai Open semifinals

  35. 11/10 18:18

    Work stoppages in Athens tram and metro next Thursday

  36. 11/10 18:10

    Agrotourism: Foreign funds invest in Greek agritech startup

  37. 11/10 17:51

    Greek fashion exhibition at the Hellenic Cosmos Cultural Center in Athens

  38. 11/10 16:35

    NATO Secretary-General Stoltenberg travels to Athens and meets Greek PM

  39. 11/10 15:09

    Greek shipping takes the global lead in Liquefied Natural Gas carriers sector

  40. 11/10 13:31

    Greek General Accounting Office foresees reduced state debt for 2019

  41. 11/10 13:23

    Boston Consulate honors Greek architect who shaped the Athens Acropolis

  42. 11/10 13:22

    Prime Minister's office: Party consensus possible on voting rights by Greeks abroad

  43. 11/10 13:10

    Greek Shipping Minister meets Piraeus Port Authority's CEO

  44. 11/10 12:50

    Cyprus and Greece ready to further promote cooperation in shipping

  45. 11/10 11:59

    International conference on underwater natural heritage held in Athens

  46. 11/10 11:38

    Greek Finance Minister Staikouras on three-day visit to Cyprus

  47. 11/10 10:44

    Prime Minister meets party leaders on voting rights of Greeks abroad

  48. 10/10 21:54

    Moderate rise in airline passenger demand recorded during August

  49. 10/10 21:49

    UNWTO: Regulation catches up with innovation - the case of short-term rentals

  50. 10/10 21:45

    New stamp series by ELTA with eminent Greek personalities (video)

  51. 10/10 21:30

    More competitive aviation could generate 200,000 extra jobs in Italy

  52. 10/10 19:12

    'Pompei and Santorini: Eternity in a day' show held in Rome

  53. 10/10 18:10

    Greek and Bulgarian Energy ministers welcome signing of IGB pipeline deal

  54. 10/10 18:05

    Spectacular transit of cruise ship through Corinth Canal in SW Greece

  55. 10/10 17:44

    Reuters: Lamda plans to start massive development at Hellinikon in January

  56. 10/10 17:39

    Greece, Cyprus and Bulgaria submit joint proposal on migration crisis

  57. 10/10 17:29

    Bills safeguarding Britons’ post-Brexit rights in Cyprus discussed in Parliament

  58. 10/10 17:18

    Mohegan Gaming presents its Hellenikon plan with Hard Rock to follow (video)

  59. 10/10 16:46

    The 15th Arraiolos group meeting organized in Athens on Friday

  60. 10/10 15:03

    Greek tennis champion Tsitsipas advances at Shanghai Masters (video)

  61. 10/10 14:30

    Greek unemployment rate dropped to 16.9% during July

  62. 10/10 13:15

    INSETE study: 20% growth in tourism arrivals in Greece during 2016-18 period

  63. 10/10 12:54

    EU Commission greenlights Greece's 'Hercules' plan for non-performing loans

  64. 10/10 11:19

    Sónar music festival takes place in Athens over weekend (video)

  65. 10/10 10:36

    THI Canada and Greek Community of Calgary welcome Olympic champion

  66. 10/10 10:05

    Volotea continues growing in Athens and launches four new routes

  67. 10/10 00:02

    Archbishop of America will travel to Bahamas on October 12-14

  68. 09/10 23:56

    Bank of Greece aims to help speed-up economic recovery with ambitious plan

  69. 09/10 23:15

    Greek PM and EU Council President meet at Maximos Mansion in Athens

  70. 09/10 23:03

    Greece honors only surviving Australian veteran from WWII Battle of Crete

  71. 09/10 21:38

    Athens Philharmonic “Meet the Maestro” event in New York (video)

  72. 09/10 20:49

    European Central Bank: Greek banks' capital ratios around Eurozone average

  73. 09/10 18:03

    5th Thessaloniki Animation Festival premieres on Thursday

  74. 09/10 16:19

    Greek President decorates International Olympic Committee president Bach

  75. 09/10 14:19

    Greece sells T-bills with negative interest first time in its history

  76. 09/10 12:41

    GNTO President: Small islands can play key role in Greek Tourism

  77. 09/10 12:34

    British tourism | Greece among top-5 destinations in the world for 2020

  78. 08/10 22:36

    Airfield expansion at NSA Souda Bay in Greek island of Crete

  79. 08/10 21:48

    Greek Music in America Archives Project moves into next phase

  80. 08/10 20:20

    Attica Regional Governor meets Chinese Ambassador to Greece

  81. 08/10 19:13

    Greek President thanks Kerry Kennedy for support to return of Elgin Marbles

  82. 08/10 19:06

    Aussie pop star Jessica Mauboy gets engaged on Greek island of Kalymnos

  83. 08/10 18:57

    Initial pricing of Greek 10-year bond at all-time low of 1.55%

  84. 08/10 18:52

    Athens Philharmonic Concert at Carnegie Hall to support Saint Nicholas shrine

  85. 08/10 18:47

    Deputy FM: Greece must aim for even closer cooperation with UK after Brexit

  86. 08/10 18:36

    Minister: Greek government to broaden criteria for winter heating subsidy

  87. 08/10 18:27

    Greek-Cypriot singer Violaris' concert in Philadelphia enchants the audience

  88. 08/10 16:23

    Greek finance ministry: Tax debt repayment scheme draws huge response

  89. 08/10 14:22

    Conde Nast Traveler | Mykonos, Paros and Crete among top-5 islands in the world

  90. 08/10 13:02

    Ancient Greek coins from Alexander the Great period found by Israel

  91. 08/10 12:10

    New research: Misleading hotel bookings rob consumers of $5.7 billion per year

  92. 08/10 10:18

    Former Nazi bunker in Thessaloniki used for digital re-animation of history

  93. 07/10 23:46

    Reuters: Greece aims for strong economic growth and tax cuts in 2020

  94. 07/10 23:33

    Greek Minister requests power disconnection for 30K consumers with arrears

  95. 07/10 22:52

    FoodTreX Travel Summit: Greece can become world’s number 1 food tourism destination

  96. 07/10 22:45

    Pompeo’s visit to Athens deemed satisfactory by Greek government

  97. 07/10 22:42

    Mitsotakis to discuss voting for Greek Diaspora with party leaders on Friday

  98. 07/10 22:32

    Theatre production on Aristotle Onassis’ life premieres in Athens (video)

  99. 07/10 20:28

    Greek Prime Minister in Cairo for business deals with Egypt and Cyprus

  100. 07/10 20:20

    Australian Hellenic Choir’s inaugural Soiree to take place in Sydney