Each month, the Hotel Heroes - our panel of trusted hospitality industry experts - answer questions from hotels around the world.
In September, hoteliers asked about phone bookings, third-party contract must-haves, budgeting for 2020 and much more. Scroll down for the Heroes' answers!
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What is the value of third-party distribution partners' subsidiaries? They bid on hotel keywords on Google, but their value is unclear.
Answered by Hotel Hero Nicolas Durand, Senior Director of Global Distribution at Jumeirah Group / Jumeirah Hotels & Resorts:
Third-party distribution can be a great help for driving additional revenue to your hotel. However, you have to ensure you have the right contract terms with your partners.
There are many different rules you need to be careful about. For example, some OTAs are asking (as part of their contract negotiation) to be allowed to bid on your hotel keyword. You shouldn't give this right to anyone - this is your brand and you need to have the full control of it!
It is also important that you have a clear strategy for your direct channels, especially your brand website. The effectiveness with which you can target various markets can also depend on the languages you have on your website. That's why I suggest you:
- Define which languages you need on your website based on the markets you want to focus on;
- Ensure that your third-party contracts respect this;
- Use your partners to drive revenue from markets that you won't be able to target directly.
In summary, focus your marketing efforts on partners who can provide traffic from markets you can't reach on your own, or invest in translating your direct website into the languages spoken in these markets.
How can I tie phone bookings back to the guest's website journey - including whether they interacted with PPC keywords?
Answered by Hotel Hero Dr. Jan Sammeck, Director E-Commerce at Deutsche Hospitality:
You can create a special telephone number that you put on your website or in pay-per-click (PPC) ads. Alternatively, you can create one that routes back to the original telephone number.
Many providers allow tracking of the specific number that was dialled. That's how you can get an indication of telephone conversions coming from web engagement.
In addition, you can also use rate codes in your PMS and CRS as unique identifiers. Bookings on this code can then be clearly identified as coming from an online campaign (including PPC, social, affiliate, email or web in general).
Answered by Hotel Hero Blessy Townes, Vice President & Head of Digital at Discovery Hospitality:
Phone call conversion tracking can help you monitor ads that lead to phone calls. Conversions are tracked when calls last longer than a minimum length you set.
To set it up, you need a Google Ads account, an active call extension, a business in an eligible country where Google forwarding numbers are available, the placement of a conversion tag and code to replace your business phone number with a Google forwarding number. The accuracy of this method, however, can be challenged; call length alone cannot guarantee that calls actually converted into bookings.
Answered by Hotel Hero Rob Paterson, CEO at Best Western GB:
There are companies that sell dynamic phone numbers that allow offline tracking of calls generated by a certain activity. The conversion can be managed by a couple of ways:
1. Manually capture the source in the PMS;
2. Capture them automatically with wrap codes on the phone kit.
Should hotels measure success based on revenue booked or leads generated, or both?
Answered by Hotel Hero Dr. Jan Sammeck, Director E-Commerce at Deutsche Hospitality:
One should define the goal of a campaign (direct bookings or leads) before running the campaign. It is a common practice for the overall success of online marketing to be measured in direct booking revenue. Leads are just a means to get to that goal. Measuring the collection of leads without measuring their conversion into direct bookers is of little strategic use.
Answered by Hotel Hero Blessy Townes, Vice President & Head of Digital at Discovery Hospitality:
Success is measured based on the objectives you set. Needless to say, lead generation campaigns should look at the number of quality leads as their key performance indicator. At Discovery Hospitality, revenue and ROI are the ultimate measurements for direct booking campaigns.
It doesn’t mean we ignore the value of leads. Comparing leads versus conversion gives valuable insights into conversion rate, which can help us to optimize campaigns and generate higher revenue.
Do you feel that RevPAR should be replaced as the primary success indicator by another index?
Answered by Hotel Hero Dr. Jan Sammeck, Director E-Commerce at Deutsche Hospitality:
In my opinion - yes. At the very least, you should have a KPI that accounts for differences in margin that are caused by the different costs of distribution (commissions, payment costs, etc.).
RevPAR alone tells you little about the profitability or “success” of a hotel. Say you have two hotels, one with a RevPAR of 100 and one with a RevPAR of 90. Let’s assume that the first one relies heavily on OTAs, with a distribution share of 80% and a commission of, say, 20%. The rest is direct booking revenue with a COS of 5%. The hotel with a RevPAR of 90 has the inverse ratio, with 80% direct and 20% OTA – guess which one is more profitable?
What should every hotel's top considerations be when building their budgets for 2020?
Answered by Hotel Hero Blessy Townes, Vice President & Head of Digital at Discovery Hospitality:
From a corporate perspective, these are the things I consider:
- Which market segments will be grown, and by how much;
Where are we in that market segment's customer journey, and which touchpoints should be retained, added or improved;
Which campaigns should be scaled up based on revenue contribution, number of conversions and ROI;
Targets in terms of website traffic growth per acquisition channel, social media engagement, and digital media mileage;
Google Ads auction insights comparing our current impression share versus OTAs’;
Lost impression share;
Tech innovations and industry trends;
Employee development.
Answered by Hotel Hero Dr. Jan Sammeck, Director E-Commerce at Deutsche Hospitality:
The most important advice I could give is: do not restrict your online marketing spend. See the recent Triptease webinar on metasearch in which I covered this at length.
Answered by Hotel Hero Rob Paterson, CEO at Best Western GB:
The market is flat and margins are being squeezed, so spend is unlikely to be increased in many cases. Focus your spend on your top ROIs and stop spending where there is no clear return!
