What hoteliers should know about guest acquisition
What hoteliers should know about guest acquisition
28 AUGUST 2018 8:14 AM

A presentation at the recent Hotel Data Conference broke down the many choices guests make when it comes to where they stay and how they research trips.

NASHVILLE, Tennessee—How people travel has as much to do with who they are as where they are going, Lorraine Sileo, SVP of research and business operations at Phocuswright, said during a session at the recent Hotel Data Conference.

Research shows one of the biggest differentiators in how people choose where they research their travel products is age, she said during her presentation, “Hotel path to purchase: The complexity behind consumer choice.”

Younger travelers (18 to 34) use all types of channels through both sites and apps, she said.

“They are more likely to use social media sites, such as Instagram and Facebook, and home rental sites, such as Airbnb and HomeAway,” she said.

Fewer younger travelers go directly to the suppliers for their research, Sileo said, and it’s typically older travelers who go to the hotel website or app, which affects hotel distribution costs.

The choice
The top things that make a person choose to decide where they are staying are price and convenience, Sileo said. Those two rate higher than anything that has to do with loyalty, such as amassing points, redemption of points and brand preference.

Online travel agencies have the advantage here because they have a perception of offering a lower price, she said.

The good news is hotel companies have improved the convenience factor, she said, as they have improved their websites and have good apps.

“This is a big difference here in how we’re perceiving the value of going direct,” she said.

Hotel companies say what’s important to guests is price and to hotels is loyalty, so they’ve started offering loyalty rates, Sileo said. People can join for free and receive upward of 10% off their rate, she said.

“Is it working?” she asked. “The answer is yes; it does seem to be working. We asked guests how they booked their last trip … more booked direct than through an online travel agency. (They’re) perceiving now that value in the price.”

While the change might not appear dramatic, one-third of those who joined a hotel loyalty program did so for the lower prices, she said, but that compares to 24% who said the same thing the prior year.

“This is showing, yes, there is a major change in the perception of booking direct,” she said.

These programs have added millions of new members, including younger travelers, in the last two years, Sileo said, but half joined for lower prices and almost half for the free Wi-Fi.

“So are they really loyal?” she asked. “Those entry members, who would be the younger travelers who are joining for the low-hanging fruit, tend to be the ones who are more likely to book outside of the program. Those more mature, elite members naturally are more likely to stick with the program.”

The loyalty rates work for companies with robust loyalty programs with lots of perks and value for guests, she said, because many people are joining them and seeing what the hotels in the program have to offer. However, hoteliers in mid-sized or smaller chains might want to think about other ways to attract and retain younger travelers.

Alternative accommodations
Younger travelers are more likely to stay at nontraditional accommodations, Sileo said. In the past, people said those who used Airbnb weren’t going to stay at a hotel anyway, but research now shows that 54% of those who booked through Airbnb said they also looked at a hotel when researching their trip.

“The renter is looking for the same thing the hotel guest is looking for: location and value,” she said, adding that things like interacting with the host and getting to know the locals (are) further down on their priority list.

The rental stay is looking more like a hotel stay, in terms of booking window, length of stay and the type of trip, she said.

New opportunities
Travelers of all ages expect more and more from their hotel experience, Sileo said. Sixty-five percent place a high importance on hotels investing in technology to enhance the hotel experience.

“It can be a sweet spot for hotels who want to keep engaging the guest and engaging the customer throughout the trip life cycle,” she said.

Guests want to buy ancillary services through hotels, she said. Nearly half of guests said it would be helpful to receive offers throughout the process, she said, either at the hotel or when they’re booking online. It could be for dining at the hotel or tickets to a nearby museum or hall of fame, an event or transportation, she said.

“There’s a long list of products obviously the hotel could sell if they wanted to, but they have to have a great platform to do it,” she said.

About half of travelers use voice-activated systems, Sileo said. There is a place for voice assistants in the hospitality space, but it’s a matter of figuring out where and how.

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.