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Google exec shares 3 trends shaping travel
September 5 2013

Google is largely good for the hotel industry—especially when the company’s executives share key insights about traveler booking behavior. 

Highlights
  • The guest experience starts well before check-in.
  • The actual experience must match the experience promised online. 
  • The Hotel Data Conference revealed a wealth of interesting statistics. 

“I guess they’re taking over the world. Google is going to have an impact on our industry over time.”
—Randy Smith, chairman and co-founder of STR

It’s rare you attend a conference these days without Google weaving its way into the conversation. The 5th annual Hotel Data Conference, which we hosted this past week along with our parent company, STR, was no exception.
 
Randy touched upon the proverbial 800-pount gorilla briefly during his annual fireside chat, where he riffs on nearly every topic you can imagine. He said Google is good for the hotel industry, arguing the company’s presence shakes up the distribution landscape to create more competition among the online travel agencies. 
 
I’d second that notion, while adding the benefits extend beyond competitive pricing. 
 
Google shows invaluable insights into the way consumers shop, share and search online. Case in point: Rob Torres’ presentation during Wednesday’s “Kicking off: Establishing the industry’s position” opening general session. 
 
The head of Google’s travel industry practice shared three key trends shaping the world of travel and tourism. 
 
1. Hospitality is no longer defined within the construct of a physical experience. 
 
The guest experience starts well before the physical check-in process, as would-be guests enter the discovery phase’s periphery of the booking funnel, Torres said. From then on, how your hotel and brand is represented online matters. 
 
And by online, I’m talking on all personal devices and platforms. Consumers are device agnostic, Torres said. They’ll switch from their smartphone to tablet to desktop seamlessly. If your online presence doesn’t follow in step, kiss that potential business goodbye.
 
“It’s critical that all of us in this room understand that,” Torres said. “We can’t control where people are consuming this information. They’re getting it wherever they want.”
 
2. Relevance is reality. 
 
The hotel industry has only just begun to leverage the potential of big data. Our biggest obstacle? Big data. 
 
“We have an abundance of data available. … More and more people just get inundated,” Torres said. “Those that win are the ones that actually will use the most relevant data.”
 
He pointed to Hotel Tonight as a strong example. The smartphone app, which allows hoteliers to offload limited rooms for same-day bookings, created a highly relevant avenue to complement a rise in same-day reservations. Guests don’t have to sort through thousands of available rooms. Instead, they get exactly what they want when they want it. 
 
3. Experience matters. 
 
A bit of a no-brainer, right? Good hoteliers know guest experience is everything. But the best hoteliers know it isn’t the only thing, Torres said. If the actual experience differs from the experience promised online, guests will not only be unhappy, but they’re increasingly likely to express their dissatisfaction across a variety of channels. 
 
“How people experience your brand and how they share that brand through social media is very important,” he said. “More and more, people basically are giving up on a brand if their offline experience isn’t the same as their online experience or vice versa.”
 
In summary …
Torres closed the panel by summing up his key takeaways. 
 
“Understand there’s so much data out there, and really personalization is key to winning this game. More and more folks are all about relevancy. … I want that personalized experience,” he said.
 
Your guests do, too.
 
Now on to the usual goodies …
 
Stats of the week, Hotel Data Conference edition:
After sitting through two days of non-stop hotel data, I feel as though I could write a book. I’ll exhibit some editorial discretion and keep my list (somewhat) short at 10: 
 
-2%: Group demand compared to the prior peak in 2007, according to Jan Freitag, director of strategic development for STR. 
 
Conspicuously absent from the fastest hotel-industry recovery of all time was group demand. A reality in the new normal? Not quite. As Freitag explained (and as I wrote about Thursday), group demand is still there for the most part, it’s just materializing through different channels. Whereas conference attendees booked within group room blocks exclusively in the past, today they’re more inclined to book outside of that block as transient bookings.
 
0: The number of properties with more than 50,000 square feet of meeting space that opened during 2012 and year-to-date 2013, according to Freitag. 
 
The reason? See the note on traditional group demand above. 
 
23%: Percentage increase in rooms under construction thus far in 2013, according to Freitag. 
 
A big increase, yes. But the actual number is still relatively low at only 76,000 rooms. By comparison, there were 211,000 rooms under construction during the peak of 2007.
 
10%: Travel and tourism’s contribution to global gross domestic product by 2023, according to Val Bauduin of Deloitte and Touche. 
 
The majority of that growth (and two-thirds of the jobs created therein) will be in Asia. 
 
4.3%: Compound annual growth rate of demand since the bottom in 2009, according to Smith. 
 
“If you take a look at the rebounds, the U.S. took off extremely sharply and has continued that steady trend,” he said, adding we’re now selling more than 90 million roomnights each month. 
 
45%: Percentage of all nights travelers spend away from home that the hotel industry captures, according to Smith.
 
There’s tremendous opportunity there, he said. Just imagine the profits to be reaped if marketers can convince Joe and Jane Smith to stay in a hotel instead of Aunt Becky’s house. 
 
56.9%: Percentage of U.S. room revenue generated by markets outside of the top 25, according to Duane Vinson, assistant director STR SHARE Center. 
 
Who says the top 25 are the primary drivers of this industry? 
 
114: Point premium the hotel industry has over traditional air carriers on J.D. Power and Associate’s 1000-point index of satisfaction, according to Rick Garlick, the firm’s global travel and hospitality practice lead.  
 
For more on satisfaction and how outside influencers are impacting the hotel industry, read Ed Watkin’s coverage of the panel titled “Beyond the boundaries: How other industries influence hotel performance.”
 
56.8%: The percentage of overall roomnights booked through brand loyalty channels, according to Tim Hart, executive VP of business intelligence of TravelClick. 
 
Not surprising, the majority of those nights came via brand.com. The smallest percentage came from the online travel agencies. 
 
5.7%: STR’s most updated RevPAR forecast for year-end 2013, according to Amanda Hite, president and COO. 2014’s expected to finish with a solid gain of 6%.
 
Another year of growth. I’ll drink to that. 
 
Quote of the week
“The lodging industry continues to encourage Congress not to make arbitrary decisions on government travel simply because it is the politically popular thing to do.”
—Lisa Costello, VP of government affairs for the American Hotel & Lodging Association, as reported in “Congress considers limits in federal meetings.”
 
With the help of STR, we revealed a wealth of previously unavailable data on government travel spend as part of our special report “Federal cuts hitting hoteliers.”
 
This was the first year such information was made readily available for public consumption. In subsequent years we’ll continue to track conference spending by department to measure notable shifts and what they mean for hotel performance. 
 
Reader comment of the week
“I cannot agree more on your view in this column. The financials of a property drive its value and I continue to express to my clients the importance of at least 3 and preferably 5 years to overcome the cyclic characteristics of this challenging market to appraise commercial property.” 
—Reader “Brent Overholt, MAI” responding to a column from Joel Ross regarding the importance of inflation adjusted data in measuring changes in hotel values.
 
Email Patrick Mayock or find him on Twitter.
 
The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.
 
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