Meetings: The Black Hole of Hotel Revenue and Productivity

Meetings are the black hole of productivity. I’m not saying this just to be dramatic. There is plenty of evidence coming your way. Keep reading!

I have been attending corporate meetings since my early days in the industry, so we’re talking about two decades now. However, things have recently gotten worse. During the pandemic, the number of meetings we all had to attend sharply increased. A Microsoft Study highlighted a 250% increase in meetings compared with what employees had to deal with before the pandemic.

Those who know me know exactly how I feel about meetings. When I get stuck on a long call, I catch myself internally chanting “This Meeting Could Have Been an Email” over and over like a monk. Meetings waste valuable time that I could be using to do actual work, like reviewing analytics, rates, content and strategy. You know, the stuff I enjoy and am getting paid to do.

Meetings are endemic to corporate environments. However, a cure is possible. It involves having leadership say no to unnecessary meetings. I think the “Anti-Meeting” movement can gain ground if more owners and senior leaders understand the huge negative impact that meetings can have on their bottom line.

There is also the fact that meetings are making you stupid, which should not come as a surprise to anyone who has been in the corporate workforce. But for now, let’s focus on the dollars.

A Very Expensive Hobby

What if I told you that meetings are really, really expensive? I wish it was mandatory for all meeting hours to be accounted for in the company P&L as a “cost of business” line item. I think if these numbers were released, there would be a quick change in how we manage our collective time.

How can you calculate the real cost of a meeting? Well, there is this simple formula:

Total Cost of Meeting  =  # of People Attending  x  Their Hourly Rate  x  Meeting Duration*

*Trigger warning: The numbers you will arrive at are staggering.

Let’s run a scenario for a small group of company managers. If five people in your organization with annual salaries of $100,000 per person spend 15 hours per week in meetings (three hours a day)… those meetings are costing you $3,846 per week. Keep up this pace, and these meetings end up costing your organization $200,000 per year! Here is a 2 min 35s montage of Owen Wilson saying “wow” to help you cope with this shocking reality.

What about larger/branded hotels? Larger organizations take this bad habit to a whole new level. Just peek into any big brand’s “FDD” (Franchise Disclosure Agreement). Every major hotel brand uses it to define services they will offer to their franchisees. You can access these hotel FDDs on the internets. Guess what item is included as a “service” that hotels must pay the brand for for? Answer: “Revenue Meetings.”

Your average revenue department managing several branded hotels likely spends a whopping 56+ “person-hours” per week on meetings alone! That’s approximately 2,912 hours per year of hours that ultimately get billed to hotel franchise owners as part of their fees. Even at a base rate of $50/hour, hotels are seeing $145,600 worth of time wasted on meetings. This time should have been spent on making your hotel more money.

Senior management is very likely spending up to 80% of their time on meetings. This is corporate sanctioned madness.

The reality is that meetings are a cost item which is entirely ours in the making. Meeting lovers are causing significant financial damage to your organization.

A (Long) Wrinkle in Time

Meetings do not only kill productivity. They also add another blow to everyone’s mental focus and health. If you have successfully stopped everyone from doing their day-to-day work, then you’d better wrap up quickly!

How long should a meeting be? My magic number: 30 Minutes Max. Going over 30 minutes indicates that either one or more of the following has happened:

  • Meeting agenda was not planned.
  • Pre-meeting prep was skipped.
  • Longer meeting time is being mistaken for “collaboration.”
  • Longer meeting time is being mistaken for “brainstorming.”
  • Someone really likes the sound of their voice and won’t stop talking.

Rarely, a slightly longer meeting is needed. However, the default one-hour meeting invite, that some folks just love to send out for every meeting, is not helping. First step toward change: email back requesting a shorter meeting. Offer to review items in advance… unless they were going to reveal the location of the Holy Grail to you… which we all know has to be done face to face with no advance notice or reading materials to prep.

Second step: encourage colleagues to change their default meeting invite setting to 30 minutes. It only takes a few seconds to save hundreds of future meeting hours.

A New Approach to Brainstorming

Just like meditation, clear thinking requires alone time. New ideas come from within and they can happen anywhere. Ideas cannot be scheduled and magically appear in a meeting room setting under florescent lights (or in front of a fake Zoom background).

Next time the senior managers get the “brainstorming” itch, try this instead:

  1. Share the topic/problem with the team via email in advance.
  2. Ask everyone on the team to email back their individual/independent ideas.
  3. Post all ideas in one place.
  4. Have attendees vote on the best ones.
  5.  Schedule the meeting.

Ok, you now have 30 mins to discuss and finalize best ideas. Good luck, we are all counting on you!

Stop Trying to Be “Synchronous” in a Remote Work Economy

Remote work is here to stay. Expecting everyone on your team to stop doing everything else to be “present together” at a designated time will keep getting harder. Meetings throw a massive wrench in the way we work asynchronously in real life. Teams work on different schedules across various time zones, reviewing files, data and statistics, and performing daily tasks that need to be done. Bringing everyone’s productivity to a grinding halt is a colossal waste of time and money. If you are calling an all hands on deck meeting, you’d better have something really important to share. Something that has to be shared synchronously…you know…like the exact location of the Holy Grail.

Don’t Confuse Meetings With Work

The theme from Severance starts playing in my head when I think of the massive number of hours I have spent in meetings (that could have been an email).  Meetings are corporate approved black holes of productivity that hide in plain sight, because they get absorbed as “work” hours.

True collaboration and brainstorming will never be confined to meetings. Employees or contractors whose calendars are filled with meetings are not really working for you; they are working for their calendar and running on a hamster wheel to nowhere. Real work happens when you stop talking and focus on the task at hand. Emails, Slack, G-chat, texts, and short 1:1 calls can resolve most of the issues in your day-to-day work life. We can collaborate without interrupting everyone’s workday to herd them into a meeting room.

Steven Rogelberg (Professor of Organizational Science, Management and Psychology at UNC Charlotte) conducted research on meetings and their impact on work. Here is a snapshot of the results:

“We surveyed 182 senior managers in a range of industries:

  • 65% said meetings keep them from completing their own work.
  • 71% said meetings are unproductive and inefficient.
  • 64% said meetings come at the expense of deep thinking.
  • 62% said meetings miss opportunities to bring the team closer together.”

These are striking numbers, yet they should not come a surprise to anyone working in our industry. We are simply meeting ourselves to death.

A Few Good Meetings

If you can handle the truth…then yes, it is actually possible to have good meetings. This is my secret formula for how to make good meetings happen at your organization:

  • Limit meeting time to 30 mins, no exceptions.
  • No sitting whenever possible.
  • No news, weather or sports-related talk.
  • No tea, coffee (not even for the closers), or food. Only water.
  • No open laptops. Notebooks only.
  • Phones face down, on silent.
  • Email in advance: agenda, reports, videos, slides, etc.
  • Observe meeting free days of the week (eg, Monday, Wednesday, Friday).
  • Slide reading is always strictly prohibited. Summaries and discussions only.
  • Have attendees anonymously rate every meeting on a scale of 1-10, and share results with the team.

Conclusion

I am not saying all meetings must die. However, most meetings can and should be avoided or shortened. Be the leader in your company who starts declining useless meetings. I’m not saying you can decline all invites from your boss; this trend must start from the top. (I’m talking to you, leaders and managers.)

Instead of reading cliche management books, advance your management career by boosting your team’s productivity and your company’s revenue. Useless meetings are crushing your team’s morale, making them dumber and less productive. Give the people what they want, and get better results from them in return. You can be a hero!

Despite your best efforts, if you still find yourself in a terrible meeting, do not lose heart. Find a meditative chant that works for you, or borrow mine: “This meeting could have been an email.”

Hotels Must Embrace Remote Work

Remote Work

After my last pandemic-focused article, my inbox was flooded with queries about remote work. I had urged hotels to embrace remote work and stop putting geographical restrictions on hiring the best talent. Most of the emails I received questioned the long-term feasibility of remote work, especially for a hotel organization.

I want to address some of these concerns and share some further thoughts on how work/office culture is already changing. Obviously, some jobs can never be performed remotely (front desk, housekeeping, etc). However, remote work is already having a direct impact on the hotel and travel industry, and this trend will continue. I recommend trying to embrace it. Not because it is trendy, but because it will increase your bottom line.

Dislike remote work? Ok, Boomer.

Much of the feedback I received about the idea of remote work was negative. Some people don’t see how it could possibly work. What if I told you that the majority of them are old? (Disclaimer: I am old too!) Sadly, the most apt response to a lot of these emails is captured by these two words: “Ok, Boomer.”

Memes and jokes aside, even some of the young(er) (40s-50s) hotel company CEOs are passionate about having their employees return to office-based work. Why the reluctance to embrace remote work? The answer lies in our past. If you do the math, you know that many of us did not grow up during the internet age. Bare bones commercial broadband really hit the market in 1998-99. That means that even geriatric millennials did not have access to internet in the early part of their lives.

Being older doesn’t mean you have to be stuck in the past. As a senior person in the industry and as a parent, I never pass up an opportunity to check in with the youth on the latest trends. This is important, as they are the future, etc.  I always try and avoid the “how do you do, fellow kids” situations. Please take the time to talk to someone whose first ultrasound was posted on Facebook. Ask them how integral internet has been to their life, and how quickly the way they use it continues to evolve. Then imagine them commuting for hours to go to a specific room to do something that they can do from their home. Imagine relocating them to an expensive city so they can be in that room from 9 to 5, leaving behind everything they love and the lifestyle their preferred location offers. I know: we all used to do that. (Cue the stories about walking 10 miles to school in the snow.) But times have changed.

Being a laggard is not tied to age, but to a mindset. The youth are speaking. Are you listening? People in departments like marketing, analytics, revenue management, content, and digital have no business being tied to a cubicle. Your middle-aged VP/CEO might not agree, but the writing is on the wall.

Where did all the good people go?

Fellow Hawaii resident Jack Johnson asked this question back in 2005. Employees are on the move, and good ones are getting harder to find. There has been a shift in the way people approach their careers. I’m sure you have heard of the “Great Resignation” looming over the workforce. Here are some sobering reads on where the job market is headed.

  1. Employees are leaving the workforce or switching jobs in droves. For many, employers’ behavior during the pandemic has played a big part in why they’re walking away.
  2. The US Bureau of Labor Statistics saw four million people quit their jobs in September, which is the highest spike on record.
  3. An HR Company called Porsinio (UK and Ireland) conducted a study in which 38% of people surveyed planned to quit their jobs within 6 to 12 months.
  4. In a Microsoft survey of more than 30,000 global workers, 41% were considering quitting or changing professions. 

The hotel and travel business is not exempt from this trend. Being forced to work from home at the beginning of the pandemic exposed a new life/work model to many people who had been practically living at work. The realization that you are working on a laptop and doing exactly same thing you did from the office is life-changing, as we can see from the millions of people looking to change their work environment.

We know how much time, effort, and carbon emissions go into commuting! And how much more you have to pay for an expensive place that’s near the fancy office building! Free office lunch is great, but no perk can match the comfort of cold hard cash being saved on housing, gas, dry cleaning, etc.

By the way, this re-examination of how and where you want to spend your time was not limited to the job. The pandemic saw an increase in separations among married and live-in couples. People started questioning who they were living with, once they started spending more time together.

The Jerk 

Let’s talk about the office jerks. The pandemic took away much of their power to harass fellow co-workers. When working from home, the jerk doesn’t sit behind you anymore. He has to log off when the mandatory Zoom call is done. This is a true galaxy brain moment: What if I did not have to work with jerks anymore? Not even on Zoom/Slack!

RIP “The Office”

People still want to work, but they do not want to join a cult.

I was amused by the texts and emails I got in response to my personal anecdote about manufactured company culture (last month’s article). It’s always great to connect with colleagues from time spent in the church of the office.

The old formula of: “Big Team + Big Office Space = How Successful You Are” no longer works.

Both companies and employees can see that people working on laptops at home are still producing the same results – or sometimes better results – in terms of overall productivity and mental health. Cutting down the commute and “office culture” time has boosted workers’ productivity. This phenomenon was outlined in several studies way before 2020. But it took a pandemic to force companies to really test out the WFH (work from home) system.

Result: A global WFH shift has shown that, even over an extended period of time, you don’t need an office for the majority of your departments. There is a reason why almost 20% of all NYC office space is empty. 

Offices have long been the extension of CEOs’ egos, with their higher floors, corporate logo on the building, lavish spreads, fancy digs. I get it, people like bling. But here is a not so novel idea: Why not use that wealth to create a happier workforce? Instead of paying rent, give employees bonuses instead. There will still be enough money for several team gatherings throughout the year.

Rethinking Middle Management

As soon as “the office is essential” façade was lifted from the corporate world, a crucial issue was exposed in the hotel corporate structure: middle management, aka The Workforce Police.

Some CEOs have the mindset that they essentially “own” the their workers during certain hours of the week, and need to corral them into an office during those hours. This desire has added a whole layer of middle managers to watch over them and whip them into shape. This is not how the youth want to live their lives. Why are we surprised that they don’t want to work in an outdated system?

Remote work eliminates much of the need to have middle management on your payroll. Most hotel management companies have a team of people employed just to make sure other people are physically present and doing their jobs. Middle management becomes redundant with remote work, as you start attracting and hiring people who are already doing the work on their own. What a concept.

Hotel and travel companies have always struggled to find people who actually do the work instead of managing the work. That’s why we have a parade of Vice Presidents and middle managers towering over lower waged, younger employees who actually can do the work they have been hired to do.

Leaders and middle managers fighting against remote work are afraid that their job is being rendered obsolete by remote work (which it is). But I don’t know how you justify paying for offices and managers when those funds can be given to your best performing employees, the ones who do the work that drives more profit.

Remote Work Culture Wars

For any good idea, there is always pushback from the establishment. It is not just hotel brands, but also global powerhouses like Apple and Chase, who are throwing shade on remote. Ironically, one of them makes phones and laptops that enable you to work well from anywhere in the world! To quote Alanis Morrissette “Isn’t it ironic? Don’t you think?”

It’s important that you read and memorize this: Remote does not mean that we never meet anyone in person ever again. It is not a prison sentence! People will still travel and meet up with their co-workers. It is not all or nothing. Teams will need to get together every now and then.

I see a lot of leaders posting about the “power of in person” on LinkedIn. It only takes about five minutes on their company’s Glassdoor page to learn about the bullying, back-biting, favoritism, or borderline illegal “happy hour” experiences that are taking place in their organizations.

Not all office culture is toxic. But idolizing in person as a singular/magical way to connect is overplayed. Remote work saves organizations tons of time! It is time that workers can use to… do actual work! Another plus is that people don’t have to focus so much on appearances. (I mean, do you even care about your company if you are not wearing Salvatore Ferragamo shoes to the next meeting?) Women are affected by this issue the most, and I’m guessing many of them would rather put more focus on their work and less on how they look.

When it comes to taking sides on the remote culture wars: Don’t pick the shiny embossed office mug, as it is not the holy grail. I recommend doing humble work while drinking from your well-worn cup at home to prevent your face from melting off.

More Flexibility, More Profits

Finally, let’s discuss the feature of remote culture that I think we can all get behind: the financial windfall!

Working in revenue optimization, I am not shy about admitting that I am all about the profits. It’s the reason people hire me! So, let’s talk about how remote work can help you cut costs and boost revenue in three easy steps.

  1. Save Office Rent: How much can you save by reducing or eliminating rent costs? If you’re not ready to completely let go, keep enough conference rooms to host teams when they need to meet in person. Twice yearly, you can book extra workspace and hotel rooms for larger groups. **Since you are in hotels, plan it during the slow season and get the best rates (tip of the hat to revenue managers).
  2. Hire Globally: I am not saying that you need to have your entire team based in another country, but how about people from another state? A state with lower taxes, for example? Or a lower cost of living? The possibilities are endless, so please Google “cost of living calculators by state and country” for a shock.
  3. Trim the Fat: People working remotely need less management. Eliminate management positions and spend the money on better talent.

Your profits were always there, my dear Watson. You were just spending them in the wrong places.

Conclusion

The office has long been the gym membership of the corporate world. It’s a place where your team is expected to show up, interact with each other, and keep up the appearance of working, even when they are not working. Commute, look busy, repeat. Look at any historical e-commerce stats: the majority of online research and shopping is happening Monday to Friday, 9am to 5pm. Yes, during office hours! This was a fact way before the whole work from home thing hit the scene.

The pandemic revealed that office-based work can often be an excuse to spend time away from home and family. For many of us, 100% of our work can be done from literally anywhere in the world. And a lot of us would like to do it from the comfort of our own home, or even on the road. Anywhere we are happy and have WiFi, we can thrive.

As for the younger generation, they are deciding that the human cost of constructing your life around a physical office is too high. People who are good at what they do – the ones who don’t need excessive amounts of meetings or supervision – are flocking to flexibility. The A Team is working from home and running circles around people still trapped in the office. As we enter this new era of work, during a pandemic that refuses to go away, just remember one very important thing:

That meeting could have been an email.

The Post Pandemic Hard Reset

I wrote two articles during the pandemic, one around the beginning and one in the middle. It’s time to complete the trilogy.

Our industry has been given a once-in-a-lifetime chance to fundamentally change itself. How we market, price and operate hotel assets needs to evolve to meet the changing market landscape. Here are my thoughts on how to make real changes in order to embrace the tremendous opportunities that lie ahead.

Embrace the Hard Reset

The hotel and travel industry was ground zero for the impact of global lockdowns: the hard reset button on the entire industry was pressed. A hard reset on an electronic device returns it to blank factory settings. It wipes out all your history but then gives you a chance to start over. A chance to build things the right way. Imagine recovering from this hard reset without making fundamental changes to the way we run our businesses. If we fail to change and decide to embrace the “old status quo,” then we are leaving a legacy of mediocrity. Being of “mediocre talent” is one of the greatest insults, coined by Bill Murray during his SNL days. Can you really imagine coming out of this global pandemic and not changing anything?

Change has to come from the top. Do you want to be known the “Status Quo CEO”? A leader who did not make improvements, even when an unprecedented opportunity for change was handed to you? Swift recovery for leisure travel will protect the laggards…but not for very long. Those choosing not to evolve will encounter more and more problems. What happens to problems in any industry? Simple: your competition solves them and moves ahead. That’s how business evolution has worked time after time after disaster struck.

I can see the dinosaurs in the hotel business currently grazing in the fields of returning leisure travel demand, ignoring the giant meteor that has crashed in their backyard. The pandemic has changed all the rules. Let’s embrace the hard reset and do things that were previously considered impossible.

Please Let My People Book

In the spirit of the Bernie meme: “I am once again asking you to please let your guests book a room on your website.” Many hotels jumped to put up the Covid-19 super mega pop-up banner during the pandemic. Now, even as we move into recovery, many continue to flash Covid-19 warnings on their website. A hotel website is not CNN.com or The New York Times, where your guests are coming for the latest updates on the virus. Your focus needs to be on providing a clean and safe space for guests, and letting them book a room without jumping over usability hurdles.

Flashing a full screen pop-up/promo on the home page was tacky long before the pandemic. Pop-ups are not content. (Wait, didn’t someone write about usability mistakes to avoid back in 2016?) A brave friend of mine who traveled in the middle of the pandemic told me she had to close three Covid-19 pop-ups and warnings in order to see a hotel’s booking link on her phone.

I’m sure that a lot of changes have happened at your hotel since the pandemic began. That’s ok, your guests know that. Please neatly organize your content on a separate page that is easy for guests to find. With demand returning, people are once again looking for experiences, stories and engagement. But the first step to profitability is letting them book a room.

Keep It Clean

Cleaning has become front and center on a lot of hotel websites. However, please try not to sound like you never cleaned your hotel before the pandemic. This is an opportunity to share the fact that you have always always been cleaning to a higher standard than random people renting their condos/homes on the side.

This is a big marketing opportunity that big brands leave on the table. There has never been a better time to celebrate your most important and often ignored hotel department: Housekeeping. Brand or independent, you have always had this huge advantage over casual short-term rentals. A whole department that you hired with the sole purpose of cleaning and keeping your guests healthy.

I > AI

Almost all hotels have been sold on the idea of an AI-powered, supercomputer revenue management system, property management system, etc. A system so powerful that, when it is not calculating the width of newly discovered galaxies, it is keeping a keen eye on your rates, revenue, rooms and profitability. Unfortunately, as a general rule, hotel software companies tend to massively oversell and underdeliver when it comes to real world results.

Why is there so much hype in hotel software marketing? The answer is quite simple: The vendors know that hotels will not leave once they implement something. Remember the “Status Quo CEO” I mentioned earlier? Those guys never want to change anything, no matter how outdated it gets. There are connectivity fees, operations hassles, fears about downtime, and the time it always takes for the staff to learn something new. Most “mediocre talent” will stick with their usual vendors, even when they are fully aware that the product is not working very well. Therefore, all software vendors have to do is generate hype and close the deal. Then they can sit back and collect fees.

The pandemic has highlighted the fact that we still need actual humans to make things happen. Even the best hotel revenue software systems cannot work well without historical data. Remember those “unprecedented times” we just went through? Guess what? Your revenue software will not be solving an equation for a situation that has never come up before. Hey, it was barely keeping up to begin with. Here I would like to give a shout out to the revenue professionals who step in when software fails and boot up their humble Excel spreadsheets to make money for their hotels.

The pandemic is a not-so-gentle reminder that when it comes to long-term profitability and pricing strategy, the right humans (at least for now) are still useful.* When entire markets are restructuring, pre-programmed formulas will not work; the reality of machine learning is not here yet. Everything needs a rethink that goes well beyond a simple algorithm that updates your rates based on occupancy. Loyalty needs to be reimagined, as do business segments. People will have to solve these issues. A balanced investment in software and smart people is crucial to having a successful commercial department at your hotel.

*If the AI machines have taken over and are reading this article in the near future…Please don’t kill me, Hal 9000!

Understand Demand and Pricing

The pandemic gave rise to some enlightened pricing specialists. I wrote about this enlightenment phenomenon in detail in my last article. I respect the power of pricing, but the pandemic reconfirmed a hard fact:

Lower rates do not magically create demand.

Demand exists for a geo location, and you use pricing to capture it. Price alone will never magically create demand out of nothing.

Some folks insisted that a $50/night rate would make someone triple mask up and risk their long-term health to visit an island resort in the middle of the lockdown. In my opinion, people that are lowering rates and then yelling “heads in beds!” on conference calls (like they are pandemic revenue experts) should be referred for mandatory counseling.

Pricing is a powerful tool that can help you capture market share. But it has to work in tandem with your marketing and net operating income goals. There is a cost associated with every distribution channel. Yes, even your most hyped and beloved source (direct revenue) is not giving you free money. Before pricing decisions are made, you must consider the cost of getting every dollar to your bank account.

Short-term thinking makes folks treat pricing like a magical ATM machine that will spit out cash every time you punch a few keys. Using dynamic pricing and just dropping rates are not the same thing. You must protect your asset’s long-term profitability.  I wrote about pricing strategy last year in the middle of the pandemic and am glad to report that most of my predictions and recommendations played out well.

Remote Rules Everything

The pandemic has shattered the myth of mandatory in-house revenue, sales and marketing teams. Outside of Operations, team members don’t need to be on site. Other industries that have embraced remote work and hybrid setups are thriving. Imagine reducing costs, increasing productivity and curtailing employee turnover in a single swoop! The commercial/office space industry is in turmoil as more and more employees and employers realize that commuting for hours to sit in a cubicle is often a huge waste of time and money. Time that can be spent doing actual work instead of commuting. Money that can be going to your bottom line instead of rental space.

Revenue Culture Wars

One terrible excuse used by in-house team advocates is that working from an office helps ‘build a revenue culture.’ I have worked with some of the best people in the hotel revenue and marketing realm for more than two decades. They all have one thing in common: remote location friendliness. They manage or belong to a global team of high performers and deliver stellar results. I have always strongly held this belief:

The revenue culture, my dear Watson, is in the results.

When I hear people tout “revenue culture,” I roll my eyes so hard that they sometimes get stuck in the back of my head. I have personally experienced these pseudo culture types in hotel organizations. It usually starts with the CEO/President reading a Tony Hsieh or Malcom Gladwell book. Next thing you know there is a printed company culture book where employees are required to give yearly quotes next to photos of themselves having the greatest time of their lives at the office. Everyone has to say they love working for the company…surreal. Meanwhile, those same employees usually wouldn’t last long enough to be in the next book because of workplace toxicity, nepotism and misconduct. Seasoned employees jokingly pointed out that those asked to leave quotes in the “culture book” during their first year would be the first to leave. That was often true.

Talent Retirement Centers

Efficiency is higher in remote work, according to experts in every single productivity study. You may be a hotel owner/management company with hotels all over the world. Yet, when it is time to build a world class marketing and revenue team, you relocate them to…Dallas!? (Nothing against Dallas. Some of my best, most talented hotel homies live there.) Why would you limit yourself to “mediocre talent” and build a retirement center for them instead of a growth organization? Mandatory relocation does not build a team …it builds your already inflated ego. Leaders should fight the primal urge to walk around the office as the mighty powerful leader, overlooking the minions in their empire.

How about a hybrid model? Then you still get to do your walk of glory several times a year when the entire team is together. Remember, you’ve still got the corner office, baby! Some of your talent needs an office, while others thrive in their home location. You want to see revenue growth? Spend your relocation budget on performance bonuses and watch your company morale and profits soar.

Industry leaders will have to put their profits ahead of their egos and fish in a larger ocean of brilliant candidates. Why settle for average revenue and profits when (to paraphrase Brando in On the Waterfront):

“You could’ve had class. You could’ve been a contender!”

Don’t be that organization shuffling a team of Grade B and C players in and out of your organization based on whether they are willing to relocate. A happy and motivated team working remotely will run circles around you.

Stop the Entropy

No word captures the despair and hopelessness in an organization like entropy. Defined as a gradual decline into disorder, entropy is easy to spot in both large and small hotel companies. I have done several paid and voluntary audits for hotel companies throughout my career that had one single culprit for their decline: Corporate Entropy!

The pandemic further exposed entropy in many hotel companies and has accelerated their decline. Those who embrace status quo right now are extremely vulnerable. A deep pocket investor can temporarily rescue some of these organizations, but the writing is on the wall.

Ten questions for the CEO of a hotel company:

  1. Have you focused your investment and development efforts on a department other than Operations?
  2. Do you really need that many Vice Presidents?
  3. Are you still running your sales, marketing and revenue departments separately with different leaders?
  4. Are you spending on outdated revenue and marketing software that is not much better than an Excel spreadsheet?
  5. Do you still require your top-performing talent to be based in-house?
  6. Are you still wasting time on mandatory team meetings?
  7. Does your revenue team have to copy several people on an email or hold a meeting in order to make rate updates for your hotels?
  8. Does your marketing team have to copy several people on an email in order to change a website photo, create a promo, or update some content?
  9. Instead of doing actual work, are your departments just managing external vendors and juggling reports?
  10. Are you running a retirement home for corporate employees instead of a growth house for talented individuals?

If you answered yes to these questions, you may be in trouble.

I used to joke that I was the Vice President of Vice Presidents during my time as a corporate employee. I have also worked at organizations where the leadership turned their smartest people into reporting monkeys, focusing on the visual formatting of their reports instead of using their spectacular insights.

Corporate Entropy is like diabetes; it is a silent killer. If you continue to ignore it, you will pay a heavy price. However, if you diagnose it in time and manage it well, it can be reversed. As with diabetes, lifestyle changes are crucial to success. You need to form healthier corporate habits.

Discovery of entropy in your organization is not a death sentence. It’s a wake-up call. An excuse to overhaul stagnant corporate practices has literally fallen in every CEO/President/VP’s lap. Good luck. We are all counting on you.

Stop Working With Jerks

Hotels are a capital-intensive business. With high capital comes a high chance of running into jerks. Hotels are definitely a magnet for inflated egos. Jerks are not always high net worth individuals…but we all run into jerks at some point in our careers.

Workplace jerks hurt your health in so many ways. From raising your blood pressure, to weakening your immune system, to making you more susceptible to an array of maladies both physical and mental. Also, the jerk condition is highly contagious and you might unknowingly bring it back to your personal life! Even more scary: dealing with jerks is harming your career by distracting you from doing what you do best. I’m trying hard not to sound like a life wellness coach here, but there is a heavy price to pay when you work with jerks.

Conversely, the benefits of working with good people go beyond anything yoga, Peloton or SoulCycle can do for your overall health. If you are experiencing a career reset during this time: Why not reset your standards on the kind of people you are willing to work with every day?

The pandemic forced many of us to be away from the office. Taking this time to reevaluate your life and work goals is not a bad exercise. If you return to the workplace, make a valiant effort to avoid joining or rejoining toxic environments. Reminder: We have limited time on this planet.

The past 18 months have solidified my relationships with the nice people in the hotel and travel business. I have already lost my tolerance for jerks in the workplace and refuse to work with them. Life is not a romantic comedy where you can convert a brilliant jerk into a loving hero, who was essentially a good guy all along. Jerks don’t change; they are about that jerk life. Don’t believe me? Trust Reed Hastings on this one. You spent a lot of time on his 250+ billion dollar platform during the pandemic:

“Do not tolerate brilliant jerks. The cost to teamwork is too high.”
– Reed Hastings, CEO Netflix

Last year exposed the fragility of life. Don’t waste your time with jerks who are masquerading as brilliant industry saviors. There are so many good good people out of work right now. There has never been a better time to build your nice-people-dream-team hotel company.

Say Goodbye to TripAdvisor Spending

The pandemic accelerated the inevitable decline of one of the most successful travel review websites in the world. I wrote about this massive change coming to the review business back in April of 2019. Businesses built on Google cannot survive once Google decides to do exactly what you do…only better.

TripAdvisor had a chance to be great but, like most corporations, it went for greed. All that easy ad revenue from hotels was too much to pass up. Their basic hotel listing (a simple link to your hotel website) used to cost small hotels $15,000 to $20,000 per year! And hotels were paying this money because they feared that they would lose their rankings. They could see it happening all around them even though it was always blamed on the magical “algorithm.”

Today, TripAdvisor is offering the very same link to small hotels for $350/month. You don’t want contracts? No problem! Pay as you go. The simple directory link from the before-times was marked up 20X for only one reason: to build their cash reserves. Let’s not forget this fact when this same old directory listing starts to go up in price as travel sector recovery solidifies.

As Google My Business continues its march to become the most relevant review website in the world, you should shift your focus to your business listing. That’s where your guests are leaving and reading reviews. Paying $20,000 for a linkback from a review website will soon be looked back on as a silly thing hotels used to do when they didn’t know any better.

Recently TripAdvisor launched “TripAdvisor Plus,” a travel subscription for guests that will cost $99 a year and get people discounts on hotel rooms. It’s another product created to boost their own revenue that does nothing for hotel owners. Remember kids, these guests were already going to come to your hotel. Now they will just come in at a lower rate. So, we are building loyalty for TripAdvisor using our hotel assets.

Right now TripAdvisor sits on a mountain of cash, thanks to the hotel industry. They will be fine and will not be going away anytime soon. Hotels, on the other hand, need to stop spending their money on outdated platforms.

Communicate Better

Most of the big box hotel brands struggled to effectively communicate with guests during the pandemic. Why are brands finding it so hard to to talk to human beings?

Over the last year, Hilton Hotels has sent me an email every month offering me a $119 rate in Orlando. Now that recovery has begun, the rate has gone up to $249, but it’s still the same email. I wonder how I got on the Orlando email train with Hilton! I am not the lead guy in the Book of Mormon musical.

Meanwhile, Marriott’s Bonvoy has been telling me that I must explore the wanderlust they know is, and I quote:

“eating me inside.”

Coming out of the pandemic, do we really have to talk to people like this? A multimillion-dollar marketing budget, thousands of meetings, and this is the best they can come up with?

No conversation about hotel communications and CRM can be complete without referring to my perennial favorite: Melia Hotels. They inspired my hotel CRM guide and also made it into my first pandemic article by sending me a 45% off promo email the week the whole world was shutting down! Guess what? They read my blog, completely transformed their online strategy, and sent me a thank you basket….just kidding! They sent me one or two emails every month offering me the usual 25% to 45% off every single time. What really caught my attention was this:

 

Three hits right out of the park:

  1. Embedded autoplay video
  2. Bad grammar, spelling and content breaks
  3. Amateur photoshopped image of lady walking on water

The pandemic (so far) has killed around 3.93 million people worldwide. How does this line pass any marketing meeting, even in the most entropic organization:

“Your house, so happy that you are not there.”
– Melia Hotels

However, not all is morbid on the communication front. One of the best emails I have seen during the pandemic did not come from a hotel brand, but from one of the fastest-growing OTAs in the world: Airbnb. It is possible to talk to people as if they were people.

In this simple email, Airbnb communicates some important points with finesse and empathy. They have non-sarcastically hit it out of the park in three ways:

  1. Empowering Hosts: Without hosts, there is no revenue. Offering them communication options was a great idea. When was the last time a hotel brand asked you what kind of marketing content you wanted to receive, and how you wanted to receive it?
  2. Providing Useful Content: 40% to 50% off discount emails are not communication. They are hotels shouting on a bullhorn to their entire database. This message is nicely targeted and provides information the hosts need.
  3. Using an Effective Layout: Clear calls to action, clear headline, personal and emphatic tone.

Hotels, please embrace sympathetic marketing. You can be edgy and creative, but you don’t have to be insensitive.

Conclusion

A spectacular recovery is in progress. I am extremely happy to have wasted zero hours on recovery speculation or creation of a pandemic recovery guide. We have a massive challenge ahead of us, no question. The one resource that is going to be more crucial than ever is good people. Your success will depend on who you choose to have on your team as demand fully returns to a hotel market near you.

Finally, one last reminder.

Pandemics come and go. WuTang is forever!

 

RIP BookingSuite: Protecting Your Hotel’s Digital Assets

On November 30th of this year, Booking/Priceline is shutting down its BookingSuite product, likely affecting hundreds of hotels worldwide. In short, they will stop running websites, booking engines, and revenue management software for their hotel clients. Even with the volume of hotels they amassed on their platform, the headache is clearly not worth it to them anymore. Sadly, they timed the shutdown during the toughest year on record for the hotel and travel industry. In addition to dealing with the pandemic, hotels on their platform now need to gather their digital assets and go vendor hunting. That’s not an easy task even in the best of times.

This is not the first or last time a crisis like this has hit our industry. In fact, it’s a lot like the hospitality industry’s version of Groundhog Day (Palm Springs for younger readers). The free/cheap/rentable/leased hotel website trap has sprung and once again hundreds of hotels are trapped. Why is it so hard for us to learn from history? If only someone were writing about digital asset management for hotels, warning us about a likely collapse of their digital assets platform?

BookingSuite’s demise in the middle of a global pandemic is yet another opportunity for hotels to learn that software companies are not their friends. Their core focus is their own balance sheet and profits. Concern for the long-term profitability of your hotel asset lies with you alone. The cheapest option will almost always end up costing you more in the end.

Here are some renewed thoughts on owning, managing and investing in your digital assets and revenue.

Play It for Me One More Time

History repeats itself, sometimes very quickly. Let’s take a quick look back at the BookingSuite origin story.

It starts like all hotel software disaster stories… with an acquisition. Booking.com acquired Buuteeq, a company peddling $150-$500/month websites to hotels and small inns. The platform was designed to churn out cheap, quick websites using templates and as little effort as possible. The operative word was cheap, and it took off in an industry that is always reluctant to make digital investments.

As with any typical hotel tech startup, funding was deployed on heavy sales and marketing, including paid speaking slots at hospitality conferences. “It’s cheap and I don’t have to do any work? Sign me up!” is how the industry responded. Hundreds upon hundreds of hotels jumped on the opportunity to rent their “most profitable channel” for a few hundred dollars a month.

Then one morning, hotels woke up to find that their most profitable channel was now a part of Booking.com (the word’s biggest Online Travel Agency)… you know, the guys they thought they were battling by spending a few hundred dollars on their Buuteeq websites and marketing plans.

At that point everyone came to their senses and started planning how they would manage their own digital assets, right? Nope. Status quo prevailed and people forgot.

A few years later in 2020, the alarm clock beeps at 6am, and I Got You, Babe starts playing on the radio…again. And I am writing yet another article on the importance of owning your digital assets.

Making a Bigger Boat

BookingSuite was run by some of the smartest people in the travel business. The Priceline Inc. empire knows a thing or two about making money. They quickly capitalized on the fact that hotels are always reluctant to spend on digital assets. With a marketing budget and knowledge base infinitely bigger than Buuteeq’s, Booking.com did what it knows to do: scale quickly and make more money! To take things to another level, they were going to need a bigger boat.

So, they expanded the product line by adding a booking engine (aka booking button) and revenue management software (which was made possible by their acquisition of a company named Price Match, based out of Paris). And just like that, a façade of “direct revenue channel presence” could be achieved cheaply. Owners and managers scratched it off their to-do lists and in one swoop migrated everything over.

Next, BookingSuite got rid of those pesky monthly retainers and switched to a straight-up 10% commission model. So get this: A typical hotel on the BookingSuite platform was already paying them a 10-15% commission on inventory sold on Booking.com. Now, in addition to that, the hotels started paying them a 10% commish on every room sold on their own hotel website! A racket so deep, it would make Tony Soprano blush.

I have mentioned this a lot in my previous articles, but I have to say it again so please take note: Booking.com is really, really good at making money. I wish hotels would watch and learn to operate with the same passion for revenue.

Titanic, Meet Iceberg

There were clear warning signs. This iceberg in the open waters was spotted by yours truly back when Booking took over Buuteeq and got into the hotel digital asset game. None of their acquisitions are designed to help hotels make more money. The goal for them has always been to gain insights and maximize their own profits.

Looking back, you can clearly see the warning shot they fired when they shut down online marketing services back in 2017. The smart folks at BookingSuite very quickly figured out that offering online marketing services for hotels was not worth their time. So, in the peak of the travel boom in 2017, they sent an email announcing their OG “difficult decision” of shutting down their SEM (Google AdWords) services.

They wanted to shift focus to activities where they could make money from you without actually doing too much work. Here is the email they sent back in the day.

Three years later, they pulled the plug on the whole BookingSuite program. No surprise.

Another Day, Another Difficult Decision

Fast forward to 2020, when another “difficult decision” email strikes inboxes across the globe. This time they are removing the trifecta of digital services: your hotel website, booking engine and revenue management software. If your hotel website and/or booking engine and/or revenue management system was with BookingSuite…then I think the “decision” part was made by them, but the “difficult” part is 100% your problem now.

Years of renting cheap digital assets and software has caught up with the industry, again. Hundreds of hotels are scrambling for support in the middle of the pandemic. Many are left with a zip file of their website, content, and photos (aka, their most profitable channel). If you have been reading my articles for a while, you know that owning your biggest digital asset is something I am very passionate about. Yet even in 2020, hotels are still not knowledgeable: they choose to be in the dark.

Shady agencies touting the gospel of direct revenue are also helping to make sure that the hotels working with them stay trapped in website content management system (CMS) dependency. Most agencies outsource all their work (eg, to India or Colombia), where your hotel website is managed in a digital sweatshop. Of course, you are assigned an overworked “account manager” here in the US who is simply forwarding emails all day to you and dozens of hotels just like you. I actually do not like the smell of cheap, generic strategy in the morning.

As these agencies grow, they super-optimize their offering and everything starts to look the same. This is the biggest reason we have a plague of sameness across the hundreds of design-heavy, content-free hotel websites; the same “book direct and save” Google Ads; the same social media posts; the same 50% off email newsletters. Yes, those drone videos, hyperbolic adjectives in content, and cliché photography all come from the same place.

Why would you choose to be an independent hotel if you want to use cookie cutter digital assets and strategy? Hotel brands have already achieved this level of mass production. Big brand hotels have dedicated vendors for conformity, from websites to toilet paper. Why masquerade as an independent hotel when everything you do is in the style of a brand hotel? Maybe it’s time to make a switch to digital independence.

A Brief Guide to Avoiding Worst Case Scenarios

You can prevent yourself from experiencing a vendor-induced disaster. You don’t have to let the next big industry acquisition destroy your digital assets. Here is a list of things you can protect today:

  1. Domain: This is the cheapest and simplest digital asset to always have registered in your name. Maintain ownership via a dedicated email address, phone number and address. Also, don’t be cheap; renew domains for 10+ years whenever you can. Having rescued several domains for hotels during acquisitions, I am here to tell you: do not take domain ownership lightly. I have seen/experienced some awful scenarios… I might write a horror series about it one day.
  2. Website: Never rent a website. That super low monthly fee or installment is going to come back one day and bite you. A proprietary content management system that is exclusive to your design or marketing agency is another red flag. And before you get caught up in the sales pitch, remember: If you are not using an open source platform like WordPress, you are going to eventually regret that decision. Don’t end up like Sisyphus, cursed to start from scratch time and time again. Please read this article every time someone tries to scare you out of using an open source CMS like WordPress. Remember, any design and any kind of website can be powered by WordPress, so you are free to pick any designer and any marketing agency you like. Just let them know you prefer to own your digital assets. If they protest…find another agency.
  3. Revenue Management Software: Many RMS systems claim to be built on magical, AI-powered, Machine Learning software. I don’t expect you build one for yourself using open source software. So, short of getting a team of engineers and data scientists, how can you protect yourself? The answer lies in something you provide to the RMS system every day so it can do its job: Data. No matter how established you think your vendor is, remember that they are one acquisition away from disappearing on you. As a small hotel, you can back up all your data using a simple service like Office 365. Larger management companies must invest in something more complicated and back up everything on Amazon Web Services, Microsoft Azure or Google Cloud. RMS systems cannot do anything without your data, but please don’t rely on them to keep it safe for you. Your vendor might love you today, but do you think it will last forever? As Outkast aptly pointed out back in 2000:

    “I hope we feel like this forever
    Forever, forever, ever, forever, ever?”

  4. Hotel Booking Engine: As with the RMS, I’m not expecting you to hire a team of developers and code writers to make you an online shopping cart. This is a service you will have to buy. But you still need to look after your data. The most useful data export from a booking engine or shopping cart is your e-commerce conversion data. This info ties directly into analytics data from your other crucial digital asset, your website. Do not leave your historical data in the hands of a hotel marketing agency/vendor. I have been a Google Analytics evangelist for as long as I have been in this business. Do not let agencies push you into using expensive analytics programs like Adobe Site Catalyst (Omniture, for old people like me). Open a Google Analytics account that is owned by you and is 100% integrated into your booking engine to retain all of your e-commerce conversion data. That is your gold mine to hold onto when someone decides to pull the plug on you. Software is great; data is greater. If your vendor pulls the rug out from under your feet, you may fall hard… but you can retain your data and some dignity before you start with a new vendor.
  5. Marketing Campaigns: You’ve probably figured out what I’m going to say already: make sure you own your hotel marketing campaign. Paid search marketing is a powerful tool, but you must own the relationship with Google via your own corporate, hotel, or personal credit card. Set up a generic Gmail address that you control and make sure your vendor builds out the campaign for you using that address. Then, if your vendor ever makes the difficult decision to stop working with you, you can walk away with your own campaigns, which you have been paying for for years.

A Few Good Agencies

Yes, there are still a few good agencies and software vendors that are passionate about what they do. They are not looking to grow fast so they can sell themselves to a conglomerate. They are run by owners who are directly involved in working with you, and they are willing to help you own, run and manage effective websites built on open source platforms. These are the people who have cut back their retainers during the pandemic while continuing to support their clients at the same level of service. If you do decide to leave them at any stage, it is not a disaster. They won’t leave you with nothing but a zip file. If they are in it for the long haul, they are more interested in maintaining their integrity and reputation.

Now more than ever, marketing and digital innovation will be ushered in by smaller, smarter and leaner teams. Innovation requires hard work hard and commitment. The few good ones are hard to find, so do your research and ask questions. Clue: The larger they are, the more likely they are to cash out at the first opportunity to sell their business.

Conclusion

The bad habit of renting digital assets has already cost the hotel and lodging sector a lot of time and revenue. Restarting from scratch is a hard option, especially when it comes to your hotel’s digital presence. Your digital assets deserve the same respect as your physical assets. The alternative is to repeatedly to pay the heavy price of losing revenue and momentum every time you bounce from one low-cost vendor to another. This latest disaster for hotels might be caused by Booking.com, but hotels that chose to rent their digital assets have 100% responsibility here. When you sign up for something that is too good to be true, don’t be surprised when it doesn’t work out in the long run. My goal here is to highlight a simple fact, over and over and over: Please invest in owning your digital assets and marketing campaigns. Then work with the right people and watch your revenue grow. Vendors will come and go, but your momentum and your profits should always stay with you.

Hotel Marketing and Revenue Management in the Time of Pandemic

Hotel Revenue Management the time of pandemic

As I write my first article during a global pandemic, my title inspiration comes from the Columbian literary superstar, Gabriel García Márquez. COVID-19 has rapidly decimated the industry I have worked in for over 20 years. There have been hardships before, but this one seems darker and more insidious than anything we have seen before. Nobody knows exactly what lies ahead, but the current reality is that thousands of our hospitality industry colleagues – many in my own personal network – have lost their livelihood or taken huge cutbacks in compensation and benefits.

March was a month filled with bad news that was staggered by geo-location, as my client base lies across varied geographies and asset types. The last of the hotel assets in my portfolio closed down on April 1. As most business comes to a grinding halt with everyone in quarantine, it has become a time for deep reflection and reconnection. I have had the chance to speak with many of my industry friends who are reeling from the effects.

With the world in quarantine, I have been surprised to see many hospitality vendors already posting their “recovery and marketing guides,” as if this is a just another minor hiccup and we are weeks/months away from business as usual. It is simply irresponsible to package a pandemic into a how-to guide. One of my close friends, industry legend Martin Soler, coined a term for this: vendsplaining.*

Vendsplaining (noun): When a hotel marketing/software vendor takes a complex problem – with specific implications for each individual client – and reduces it to a simplified “issue” that their one-size-fits-all proprietary guide or tool can solve. 

That term quickly inspired me to come up with my own term: vendcast.**

Vendcast (noun): A webcast sponsored by one or more hotel marketing vendors that addresses problems faced by hotels by offering regional or generalized strategies and tools.

* I have obtained Martin’s permission to use this word at every given opportunity.

**At the time of writing this, there are about seven vendcasts in progress, in which the vendors are vendsplaining how to beat the pandemic with a perfect plan/guide.

There is a ton of speculation on recovery timelines. I will not be doing that in this article, in case that is what you were looking for. But the one thing everyone can agree on is that a fundamental shift is inevitable in the way we operate hotels, restaurants, and airlines and plan our travel. This article is a summation of my thoughts on how things can and should change. Many of these thoughts arose from time I spent on calls with travel industry friends, ranging from Jedi masters, asset managers, investors, clients, and…vendors who don’t vendsplain (yes, they do exist!). I am focusing on the two areas of the travel business in which I have been professionally engaged for two decades: Revenue Optimization and Marketing.

There Will Be Blood

First things first. Nobody is coming out of this unscathed. From a remote four-room inn to the 650-room big box brand hotel across from the convention center in a major city, every property will be affected. I have seen articles from some so-called experts calling this “a swing of the pendulum.” That’s incorrect, as this is more a swing of the axe. No matter what the recovery timetable ends up being in the end…people and corporations across the globe are recognizing inefficiencies in how they conducted business before the global shutdown.

Here are some of the major travel industry players taking a direct hit:

In summary, there is no AI-powered pricing software, content strategy, or digital marketing ad campaign that can help hotels recover revenue quickly. Acceptance of loss has to be the first step in what looks to be a slow recovery. Anyone offering a swift hack to get everything back to business as usual should be avoided, like the coronavirus itself.

Hotel Revenue Management: What’s Next?

Some revenue optimization basics are always prudent, but all strategies need be tailored to your location, as well as regional and global financial trends. Pricing is crucial but your product still has to deliver corresponding value. Amenities like breakfast, upgrades, etc. will be more relevant than ever. So letʻs not forget the basics: your databases, room types, distribution mix, and most of all your offering all impact your profitability. What I have outlined below are some broader changes that may be coming into play over the next several months and years.

The Ides of March

2019, which now seems like so many years ago, was a good year for most hotels worldwide. To quote Dickens: “It was the best of times, it was the worst of times.” Why? Because the RevPar growth was already slowing down following the recovery from our last financial meltdown in 2008.

The warning signs pointing toward the end of boom cycle for travel were already there. In addition to it being an election year in the US, recession was already on the lips of many finance world soothsayers, warning us of imminent decline at the end of a growth cycle.

Asset managers, owners and operators worldwide were chasing ADR growth for 2019, as it was the only way to increase profits. But that was easier said than done. Why?

  • New demand in the market was nicely met by all the new hotels going online. This made it harder for the established hotels to pull in big ADR numbers.
  • Rate of inflation was higher than the ADR growth, which in simple terms means “it got more expensive to run a hotel.” Rising costs can eat into your profits real quick, and that is where the majority of hotels were losing money. Payroll expenses kept going up.

The general forecast for 2020 from top industry sources like STR and Phocuswright was never super rosy to begin with. A major correction in rates was already under way before the pandemic in markets like Seattle, Houston, Boston, etc. Markets were dealing with their own issues. Case in point: San Francisco was reeling from negative press, interactive street poop maps, and loss of major conventions (Oracle Open World) due to high ADR’s and “poor street conditions.”

We have a tendency to look back at the “good old days.” I want to make sure we stay cognizant of the fact that signs of the slowdown were everywhere…we were at the end of the 10-year growth cycle. But nobody expected 2020 to fall off the cliff like it did.

When people eventually start traveling again, the comeback will be slow and painful for a lot of hotels. As a revenue optimization professional, I foresee some long hours ahead on the road to recovery. As I look into the future, talk with my colleagues and make notes on my trusted whiteboard, here are some things I can see changing for our industry.

Goodbye, Non-Refundable Rates

You read that right. I think it is time to say goodbye to this incredibly tempting rate type, which the industry embraced during the good times. As a guest, nothing is more annoying than realizing after a change of plans (for a variety of valid reasons) that you booked a great deal at a hotel you are not going to visit anymore. Airlines are the kings of non-refundable fares; like everything else in revenue management that trickles down from airlines to hotels, we embraced it and made it a part of our industry. Check out the horrible press that Airbnb received for their complicated and confusing refund policies.

It is time for both independent and brand hotels to step away from this rate type and let people book with confidence. Taking people hostage with terms and conditions seems out of place in the world we are about to inherit. Recovery starts with flexibility and, yes, you can quote me:

“Recovery starts with flexibility.”

– Vikram Singh

We simply cannot take people’s wallets hostage anymore. A crisis like this presents the perfect opportunity to embrace flexibility and use it to build “brand loyalty,” something we all love to talk about but very few know how to transform into revenue.

Ending Direct Revenue Mania

This point will soon be published as its own lengthy article. It was slated to be my next topic before the outbreak. However, here is a very basic TLDR summary:

Over the past few years, there has been a certain fanaticism about Direct Revenue. Software and marketing vendors have made it their tag line. It has been cast as the holiest and purest of all revenue channels. The term “most profitable channel” has been used ad nauseam. I strongly believe that we need to make a slight correction here. Maybe chill out with the direct hyperbole, maybe do some meditation and yoga to relax?

The recovery, when it happens, will be one of the worst times to get picky about distribution costs and wage wars on your distribution partners. We already know that a massive correction is about to happen to hotels and their distribution mixes. Direct channel is and always will be important, nobody is arguing that but it is not free money. There is cost associated with it and it has its limitations when it comes to generating the volume of revenue it takes to make a profit.

Vendors with “I Love Direct” and “Direct or Die” facial tattoos will need to get off their high horses and walk a few miles to cool off. Let’s go back to the 80’s when Frankie say relax. Remember,  direct revenue is not free money. The industry needs to come to terms with the costs that are associated with all channels. We cannot afford to tilt at windmills anymore. (It’s also a great time to read/reread El Ingenioso Hidalgo Don Quixote de la Mancha.) Obsession over an idea, no matter how noble, never ends well. You can quote me on this:

“Recovery will happen from all channels.”

– Vikram Singh

The Distribution Remix

Keeping in mind the unique recovery challenges associated with this pandemic, let’s take a brief look into the future. Groups and accounts associated with large meetings and conventions will likely take the longest time to come back. Corporate travel, which is traditionally the first one to bounce back, will also take more time based on the massive number of furloughs and layoffs. Hiring back always takes longer than taking an axe to the workforce.

Local drive markets will see the first signs of recovery. Eventually, the world will slowly but surely return to air travel, eager to meet family, friends and colleagues, and having forgotten about dirty airplanes, liquid bans, squalid airports, and the joys of TSA screenings. Maybe they will even cram themselves like sardines into basic economy fares to travel the globe. However, for the US market, incentivized in-state traffic will usher in the recovery, followed later by national and then international traffic.

For all your revenue management initiatives, remember that there has never been a more important time to be nice to your neighbors. I want you to read this with the Mister Rogers intro theme playing in your head.

The End of Resort Fees

I don’t think any two words have invoked a more venomous reaction from hotel guests over the last two decades than “Resort Fees” (aka: Urban Fees, Facility Fees, Destination Fees, Resort Charge, etc). A fee by any other name would be equally notorious. Critics of the fee have called it the “most deceptive and unfair pricing practice in the hotel industry.” It allows hotels to advertise a low rate and then ask for more money at check-in, even if the guest is not interested in using the amenities it supposedly covers. Even as a hotel revenue professional, it sounds pretty bad when I type it here. It’s basically drip pricing for hotels.

The resort fees trend started in the US (mid-1990’s) and has generated tremendous hate. How much hate are we talking here? I am glad you asked. So much that, as of this writing, 47 Attorneys General have opened an investigation into it. The most dramatic example was when Marriott Hotels was issued a subpoena by the Washington DC Attorney General for their non-cooperation.

In a most bizarre, almost surreal period in the travel business, the two top OTA’s are doing their part to “tackle resort fees” while major brands stay silent.

Expedia: They offer higher rankings to hotels not charging resort fees. Their official statement reads: “We know hotel-collected mandatory fees can be confusing to consumers, and we expect, among otherwise equivalent hotels, these changes will result in higher visibility on our sites for hotels not charging these fees.” In short, if you charge resort fees, Expedia will lower your rankings on their booking site and show guests a warning that you charge resort fees. Wow!.*

*In Owen Wilson’s voice. Please enjoy a 2-minute, 35-second compilation of him saying “wow”. You’re welcome.

Booking: It’s no surprise that in classic Booking.com fashion, they want a piece of the resort fees pie. They are including resort fees when calculating their commission. Official statement: “Hopefully, this will help continue to push the entire industry toward more transparency and fewer ‘surprises’ for customers.” 911, I would like to report a murderous sweet burn. If you can’t best them, make some money off of them in the name of transparency. Hey, nobody has ever accused Booking of not being great at making money. The fact that they used the word transparency is the ultimate atomic burn on our industry. Do kids still say atomic burn? Probably not, but you guys get the gist of it.

Post-pandemic recovery will be a great time for hotels (both brand and independent) to move away from drip pricing and give the guest confidence when they are booking their next trip. Big hotel brands like Marriott, Hyatt, Hilton and IHG have a tremendous opportunity right now take the lead on this. After all the complaints and articles about “evil OTA’s” stealing their customers, how can major brands let them lead the charge on transparent pricing? Are we awake, or is this a dream inside a dream inside another dream? Can someone please start playing Edith Piaf and give me an inception kick?

Brands need to show that they really care about their customers beyond sending everyone in their database a COVID-19 email, or posting videos of their CEO in tears, or yelling at them to “BOOK DIRECT” via expensive well-paid celebrities. An opportunity to take the lead has landed on the laps of the most powerful decision-makers in the hospitality industry. Please, let’s do the right thing.

Hotel Marketing: What’s Next?

As with revenue management, winds of change have been blowing in the marketing landscape for a while. All hotel websites look the same, everyone has a drone video, hotel ads look the same, all are inviting us to book direct and save, most mobile booking experience sucks, all have a best rate guarantee and, finally, all hotels are offering 20%- 40% off their best available rates in their email blasts.

A complete shutdown of non-essential travel is also the hard-reset button for hotel and travel marketing teams worldwide. This is the right time to start thinking about how you plan to be different when things get back online. Over the years, I have told hotels to:

Build Better Websites
Get Better Booking Engines
Stop Spending on “SEO”
Start Spending on Ads That Work
Stop Wasting Money on TripAdvisor
Send Better Emails
Have Better Hotel Events
Upgrade Their Success Metrics
Start Writing Better Content
Start Owning Digital Assets
Do Not Rent/Lease Websites

That’s enough content to publish a small book. Maybe I will one of these days. Until then, I encourage you to reread some the long-form content I have posted and get yourself mentally prepared for the changes ahead.

Here are a few other items I have been getting a lot of questions about.

You Can’t Growth Hack a Pandemic

The final stage of grief is acceptance. Let’s start there. A wide range of COVID-19 recovery strategy guides have already been published without any concrete “open for business” dates from the world’s governments. Based on the content produced so far, I can see that the mindset is still around how marketing is going to save the day. Example: Discount Gary Vee wannabes are busy posting “growth hacking” content that is completely detached from reality. This mindset might have partially worked after some of the other declines hotels have experienced in the past …but this is going to be different. As I write this, 16 million people in the US have lost their jobs. 

The unemployment rate in the US is predicted to hit 15%, which is the highest number since the Second World War. It is irresponsible to spin a marketing guide sitting here in the month of April. Recovery will be hard and extremely hands-on. There is no road to a quick bounce-back, but there will be an eventual bounce-back. It is more important than ever not to oversimplify recovery. Observe and report. Recovery will start locally and expand out from there.

Right now, it’s better to start with some things that are long overdue for an overhaul.

Move Beyond Vendor Management

For most hotels, this a moment of real change. People with the word ‘marketing’ in their job title will have to start doing actual marketing work. There is simply no money left to pay employees for emailing/harassing vendors and then spending useless hours in marketing meetings. There are some very talented people out of work; your recovery will be based on the caliber of people you choose.

There is hope for those whose entire career has been vendor management…they just have to learn how to do actual work. The shutdown is a great time to expand your skills beyond doing marketing calls and playing email jockey.

Hands-on agencies will survive as they are doing the work for owners who are busy running the property. On the flip side, agencies collecting monthly fees from hotels that were sitting at 20% to 30% occupancy even before the pandemic hit… will simply not make it. The luxury of paying agencies thousands of dollars every month to change a few words and photos on your website and run a few Google Ads are over. Specially when you have “marketing and e-commerce” in your job title these expenses cannot be justified anymore. You either do marketing or get out the way of ownership to work with someone who does.

Stop Spending on “SEO”

I outlined how the Hotel SEO Bubble burst back in 2013. If it is still going to appear in your agency invoices as a line item when you re-open…then Houston, we have a big problem. Google is great, but it is not your friend and owes you nothing. Google is here to sell ads and make money. If you keep your website healthy, lightning fast, and usable on mobile, and keep your Google my business listing current, then you will be fine.

Content, site speed and mobile usability reign supreme. Chasing rankings in 2020 and touting organic search results is the ultimate hipster move. Riding a unicycle in a bike race is cool but you will never win. It’s a great time to ask yourself what you are paying for and how you can migrate that cash over to something useful, like paid ads or content production.

Pause Paid Advertising for Now

When your hotel is closed, it is ok to pause your ads. Yes, this 100% includes brand name campaigns in Google and all metasearch campaigns. Agencies/vendors that are telling you that “cost per click” in the market is low should use use their time in quarantine to learn demand and supply 101. Please email them this list of classes to take.

Nobody is booking travel right now, and therefore the cost is low. This should not be packaged as a great opportunity to capture some future pie in the sky business. If there are no surfers in the ocean, then it is very likely that there are no good waves to be ridden or that a shark alert has been issued. When in doubt, don’t go out. (And just like that, I get to use a reference from my home in Hawaii.)

Don’t panic and fall for the whole engagement sales pitch. Take a deep breath. Is your website still running well? Google Business Listing updated? Good, now wait until we get an open for business date. Please don’t wave ads in people’s faces while they are locked down. It is annoying and in no way an inspiration for them to book travel.

Cash is tight, so please take care of your employees first. They will be crucial when the recovery starts. Google and others will take your money anytime…it’s like their favorite thing to do, every day. Also, if you are still clinging to TripAdvisor ads, it’s ok to let go now and reallocate your budgets.

Relax With Social Media

The road to social media is paved with disaster. It’s ok to tone it down and take a health break from it. There is nothing you need say on Twitter/Facebook/Instagram that is crucial to the recovery. I wrote in detail about influencers in my last post. This is the perfect opportunity to consciously uncouple from influencers and focus on taking care of your employees, neighbors, and communities. (I saw an article that highlighted “charitable acts as great hotel branding opportunities”. I rolled my eyes so far that they were stuck behind my head for a while.)

Please don’t succumb to the hubris that you need to entertain people on your hotel social media accounts while they are getting laid off and face an uncertain future. Leave that to Netflix/Amazon/Hulu, etc. ICYMI Here are some things that already have caused a terrible backlash on social:

In short: Avoid the urge to post at this time. When things open again, you can get back to posting “healing and inspirational photos” in no time. Just because you have a microphone does not mean you have to say something all the time.

Take It Easy With Email & CRM

I think everyone and their brother has already sent out a COVID-19 email. A company I brought a paper clip from in 1999 recently emailed me about their concern for my well-being. Every single hotel brand, including the one I stayed with once in 1995 (25 years ago), sent me an email. Idea: Instead of blasting your entire database you are better off putting your message on your home page and reserving email to communicate with people who have booked a stay with you.

Oh, remember the hotel group that sent me 60+ promo emails in a year? Guess what? They never stopped and were pushing a 45% Relax On Shores Of Cancun vacation to me in Hawaii late into the lockdown in the middle of March. You simply cannot make this stuff up!

 

Time to Retire Retargeting

I am going to keep this short and sweet. Retargeting was never cool and has always been annoying to your guests. It was nothing more than a violation of privacy that they let slide in the name of convenience. I had been planning to write something more detailed to make my point. But sometimes things just land in your lap and you close the case. A single image can deliver more power than a thousand words. In my case, make it 3000 words (my average article).

Banner ads for hotels and travel companies have been showing up in articles about mass graves and medical supply shortages! One in particular as hit me hard as I was reading about how doctors in Italy had stopped counting dead bodies. Lo and behold, there was an ad for a hotel brand with a BOOK NOW call to action. Again, you cannot make this stuff up:

Let’s take this opportunity to stop paying for retargeting. This is a marketing idea whose time has passed. Say your goodbyes.

Conclusion: Skilled Teams Will Lead the Recovery

If you are still reading this, I saved the best for last, just for you. Let’s start with an excerpt from one of the greatest stories ever told:

“I wish it need not have happened in my time,” said Frodo.
“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”

– J.R.R. Tolkien, The Fellowship of the Ring

The recovery will happen. Speculating on its timeline is a waste of time. I refuse to speculate when there is still so much work to be done in our industry.

We have a massive challenge ahead of us, no question. Recovery efforts will be further complicated by the limited resources we will be left with after the shutdown. One resource that is going to be more crucial than ever is good people. Your success will depend on who you choose work with when we get back to business. The silos of revenue, marketing, and operations need to come tumbling down. From their rubble will rise the superhero recovery teams (minus the capes and spandex of course). The gap between the A-team players and everyone else is going to get bigger. Smaller, smarter and nimbler teams will shine.

Right now, we hold steady, think about the future, and wait for the safe time to start again. And remember: quarantine is temporary, but Wu-Tang is forever!

Hotel and Travel Conferences Need an Upgrade

hotel conferences need an upgrade

When it comes to hotel conferences and trade shows, I will go ahead and show my age by saying I have been to almost all of them. During the earlier part of my career, I was an attendee; later I became a speaker. After I received hotel revenue optimization enlightenment, I took it upon myself to go out and educate an industry that seemed perpetually stuck. Several hundred conferences later, a clear pattern has emerged. However, this pattern will need to change if events are to become truly relevant to the industry they serve.

Below are some of my observations, and they might sound very familiar to you. Here is a walk down my own hotel conference memory lane, paved with some dark memories and paired with my proposed solutions.

The Quirky Keynotes

Hotel conferences, like all the conferences out there, love their keynotes. Enter the “I have nothing to do with your business” keynote speaker. Here are some of the usual suspects you might recognize:

  • High-energy motivational speakers (yawn)
  • Speakers who climbed Everest
  • Speakers who climbed Everest while walking backwards
  • Speakers who sold their million-dollar shoe company
  • Speakers who are also amateur magicians

Try this instead: The keynote session has evolved into a way to show off how cool you are, instead of addressing what is really facing the industry. I am all for Everest climbers and magicians, but a nanotechnology expert is not going to help attendees understand why they are not keeping up with the competition.

The One-Hour Sessions

Not everything needs an hour. Conference organizers who give an hour to everything to neatly divide and balance out the conference make the day painful for the rest of us. An important thing to factor in here is a famous quote by Philip B Crosby: “Nobody can remember more than three points.”

People can typically focus their attention for 20 minutes, and then all bets are off. The lights are on, but no one’s home. On the speaker side, making things last an hour usually translates into stretching 30 minutes of excellent material into 60 minutes of meh. “Meh” is the enemy of good content and must be stopped. I’ve even seen speakers jamming on the stage to fill up time like they are Phish. (Sorry to my readers who are Phish fans!)

Try this instead: Give speakers a 30-minute window for content, 10 minutes for questions. This small change will bring about heavy editing, resulting in better content and happier conference attendees who will feel that they actually learned something.

Panel of Death by Boredom

Let’s face the fact that panels have been boring since the dawn of human civilization. I don’t think I have seen anything less productive than a panel discussion. I have almost died while listening to – and even while being a part of – a “panel of experts.” You think you are going in for a scoop, some inside stories, and a fascinating peek into personalities. Instead you get bored to death. Here is how a typical panel discussion unfolds at hotel events:

The Moderator. The event sponsor or other tangential player acts as emcee, lobbing pre-arranged softball questions at the supposed experts. These are their responsibilities:

  1. They hold a microphone. A stand can do that job.
  2. They email attendees two weeks before the conference asking what questions they would like to be asked. Do the panelists need a heads-up on topics within their own area of expertise?
  3. They ask the panelists to “introduce themselves,” even though you already know who they are from the event website/signage. These introductions take several minutes per panelist… precious time you had on Earth to do something meaningful.

The Panelist. This is usually a corporate-type person or another company sponsor (not important enough to be a moderator, of course!). They will pretend to answer questions emailed to them two weeks ago and look surprised. Also, they love the sound of their voice.

Here are my Top 3 panel highlights to date:

  1. I once did a Lord of the Rings analogy on a panel. The moderator and fellow panelists almost had a heart attack, but the audience finally woke up! I have not been invited back.
  2. I mentioned that the traditional hotel sales era revolving around having martinis @3pm is now over. Wyndham’s SVP of Marketing at the time brought me a $30 martini to my next panel discussion (I don’t drink alcohol), then argued that open source is a terrible idea for hotels. I have not been invited back.
  3. At a data conference in 2010, the head of Ecommerce for Hilton Garden Inn mentioned that mobile revenue is not a big deal. I told him that it was not a big deal for them because their mobile booking experience was a nightmare. I recommended that they look at this new company called Hotel Tonight to see how mobile bookings should be done. I have not been invited back.

Try this instead: Don’t do panels. When I’m invited to join a panel, my condition is that I will not be following a script, which usually scares away the panel hounds.

The Sponsor Con

This I have survived…many, many times. Nothing is scarier than the moment when the conference speaker starts talking about what their company offers, followed by 20 slides on their new product release.

Hotel conferences worldwide are turning into conferences by the sponsors, of the sponsors, and for the sponsors. I completely understand that it takes money to run and manage conferences. But somewhere along the line, companies have completely taken over. Everything is for sale…from the name-tag holder, to the table on which you will rest your coffee.

I have held this opinion from a very early stage of getting into the event speaking business: Sales people cannot educate. I know it’s an unpopular opinion, but this is not open for debate. I have attended and spoken at hundreds of events, and this holds true every time. I am not saying that salespeople have some evil agenda against education. But they do have sales targets and quarterly deadlines to meet.

The “sponsor to speak” epidemic in the hospitality business has taken a massive toll on the amount of useful information hotel owners and managers have been able to accumulate by attending industry events.

In my younger days as a speaker, there were many times I would do a gig for free to get “exposure.” As the only non-sales guy at an event, it was not a challenge to excel. Fast-forward to today: I only do paid gigs. It needs to be clear that I am getting on stage to share and teach from my experiences, and not to get attendees to buy anything.

Try this instead: Marketing dollars burning a hole in your pocket? Why don’t you sponsor a real speaker instead of the sales guy? You can still fly your banner on the stage, without confusing attendees with sales pitches thinly disguised as education.

The Buzzcon

Hospitality and travel event planners are perpetually on the lookout for buzzwords when selecting event topics and presentations. Here is a typical formula:

Buzz-wordy topics = Your event sounds relevant = Ticket sales

Here are some hotel industry buzzword examples for you: Big Data, Artificial Intelligence, Machine Learning, Automation. After years of trying to figure out why conferences rely so heavily on buzzwords, I finally realized that events are struggling to stay relevant. Using the latest buzzwords is their click-bait scheme to drive attendance.

Unfortunately, when you run a buzzcon, the content takes a hard nosedive. Most buzzword slides end up being what I like to called “Google-able content.” If your attendees can find the information you’re presenting on Google and you are not bringing anything from your own experience…then, in the words of the great Bill Pullman, “It’s game over, Man!” There is a speaker I know who literally reads off a list from Google Trends at events. That is torture, and I almost called Amnesty International on him.

Try this instead:

  1. Make sure you really need the buzzword for your conference. If you must use it, then have actionable items right after.
  2. Make sure presented content is not already available on Google/YouTube.
  3. Ask speakers for fresh content. How does the new trend change travel in the next few months and years? Make sure they bring specific examples. Ex: Anyone saying “artificial Intelligence is going to change travel” should be drop-kicked off the stage if they do not have actual examples!

The User Con

Having worked for hotel software vendors, I have direct personal experience in the surreal world of the hotel software “user conference.” I’m not sure where to start, so I will start with the basics. Most user conferences in our industry are not about hotels, innovation, or taking the industry forward. They are about the vendor telling the world how well they are doing. I am talking about big, multimillion-dollar conferences presented by companies who have not upgraded their product in years! Big is the operative word here. I have seen more money being spent on events than on people and product development. That pretty much summarizes the issue here. The user conference becomes an extension of the CEO/President’s ego.

A personal anecdote here summarizes everything. Shortly before a multimillion-dollar production event for a software company, it was announced that the company was being sold to a direct competitor. The employees, some of whom had worked with said competitor in the past, were in shambles…fearing mass layoffs, career stagnation, and relocation issues.

As with any conference, there was a band playing on the final evening. Not a soul got on the dance floor. Most of the employees were reeling under the pressure of smiling and keeping face while their professional lives were being upturned. So, the band started playing and the first ones to start dancing together were the President and CEO, dancing with the joy of two people who had just become millions of dollars richer. I looked around at the horror and pain in the eyes of the employees…that image stays with me. To add insult to injury, the employees were then required to sing to the President and CEO. This is the most surreal moment I have experienced at an event.

Try this instead: Don’t be evil! The user conference is about the users and not about you. Focus on education and content instead of making your employees cry.

The Ted-Type Con

Another type of conference making the rounds is the wannabe Ted Talk type of event, minus the Ted Talk level of content. Here are some signs that you might be at this event:

  1. Registration Fees: $5000 to $8000 (early bird discount $4999). Come on, now! You know what kind of budgets most hotels are working with. Nothing says innovation like pricing out 99% of actual hotel owners and operators. It feels like a dystopian future where only the 1% can afford to attend and talk about how to succeed in the marketplace.
  2. Attendees/Speakers: Only CEOs, CMOs, and COOs (see above) are attending. Oh, yes, and the wide-eyed salesperson for a software company who wants to sell to the C Suite – or hand out their resume to them.  Do you think anyone would spend $4000 to $8000 of their own personal money to be at this event because of the content? Man, it’s so easy to spend other people’s money!
  3. Content: I’m sure you have heard the “30,000 feet” overview cliche thrown around by all kinds of MBA grads. Now add another 380,000 feet. Yes, you are now officially in space, looking down at Earthlings. The content is super vanilla and not usable in real life. The CEO of Marriott is never going to say anything at an event that could jeopardize their stock price. Get real.

Try this instead: I know it is not hard for me to convince anyone to not spend thousands on this type of event. Go to YouTube and watch some Ted talks. Total cost: $0.

Pet Peeves

And now for something a little different… a quick list of my personal conference pet peeves.

  1. The video keynote. Please stop. I’ll make an exception if you are working on the International Space Station.
  2. Standard PowerPoint template. Nothing screams “innovation and new ideas” like having speakers use a uniform conference-themed PowerPoint template to share such ideas.
  3. Speaker during lunch. There is nothing like the sound of clinking water glasses and silver to get the audience and speaker in the mood for soaking up ideas. People are already exhausted from the morning sessions, and need to nourish themselves before receiving the afternoon content. Please let people eat and make the customary small talk during meals.
  4. Landfill schwag. Personal horror story…buttered popcorn flavor chapstick.
  5. Business card collectors. If I want to give you my business card, it will happen naturally via a real conversation.
  6. The conference app. It hits the apps trifecta: expensive to make, bad usability, useless after one show. Get a website with pages on where, what, when, how to get there.
  7. Bad food. Come on! We are in the hospitality business!
  8. Slow WiFi: Sorry, your conference has failed. Everyone should immediately evacuate the building.
  9. The conference promo video. Oh look… people are having so much fun AND learning AND eating gourmet food! Yes, make a video about the conference…but stop using this generic formula for all your hotel conference videos:
    • Catchy EDM tune
    • Location city shot
    • People entering the building, always smiling
    • Customary registration desk
    • Presenters on stage with no audio (techno music intensifies)
    • Engaged attendees listening
    • People playing golf, shaking hands (having a jolly ol’ time)
    • Exhibitors engaging in deep conversations at the trade show (implied deal-making)
    • Short clips post event from attendees raving about the importance of the event (their name and title clearly on display)

Try this instead: Stop paying for sizzle reels. Move that budget over to actually posting some excerpts of speakers sharing actual content. Remember you are the producer…not the talent. As for the rest of the pet peeve items…I think I’ve made my point.

Da Tradeshow

Hotel vendors spend countless hours thinking about their branding and story for trade shows, then print the same message on everything and show up with the sales team to answer questions. I am all for a chance to do a face-to-face meeting with your peers and customers, but after a while everything starts to look the same. They’re there just to be there. Exhibitors are at the event not to win, but to not lose.

Try this instead: Have more respect for yourself, your company, and the audience. Even if you don’t have a new product announcement, offer up some new tutorials, new research, or a fun way to engage with attendees. Hey, have you heard of this thing kids love called YouTube?

The Buyers’ Club Speed Dating Event

Now this is something that the SEC, FBI, DOJ and Interpol (international events) need to prosecute. The concept is that vendors pay $10 to $15K to attend a 2-day event where “ qualified” buyers from hotel companies are hosted by the organizer. The organizer goes so far as to “guarantee” that vendors will meet a particular sales goal. (But this guarantee evaporates once the event is done and paid for.)

Events focus on a range of topics, from hotel hardware to hotel software, from towels to booking engines. I had the misfortune of attending one of these events as a vendor, and what I saw there completely transformed my approach to hotel events. I still cannot believe these events are legal. This event is the proverbial rock bottom of hotel conferences. More on this when I write my book.

Try this instead: Don’t go there. To quote Admiral Akbar, “ It’s a trap!”

Conclusion

Conferences should be about connecting with people, and learning something new from personal interactions that you can’t get from Google. Hospitality is an exciting business. Folks, we are literally in the business of events. Our industry events need to be at another level. Technology companies are doing circles around us. Events represent a great opportunity to upgrade ourselves and rise up together as an industry, not only by sharing relevant information, but also by showing what great hospitality looks like.

The Ultimate Guide to TripAdvisor for Hotels

When TripAdvisor was founded in February 2000 in a small office above Kostas Pizza on 315 Chestnut Street in Needham, Massachusetts, I don’t think anyone could have predicted the amount of time and energy it would consume, and the strong emotions it would conjure.

Since I started my blog in 2013, I have consistently fielded questions about TripAdvisor. Looking back at the sheer volume of time I spent answering these complex emails, I think it’s time to for me aggregate my knowledge, experience and advice in one place. Here are some of the most frequently asked questions, along with my responses.

 

Is my competition  trying to take my hotel down on TripAdvisor?

Short Answer: Yes, it’s possible.

Long Answer: I get asked about this a lot by hoteliers around the world. “You are not being paranoid” is how I start most replies. There are some hotel owners/operators who turn to the dark side when it comes to TripAdvisor. Instead of improving their own product and service, they trash their competition. These are the folks that the youth today refer to as the haters.

The hospitality industry has always had its fair share of bad apples. Anytime you claim something is powered by algorithms, there will be a group of players ready to game the system. In a time when so much power is bestowed upon TripAdvisor, a lot of time people feel desperate to win. Desperation should lead to hard work…but often leads instead to a “win by any means” mentality. How many hotels walk on the dark side by writing/sponsoring their own glowing reviews and/or posting negative ones for their competitors will never truly be known.

Offenders are not just mom and pop operations. Let’s not forget Peter Hook*, a senior executive at Accor Hotels who took it upon himself to write awesome reviews for his own hotels while posting negative ones for competing brands. He got caught when the TripAdvisor Facebook app linked his anonymous username “Travare” to his Facebook account — after he had posted 106 reviews in 43 cities!

This incident happened all the way back in 2013… so how have things changed? Elementary, Watson. The bad guys have gotten much smarter.

*Self-fulfilling prophecy: He described himself in his Twitter bio as the “Director of Propaganda” for Accor hotels in Asia-Pacific.

 

Can you game the TripAdvisor “algorithm”?

Short answer: Yes.

Long answer: It has been done, and has led to some epic fails for TripAdvisor.

  1. Bellgrove Hotel, Glasgow. In 2013, this “hotel heaven,” a hostel for the homeless, made it onto the list of TripAdvisor’s 100 best places to stay, thanks to the efforts of pranksters who posted numerous five-star reviews.
  2. La Scaletta, Italy. Italians know their food, fashion and automobiles. Apparently they also know how to expose the flawed “algorithms” of the largest review site in the world. Read how a non-existent restaurant made it to the #1 spot. I gotta give it to the Italians on this one…the phone number for the restaurant was that of the city’s police station! Prendere in giro! The final burn: In December 2014, the Italian Antitrust Authority fined TripAdvisor €500,000, complaining that the site had failed to adopt controls to stop false reviews while promoting its content as “authentic and genuine.”
  3. The Shed at Dulwich, South London. All the British food jokes aside, London now has a ton of exciting chefs and restaurants competing for dominance in a growing food and beverage scene. Enter freelance writer Oobah Butler. His fake restaurant in South London became “London’s Top Rated Restaurant” on TripAdvisor. And this was all happening in 2017, not that long ago.
  4. The Riu Imperial Marhaba, Tunisia. This story is really tragic. Thirty-eight people were shot at this hotel, and it had closed its operations. Yet TripAdvisor included it on its coveted “2016 Traveler’s Choice Award” list. Makes you wonder, when do you become too big to do basic research when making your award lists?

 

PSA: Don’t put your life in the hands of a review site.

Let’s take a brief moment to address something terrifying about TripAdvisor: Profits will always be more important than people.

For me, the darkest side of TripAdvisor’s unchecked power and accountability was exposed in 2017 by The Milwaukee Journal, which uncovered how reports of rape and assault at some all-inclusive resorts in Mexico were deleted from their site. These two publicly posted excerpts really highlight the problem:

Exhibit A:

Milwaukee Journal: Why were these warnings deleted?

TripAdvisor: They were “determined to be inappropriate by the TripAdvisor community,” or removed by staff because they were “off-topic” or contained language or subject matter that was not “family friendly.”
 
The Milwaukee Journal Sentinel asked to see the posts that were removed. The company refused.

Exhibit B:

When there were murmurs that the US Federal Trade Commission would be getting involved, TripAdvisor put out an official response via The Verge and Engadget. Here is an excerpt:

“We are not aware of an inquiry by the Federal Trade Commission nor have they contacted us. TripAdvisor is a global user-generated content platform that enables travelers to post positive and negative reviews and forum content about their experiences. We receive 290 pieces of content a minute and need to ensure that information posted on our site adheres to our content guidelines to ensure the integrity of these posts. We stand by our publishing guidelines and how they are applied.”

What I heard:

  1. The FTC is not coming after us, we are funded and have tons of cash for lawyers, so all is good with us.
  2. We get 290 pieces of content/minute for free. You really think we should be expected to hire enough people to go through it?
  3. We stand by our “publishing guidelines”… too bad about your death, robbery and sexual assault.
  4. Now if you’ll excuse us, we will go back to selling ads to hotels and restaurants.

The fact of the matter is, when you book a room at a hotel and make the decision solely based on the “world’s largest review site,” you are sometimes taking your life into your own hands. Remember, just as with Facebook: it’s a free site and they owe you absolutely nothing.

 

Do you use TripAdvisor to research personal travel?

People on my blog ask me a ton of personal questions. Should I feel like a celebrity? Short answer: No.

Whether or not I personally use TripAdvisor is a common question. Yes, I do. But, like anyone who does research on TripAdvisor, I’ve had to learn how to analyze what I’m seeing. I almost feel like Sherlock Holmes when I am reading a hotel or restaurant’s TripAdvisor page, looking for clues and using astute observation to determine what’s really going on.

I do not have a degree in psychology or behavioral sciences, but I have to say that I am a Quantico-level fake hotel review spotter. The sheer number of hours I have spent on TripAdvisor has given me almost perfect clarity. I feel like Neo in The Matrix…making the bullets slow all the way down. (Here is a link for some of you young readers.) The fact is that anyone (with a little practice) can spot the low-quality reviews posted by competitors, tricksters and desperate owners.

Here is my typical process, in case you want to sharpen your own methods:

  1. Look Beyond the Algorithm. I check to see how heavily the hotel is investing in TripAdvisor advertising. The amount money a hotel is spending on TripAdvisor advertising equates to how much time, energy and money is NOT getting spent on things that matter. Example: I can see when a hotel general manager’s bonus has been tied into their TripAdvisor rankings. That means the GM is spending a ton of time online, instead of in the hotel lobby talking to guests. As a user, you need to realize that TripAdvisor stars and rankings are guidelines, not commandments. To find real value, you have to dig deeper than the surface and play with the price and location filters. As with any set of data, you have to segment to win.
  2. Are They Trying Too Hard? I look out for hotels that press too hard for you to leave reviews online, offer special prices in exchange for reviews, etc. When a hotel steps into desperation mode, you know a lot of time and energy is going into collecting the volume of reviews and not the quality of the product itself. I have seen it all…from hotels offering to “complete” the review for me, to them sending me 10 emails requesting a review, to placing TripAdvisor review cards in the W/C. Remember folks: Desperation is never attractive.
  3. ‘Everything Is Awesome.’ Oh, great… I now have that song from the Lego movie stuck in my head! For those who don’t know, here is a gift that is sure to take over your day (and night!). These hotels are easy to spot because everything there is awesome. It is impossible to run a hotel that is all things to all people. When I see a barrage of awesome reviews non-stop over a short period of time, it pretty much signals that there is something going on that deserves more scrutiny.
  4. Go Direct. What do I do when I have a question/doubt? Email the hotel. It’s easy. Click on the contact page and reach out to a real human who might be able to answer questions, make recommendations, etc. Believe it or not, it works 99% of the time! If you do not have a positive experience doing this, you will know what’s behind the curtain of the TripAdvisor reviews and rankings.
  5. Diversify. TripAdvisor is not the only review site out there. Don’t forget the little search engine that is out to take everyone’s lunch. Google’s hotel reviews are a good source for quick concise content. Before I dive into TripAdvisor and start psychoanalyzing their “trusted” reviews, while getting hit with terrible banner ads and being yelled at to “book the best deal I will ever see in my whole damn life”… I locate the hotel on Google and see if there are some usable reviews. Let’s not forget there are a ton of professional travelers that post some truly amazing long-form hotel reviews. Here is a link to one of my favorite hotel review sites. They are not the “biggest review site,” but they are definitely covering a decent spread of small and large hotels in long story form with clear photos.
  6. Log Off. Last but not the least. Friends don’t let friends browse TripAdvisor while logged into their account! Right now is a pretty bad time for privacy. Let’s not divulge more information about ourselves to a multibillion dollar corporation! You don’t need them to serve you more “targeted” banner ads that you ignore, while they are heavily pushing hotels to buy these useless ads. TripAdvisor’s “Just For You” recommendations is not a feature designed to make your life better…it’s an avenue to sell more ads.

 

PSA #2: TripAdvisor’s homepage tagline evolution tells a story.

There is no hiding the fact that American companies love their taglines. TripAdvisor went after the whole trust thing hard for the longest time, until trade law finally caught up with them.

2006: “Get the Truth. Then Go.”
2010: “World’s most trusted travel advice”
2011: (April) “Over 45 million trusted traveler reviews & opinions”
2011: (September) TripAdvisor is banned from claiming that their reviews are “trustworthy” and must remove the following phrases from their website, courtesy of British Advertising Standards Authority:

  • “Read real reviews from real travelers”
  • “Reviews you can trust”
  • “More than 50 million honest travel reviews and opinions from travelers around the world”

2013: “The World’s Largest Travel Site” (The word “trust” is completely gone.)

2018: “The world’s largest travel site. Know better. Book better. Go better.”

Are TripAdvisor’s sponsored placements and ads a good idea?

Note: This is probably the most common question I get.

Short answer: No

Long Answer: Don’t pay to drive traffic to OTAs. They definitely don’t need your help making more money. If you need “brand exposure,” invest in your service and product instead. Investing in impressions and click-based ads on a platform that is not connected exclusively to your website and booking engine defies logic. Unless you are P&G/Unilever/General Electric with money to burn…spending money on banner impressions is a huge waste of your marketing dollars.*

“Logic is the beginning of wisdom … not the end.”

— Commander Spock, USS Enterprise

How about you invest in these 5 things instead:

  1. Make a better hotel website.
  2. Invest in better hotel content and photos.
  3. Get a better hotel booking engine.
  4. Improve your product value.
  5. Invest on Google, and drive direct traffic.

Bonus tip # 6: Subscribe to my blog. It’s free!

*I refuse to debate folks who love to talk about how much traffic VOLUME they get from TripAdvisor, or how well their campaigns are currently performing. I get it, you read things on the internet. I will someday run ads for the hotels I am working with ONLY when I can link the ads directly to the hotel’s website from TripAdvisor. You know, like the cool option I have with Google? If I am spending on ads, I want to exclusively close them on my most profitable channel. Thank you.

What do you think of the good ol’ TripAdvisor business listing?

Short Answer: This prehistoric marketing tactic by which you spend money for a link, which is declining in volume every year, deserves to be in a marketing museum.

Long Answer: I am old enough to remember when TripAdvisor launched their infamous Business Listing for hotels. I am also old enough to remember when you could get some pretty interesting results on Google from listing in online business directories. Wow, this took me all the way back to the late 90’s, early 00’s!

Fast forward to 2018. TripAdvisor still successfully charges a lot of money for placing a link to your hotel website. I must hand it to their marketing machine for showcasing the yuge value of this link. The word “convenience” gets thrown around a lot. How helpless are hotel guests that they cannot open another tab in their browser and just Google the hotel that has piqued their interest on TripAdvisor?

Here is the kicker. Over the past several years, the volume of traffic from a TripAdvisor business listing has dropped across the board for all hotels that I have worked with. The success of the new TripConnect CPC and InstantBook products has something to do with this. Why sell you a click for just a flat fee? Why not make a % commission on top of it by converting those clicks. The whole convenience argument starts to fall apart when you realize that anyone booking travel in this day and age has at least 5-10 tabs open on their browser.

So I cannot understand why hotels continue to pay for a simple link to their website from a page on a third party site. Possible answers:

  • Convenience. You really think someone smart enough to read online reviews cannot open a new tab in their browser and Google you? Spending thousands of dollars every year to save your guest a click?
  • Fear. There is heavy speculation that your TripAdvisor rankings ‘allegedly’ might decline when you stop advertising with them. Lawyers, pay attention that I am using the word “allegedly.”
  • Habit. There is the “we have always done this and it’s now a part of our annual budget” reasoning. An average hotel in NYC is probably paying 10K to 15K for a link. Now imagine they took that cash and spent it on better coffee for guests in their lobby. Or how about renting puppies to hang out with the guests on weekends? Imagine the possibilities!

 

How do I deal with business listing hyperinflation?

Short Answer: Just say no.

Long Answer: Only in the hotel business can you have the audacity to ask for more money (2018 vs 2017) for a link to YOUR own website from a page where YOUR guests have contributed all the content. But wait, there’s more! You are getting fewer clicks than before. It feels like an episode on Black Mirror.

But this is actually happening. TripAdvisor has raised the price of their business listing for every hotel I have worked with in 2018 (that’s over 70 hotels). This is happening even when the total number of referral clicks from TripAdvisor has gone down for ALL properties when comparing 2018 with 2017 YTD. But, guess what? You can keep your old rates if you start buying TripAdvisor sponsored listings! Alrighty then.

Can you imagine a hotel asking for a higher rate, while sharply reducing the value of their hotel product compared with the previous year? People would lose their minds and go right to….oh snaps!….TripAdvisor to post a barrage of negative reviews.

Sometimes it really feels  like that hotels are stuck in the sunken place. Get out!

 

Do I have to promote my new hotel with TripAdvisor Sponsored Ads?

Short answer: No.

Long Answer: Here is a simple two-question test you can use to find the answer for yourself.

Question 1. Is the ego of the owner/operator tied to TripAdvisor rankings?

Then yes, you will have to run banner ads on TripAdvisor, get little or no reporting in return, and listen to someone talk about Billboard Effect in your marketing meetings. Everyone will be pleased and there will be high fives all around.

Question 2. Is the owner/operator a professional who wants to generate net operating income while offering a good product?

Then no, there are better options for promoting a new hotel. You need to perfect your product first and then grow organically. Organic growth is much more permanent than plastering the internet with banner ads that nobody cares for. In addition, you need to target guests at several different points in the buying cycle. There are many other channels where you can list your hotel and get exposure, just to get a baseline on your newly opened product. There is even this little billion-dollar hotel booking site out of Amsterdam and another one in Bellevue than can help you get exposure without annoying people with sponsored listings. (Alert: these sites also offer banner ads, so watch out for that!)

Are your revenue and TripAdvisor rankings related?

Short answer: Yes.

Long answer: There is no denying that your revenue is going to take a hit if you lose your rankings. But please understand that it is not the end of the world. To make a profit, you must diversify. Google, Expedia and Booking all have reviews too; don’t put all your review eggs in one basket. Recovery from a TripAdvisor meltdown is possible, but your pricing, marketing and product quality need to be in full alignment. Please do not tie your distribution to a review website.  That way, when the TripAdvisor “algorithm” is not your favor, the odds might still be in your favor.

Pro tip: Do not tie your personal sanity to TripAdvisor. Stay focused on the real world and engage with your guests in real time. The saddest thing I’ve seen in relation to TripAdvisor was at a trade show.  A hotel owner was in tears pleading with TripAdvisor staff, saying that his negative reviews were affecting his marriage. Don’t be that guy; don’t give so much emotional power to a review website!

 

Conclusion

TripAdvisor is a social media network that uses free content to make money. Your hotel is a physical brick and mortar business in the real world that people can experience by booking a stay. Before you know it, someone will acquire TripAdvisor; then the new owners will figure out more ways to increase their bottom line. You cannot obsess over it, or automatically spend your hard-earned revenue on buying advertising without thinking it through. You are not in high school anymore. In the long term, it really does not matter what people say about you. Run a good hotel, work hard, be kind to your guests, and it’s inevitable that you will make money.

Last Click Attribution Is Killing Your Hotel Marketing Campaigns

Last Click Attribution Is Killing Your Hotel Marketing Campaigns

Marketing success today can be measured using many diverse metrics. Analytics programs let you measure everything from who and where your website visitors come from to what content they are interested in. These engagement and conversion metrics can help you understand what is really working when it comes to your website and marketing efforts.

Some hotels have an in-house digital marketing team, but most outsource their online campaigns to an agency. Either way, these teams are usually tasked with producing an ROI (return on investment) report for every dollar spent on channels like Google AdWords, Facebook, etc. There is an industry-wide obsession with knowing where the last revenue-generating click came from. This metric invariably takes center stage in marketing meetings, ensuring that the conversation never moves beyond the last click and how much revenue was booked. Ignoring overall marketing channel performance might have worked for hotels in the good old days, but not today. A lot of hotels are struggling to understand why they are not seeing massive returns on their advertising dollars anymore. Even brand name traffic and clicks are in decline. So what has eroded your marketing campaign power?

The villain in this story – the one preventing you from moving forward – is this thing called last click attribution. It has derailed countless hotel marketing campaigns for both large and small operators. I’d like to take some time to help you understand attribution models in the hospitality and travel business, and how they affect your marketing efforts.

What Is an Attribution Model?

The good news is that most hotels and inns are spending some amount of money on digital ads. The bad news is that decision-makers have a limited understanding of how online marketing works today, and which strategies they should be crediting for the successes and failures of their campaigns.

Let’s dive right into attribution. An attribution model is a set of rules that that help you determine which touchpoints along the conversion path should be getting the credit for the final sale or conversion. Sounds simple… but it’s not. What makes it tremendously complicated in our sector is the number of touchpoints involved when someone is planning a trip, and subsequently a hotel stay.

A touchpoint is any point of contact that occurs between you and your customer; in our case, we are discussing online touchpoints. Here is a list of some of the touchpoints that might occur between your hotel and a potential guest who is planning a trip to Sydney over a period of weeks or months before visiting:

  • Top-level destination research: airfare searches, Sydney travel blogs, etc.
  • Neighborhood research: staying in Bondi Beach vs Central Business District vs iconic Sydney Harbor
  • Hotel research: Narrowing lodging search by researching independent vs brands; top-ranking hotels for value and price on TripAdvisor; hotel websites, social media profiles, and blogs
  • Things to do: online searches for top things to do in Sydney; lists and blogs about Sydney; seasonal events
  • Dining: restaurants, dietary requirements and cuisine preferences, must-haves, food blogs, review websites

While the above process is happening, your guest might also encounter some of these hotel-specific marketing touchpoints:

  • Hotel display ads: placed on top travel blogs and websites
  • Hotel location and value Google ads: “Luxury Hotels in Sydney,” “Hotels near Sydney Harbor”
  • Hotel brand name Google ads: when they search for your hotel by name
  • Hotel TripAdvisor Page: while they are still researching your price and value
  • Meta/OTA rate shop: your listings, reviews, and rate profile
  • Hotel blog post about seasonal events: useful content on your website
  • Hotel email newsletter: perhaps they sign up to stay in touch before booking or arriving the hotel
  • Hotel local dining guide; return visit for more useful content on your website
  • Hotel Facebook ads: and other social media ads, while scoping out your social profiles

Every single touchpoint is a crucial part of the shopper’s journey. This Expedia study showed that a typical hotel guest will visit over 38 websites before booking the room.

A typical website reservation that you are seeing today is the result of 30+ touchpoints that occurred at different stages of travel planning before the final act of booking a room. All the online channels you use today are more connected than ever; they must work together to support your goal of getting a booking. If you are only looking at where the final click came from when attributing revenue, you are missing the big picture. The very last step in a long decision-making process has not single-handedly earned the booking. It doesn’t make sense to allocate your entire marketing budget based on the last click that occurred before the booking.

So, let’s talk now about proper marketing channel attribution.

Deciphering the Attribution Models in Google

Google has been working on making attribution modeling more mainstream. In 2014, they released the Attribution Modeling Tool in Google AdWords. They actually want you to see how users interact with your ads, so you can run better campaigns. As of May 2016, you can integrate the attribution model of your choice with your conversion data and ad bids. Excellent tool for everyone involved! It’s especially helpful for the very few with “Marketing” in their job title that actually log in and work on their marketing campaigns. Of course, if you are just waiting for agency reports to drop into your inbox, you cannot witness this beauty firsthand…but at least you can make changes to the way you measure success.

Once you have decided to actively assign attribution for your paid and earned marketing efforts, you have to determine which model works best for your business. The following example illustrates how each attribution model would work for a hotel reservation with four touchpoints.

Touchpoints

  • Touchpoint 1: Google PPC Ad. Guest X finds your hotel website for the first time by clicking on one of your Google AdWords campaign ads for “luxury hotels in Sydney.” They browse the website and consume your content and photos. You capture their email address (with their permission, of course).
  • Touchpoint 2: Facebook Ad. Two weeks later, Guest X returns to your website, this time from a Facebook Ad about “Things to do in Sydney.”
  • Touchpoint 3: Email Marketing. Five days later, you send them an email about upcoming events in Sydney and why your hotel is in the best location to enjoy them. You get a click-through.
  • Touch Point 4: Direct Traffic. The next day Guest X books a room directly on your website by typing www.yourhotelname.com into the browser. Mission accomplished!

Your Attribution Options

  • Last Click Attribution. The last click before booking, in this case your website’s direct traffic source, gets 100% credit for the reservation.
  • First Click Attribution. The first touchpoint, your Google AdWords campaign ad for “luxury hotels in Sydney,” gets 100% credit for the reservation.
  • Linear Attribution. Every touchpoint – Google AdWords, Facebook, Email and Direct – gets equal credit for the reservation (25% each).
  • Time Delay Attribution. The touchpoints closest to the reservation dates get the majority of the credit. In this case, Email and Direct get most of the credit; Google AdWords and Facebook get less.
  • Position-Based Attribution. The first and last touch points (Google AdWords and Direct) get 40% credit each, and the remaining 20% credit for the reservation is divided evenly between the middle touchpoints. Facebook and Email get 10% each.
  • Data-Driven Attribution. This model gives credit for conversions based on the steps people have taken to find you and ultimately book a room with you. It uses data from your own account to determine which ads, keywords, and campaigns have the greatest impact on conversions. This is only available to accounts that have accumulated enough data over time. I love this model!

Where can you see all this? Oh, it’s right there in your Google Analytics dashboard! Look under Conversion > Attribution.

I have always loved GA. Here is why I think it’s better than anything fancy out there.

Why Should You Abandon Last Click Attribution?

Everyone would like to see the return on a marketing investment. It helps you justify why you did what you did, right? The cliché line “what gets measured gets done” (used by folks who love management guru books) is very hard to implement in digital marketing. I want to be clear that measurement is not the enemy here. It’s how you draw insights from the data that makes or breaks your marketing campaigns and future revenue.

Marketing budgets are already in very short supply in the hotel business. Imagine what happens when the allocation of these tiny budgets is determined solely by the last click that generated a booking. The result is apparent in hundreds of marketing reports today. It’s just not working anymore. It’s time to let go and move on.

The Booking Journey

The path to booking a hotel room today spans multiple websites and devices: online travel agents, metasearch, review sites, social media, etc. When you are dealing with 38 touchpoints, it’s not enough to look at the bottom of the funnel. Instead, ask yourself what you are doing to help your guest move through their booking journey.

Do you think your typical pay per click brand name ad “Official Website: Book Direct And Save!” helps when someone is still researching your location? No, it doesn’t!

Are you speaking with your guests on social media? Or is your Facebook strategy just serving up a“25% off for Spring Break” display ad?

What about email? Is it all about 35% off your best rates? Is that the only conversation you are having with your guests?

Focusing on the last touchpoint prevents you from helping your guests during the planning process, before they are ready to book. You are so busy moving marketing dollars to campaigns that target the last touchpoint that you never feed and fund top-of-the-funnel activities and channels. Ultimately, the volume is going to decline and you are going to end up playing the price game instead of selling value.

Underutilizing Your Marketing Arsenal and Agency

By giving 100% credit to the last click channel, you shift the focus of your marketing campaign to that one channel. All eyes are on the tool that is converting and showing a healthy return on investment. Hotel marketing agencies get stuck producing “ROI reports” to justify their existence every single month. Fixation on one channel kicks off a vicious cycle in which your revenue numbers start to decline, you fire the agency, hire a new one, repeat. This is particularly harmful if your digital assets are not in your control and you start from the bottom every time just like Sisyphus. Your website, campaigns and data need to consistently grow over time, and not get disrupted or lost when you change vendors.

Content production, photography, social media conversations, and email conversations are all part of your full marketing arsenal. Don’t go to battle with one weapon when you have a wide range of tools that allow you to target every single phase and touchpoint of the booking cycle.

Others Prosper While You Analyze

I have previously written about dinosaur metrics to avoid and super metrics to embrace. With most marketers 100% focused on the last click at the bottom of the funnel, the top-of-the-funnel playing field is wide open in the travel business. Online travel agents have done a great job of focusing on the entire travel journey. Of course, they bring tons of cash to the game and dominate paid channels…but there is a ton of work on the top of the funnel that is funded by conversions. They run, manage and curate thousands of websites that have content relating to the early stages of the travel-booking journey. As  a result, they build trust and solid brand names in the travel business without owning a single bed.

When you leave opportunity on the table, someone will always be there to seize it.

Conclusion

Booking a room at a hotel, bed and breakfast, or Airbnb is a process. First comes the destination, then the location within the destination, then a price and value comparison, and finally the right user experience to complete the booking. Judging your hotel and travel marketing campaigns at the finish line incorrectly assigns all the praise and investment to one single component. In time, your super-performing touchpoint will face a decline and stop producing revenue for you on its own.

New lemons are needed to make more lemonade. Stop squeezing the life out of your campaigns by focusing on the last click.

BookingSuite: A Lesson in Direct Revenue Strategy

direct revenue strategy

Throughout my career in revenue optimization for the hospitality and travel industry, I have always stressed the importance of owning your digital assets. This means having control of your domain, your marketing campaign’s analytics and history, and especially your website. As a strong supporter of open source technology, I have stepped in every time a marketing vendor (“expert”) started trashing new and innovative options for hotels. Of course, vendors will always favor their outdated proprietary systems over new technology. They have made a huge investment and have to keep selling. But being tied to old technology is never going to give your hotel an edge in the online marketplace.

WordPress is a perfect example. As a flexible, secure, and user-friendly website platform, it has been displacing proprietary content management systems worldwide. Threatened, some hotel marketing agencies starting publishing propaganda about WordPress; they said it was “unsafe” and did not include essential “marketing features.” In response, I have steadfastly encouraged hotels to embrace open source and steer clear of fear-mongering by agencies trying to push their agendas. Of course the agencies want you hooked on their website platforms. It provides them with the security of you not leaving them. Know that when you do leave, you will be left with nothing but a zip file containing the remains of your most profitable channel and a “we are sad to see you leave” email. Good luck!

Case in Point: BookingSuite

In 2014, I wrote a detailed article on Priceline’s Acquisition of Buuteeq, in which I again outlined the importance of owning your digital assets. Buuteeq was run by smart people who tapped into the reluctance of hotels to invest in their own direct revenue strategy. They offered to relieve hotels of the headache of owning and maintaining their digital assets, starting at just $99/month! They did a great job of marketing themselves and were able to successfully scale their own business by offering websites and marketing packages to hotels for a low monthly fee. At a crucial time when direct marketing investment was already a massive challenge for hotels, this approach was not doing the hotel industry any favors.

After the Priceline acquisition, I tried to make the strongest possible case for not renting your website and your marketing strategy from the largest online travel agency in the world. Priceline Inc. has its own agenda for growth. If you were to look at their stock performance and revenue breakdown, you would see that they do not make money building websites or running your marketing campaigns. They make money when people use their suite of OTA websites to book a room. Surprise! They prioritize their own direct revenue channel over yours.

Unfortunately, the illusory free lunch is too tempting for a lot of industry folks. BookingSuite (Buuteeq’s new identity under Booking.com) did more than just retain Buuteeq’s hundreds of hotel and B&B clients. They heavily leveraged the reluctance of hotels to spend time and money on marketing and signed up more hotels than ever. This seems to be a fatal flaw for hotels. They have made a habit of outsourcing 100% of their marketing to the vendor with the lowest bid. Then they get to check the box labeled “direct revenue strategy.” Death by checklist? Check.

Folks, We Have a Hard Stop

Earlier this week, BookingSuite announced that it will no longer be offering Search Engine Marketing services to hotels using their website platform. Below is the official email that was sent out to hotels using their system:

bookingsuite

They could not have summarized it better:

“SEM is an important component of your digital marketing strategy.”

You know what else is an important component of your digital marketing strategy? Your website. The thing that so many hotels are currently renting from BookingSuite. If they can drop SEM …how much sleep they would lose over the few dollars you pay them every month to rent a website? That $99 to $999/month website does not sound like such a hot deal now, does it?

Here is some Shakespeare for added effect:

“As flies to wanton boys are we to the gods. They kill us for their sport.”

― William Shakespeare, King Lear

Your website, booking engine, digital marketing efforts, and revenue management strategy are the pillars of your direct revenue. Viewing them as cost centers instead of investments in your future is the root problem underlying disadvantageous marketing decisions for hotels of all sizes. This cost vs investment approach (looking at departmental budgets instead of overall growth and revenue) is causing hotels to act against their own self-interest; it makes you pick the wrong vendors for wrong reasons.

Not to get all Nostradamus on you, but I would like to quote myself from all the way back in 2014:

“Ownership of your digital assets is more important than ever before in the history of the lodging business. Who provides your technology and in what format really matters. In this case, if your hotel is using a website made by Buuteeq, your site is now essentially a subsidiary of one of the biggest OTAs in the world.”

This Is the Checklist You Need

The fact remains that the majority of hotels and inns worldwide are renting their digital assets; and this is hurting their long-term direct revenue potential. When you make all your marketing decisions on the basis of lowest possible cost, your long-term profitability will suffer.

If you’re ready to take control, here’s a five-step checklist to get you back on track.

  1. Website. Pick any designer/website vendor in the world… but build and power your website using WordPress as your CMS. It is always the right time to start running and managing your most profitable digital channel using open source technology.
  2. Search Engine Optimization. Google is all about website speed, health, usability, and useful content. There are no secret algorithms that any agency has in place to tackle this. You can read in detail here how search engine optimization has changed for the hotel and travel industry over the years. Staying with a vendor because they are good at SEO and “keyword rankings” is like investing in the stock market using a psychic as your portfolio advisor.
  3. Pay Per Click. Here is some detail on why PPC is one of your most powerful marketing tools. Pick any vendor you like as long as you use your own credit card to pay Google directly and own your AdWords account. Yes, you should own your AdWords campaign so that you maintain control of your history and retain the quality score built over years of spending and testing. That way, when your vendor wants to peace out on you (example: what BookingSuite is doing now), it won’t be a big deal. You will have to find a new vendor; but you will not have to start from scratch again.
  4. Social Media. Make sure the ownership of all of your social media accounts stays with you. Use your email address, and not a vendor’s. This includes Facebook and all other social media marketing campaigns that you are currently running.
  5. Analytics. Stick with Google Analytics. Here is a detailed article on staying away from expensive solutions designed with agencies in mind. When working with Google Analytics, always set it up with a Gmail address that you own. You might have several vendors working on your account with access to the same data. But they shouldn’t control the account. Avoid the headache hotels experience every day when the vendor who owns their analytics account decides to walk away, taking years of website data with them.

Here is a detailed guide on managing all your digital assets. Successful hotel and travel marketing departments own and continually build on their marketing and digital assets. Just like you would not build a hotel on land that you do not own (or lease for a long time), your online assets should not be built in someone else’s proprietary digital environment. Of course, you will always need someone to help you maintain your hotel/home. But you don’t have to give someone the deed to the house in exchange for making sure the plumbing is working. *mic drop*

Conclusion

People I have worked with over the years know that I do not believe in declaring “wars”; I believe in making revenue. The hyperbole in the marketplace around the “war on OTAs” is impractical and annoying. Using this article to launch a tirade against BookingSuite is a complete waste of time. You cannot blame others for your poor decisions. Also, please remember that Priceline Inc. and Expedia Inc. are not going anywhere anytime soon. So, buck up, Champ.

My goal here is to highlight that now is (still) the perfect time to invest in owning and maintaining your digital assets and marketing campaigns. Marketing agencies and vendors will eventually get acquired or lose interest. Nobody can control or predict when that will happen to your marketing agency. I could not have predicted the exact date when Buuteeq (the helpful agency who wanted to take all your work and worries away at a super low price) would sell out to the world’s largest OTA…. or the date when they would later shut down the SEM services that were not making them enough money. What I can do and always will do is to recommend that you own and invest in your own digital assets and marketing. Remember: your profitability needs to outlast your current marketing agency. Stay woke.

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.