Dinosaur Metrics Are Taking a Bite Out of Your Hotel Marketing Performance

Marketing is evolving as I am typing this sentence. I’m here to make sure you are not wasting your time, energy and marketing budgets by focusing on outdated metrics. Many of the metrics you’re using have become irrelevant because of the seismic change in how people are researching and booking travel today. If you are still measuring what does not matter, you will end up getting blindsided. Don’t let a false sense of security, or an unwillingness to change, cost you market share and revenue.

Outdated Online Marketing Metrics

Traffic

Measuring straight up year-over-year traffic is a quick way to lead yourself into the land of confusion. Because of the way Google has personalized the heck out of their search engine, those massive droves of online visitors that used to reach your website are now:

  1. Finding the information they need in the Google universe (Google Hotel Finder, Google Flights, etc)
  2. Seeing their own version of Google based on their browsing history, their click-thru history, and the retargeting associated with their Gmail accounts. Basically, they are not seeing universal results, which used to result in massive traffic numbers.

Over the past several years, I have seen a decline in website traffic across the board in hotels and travel. The way people are moving across devices throughout the day, coupled with their growing concerns about privacy, means it’s getting harder to track them. Don’t worry: those wanting to sell you ads are working hard on a solution. But conversion and engagement metrics, not traffic, need to be center stage.

Childish Gambino sums it up: “Yeah, you got some silverware, but really are you eating though?”

Keyword Ranking

The personalization of search engines that I highlighted above directly affects another popular favorite from the days of old timey marketing: the beloved Keyword Ranking report. Back in the day, you know pre-2005, you could really hang your hat on this one. Rankings meant traffic, and traffic converted. Ah, the good old days! Today you are paying someone to dominate a list of keywords as part of SEO. You might as well burn cash to stay warm. Read these articles instead to learn how SEO has evolved, and why ‘pay to play’ is the new (old) king.

Meaningful content and website expansion have replaced keyword rankings. Looking at the Top 10 Keywords report in 2016 is like looking at a newspaper from 2005 to predict the weather today.

Email Open Rate

Bragging about the size of your email database is so last decade. The more relevant question is: how many segments or groups do you have within your database? Male vs. Female? USA vs. International? City vs. State? Sending massive email blasts without any segmentation is a sure shot way to get ignored/unsubscribed. Your content is key and needs to be segmented to succeed. Here’s an example of an email campaign that is WAY too broad, and therefore destined to fail.

137_Travel_Deals
You can beat your competition by embracing the power of segmentation. Like search engines, email systems also are not doing what they used to do back in the day: the good ol’ pixel-based tracking. One of the biggest email clients (Gmail) does not open image emails by default, which singlehandedly derails the “opened” metric. Anyway, sending emails like the one above does not help, even if they register as opened. I may have opened the email, but I will not sift through 100+ deals to find what I need, thanks. I have Google/Expedia for that!

Social Likes, Shares, Followers

Still counting Likes? Followers? Well, you can stop doing that. Neither of these things is anything more than a suggestion that someone might pay attention to you. For hotels and travel, this is where discussion is a better KPI (Key Performance Indicator) than the number of likes, retweets, and shares. A discussion can be an online interaction on social media, a phone call, or an email exchange. These interactions can take place during the trip planning phase, at the property during the stay/event, or post stay. All of those activities mean more than clicking on a Like button.

Social media is not the place to be broadcasting a message and expecting to get revenue. I fondly remember the days when agencies could make money by adding a “BOOK NOW” link on Facebook! But that didn’t last long. Today you need to look at the level of discussion you are having online. So, have you engaged your customers? What content have you produced that they should care about? These are the real questions to ask.

Pro Tip: Look at Insights section of your Facebook page. Go here to see your Twitter situation: http://analytics.twitter.com.

Conclusion

Travel is one of the most competitive segments online. You have to up your analytics game if you want to stay relevant. Pats on the back and high fives for outdated metrics are bad for your profitability (and your street cred). It’s always a great time to update your online marketing metrics to stay competitive. In my next post, I will cover the exciting metrics that actually drive your profitability. Stay tuned, stay woke!

Do You Really Need a Separate Brand for Millennials?

Almost every other week, there is an article about how hotels are trying to “embrace” the Millennial traveler. Basically, anyone born from the 1980s to the early 2000s is in this group. It’s everyone’s new favorite generation to talk about in the hospitality and travel marketing realm. But are they really that different from the rest of us? Do they “Tru-ly” need their own brands?

The Brand Approach

All the big brands seem to be in a rush to get the Millennials’ dollars and build loyalty with them. Their solution so far has been large-scale branding. For a large hotel company, the biggest reason to launch a new brand is to create a new concept for more investors and owners to invest in. That is the prime objective. Besides, you know that there are only so many similar Hilton/Wyndham/Marriott-owned brands that can exist in the same city. A new brand is so much easier to sell to owners and investors because you will be the ‘first’. But is this really the best approach from a marketing standpoint?

Smaller independent hoteliers are having much better luck with Millennials. Why is this happening? Well, where do I start… Oh yes, let’s start with the concept of having a Hotel Brand. In the old Mad Men days of building a brand, there were concepts, meetings, Scotch, and then after-work drinks. Et voila! A brand was born, and everyone involved made a lot of money. Ah, the days before social media and alcohol-free workplaces. Constant connectivity, sharing, and reviews now let the customers (old and new) decide what you are, instead of relying the drawing board you made up in a Madison Avenue office.

Creating a large brand is not the best way to get attention from people who cherish small-scale uniqueness and value over gimmicks. Let’s see how this plays out in Hilton’s latest branding effort.

Tru Video Breakdown

Hilton recently overcame superstition and launched its 13th brand, called Tru. I see what they did there…took out the E in True. #innovation

Here’s what I learned from their marketing materials. Apparently, the new travelers like to work on a laptop in their tuxedo jackets and boxer shorts:

tru by hilton

 

Now I present to you… the brand essence video.

 

In case you don’t have the time or patience to watch the whole video, here’s a quick recap:

Bam Bam Bam, Wow Wow Wow. Fun Fab Fit. Now Now Now Now, Yum, Mmm.

OMG. Is all I could come up with when I was done watching it. You can decide for yourself.

This new brand is targeting those with a “Millennial mindset” who want (and I quote): “a brand that is simplified, spirited and grounded in value, filling a massive void in the midscale category in the U.S. and Canada. Built from a belief that being cost-conscious and having a great stay don’t have to be mutually exclusive, Tru by Hilton offers an experience unlike anything in its space, consistently delivered in a surprisingly affordable way.”

According to Hilton, no brand is meeting the Millennial’s needs at the midscale price point. Which is really odd, because there are so many midscale independents out there providing a very good price/location/service value.

Just looking at their top three big chain competitors, here are several examples of Millennial-themed midscale hotels:

  1. Hyatt: Hyatt Place
  2. Starwood: Element and Aloft
  3. Marriott: Moxy, Courtyard Residence (And, by the way, have you seen how much fun people staying @ Marriott Residence are having according to this TV spot: Take Over the Town at Residence Inn?)

Tru Features Breakdown

These are the “innovative features” Tru by Hilton offers the traveling Millennial (in their own words):

  1. No Desk in the Room
  2. The Hive – A first floor experience that’s more than a lobby – 2,770 square feet of open space with unique ways for guests to engage with others or spend time alone, in one of four distinct zones for lounging, working, eating or playing. (Obviously, nobody on the marketing team saw the Resident Evil movie or played the video game before selecting this name.)
  3. The Play Zone – Filled with table games, a large-screen TV (featuring DIRECTV), and tiered, stadium-inspired seating.
  4. Command Center – A re-envisioned front desk – featuring a social media wall with real-time content to foster engagement among guests, and a 24/7 market offering fun snacks and refreshments, single-serve wine and beer, healthy light meal options, and sundries for purchase.
  5. Complimentary Breakfast – “Build Your Own” breakfast consisting of a toppings bar with 30 sweet and savory items allowing guests to customize bagels, donuts, Greek yogurt, and oatmeal to satisfy their taste buds and cravings.
  6. Rooms – Smart and efficiently designed guest rooms full of the things that matter most – all-white comfortable platform beds, 55″ TVs, eight-foot wide windows, access to power everywhere, and surprisingly spacious bathrooms.
  7. Fitness Center – Defines wellness trends, rather than follows them, with a concept focused on cardio, strength and flexibility. (Say what?)
  8. Free WiFi & Mobile Key – (good)
  9. Free DIRECTV – (good)
  10. Cleaning – Rooms and linens cleaned with P&G Professional™ products (NYSE: PG), including Tide® Professional™, Swiffer® Professional™ and Febreze® Professional™ to help enhance the guest experience and drive operational efficiencies. (Hmmmm, ok?)

True Features Breakdown

1. No Desk ≠ Automatically Millennial Cool. Somewhere it got established that not having a desk makes a hotel room Millennial-friendly. But people have been using desks for activities other than just working for quite some time now and that is not going to change. Also, the Tru infographic clearly has the tuxedo guy working on his laptop; so is he working in his boxer shorts somewhere outside the room?

2. There is such a thing as a Free Breakfast. Their direct competitors like Aloft, Hyatt Place, etc, offer this already. Unless there is a regional/local twist, it really does not help you stand out.

3. No More Three-Letter Words. Bam. Fun. Fab. Fit. Now Now Yum. Littered all over the hotel lobby carpet. How about NOT. Educated Millennials have a decent vocabulary. Just because they use bae, woke and lit does not mean they are going to be impressed with your three-letter words. This may have worked in focus groups on which hundreds of thousands of dollars were spent. But to me it feels a little over the top.

Conclusion

It was time for Hilton to come with something to put up against the other brands in the midscale category. However, their hyper-Millennial(ized) marketing is more than a little phony; it will not resonate with a generation seeking uniqueness and local experiences. The essence video is a bit embarrassing for me to watch, and I’m sure I’m not alone. Millennials don’t want to feel like they’re a cheesy subset of society. They chase value as much as any other demographic would. Tru(e) dat. (Thud. Drop mike.)

My Top 6 Articles of 2015

2015 was a phenomenal year for my site. I would like to thank all of my subscribers for participating, sharing, and spreading the “Words.” I love writing for you guys!

This year my articles were read by visitors from 158 countries! I was excited to see Cuba on the list, as they are poised to see some amazing growth in travel and tourism.

It was a great year for me professionally as well. Amazing projects all over the world, from London to Oman to Hong Kong, helped me maintain a global perspective on travel. One of the high points was giving the keynote address at the Airbnb Open conference to over 4000 attendees from 110 countries!

What really made my day was meeting subscribers and readers like you at events far away from home. When I started writing in 2013, I never thought I would be having fans in Pago Pago, Miami, and Cape Town.

In 2016, I plan to continue offering content that you can use to grow professionally without getting bored to death. I’m still rooting for you to make more revenue and more profits.

As for 2015, the tribe has spoken. Here are my top posts based on traffic, engagement and social sharing:

  1. Expedia Acquisitions Signal Tougher Times Ahead for Hotels 
  2. The Free Website Trap: Lessons From Priceline’s Rebranding of Buuteeq 
  3. The End of Hotel Rate Parity: Much Ado About Nothing
  4. How Airbnb Is Crushing Traditional Hotel Brands
  5. Let’s Keep It Real: The Truth About Hotel Meta Search
  6. Your Marketing Focus Must Shift To Hotel Value Over Price

Share, subscribe, prosper.

Marriott’s Acquisition of Starwood: Winners and Losers

Marriott’s acquisition of Starwood is great news for investors, but unfortunately not for Starwood hotel guests and employees. The quote that sums up the reasoning behind this deal came from Starwood Chairman Bruce Duncan.

“We are committed to what is best for shareholders.”

Notice that employees and guests are not mentioned. This is because they are not the focus of the consolidation. Industry consolidation is aimed at increasing investors’ profits or killing a competitor in the industry. With this deal, Marriott is hitting both those key points. When a deal like this is made, the numbers have been run and re-run hundreds of times. Everything must look good on paper, first and foremost. Banks and investors are going to be the clear winners in this deal.

However, I’d like to talk about the important players in this deal that are not likely to fare too well: the guests and the employees.

Guests (The Case of the Diminishing Rewards)

The massive march toward total devaluation of loyalty points continues onward. Every major hotel chain has devalued its rewards program in the past five years. Hilton, Marriott, Starwood and Carlson issued major devaluations in their loyalty points in 2013 and again in 2015. Historically, mergers have almost always resulted in devaluation of loyalty programs and inferior service. Anyone who thinks bigger is better when it comes to personal attention has obviously never called his cable company.

In 2013, Marriott created a new (read higher) category of hotels: the super “category 9” hotels, where it takes 45,000 points to stay for one night! They also raised the points requirement per night on 40% of their portfolio, which in their case was an increase of around 5000+ points to book a room. In March 2015, Marriott moved approximately 25% of their hotels into a higher bracket; that means you now need more points per night to get a room in the same hotel.

Starwood has been known to have the best elite program in the game. Even so, earlier this year 20% of their hotels did the category shuffle. The difference is that, in their case, half of the hotels in this 20% segment moved up a category and the other half moved down. Much less drastic than Marriott.

With Marriott taking over and a loyalty program merger inevitable in the near future, the overall value proposition is going to go down. It might be good for low- to mid-level SPG status holders, but the super elites will take a hit. Even the credit card offers from Starwood have always been out of Marriott’s league. There is no other way this is going to play out: the existing Starwood elite SPG program will take a hit.

I was disturbed by the whiny and entitled responses to the merger by the “elites” in this NY Times article. But the fact is thing are going to get worse for them and they know it.

Employees

History and common sense both tell us that consolidation is hardly ever good news for employees. This merger is no different than most in that respect.

Starwood made some mistakes over the years by spreading itself too thin specially that their gable in Asia, Europe and the Middle East didn’t really pan out. If you remember, they took a lot of pride in “moving” their corporate offices to international hubs for 30 days (China, Dubai and India for 30 days). Because, what motivates a team more than jet lag…right? This was nothing more than a gimmick, like that time in 2006 when Starwood Hotels opened in Second Life, which was supposed to be the next big thing. You really cannot be going international when all your core marketing and strategy is centralized in Stamford, Connecticut. 

Anyway, with this expansion came international teams. So guess what is going to happen in Singapore and Hong Kong and New Delhi, where both hotel chains have regional presence? Will they need two Sales Directors, Revenue Managers, or Operations Directors sitting in two offices in the same city? What about in the US where Marriott already has a massive corporate team? Short answer: No.

Marriott has made a name for itself with its efficiency. Kudos for that. But this also means that they are not going to be supporting multiple teams of people to do the same job. This is particularly relevant to employees in senior and cluster management and operations positions.

The market right now is flooded with Starwood resumes. This is especially true in international markets. Since I am very fortunate to have friends working globally for large hotel chains, I know for a fact that there is some panic in the job market.

Most guests will be fine and will deal with the changes in the loyalty program and dwindling levels of personal service over time. But the human cost in terms of disrupted careers and lost opportunities is harder to absorb.

Conclusion

It’s not all doom and gloom. This merger presents a huge opportunity for independent and ultra-luxury hotels. It’s the perfect time to outshine the rapidly diminishing hotel loyalty programs that the behemoth hotel brands are trimming and slashing, by offering a unique experience that includes highly personalized service. Another group that should be celebrating this consolidation, aside from the bankers, is Airbnb and the other apartment/home rental players. This is just what they wanted for Christmas, even if they didn’t know it. More business travelers will be looking to go rogue when faced with diminishing loyalty points, and therefore diminishing loyalty.

Hotel Brands’ Struggle to Understand Airbnb: The IHG Edition

When I’m on Twitter, I’m usually catching up on some of my favorite comedians (mostly comediennes) and posting my own material. But every now and then, some non-comedic items capture my attention. This live tweet caught my eye on September 30.

Sean McCracken* with Hotel News Now posted this update from IHG’s annual conference.

*(Let’s get our “release the kraken” jokes out of the way. I bet he hears them a lot.)

IHG CEO QUOTE

Wow. The “Solomons” referred to in the above tweet is not some mid-level manager at IHG trying to shake up the crowds. He is the Big Kahuna/CEO of Intercontinental Hotels Group! At first I could not believe that the CEO of one of the biggest hotel brands in the world would go on stage at their annual conference and say something this ridiculous and detached from reality. Then I realized that he was engaging in the long-standing tradition of hotel brands building up a boogeyman to rally against. I will elaborate on this later.

Solomons’ comment also sums up the very reason why hotel brands today are struggling with the reality of the rapidly changing travel landscape. If this is the belief held by those on top, there is very little hope that the brands will manage to stay relevant in the near future.

The Struggle Is Real

IHG CEO QuoteInterestingly, IHG is one of the brands I often refer to when speaking about Airbnb and its impact on travel. The ex-CMO of IHG shocked me at a conference three years ago when he did not know what Airbnb was. They now have a new team in place, but the struggle continues.

The fact that the CEO of a company listed on the New York Stock Exchange (aka, Wall Street; aka, the folks who brought us “Greed is Good” is calling Airbnb (unlisted) the product of “Silicon valley greed” is painfully ironic.

The real kicker here is that Richard Solomons’ bio comes straight out of the world of investment banking. To quote his Wikipedia page:

“Solomons worked in investment banking with Hill Samuel Bank for seven years, including two years in New York. He worked for seven years in investment banking, based in London and New York. Solomons qualified as a chartered accountant with KPMG in 1985.”

Meanwhile, according to Wikipedia, the CEO of Airbnb, Brian Chesky, has a BFA in industrial design from the Rhode Island School of Design. And he was broke when he started Airbnb to make ends meet.

This is usually my “drop the mike and walk away” moment. But since this is not a stage, I will keep writing.

Hey Guys… How’s Kimpton Doing?

Brands have been notorious for creating a boogeyman when facing change. The past few years have been all about Online Travel Agents stealing their share. Now they have a new entity to blame for their issues: Airbnb.

IHG’s recent acquisition of Kimpton, which I wrote about here, is playing very much in line with my prediction. The brand that took years to build is succumbing to the giant shadow its new owner is casting. Case in point, the loss of key landmark Kimpton assets in San Francisco:

[table id=6 /]

Kimpton’s single largest market was San Francisco, and they have now lost more than 75% of their presence. This is a much bigger threat to Kimpton than Airbnb and OTA’s put together.

So many of these iconic assets are getting renamed, losing the brand recognition that Kimpton employees built over so many years. I really hope Keane played “How to Save a Life Brand” at the IHG show.

Conclusion

Hotel brand annual shows are squarely focused on hyping the brand, and that is understandable. What is not acceptable is to misinform your franchisees and owners about where the business of hospitality is heading. They are hungry for education and knowledge, not just their Pancake Selfies at the “Stack Station.” Google it.

The End of Hotel Rate Parity: Much Ado About Nothing

Over the past few months, there has been a lot of talk about the imminent “end of hotel rate parity” and what it means for the hotel industry. Rulings in favor of ending rate parity clauses have been handed down by regulatory bodies in France, UK, Sweden and Italy. (Rate parity is the practice of maintaining consistent rates for the same product in all online distribution channels—Expedia, Priceline, etc.—regardless of what commission the OTA makes.)

The reactions to a scenario in which rate parity will not be required or enforced have ranged from “OMG! This is the greatest thing ever!” to “This will destroy the OTA’s!” to the proverbial “Meh.” Some industry veterans have declared it to be a “revolution” or – even worse – have employed one of my least favorite phrases in the English language – “game changer.”

I recommend putting jubilation on hold if you’re anticipating the quick death of OTA’s and the beginning of a new era of tremendous profitability for hotels. Some may believe that that the duopoly of Expedia Inc. and Priceline Inc. were built on the simple and magical hotel rate parity clause, and that they will perish without it. In response, I’d like to offer a gentle reminder:

The market cap of these companies as I wrote this article today:

  • Expedia Inc. – $15.87 billion
  • Priceline Inc. – $66.49 billion

(Source: Yahoo Finance)

The Myth of Hotel Rate Parity as an Obstacle to Profitability

Rate parity agreements put in place by OTA’s were never fully implemented by independent hotels. The complex distribution structure of an independent hotel operating in the real world made it impossible. Brand hotels have probably done a better job at implementing rate parity across their thousands of hotels. Even then, rate parity is just not that easy to implement and control.

Smart asset owners and managers devoted very little time to this clause in their OTA contract. Instead they focused on getting the most out of the OTA’s and building their direct revenue. On the opposite end of the spectrum were people who ran around in circles worrying about maintaining parity like it was life and death. Just recently I had to console a very concerned Director of Sales who would freak out every time he looked at the rate plan, yelling “What about rate parity?”

Rate parity is, and never will be, a “gun to the head” for hotel revenue managers or owners. Rate parity has not prevented independent assets from building direct revenue, nor does its demise automatically supercharge their revenue. I’ve worked on asset turnarounds totaling over $1.5 billion over the last decade; rate parity has never once been a factor that kept us from reaching our revenue goal.

It’s actually pretty simple. Hotel and lodging business managers who have not 100% outsourced their reading, learning and critical thinking are profitable today, and will stay profitable when the rate parity clauses go away. Rate parity, whether it’s in place or not, doesn’t override the many other important decisions that drive profit.

This Changes Everything… Not.

Some people are so excited about this development, they tout it like it’s the beginning of a phenomenal new age in travel and distribution. This is not the launch of the iPod, iPhone or i iPad, and we are not at the Apple developer conference.

Rate parity was not holding you back from taking control of your distribution and profitability. A new channel manager software is born every week. You always had the power to set your distribution priorities, and you will still have that power in the future.

The fact remains that if you still have not convinced your guests that your own website is the best place to book, it’s a failure of your online marketing and distribution strategy. Giving so much power to an OTA, and a clause in their contracts, is the very reason a lot of hotels are struggling today to build direct revenue. That, and the fact that their marketing department does not really do any work but totally excels at “vendor management.”

Controlling and Contributing to the Travel Cycle

The OTA duopoly of Expedia and Priceline has been actively focusing on owning the travel cycle. From planting an idea (inception), to research (content), rate search (metasearch), transportation, things to do, and loyalty points and rewards.

To think of rate parity as the pillar on which the OTA’s have built their revenue and profitability is flawed. The key to their success is their unflagging commitment to investing online, which is where people are researching, dreaming and shopping travel. In complete contrast, a Hotel Brand’s # 1 prime objective is to build the “brand” to collect brand licensing fees. That’s the revenue that impacts their share price.

Controlling and contributing to the travel cycle has never been part of the brand hotel’s master plan. Hiring expensive ad agencies to stay current with the latest marketing fad seems to be the modus operandi for most of them. You see, perception rules everything around them. It’s never online revenue or their guests’ ever-expanding needs, you know, like fast and free WiFi.

Smart hospitality asset owners recognize that their guests’ needs are basic and evolving at the same time. They are creating their own brand loyalty by doing more for their guests and ensuring repeat business via engagement.

Looking Beyond Hotel Rate Parity Games

Instead of worrying about parity, extreme channel management tools, and data overload, how about you shift focus to the guest and their travel cycle? Just like the OTA’s. Here are some things that should be happening in your hospitality business right now:

Diversification

The guest and their travel cycle needs to be your focus. Diversify your efforts and instead of just thinking of them when they are ready to book a room, think of them in different stages of their travel from their home to your hotel. As the asset owner/manager even with all the online tools available to them – You can still can solve a lot of issues for your guests and build a relationship with them beyond “Book Now” button. This relationship ensures that they take your word for the Best Rate Guarantee and book direct with you irrespective of where they are researching airfare, activities and transportation.

Using a CRM (Customer Relationship Management) Tool

Every hotel today has some sort of a CRM system, but very few actually use it. Nameless, faceless throwing of room keys at your guests at the front desk has to stop. Reaching out to your guests (establishing a relationship) and then staying in touch (relationship management) has to start.

Robots will not build relationships (unless you are watching Terminator 2: Judgment Day). Not staying in touch and not keeping track of your guests drives them to channels that offer a better travel experience and better support. Hotels that truly connect with their guests, and provide what their guests crave (information, support, service, appreciation) are the ones who will continue to build profitability.

Conclusion

Hotel parity is another red herring preventing you from truly building your hotel’s long-term profitability. Even if hotel rate parity were to disappear overnight, thousands of hotel CRM tools would still be collecting dust. Sales Directors would still be outsourcing strategy and marketing to agencies who service hundreds of clients, including their own competitors. Hotel websites would still lack fresh content, and offer guests a substandard booking experience. Your front desk staff would still not recognize loyal guests, and would still fail to encourage them to spend more at your hotel via special dining or activity promotions. Need I go on?

If you are obsessed with rate, you are bound to neglect a lot of important work that needs to be done. You can quote me when I say, “ If you live by the rate, you die by the rate.”

Your Marketing Focus Must Shift To Hotel Value Over Price

It’s amazing how much time and energy gets poured into deciding the price of a hotel room. There are STR reports, RMS Reports, and booking engine reports to go along with the hundreds of tools that are solely focused on how much you are charging for your room. There are stacks of reports on top of other reports all showing pricing data – past, present and future. You want to know anything to do with pricing? There’s a report for that.

Now, where is the value report? You see, selecting your competition based on the size of your bed and the bathroom sink is an idea that has passed it’s prime.

Boutique hotels (a term that needs to be retired) took a lot of time defining their hotels and restaurants as being truly different and holding certain value that a braded cookie cutter hotel is never going to match up to.

Taking the time to educate your guests can make all the difference in value perception. Better perception = Better Price = Better Profits.

A lot of the traditional boutique hotels under pressure from stakeholders over the years have descended on the price level competition. When your biggest USP is your price, then it’s all that you will be judged on. A room rate becomes your only significant value.

Pricing is an extremely shortsighted play. Anyone looking for long term profitability needs to look at the value that they are providing to their guests.

Here is how you can start to turn your team’s focus on highlighting your value versus going into price wars that hurt long-term profitability:

Don’t Make Up Value- Be Who You Are

Just last week I saw an email from the “corporate” director of sales for a small no name hotel asset in the middle of nowhere wanting his website look like the Four Seasons and Jumeriah Hotels- both super high end luxury products. This happens often when clueless marketing “directors” start to consider the website as an extension of their ego’s. ( Note: It’s a guarantee that  their egos are much larger than their value as employees).  The value of your hotel is not a fantasy that you would like it to be. It’s who you really are. There are independent hotels and there are cookie cutter brand hotels. Every time each one tries to be something it’s not- It always ends badly. Lying about value is actually worse than not showing any value so please keep the marketing types and their ego’s in check. This is a clear reason why you should not call a Holiday Inn Express a “boutique hotel”. Hotel brands are already exhausting every day guests with mundane name/ brand variations of the same product.  Step up and embrace who you are. Value will be best competition differentiator you have that cannot be easily replicated.

Better Value Segmentation

Segment of go home. The key is in understanding that your hotel/lodging product is likely not a good fit for everyone and that’s OK. Before embarking on expensive capital expenditure or shelling marketing dollars on a “branding” agency as yourself if you clearly know who your target audience is?

I am not just talking about who is checking into your hotel today. What about guests checking into your hotel in the next 10-15 years? Who are you targeting? You can never relate to someone unless you narrow down your focus. Pretending to be all things to all the people is where things gets complicated and you start to use price as a flotation device.

Leverage Your Location & Story

Simple test. Get your friends to walk up to your hotel front desk and ask “ Why should I be staying at this hotel” . What you hear back might surprise you. Many times what you hear has never been mentioned on the website or on your value pitch.
What’s you frequency Kenneth? Do you have a story to tell? Does your hotel location ( city, area etc.) has a story? This is what you should be telling your guests online and in person.

What your guests tell Tripadvisor when they check out is a whole another story but in 90% of the cases a good story helps with value perception and reflects in your online reviews. Start training your guests to leave the reviews that you what them to. Do not wait after the fact; you have a first mover advantage that you need to hit. Own and leverage your location. Be the expert the your unfamiliar needs. I know everyone has a smartphone but most humans are still looking for a human touch, cue in Bruce Springsteen.You should also be telling your guests about the history of the company that helps build some confidence in your lodging product.  Why are you in the hospitality business is a good starting point.

Have Confidence In Your Product & Rate

If the only way you can highlight the value of your product is through wavering on price, then you will always be struggling to compete. Anytime a hotel resorts to selling rooms to someone that will advertise them for $7, the value lost is irreplaceable.

When you get your guests to the booking stage and are about to get money in your account, do it with conviction. Matching your price to value is a cycle that needs to start at every page of your website and lead all the way into the booking engine.

Highlighting your property’s features and what you bring to the table. One golden rule here is not speak poorly about the competition. The minute you give any time discussing the competition, you have already lost the sale.

Emphasize Your Human Touch

When talking about the hotel assets it’s possible to show your product to be superior product by mentioning the high thread count sheets, fancy toiletries, fast WiFi and other bells and whistles.

Your competition is always providing some level of a basic product which might be a few levels above and below you. This is hard for your guests to understand and truly differentiate. The example I like to give is of two Starbucks on the opposite end of the street. Everyone has a favorite location and even though the product is same, it’s always the people that make the difference.

People will do business with someone who cares about them. This is where your human workforce comes into play. It’s your greatest differentiating factor and you should use it at every given opportunity.

Conclusion

Running any form of a lodging operation means that you are a) competing globally with people who can outspend and out market you. B ) you business is going to be seasonal. Your guests are willing to pay more for a product if they think it gives them a truly special or significant value—and if you present it to them in just the right way, the revenue if yours to take. Pricing is the short term and will let you win a few battles every now and then. Value on the other hand is always going to be the deciding factor in winning the war.

The Free Website Trap: Lessons From Priceline’s Rebranding of Buuteeq

The Free Website Trap: Lessons From Priceline’s Rebranding of Buuteeq

Last year, Priceline.com made a splash when it acquired Buuteeq, a digital marketing and website “cloud-based system” for independent hotels, for what looks like $98 million.

My detailed analysis of that purchase made a lot of headlines, and also missed a lot of headlines when some of the top hotel news websites did not carry my article. (Buuteeq was a big advertiser for them.)

Last week, Priceline announced that it would no longer let Buuteeq operate as an independent brand, and that they now offer free websites in exchange for a 10% commission on every dollar generated on those sites. Here is my analysis of what this means for the lodging industry.

Goodbye, Buuteeq.

The first thing I observed is how quickly Priceline moved away from letting Buuteeq “continue to operate as an independent business within The Priceline Group.” I was highly skeptical about them being allowed to operate independently when I first wrote about the acquisition in August 2014 (read my conclusion section here). Thousands of independent hotels and B&Bs using the Buuteeq platform were given a “nothing is going to change” story by the founders.

Here is an excerpt from an email that one of the founders of Buuteeq (Brian Saab) sent to a bed and breakfast client:

“We remain an independent brand (one of the prime reasons we considered the merger with Priceline Group) and we continue to run business as usual. That said, I am thrilled to be able to rub shoulders with other brands in the group; we’re already getting great advice on how to improve conversion for hoteliers (who wouldn’t want to get best practices from the likes of Priceline, Kayak, and Booking)!”

How cute! But we all know by now that nobody acquires a small company to make things better for their existing clients. They buy assets to benefit the larger group, which in this case is Priceline Inc. The interests of thousands of small and independent hotels is not the primary objective of Priceline. Their own revenue is their prime objective (as you should expect). Have you seen their amazing stock price lately? And yes, I still use Yahoo Finance.

The hotels who built their entire online presence on the Buuteeq platform – instead of owning their own digital assets – now have even less control over what happens to their own website and marketing. Priceline Inc. will tweak, update and change the new entity as they deem fit.

You must keep in mind that Buuteeq was acquired because it was working. It was built by smart people: former Microsoft executives Forest Key, Adam Brownstein and Brian Saab. They raised the capital, built the platform, and implemented aggresive sales teams that closed thousands of hotels and inns. They even convinced established hotel brands like Choice Hotels to join them. They flourished by playing on one of the lodging industry’s major deficiencies: the fact that people in hospitality do not want to spend time or money on direct marketing/ building a website/ getting a decent shopping cart.

This hands-off, price-shopping hotel culture was the key to their success, even when it’s common knowledge among lodging operators that their website is their single most profitable channel. The same key will unlock BookingSuite’s success. They’re just taking it to the next level. What can I say? It’s as surreal as a Salvador Dali painting.

Hello, BookingSuite.

For quite some time now, I have been seeing the BookingSuite link taking the place of “Hotel Marketing by Buuteeq” on independent websites. How did I know that the Buuteeq brand would be “sunsetted” by Priceline? Because there is so much more money to be made by taking a % of bookings versus peddling “digital marketing platforms” for a flat monthly fee. Where is the fun revenue in that?

You see, if a hotel on the Buuteeq platform decided to spend money directly on Google via PPC (which is their greatest marketing tool!), the hotel itself would profit from PPC success. This of course, is not what Buuteeq/Booking Suite would like to see. They would prefer to cash in on any marketing success you experience.

So, back in August 2014, less than 24 hours after the Priceline takeover, the old Buuteeq pricing chart disappeared. Since nothing can be truly deleted from the internet, here is a retro screenshot showing what Buuteeq was charging:

buuteeq pricing

 

Now let’s estimate what Priceline will make by charging 10% commission on every room booked on your BookingSuite–powered free website:

[table id=5 /]

The chart above clearly shows that even a small inn booking $10,000 in revenue is worth more than the flat-fee “Ultra” client, which only made them $1000 in monthly revenue, and out of which payroll, project management, etc. had to be paid. With the new pricing model, even a hotel booking as little as $5000/month is probably more profitable than offering monthly plans and pricing tiers. Remember, Priceline is not about giving choices to hotels and lodging providers. It’s about giving choices to your guests, and making a ton of cash doing it.

On the other hand, you could make yourself a comparable website that you own for around $1000, or one month’s commission. Even if you splurge on a custom site for 5-10K, you’ll be coming out ahead way before the year is up.

Now with BookingSuite, Priceline is going to do something they are exceptionally good at: make more money for themselves from selling your hotel/inn/bed and breakfast. Not only do they want to make money by selling your rooms on their Booking.com and partner websites for a 20% commission; they also want to make 10% on every room you sell from your own website. Cool trick, eh? They are about to make it rain revenue.

Free Websites? It’s a Trap!

Who can forget that moment in Star Wars: Return of the Jedi when Admiral Gial Ackbar realized what was going on.

“It’s a trap.”

Yes, free websites are a trap indeed. The old adage “there is no such thing as a free lunch” needs to be revisited by anyone in the hospitality business who is considering getting a “free” website. Yes, BookingSuite is a “free” website, but it comes with a very big price. The price is 10% of every single dollar you book on that website.

I am not against paying an OTA (Online Travel Agent) a commission for revenue they deliver to my hotel, when they incurred the marketing cost of bringing that guest to me. I don’t even mind them converting a guest who is hooked on their brand. The thing to consider here is that, when using BookingSuite, you are going to share 10% of every dollar booked on the website, even the revenue that you made because of your own:

  • direct marketing
  • reputation & press
  • referrals
  • word of mouth

Here is a wonderful thought. Instead of paying a flat 10% commission to BookingSuite, spend it here instead:

  1. Spend directly with Google. Buy something as simple and effective as your brand name keyword searches.
  2. Pay a photographer. Photos make or break a website. Better photos = better revenue (update them on all your channels!).
  3. Put more/better content on your website. Convert visitors on your website by giving them better information about your location/destination.
  4. Do some testing. Try out social and meta advertising platforms with minimum budgets and see what works best for you.
  5. Get a print ad. LOL, j/k. Print is dead. Just added this here to make sure you are still reading.

The “We Do Not Have Website & Marketing Budget” Myth

Ok, this one is one of the most irrational arguments against building your own website and brand presence. Even in their Wall Street Journal announcement, Priceline highlighted that:

“BookingSuite is aimed at independent and boutique hotels without the deep pockets.”

This has to stop. Buying a website and investing in direct marketing is not like buying diamonds or an island or a luxury yacht. Not only are websites inexpensive, but as a lodging operator you simply cannot decide to skip direct marketing. As for booking engines, there has never been more choice than today. I think a new booking engine might even get launched by the time you finish reading this article.

Here is what a hotel website will cost you if you would like to get one today:

  1. Download WordPress: $0. Download is free, but you have to know a little tech. Don’t worry, you can do it with a very small amount of online research. (See…no free lunch!)
  2. Get hosting: $10–$15/month. Try: Bluehost, Host Gator.
  3. Pick a design theme: $0–$80. There are many pre-designed templates to choose from if you’re on a budget. Look at Elegant Themes, WooThemes.
  4. Stitch the site together: $600. Add logo, content, photos, etc. You’d be surprised at how much you can do yourself. But if you’d rather not, developers are available for $20–$60/hour. They can make your site in 8-10 hours, at a cost of approx $600.
  5. Start running ads on Google: $500/month. Open a Google Adwords account ($0). Get support to write an ad for your brand name searches, and set a budget that is right for your market ($200–$800/month).

So the question you have to ask yourself is: who is this hotel with deep pockets? In the age of WordPress, can you really not afford your own website? Can’t afford and being lazy are not the same thing.

The article in Wall Street Journal also mentioned that BookingSuite already has 2,800 lodging partners signed up and another 3,600 joining soon. Amazing, to read that so many people are willing to share revenue for the lifetime of their website rather than make a direct investment of their own time and a little bit of money.

Lodging operators who have no money to get a website should probably look for a new line of business. Only, no business today can really survive without the web. And no business can survive without direct revenue and innovation. Just ask music industry executives, or Blackberry (RIP).

Conclusion

Is there hope for hospitality? Yes! Actually it’s a simple 2-step program:

  1. Always own your digital assets.
  2. Be wary of free lunches. There is no free lunch in this life. You will pay for it one way or another.

If you’re ready to take the brave leap into being responsible for your own website and marketing, I’m right here for you. Email me. I’m always ready to talk with you or help you with a project. You just need to take the first step.

Google’s Mobile Update: Keep Calm and Get With the Program

google mobile update for hotels

Every time Google issues an update, hotel marketing agencies have a field day writing articles and trying to give you a reason to panic about your online presence. To provide you with a respite from the hyperbole, I would like to assure you that:

  1. Everything is going to be okay.
  2. This update is actually a great opportunity for you to take your online presence to the next level.

Here are my answers to some of your burning questions about the Google Mobile Update of 2015.

Why is Google doing this update?

Good question. The simple answer is: Google wants to make more money. (Just for reference, this is always the reason Google does anything.)

Google is at the forefront of mobile web. They have seen mobile search surge past desktop usage over the past several years. Their significant investment and success with the Android ecosystem further cements the fact that Google plays to win. In its continued dominance of global search traffic, Google has a clear agenda: to provide its users with the best possible search experience so that they stay loyal to Google. More Google searches means more chances for users to click on Google Ads, which means more AdWords revenue for Google.

With the majority of web traffic shifting to mobile over the past decade, Google needs to ensure that the websites providing the best mobile experience get top placement in their mobile searches. Think of it as Google’s Spring Cleaning for Mobile Search, where they want to “incentivize” you to have a better mobile presence. Instead of wringing your hands, consider that Google is doing you a favor by reminding you to bring your mobile presence up to par. Complying with Google’s guidelines is a win-win; it’s not only good for your business, but also great for their business. Google will not be relinquishing their mobile search dominance anytime soon, so…yes, it’s time to get with the program if you haven’t already.

What will happen during this update?

First things first. This is not an “apocalypse” or an “Armageddon” event, as many hotel and web marketing agencies might have you thinking. By using the word “significant” in their announcement of this update, Google made Christmas come early for hotel marketing agencies and their press release machines. But you don’t need to purchase any special marketing services to comply.

Here is what is happening:

On April 21, Google will be rolling out an update to its algorithm in which mobile-friendly websites will be given preference in rankings. This update is just a reflection of the fact that mobile web is a way of life for humans worldwide, and Google wants to show those humans better search results and more ads.

Likewise, if you have a website, and you want people to find it and use it, you should be providing them with a good mobile experience. Being mobile-friendly is a good common sense practice, like eating more vegetables. (Google is just like your mom, who still reminds you to do it every once in a while, for your own good.) Or, think of those ‘no shirt, no shoes, no service’ signs outside some beach restaurants. This update is Google’s indication that they have standards too, you know, just in case you have been living under a rock for the past decade.

Unlike previous updates that looked at your website/domain as a whole, the Google Mobile Update will look at your website on a page by page basis. A few pages that are not mobile-optimized will not “blacklist” your entire website. Of course, the pages that are mobile-optimized on your website will get preference in rankings.

Is your website mobile-friendly?

The good news is that you do not need a fortune teller, a “site audit,” any sort of advanced digital screening, nor any DNA splicing.

Just test your website here: https://www.google.com/webmasters/tools/mobile-friendly/ 

Think of this as Google’s very own Hogwarts style mobile-Sorting Hat. You will know where you stand in a few seconds. You’re welcome!

Disclaimer: Please know that this test is not perfect. There is no substitute for human testing, and I don’t mean your agency account manager. I mean you need to do it yourself. As I recommend in all my speaking gigs: go to a mobile phone store, and start pulling up your site on different phones and tablets. You might need some device-specific help from a developer for minor issues, but you’ll know if your site works on mobile or not. End disclaimer.

What’s the worst case scenario?

With every Google update, nobody but Google engineers knows exactly what is going to happen. But what’s the worst-case scenario if your website is not mobile-optimized? Google might remove the non-mobile-optimized pages from their mobile search results, or at least push them down a few notches.

If this happens, you will notice a change in your organic traffic. Then you’ll know that it’s time to update your mobile experience. Do that, resubmit it to Google Webmaster Tools, and you will be back in the index next time Google robots crawl your website. Easy like Sunday mornings.

A lot of you have read and reviewed and commented on my article on the SEO Bubble, and how it has already burst. I recommend re-reading that article and focusing on the big picture that lies ahead.

Nobody will be annihilated or lose any limbs/appendages because of a Google algorithmic update. And while you are reading this guess what will happen to your pay per click ads? Nothing! You see, when you pay Google, they are your best friend. Like I ahve said before- Pay Per Click is still a hotels best marketing tool. 

How do you become mobile-compliant?

  1. Do not panic.
  2. Get off your marketing agency’s proprietary CMS system and move your website to WordPress ASAP. (Need more information on that? Read this and this. If you ever needed an incentive to properly own your digital assets, this is it.
  3. Once you get yourself onto a nice responsive WordPress theme, go into Google Webmaster Tools, resubmit your website, and check for any other errors.
  4. Check your analytics data after resubmission observe your website performance changes. The web is always evolving: test, observe, repeat.

Conclusion

I feel really old when I think of the “Mobile Web Marketing” speeches I used to give circa 2006 at hotel marketing events all over the world. All web is mobile web today. Google is just trying to make some stubborn folks join 2015. For those folks, it’s a perfect time to catch up on some long-needed updates. For the rest of us, it’s business as usual.

Keep calm and stay mobile.

 

Let’s Keep It Real: The Truth About Hotel Meta Search

Hotel marketing types love trends. Every day there is the same old story about a new thing that changes everything. It’s always a thing that, if the hotels would only start doing it, or hire an agency to do it, or subscribe to a tool that would do it… the heavens would open and it would rain revenue.

I’m sure everyone remembers (if they are not still living in) the Social Media Monetization Era. Now, the new craze is Hotel Meta Search. Unfortunately, over the past few years, its virtues have been overstated, to say the least. Yes, it’s a channel worth trying. But no, it’s not a magical weapon that will transform your online revenue and put the OTAs out of business. (Magical weapons do exist, but only in online role pay games or Peter Jackson trilogies.)

If you want to get in on hotel meta search, first you need to understand it. Don’t get your information from the vendor who’s trying to sell it to you. Here’s the truth about hotel meta search, and how you should use it. I’ll start by debunking some sales-fueled propaganda.

It’s Not Ground-Breaking Hotel Technology

Connecting your booking engine to Google Hotel Finder or TripAdvisor is not, in any way, shape or form, “ground-breaking technology.” OTAs have been doing this for years, and making plenty of money. The new development is this: Some hotel marketing agencies have developed an interface between advertising platforms (Google Hotel Finder, TripAdvisor, etc.) and a hotel’s IBE/CRS (Internet Booking Engine/Central Reservation System); and now they want a nice return on their investment. By making meta search sound like an interstellar technological breakthrough, they hope to get hotels to sign up en masse and pay them a monthly fee.

Remember, Google’s cost per click (CPC) based advertising − AdWords − has been around since the year 2000! Hotel meta search is just another way for providers to collect advertising revenue. Simple.

It Will Not Destroy Online Travel Agents (OTAs)

The agencies who are trying to sell you on hotel meta search generally focus on one of these three themes, each of which is backed by lengthy articles:

  1. Meta search is “shifting share from OTAs.”
  2. Meta search is “leveling the playing field for hotels.”
  3. Meta search is “going to destroy OTAs.”

Reality Check: My long-time friend, partner, and online travel marketing superstar said it best:

“The only thing that will ever destroy an OTA is another OTA.” − Ronnie Soud

Take a minute and let it set in. There you go…easy now. Let’s move on to some facts about hotel meta search and OTAs:

  1. Some of the biggest hotel meta search engines are currently or previously owned by an OTA. TripAdvisor used to be owned by Expedia; Trivago is now owned by Expedia; Kayak is now owned by Priceline. The CPC or CPA revenue odds are ever in their favor.
  2. Hotel meta search is targeting a specific stage of the travel funnel; it does not control the entire travel purchase cycle. OTAs are doing much more than meta search. They are doing a brilliant job of targeting every phase of the cycle. From destination research to final purchase, they cover all the bases.
  3. At the end of the day, it’s still battle of the clicks. When you are running a Google Hotel Price Ad, so are the OTAs. And as always, they are packing some serious firepower (ie, money). Hotel search engine marketing history (circa 2000-2010) clearly shows us how well OTAs can work those click-based advertising platforms.

I’m not saying that hotels have no chance, and should just give up. It’s ok to get in the game. This is a new channel in which to buy advertising, and you should try it. But keep it real: No hotel marketing agency is going to be “defeating” the OTA’s with their magical MetaSearch Gateway… ever.

It’s Not a Return-on-Investment Slot Machine

I have previously written about the disasters of ROI-based marketing. Hotel meta search marks the return of hyper-inflated (and to a real marketing professional, sickening) 800% to 2,500% ROI promises. All you have to do is get a monthly “middleware” connection, allocate a small budget, and then revenue will be pouring in. Yes, hotels marketing agencies are now marketing meta search the same way they did search engine marketing. This kind of hype gives rise to things like the Hotel SEO Bubble.

It’s really dangerous to fall for dazzlingly high ROI gimmicks. Meta search is not a loose slot machine. Exaggerated ROI numbers should always be a red flag and not an enticement. In fact, for every new marketing buzz, I have four words: law of diminishing returns.

As for the Encyclopedia Britannica link above, yes I am that old.

It Should Be Part of Your Bigger Revenue Picture

Make it a point to advertise directly with the hotel meta search engines whenever possible. Avoid retainer-style agency services. And, as a general principle, avoid automated bid management software, just as smart advertisers do with good old search engine marketing.

You need to focus on the bigger revenue picture and make sure your hotel meta search investment is supported by the following essential activities:

  1. Create Content: Update and experiment with your website and booking engine content.
  2. Take New Photos: When was the last time you did a property photo shoot?
  3. Revisit Pay Per Click: Tighten up your pay per click strategy. Are you optimized/spending enough?
  4. Do a Bubble Check: Check to ensure that you are not caught up in the frenzy. Assess how meta search is performing, and put your money where it really matters.
  5. Fix Your Booking Engine: Focus on sharpening your booking engine conversions. All your hotel meta click traffic will go there to convert. If visitors cannot book a room efficiently, at the right rate, then what is the point of all this?

Conclusion

The hotel meta search engines are doing what they do best: helping guests with price shopping and selling click-based ads. They will not make the full value proposition to your guests. You have do that for yourself . So, what are you doing to provide real value to the travel shopper, and ultimately to your guest?

Hotel marketing tools are useful, but they are never going to replace innovation at your hotel. The creation of value should rule everything you do − not only in your marketing efforts, but in your hiring decisions, pricing strategies, front desk policies, etc, etc. Embrace hotel meta search as one more tool you can use to reach potential guests. But then, make sure you are giving them something truly valuable: not just a good price, but the best experience they can get for that price.