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HawkPartners Hotel Digital Insights July 2012
 

HawkPartners Hotel Digital Insights July 2012

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    HawkPartners Hotel Digital Insights July 2012 HawkPartners Hotel Digital Insights July 2012 Presentation Transcript

    • Digital Marketing Innovation inHospitalityJuly 2012For more information contact:Jennifer Anthonyjennifer.anthony@hawkpartners.com703-304-4585Brooke Hempellbrooke.hempell@hawkpartners.com678-602-6058Scott Wilkersonscott.wilkerson@hawkpartners.com301 951-7046
    • With over half of bookings done online, major hotelbrands need to innovate digitally to sustain leadership•  OTAs were estimated to cost hotels $2.5 billion in 2010, capturing $40–120 per booking, vs. the $2–6 cost to hotels when booking is done at their own sites % of Major Chain Hotel Bookings Online60% (U.S. 2011) 16% 17% 12%40% 10% 9% OTA Brand Sites20% 0% 2006 2007 2008 2009 2010 Source: “Distribution Channel Analysis: A Guide for Hotels,” HSMAI Foundation, January 2012 2
    • Four key elements drive digital innovation within the hotelspace Web Site Digital Effectiveness of brand site Marketing Search, display, and •  Site technology, search & navigation email marketing efforts •  Reservations & service •  Innovativeness of content •  Rewards/loyalty •  Frequency, integration w/ •  Property/destination guides social media, presence on emerging platforms Mobile SocialInnovation/optimizationof smartphone & tablet Mediamarketing Brand presence,•  Availability/functionality/ community size, popularity of apps•  Robustness of mobile site Digital & user engagement •  Major platforms: Facebook, Innovation Twitter, YouTube Source: Adapted from “Digital IQ Index: Hotels,” L2 Think Tank, March 2012 3
    • A recent study rates Four Seasons, Hilton, and Marriottahead of other major hotel brands in their “Digital IQ” L2 2012 Digital IQ Index RankingsCompetitor Rank Digital IQ Rationale •  Website delights, with strong visuals, curated itineraries and user reviews 1 150 •  Cohesive online experience, with multiple social communities •  Experimental approach to digital, with staff contributing content •  Leveraging IT on-property to deliver digital guest experience 2 149 •  Highest score in search marketing •  Largest/fastest growing Facebook Community •  Robust online booking engine 3 143 •  Co-founder of Roomkey.com – driving effort to bypass OTAs •  Strong mobile experience in-room and on the go •  Mobile standout, including use of targeted mobile advertising (e.g., to 4 137 business travelers accessing an airport’s WiFi service) 5 133 •  Forward-thinking Foursquare initiatives and site relaunch 6 131 •  Innovative use of social media, bolstered by guest-supplied photos •  Highest rating for branded site 7 128 •  Partnership with Bazaarvoice to integrate guest opinions in Facebook 8 125 •  Considered “strong but safe” •  High LOVE factor, photo contest sparked strong user generated content 9 116 across channels Source: “Digital IQ Index: Hotels,” L2 Think Tank, March 2012 4
    • Mobile The travel industry boasts the highest share of mobile commerce revenues •  Hotels have moved quickly to optimize their web sites to offer mobile booking functionality (with biggest jumps in Android and iPad-supported applications)US Mobile Commerce Revenue Mobile Adoption Rates by Industry (2010) % of Hotel Brands on Mobile Platforms 22% BlackberryBlackberry Entertain/ 2012 Tickets 20% Other 2011 12% 3% House iPad 44% Travel wares iPad 30% 6% 12% Office Supplies 46% 7% Android Android 10% Books/ Music/DVDs Computers/ 9% Mobile 66% Electronics website 20% Apparel Website 63% 13% 68% iPhone iPhone 54% Sources: “US M-Commerce, by Industry,” ABI Research, as cited in press release, 5 December17 2010; “Digital IQ Index: Hotels,” L2 Think Tank, March 2012
    • MobileA new generation of mobile apps enables easier bookingand quick access to property-specific information and deals Starwood Choice Hotels Marriott“Native booking module makes it “Quickly find & book 6,000+ “Just one tap away on youreasy to browse and book hotels” properties anytime, anywhere” iPhone or iPod Touch” Browse city guides, Retina display maps, hotel photos graphics Access to special deals 24X7 Cust Svc SPG Account Info GPS functionality to find Sources: “Top Five Hotel Mobile Apps,” Inventorspot.com, iTunes & Latest Offers hotel near current location 6 App Store, Hotels, July 2012
    • Web SiteBut many hotels lag behind guest expectations for current,easy-to-understand web site content and rate information Source: HotelMarketer.com Infographic, May 2012 7
    • Web Site Curated content is a powerful way for hotels to keep travelers on their web sites for longer Average Time On Web Site % of Hotel Brands (in minutes, by Content Feature) (w/Feature on Website) Concierge/ 6.24 15% Staff Tips 5.31 Curated 6.20 Itineraries 17% 5.38 Photos of 6.04Local Attractions 5.25 27% Guest 6.12 Testimonials 5.41 52% Photo 5.47 Galleries 5.14 94% With Without Source: “Digital IQ Index: Hotels,” L2 Think Tank, March 2012 8
    • Web Site Recognizing the value of unbiased ratings, Starwood was the first major hotel brand to offer online ratings & reviews Starwood launched Ratings & Reviews in October, 2011 with direct mail campaign •  Recent guests received an invitation to rate their hotel experience, rather than traditional satisfaction survey Similar to 3rd party reviewReviews are displayed directly sites, guests can see breakdown of ratingswith hotel property bookingpages, making it easier forconsumers to find relevantproperty-specific information 9
    • Digital Hotels trail other prestige industries in their use of email marketing best practices •  Hotels take the first step of signing up guests through email, but miss out on critical touchpoints, including welcome email, and making emails viewable on mobile devices Use of Email Marketing Best PracticesAverage Emails Hotel Industry, December 2011 98% per WeekSpec Retail 3.2Magazine 2.8 60% 56%Beauty 1.2 50%Fashion 0.7 35%Hotels 0.2 11%Jewelry 0.1 Send to Links to Viewable Additional Welcome Email a Friend Social Media On Mobile Emails Email Sign-Up Source: “Digital IQ Index: Hotels,” L2 Think Tank, March 2012 10
    • Differentiation in social media is increasingly difficult, Social Mediaas presence across platforms has become table stakes Overview of Social Media Marketing Practices Social Media Competitor Facebook Twitter YouTube FourSquare •  Book travel •  38K Followers •  Frequent updates •  View or post photos •  Need to have Twitter •  Videos of chefs •  Tab for Hilton Honors account to access cooking, events & •  NA •  LGBT promotion icon •  Frequent updates new room designs •  Video of Annual Report & Welcome •  No link through •  View & post photos •  183K Followers home page •  Frequent updates •  NA •  Welcome icon for •  Old postings community service •  Book travel •  No link through •  1st hotel to partner w/ •  View or post photos •  13K Followers home page •  Primarily travelers Topguest to connect •  Welcome concierge •  Leverages YouTube posting vacation with location-based video for announcements •  IHG curated discussion photos/comments •  Socially resp focus networks •  View or post photos •  91 Followers on •  Through SPG site •  Integrated and/or reviews SPG Insider (limited •  Frequent updates partnership •  Check events posts) •  Videos of chefs •  Use SPG points to bid •  49K on Starwood cooking & special •  SPG members earn on auction events Buzz (freq updates) events rewards •  View photos •  Occasional promotions, •  No link through •  Some use with focus limited activity homepage •  Few company posts •  10K followers •  Limited viewings on western US •  No direct booking properties functionality •  Limited updates Sources: Hotel websites, Facebook, Twitter, YouTube, Hebsdigital.com, 11 “Converging Social & Mobile: Why 2012 is going to be the year of SoLoMo,” 3/2012
    • Social Media Hilton has the largest and fastest growing FaceBook communityClose to • Hilton utilizes its300K Facebook page to:followersvs. 100K - Provide anotherfor SPG channel for guest toand 111K book travelforMarriott - Target priority segments, like the LGBT community - Run promotions and sweepstakes - Provide sticky content that drives engagement, like photos Source: hilton.com, Hilton Facebook 12
    • Social Media New sales and communication avenues have the potential to disrupt channel practices in the hotel space Potential Disruptors in Digital Marketing Consortium-Controlled Flash Sales Social Networking Sites Booking•  Direct booking hotel search •  Total gross billing from 3 major •  The fastest growing social engine with better terms than daily deal sites represented networking site - businesses most OTAs 8.5% of all travel vendor billing create Google + pages to - Opportunity for hotels to gain for 4th Q 2011 ($71.5M) engage customers back some of $2.5B in OTA •  Pros: data mining resource - target by topic of interest annual commissions •  Cons: - offers platform for visitors to•  Drives down costs & enables - Cannibalizes sales recommend hotels better customer experience - measure pages by type of - Erodes rate parity (“The Law•  Launched January 2012 by of Unintended Channel Share interaction Choice Hotels, Hilton, Hyatt, Loss”) •  ~2/3 of hotel brands had a IHG, Marriott & Wyndham; - Does not drive significant presence on Google+ in 2011 Best Western followed bookings Sources: “Digital IQ Index: Hotels,” L2 Think Tank, March 2012; hebsdigital.com, “Another Look at Flash Sales Sites,” 3/2012; Tnooz.com, “Do Flash Sales level the Playing Field for 13 Independent hotels,” 4/2012; Google +
    • Social Media It is unclear if travel flash sales remain a disrupter, or a focused way for smaller independents to increase reachBreakdown of Flash Sales Travel Deals • Flash sales provide Independents and Inns with from Groupon, Living Social and Travelzoo another lever to drive demand Vacation • 12% branded hotel participation raises questions: Tour Homes/ - Are independent property owners using flash sales on Operators; 5% Timeshares; unsanctioned basis? 9% - Do chains turn a blind eye at the corporate level to give owners flexibility? - To what extent does this practice violate pricing parity agreements?Independent BrandedHotels; 42% Hotels; 12% Inns and B&Bs; 32% Source: ”Travel’s Daily Deal: Distribution Disruption or Flash in the Pan?,” 4/2012; PhoCusWright Market Research and Yipit, based on 4Q2011 flash sales deals for accommodations 14
    • Social Media The marketing success of flash sale providers may inspire hotel brands to up their digital email campaigns Sample Flash Sales•  Built on email list of consumers •  Weekly, members-only flash •  Partnership creates email interested in receiving travel sale with exclusive deals of subscriber base of 50 M deals 50% or more off handpicked potential travelers•  Largest publisher of deals on hotels in top destinations •  “Groupon Getaways” offer the internet, with over 25 M worldwide discounted deals to properties subscribers •  Deals must be purchased within Expedia’s network of•  Publishes Top 20 deals by within 72 hours, need to 135,000 hotels location, each researched by register as Orbitz member to Testing Center receive Insider Steals by emailUncertain if this model is sustainable and what the impact will be on major hotel brands: •  Do flash sales prompt repeat business? Additional spend on ancillary services? •  Is there additional opportunity to drive new bookings through email outreach? E.g., by inspiring unplanned getaways •  Or, will customers be content to wait for next flash sale? 15
    • How to Learn More•  Please contact us to learn more about our perspective on digital marketing:Jennifer Anthony: Brooke Hempell: Scott Wilkerson:jennifer.anthony@hawkpartners.com brooke.hempell@hawkpartners.com scott.wilkerson@hawkpartners.com703-304-4585 678-602-6058 301 951-7046 About HawkPartners! Sample Hospitality Clients HawkPartners is a marketing consulting firm that works at the intersection of market research and marketing strategy to help industry-leading, Fortune 500 clients make fact-based decisions. In the hospitality space, HawkPartners works to help our clients understand their customers and competitors, and to develop game-changing marketing strategies." Founded in 2003, the firm is headquartered in Cambridge, MA, with additional offices in New York, and Washington, D.C." www.hawkpartners.com! 16