Hotel Industry Blog

Monday, January 26, 2009

Should you discount your rates in a downturn?

By making obvious cutbacks you will only damage your reputation with the people who matter most
Customers' expectation of price may change in a downturn, but their expectations of service levels don't drop. Lowering rates may be one response to weakening occupancy but the lower income generated may result in lower service levels which in the longer term can damage your brand - according to a recent article on Caterer Search on the pros and cons of lowering rates: "by making obvious cutbacks you will only damage your reputation with the people who matter most".

While many strongly advocate reducing rates, there are other avenues to explore.

It's all about value, not price
In discussions with our hotels, Bookassist has advocated the necessity to look at the mix in what you have on offer, showing more value, rather than across-the-board discounting of price which can damage not only an individual hotel brand but an entire sector. Hotels should "look at added-value options to hold price, such as including breakfast free of charge, and focus on increasing the overall revenue they get from clients during their stay", according to Caterer Search. Bookassist's advanced add-ons facility, allowing for upsell directly at the time of booking, is an invaluable tool for this approach to value rather than just price.

For a perspective from the British Hotelier of the Year conference, see: http://www.caterersearch.com/

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Thursday, January 22, 2009

Get high search ranking through blended search results

Optimised web pages are far from the only way today of cruising to the top of the listings thanks to the increasing trend of blended search results

Google Universal Search, an approach also termed “blended search”, is about mixing sources in search results listings - for example giving you image search results and video search results in with traditional relevant website search results. Yahoo! and MSN do this too. To a large extent, the potential for optimising for such blended search has not been seized upon by the marketplace. Launched in May 2007, the second anniversary of Google’s Universal Search is fast approaching and in that short time some very interesting user patterns have emerged which should prompt online marketers to wake up to the very real opportunities being presented for getting your listings in front of customers.

Vertical searches

First, some background. Google and other such search engines are broad-based search engines which are not so good at zoning in on relevant information for more generic searches. Users regularly get a Google results page which states that millions of possible results exist for their query - for example a search today for the term “harmony” yielded the statement “Results 1 - 10 of about 72,200,000 for harmony [definition]”. Often, we have to think hard ourselves about how to narrow down the search to make Google perform more accurately for us.

To counter this problem for users, and to promote its own offerings more, Google continues to launch a number of so-called vertical or specialised searches to allow people confine their searches to certain criteria or avenues of interest. Examples of such vertical searches are Google Image Search, Google Blog Search, Google Local & Maps, Google Patent Search, Scholar etc. You can find these searches in the tabs bar at the top left of the Google home page. There are many other such searches which are proving increasingly useful and gaining in popularity for sophisticated targeted search (Google Accommodation as a vertical may not be that far off, who knows?). But with the exception of Images and Maps, none of these are reaching mainstream searching volumes.

Because many people still don’t use these vertical searches, Google is increasingly promoting results from these verticals in the standard Google results listings by folding in images, videos, books and of course local map results right into the standard search results. Web search is no longer simply “web” search.

An edited example of this is shown in Figure 1. A search for the term “galway” shows the standard results but it is highly mixed - label 1 in the figure shows Google Local & Maps results which might be relevant, placed right at the top. Natural listings of web results start at label 2 but are again interrupted by the insertion of YouTube relevant video results at label 3, before the results revert again to natural listings below the videos. You can do this search a number of times and find that the map or video results may not always appear so the approach from Google is not rigid.


Figure 1: (click image for larger view) Google’s approach to blended search results in its Universal Search interface, which is now the standard. Areas 1, 2 and 3 here show Google Local & Maps, natural listings and YouTube results respectively.


Often, for more specific searches relating to businesses, the Google Local & Maps area will concentrate more solidly on Google Local and show a series of relevant businesses related to your search, such as the Google Local listing shown in Figure 2 for the search term “Berlin Hotels”.


Figure 2: (click image for larger view) Google Local shows relevant businesses related to a search term on an interactive map embedded in the standard search results listings, in this case Berlin Hotels.


How people interact with search results

Probably because images, maps, and videos are more visually striking on a results listing than just plain old natural listings, their influence is far higher in terms of click through rate. Bookassist recognised this early on and has long advocated the use of such media for hotels to promote their business more effectively online and has been at the forefront of Web2.0 implementation in the accommodation sector, not just in Ireland where it is the market leader, but in all its marketplaces abroad.

Research in 2008 by iProspect(1) attempted to quantify what users are doing with these blended search results on Google, Yahoo! and MSN. A diverse user base of just over 2400 was surveyed, which in an ideal world gives an error margin of about 2% and, to be fair to iProspect, their methodology for balancing the backgrounds of the respondents brings them to a conclusion of a slightly wider error margin of about 3%. Some very interesting trends emerged. Summarising the results for users surveyed:

* 68% of users clicked a result on the first page of results, and 92% of users clicked a result within the first three pages of results.
* 36% of users clicked on a “news” result within the blended search results page, and 31% of users clicked on an “image” result within the blended search results page, while only 17% and 26% respectively click a “news” or “image” result after using the news and image vertical searches directly.
* 17% of search engine users surveyed click on a “video” results on a blended search results page, while only 10% click on a “video” result after conducting a video-specific search on the Video tab.

Basically, the research indicated that a user is around twice as likely to click on a specialised search result in a blended listing than on that same results in the vertical search results themselves.

Web 2.0 shines

There are two important lessons here. Firstly, we can get more clicks with good content in the images, news, maps, video, blogs and other “verticals”. But secondly, and more importantly, is that while an enormous amount of blood, sweat and tears is spent by search engine experts in optimising web pages for natural listings - getting keywords right, keyword densities, meta tags, image alt tags, incoming links etc. - the criteria for getting local business listings, videos, images, or other vertical search results into the first page of search results are far more lax at the moment.

Put simply, because there are less videos about “hotels in Berlin” than there are webpages, it is relatively more easy to get your services towards the top of a relevant search by using well-tagged videos, images, blogs etc than by optimising web pages. This is a great opportunity for Web 2.0 content to shine.

A recent Forrester research paper(2) highlighted this current advantage: “On the keywords for which Google offers video results, we found an average of 16,000 videos vying to appear on results pages containing an average of 1.5 video results -- giving each video about an 11,000-to-1 chance of making it onto the first page of results. By comparison, there were an average of 4.7 million text pages competing for a place on results pages with an average of just 9.4 text results -- giving each text page about a 500,000-to-1 chance of appearing on the first page of results.” This statement indicates that an optimised video could be about 45 times more likely to appear in a search result for a particular keyphrase than an optimised webpage. While these figures are again not strictly scientific and should be treated with caution, any user who has seen blended results would see the clear advantage to be had by having additional media available to reflect your business. This advantage clearly won’t last forever.

What to do

Here are some basics that will help you capitalise on these opportunities. Start by registering as a user with Google, then:

* Go to Google Local (local.google.com), and use "My Maps > Create new map" to get your business listed and positioned on the map so that it appears for search results on Google Local & Maps. Use good keywords and descriptions in the business description as you would with regular search engine optimisation.
* Get good quality videos, preferably entertaining and not just brochure-ware, and host your videos on YouTube (youtube.com). Give them keyword optimised titles, tags and descriptions, then use YouTube’s embed feature to embed the videos in your website as a video gallery.
* Get an image gallery of high quality pictures onto Google’s Picasa photo service (picasa.google.com) and embed the image gallery into your website, again with each image having keyword-driven titles, descriptions and tags.
* Go to blogger (blogger.com) and set up a blog and begin to write content on a daily or weekly basis ensuring you always have something relevant to say about your business. You can use basic blogger templates to link your blog to your website and ensure you also link your website to your blog.

Blogger in particular is so simple and effective to use. It is free and easy to set up and, in a hotel's case for example, can be used for advertising special events and other events that change on an ongoing basis rather than the traditional approach of just putting a paragraph on the hotel's events page or special offers page every once and a while. Good URLs are also easier to get with Blogger, for example hotels could set up a URL with prime keywords such as patricksdayindublin.blogspot.com or easteringalway.blogspot.com. Hotels could then create relevant content about such events, but in parallel push their own packages and websites as examples. For annual events, the blogs can remain up all the time, and they should generate more traffic year after year. Good URLs can be worth their weight in gold, figuratively speaking, if used properly.

The key here with all these opportunities is not just to get other vertical searches populated with good information about your business, but to also use these to pull your regular website up through embedding and linking with quality content.

You win on both fronts with your regular website and your new Web 2.0 content.

References
(1) iProspect
(http://www.iprospect.com/premiumPDFs/
researchstudy_apr2008_blendedsearchresults.pdf)
(2) Forrester
(http://blogs.forrester.com/marketing/
2009/01/the-easiest-way.html)

Authors
Dr Des O'Mahony is co-founder & Managing Director of Bookassist, Ciaran Rowe is Senior Search Specialist at Bookassist's Dublin office.

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Booking buttons from the channels - proof of the power of direct booking

The big name third party accommodation channels have served an important role in the online travel arena. In the years when search engines were only beginning (Google started in late '98) and hotels did not have the knowledge to market themselves properly online, third party channels were the very necessary middle-man between the online booker and the accommodation provider, facilitating indirect booking. Their generally high commission charges were justified by the delivery of business that otherwise was lost to the hotel.

As direct search moved to dominance, as online bookers became more savvy and in particular as hotels embrace online marketing, the need for customers to use third parties is rapidly diminishing and the opportunity for direct booking between customer to hotel is rapidly rising. Not only can this direct booking model providing better value for the online customer, it is also helping hotels strongly reduce their commission charges while allowing them build their own brand allegiance online to capture repeat business.

Bookassist was the first to push this direct booking model for hotels, since its foundation in 1999, constantly highlighting its growth and its importance as the key booking strategy for hotels. An average of 50% of hotel business is now generated online, and the more of this that comes direct, the better for the hotel.

In this changing environment, third party channels are beginning to recognise this shift in consumer habits which will begin to erode their indirect booking income stream. In recent months, two large third party accommodation channel sites have launched booking services of sorts to allow hotels capture bookings directly on their own websites, and others will surely follow. If anything proves the rising dominance of direct bookings on hotel websites versus indirect bookings on third party channels, it is the launch of these services by third parties. Hotels should recognise the reality in this move.

Typically, the third party offering has taken the form of a button or simple form which the hotel can embed on its website. The customer clicks to book and is taken back to the third party channel to complete the booking.

This is bad news for hotels, and here's why.

A booking button, form or link-off service to a third party channel is not a direct booking facility. It merely cannibalises the business that has already arrived directly at the hotel and which should be serviced by the hotel. The facility seriously devalues the service presented to the customer in the hotel's name, leaving the customer with a "passed over" feeling that the hotel would rather not deal with them. Usually, there is no way to continue navigating throughout the hotel website or returning to it with a single click. Customers can be re-directed to third party channel website where offers from other providers are displayed. Hotels will likely find it extremely difficult to request upgrades or new features and the technology will be limited, since this does not represent core business for the third party channel.

A booking button, form or link-off service to a third party channel is not a direct booking strategy. Direct booking is about more than a booking facility, it should be a key strategy to drive an increasing percentage of your online business to the hotel website and as such the booking facility chosen is only a small part of that. What a third party channel cannot and (for obvious reasons) will not do is aid the hotel in building a direct online marketing strategy and in reducing their reliance on high commission third party fees. This is where the long term damage can occur for hotels that do not adopt their own direct booking strategies.

We view this move by third party channels as a strategic move to increase control on the hotels as those hotels become more and more aware of the importance of direct distribution strategies and online marketing, and to placate hotels considering a direct strategy into thinking that their third party channel can provide one.

The fact is that while third parties can and do deliver valuable business to hotels, they are none the less in competition with the hotel website online. Using third party "direct" booking facilities can mean allowing those channels to have full information on the hotel's inventory, pricing strategies and yield strategies, as well as full access to the hotels customer's database. Such information could allow a third party channel to assess everything happening on a hotel website in comparison with a hotel's direct competitors.

Our advice for hotels is that they can still work with third parties on channel distribution, but when it comes to their direct distribution they should partner with a true technology company that understands their challenges and requirements, a company that shares the same goals as the hotels themselves: to build the hotel's own brand, to handle the customer online with the highest level of service and security, to make hotel websites the primary distribution channel with the lowest commission rate possible and the highest margin for the hotel.

Authors
Dr Des O'Mahony is co-founder & Managing Director of Bookassist, Yahya Fetchati is Head of Business and Operations at Bookassist.

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Tuesday, January 20, 2009

Irish Data Protection Regulations combat misuse of email addresses in particular for marketing use - opt-ins essential

Bookassist deals with hundreds of bookings daily where online customers must enter details to complete a booking. Following best PCI DSS standards, data protection is paramount to Bookassist operations.

But additionally to help hotels police their own data, the booking engine requires an opt-in for customers who are giving their personal details, where the customer must specifically consent to their information being used. Bookassist reports this choice to the hotel so that the hotel is fully aware of what they can and cannot do with the customer's contact details in the future.



To highlight the importance of this to all industries who handle personal data, the Data Protection Commissioner recently issued a press release on foot of new legislation introduced in December which significantly increases penalties for misuse of personal data. The full press release is reproduced below.


PRESS RELEASE

22 December, 2008

Data Protection Commissioner welcomes new Regulations on unsolicited communications


The Data Protection Commissioner, Billy Hawkes, today welcomed the introduction of new Regulations by the Minister for Communications, Energy and Natural Resources, Mr. Eamon Ryan T.D., to deal with unsolicited communications in the area of electronic communications networks and services. Statutory Instrument No. 526 of 2008 which has now come into effect amends Statutory Instrument No. 535 of 2003 which has been in force since November 2003. Amongst the changes in the new Statutory Instrument are:

An increase from €3,000 to €5,000 in the penalty for a summary offence in respect of a contravention of the regulation relating to unsolicited communications.
The creation of an indictable offence for a contravention of the regulation relating to unsolicited communications. Where the person tried is a body corporate the fine imposed may not exceed €250,000 or, if 10% of the turnover of the person is greater than that amount, an amount equal to that percentage. Where the person tried is a natural person, the fine imposed may not exceed €50,000.
Provision for the prosecution of an officer of a body corporate for an offence under the regulations whether or not the body corporate itself has been proceeded against or been convicted of the offence committed by the body.
In relation to offences concerning the contravention of the regulation relating to unsolicited communications if, in court proceedings concerning such offences, the question of whether or not a subscriber consented to receiving an unsolicited communication is in issue, the onus of establishing that the subscriber consented will lie on the defendant.
Speaking today, Billy Hawkes said: “The signing of these Regulations by the Minister is an important and significant step in the fight against unsolicited communications for marketing purposes. I welcome the increase in penalties which have come into effect I am confident that the strengthening of the law in this area will help me in my task to enforce the regulations concerning unsolicited communications. I want to take this opportunity to remind persons engaged in direct marketing activities that my Office continues to pay close attention to the whole area of unsolicited communications by telephone, fax, email and text message. The new regulations, together with the serving of a considerable volume of summonses by my Office in the past fifteen months, serve to send a strong message to all involved in direct marketing about the necessity of compliance with the law.”

Concluding, the Commissioner said: “I want, in particular, to send a message to all involved in business to familiarise themselves with the law which applies to unsolicited communications for direct marketing purposes. Increasingly, in this period of economic downturn, my Office is receiving complaints about businesses making unsolicited contact with their past customers for marketing purposes. In many cases, such contact is unlawful and, if carried out by telephone, text message or email it may be a criminal offence. Ignorance of the law is not an acceptable excuse for non-compliance and I will have no hesitation in applying the full force of the new regulations to offenders.”


Ends.

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