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The
Distribution Dilemma
New distribution channels are emerging
seemingly every day. But are they relevant and do you need to be there?
Here's your answer.
Tuesday, June 29, 2010
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Yes, it's come
down to this. Distribute or die.
OK, so that may be a little dramatic but no one care argue the fact that
consumers are seeking to book hotel rooms through new and emerging
channels. And hoteliers that aren't in a space the guest is in when he
or she finally makes that decision to buy, well, then, you'll be stuck
on the sidelines.
Suddenly new channels seem to appear out nowhere and everywhere all at
once. For example, did you know that Facebook pages are now linking
directly linking to booking engines? Well it's those making the smart
shift to these new arenas that are capturing more reservations. Oh yeah,
and they're avoiding third party booking fees too. Now that's a
win-win.
At last week's Hospitality Industry Technology Exposition and Conference
(HITEC), there was a lot of talk about the possibilities and challenges
afforded by new ways of connecting to guests.
Take Ocean Properties for example. Social media channels are yielding
them the best ROI on marketing dollar spent to the tune of 10 to 1,
according to Loren Gray, Ocean Properties' Director Of E-Commerce. Some
properties in Key West and Sarasota are getting ROIs of 25 to 1 or
more.
"Social media has been a great distribution platform for us. We like to
push through direct channels, which are the lowest cost channels," said
Gray. "When you have a few thousand people following a property it is
critical mass."
Gray said that through Facebook Ocean Properties is better able to
communicate one to one with potential guests, typically those who
already have an affinity for the brand. He said they start a dialogue
with people where appropriate and convert them from lookers to bookers.
But it's not as easy or straightforward as one would hope. Gray said
industry wide guests are becoming confused because they have plenty of
different channels to find the brand. The end result can be sending
messages out that conflict with that guest's specific interests. And
that could backfire. "There can be too many options which are too many
choices. It's possible to create unrealized expectations based on the
channel they come through." He said.
"To me social media means there are a bunch of channels. [Hotels] will
have to do their best to connect to all of them and see what works,"
said Keith Cotton, VP, Supplier Solutions, Hotel Booking Solutions.
Meanwhile, Morgans Hotel Group is getting a full 25 percent of its
business through its proprietary website. So they're focusing on
continuing to drive business through this channel. That means making the
website a whole lot stickier.
"We recently launched a reimaging of website which creates a highly
visceral and immersive experience for our customers. The time people
spend on it has been raised significantly," said Tom Buoy, SVP
Distribution & Revenue Management, Morgans Hotel Group.
The biggest challenge Morgan's personnel have is continuing creating a
steady stream of relevant content for their guests.
In the economy sector Vantage Hospitality is looking to find ways to
distribute their Americas Best Value Inn properties as well as its three
and four star properties under the Lexington brand. But only if it
makes sense, said Vicki Schell, Vice President of Distribution, Vantage
Hospitality Group. "My goal is to grow brand awareness. If new channels
are not relevant to my [brand] I am to play there. For us it's not
important to be the first ones out there. Let someone else test the
waters. We continue to look where we should be especially if there is no
cost attached," said Schell.
Schell also said they are focusing on basic content. For example making
sure all properties have standard high quality photographic images, an
ongoing project for the company. It's also critical for them to have
updated content on the property and surrounding area.
Gray said that customers crave dealing directly with the hotel. One
reason is they feel more comfortable everything will be right upon their
arrival. And Ocean is seeing a real shift in booking behavior from the
GDS and wholesalers directly to their reservations system.
"Our direct channel is our channel and that is where we want to drive
business to. Right now the sense we are getting is consumers want to
deal directly with property and that gives us a unique opportunity to
have conversation with the guest immediately. The only channel we can
control is direct so we try to drive them to there for better control,"
said Ocean's Gray.
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