The role hotels will play in the future of distribution
 
The role hotels will play in the future of distribution
04 OCTOBER 2018 8:33 AM

Topics of discussion during this week’s Direct Booking Summit in Dallas included the evolution of the booking process and how hoteliers cope and integrate emerging booking channels.

DALLAS—The booking process is changing before hoteliers’ eyes as more and different channels emerge, technology unlocks potential and consumers’ expectations adjust.

Hotel booking of the near future will have to be faster, personable when it matters and at least somewhat accepting of third-party platforms, according to experts who spoke during the Direct Booking Summit this week.

“There’s a lot of changing that’s going to happen, so we need to be in a very self-educational place, because most (hoteliers) don’t have time to go back to college. And if we did, I guarantee those professors wouldn’t know what’s going on either, because it’s moving so fast,” said Calvin Anderson, chief revenue officer at RLH Corporation, during a session titled “Addressing the exponentials of the modern consumer’s conversion paths.”

It won’t be long before booking a trip is a completely different experience than we’re used to now, he said.

“Even though I’m incredible at it—I check in (for) flights, get rental cars; I don’t even need to ask you for a discount you for a discount, I can find it myself—it still takes me an hour and a half to two hours combined, if not certainly more, to really plan an excellent trip,” Anderson said. “That is lean-forward search, which is what we’re used to. We’re looking through hundreds of hotels … and there’s hundreds of hotels that are junk that I don’t want to see. And that’s going to start to go away, and we’re already starting to see that a little bit.”

Emerging channels
Likely playing a big part in that evolution will be tech giants Google and Amazon, which are already making inroads and overtures in staking their claims in the industry, speakers said.

“Google is certainly becoming even more ubiquitous through the booking funnel,” said Jay Hubbs, SVP of e-commerce and digital marketing at Remington Hotels on a panel titled “Metasearch in 2018.”

“(Google) being on that shelf is arguably more important than being on any other shelf right now. We are changing the lens for how we look at Google tremendously,” he said, adding that the search engine is where guests often begin their booking journey.

Anderson said the source of Google’s strength is the data it collects on hotel guests.

“A certain, very prominent CEO at the NYU conference said, ‘We know more about our guests than Google.’ If I were in the room, I would have said, ‘Ha! Incorrect!’ … We don’t know more—unless the maids are really good at checking for used Cheeto bags in the garbage can after you leave—Google knows a lot more about you.”

Share of bookings
To continue to survive or thrive, hoteliers will have to stake their claim to as much of the booking pie as possible, while coming to terms with the fact that third-party channels aren’t going away. But the size of that optimal booking wedge depends on the hotel and the market, speakers said.

During a panel titled “Unlock the potential of every acquisition channel,” Dan Towvim, senior director of e-commerce and digital marketing at Sonesta Hotels, said the cost of acquiring a guest through direct booking must be weighed against the cost of other channels, as well as the longer-term return.

“When we’re converting people over from third-party bookers to booking direct, we look at what were we paying in acquisition cost for that person booking through Expedia, compared to now coming through us as a brand direct,” he said. “Having branded properties, I’ve got to factor in the rewards members points, I’ve got to factor in not only loyalty fees but (cost) per reservation call that the call center is taking … so we have a bit of a deeper layer that we have to commit to when we’re analyzing is it worthwhile to us to try to convert that person over.

“Anybody who books through Hotwire or opaque (sites), we know they have no brand loyalty really, so why try to waste our efforts in doing marketing campaigns or targeting them when we know they’re just going to go back and end up booking through that portal anyway?”

Kelsey Miller, of Woodside Hotel Group, discusses booking channels on a panel at the Direct Booking Summit that also included Sonesta Hotels’ Dan Towvim. (Photo: Robert McCune)

Kelsey Miller, corporate director of digital marketing at Woodside Hotel Group, said determining the cost of guest acquisition is “not an exact science.” But, she advised, “You’ve just got to take the time to really think about it and make some assumptions. It’s allowed me to be on a more tactical level and set benchmarks I’m comfortable with.”

She also cautioned such an exercise can be a bit of a data “rabbit hole.”

“It’s really hard to think about costs without also thinking about the attribution models and actually taking the time to go through a cost-of-acquisition exercise. And through doing that, it was really interesting (to learn that) a lot of our pre-costs are fixed, so your return really depends on the performance and how effective you are at driving direct,” she said. “Depending on the attribution model of your campaign, if it’s pay-per-click, you have to factor in your cancellation rates that come through there, too. And then also maybe attribute some phone revenue to it.”

Sanovnik Destang, executive director of St. Lucia-based Bay Gardens Resorts, said for his company, too much direct booking would be a bad thing.

“The wholesalers are very important to certain markets. No matter what you do in St. Lucia and the Caribbean, you will find that Europeans always like to book through wholesalers,” he said. “Right now, we’re about 40% to 45% book direct. We’d like to be about 60%.

“But would I like to be at 100%? No, and the reason for that is if you do that, it means you’ll be shifting heavily to the U.S. market, and that’s good now, but if the economy turns, and I’ve seen it happen, you’ll wish you had that U.K. and European market. But you will have lost them.”

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