Hotel Industry Blog

Wednesday, August 31, 2011

Fixing PPC budgets to previous revenue will fail - Part1

Bookassist's Ecommerce Project Manager Mark Dolan explains why fixing Pay Per Click (PPC) monthly budget as a percentage of the overall website revenue from the previous month is a mistake

Many hotels discuss a "lower risk" strategy of fixing their budget for the current month's PPC campaigns based on a percentage of the previous month's revenue. We don't consider this to be a sound strategy for online revenue growth. There are two reasons:

1. High performance in PPC will be restricted due to lack of budget
2. Low performing PPC is masked by overall growth and will be allowed continue to overspend.

To illustrate these cases I will use the following example:

Situation
Suppose a company had a revenue figure of €300,000 in July and currently has three salesmen: "direct", "organic" and "referrals". The MD hired a new salesman "PPC" in August who has promised great returns on investment (ROI) of greater than 10:1. There is a cost however of €100 per sales call. To minimise costs the MD set the salesman's PPC’s budget at 1% of overall monthly revenue, so his budget for August is €3,000 which works out at 30 sales calls.

Scenario 1
PPC salesman gets fantastic results, an ROI of 20:1 resulting in revenue of €60,000. Salesman PPC thinks he can double the number of sales calls for the next month and bring revenue generated by him up to €120,000. He will not get the opportunity. The other 3 salesmen didn't do as well so the overall revenue figure stayed at €300,000. The MD understood PPC performed very well but stayed with the formula of 1%. So PPC was restricted to just 30 sales calls for September instead of the 60 he had hoped for. This equates to a missed opportunity to have increased revenue by a further €60,000.
Result: High performing salesmen PPC is penalised by other poor performers and will be restricted due to lack of budget.

Scenario 2
PPC salesman was all promises and only brought in €6,000 from his 30 sales calls. The MD is obviously disappointed but has signed up for a contract so continues with PPC hoping the salesman improves. At the end of the month however the other 3 salesmen perform quite well so overall revenue grows to €350,000. This means that instead of reducing the budget for the PPC and taking time to fix the problem, he actually gets to increase the number of sales calls in the following month.
Result: Poor performing salesman PPC is masked by overall growth and will be allowed continue to overspend.

Solution
Set an advertising budget for your PPC (Pay Per Click) campaigns and vary those budgets depending on the PPC campaign performance to maximise revenue potential.

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Mark Dolan is Ecommerce Project Manager with Bookassist.
He manages the Traffic Builder department that manages online marketing for hotels.

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Monday, August 15, 2011

Using Browser Start Pages

Bookassist's John Braine discusses some better options for your browser start page to help you make the most of your browsing experience.

This is the first of hopefully many blog posts I'll be writing which aren't particularly related to hotels or hospitality but will still be useful for discovering general tech tips, productivity tips, and web design & development advice and techniques.




Having a good browser start page, for either your browser home page or a new tab, can bring you to your most frequently used web sites quickly, without typing into the address bar or browsing your favourites/bookmarks. I've toyed with a few start page options over the years but I've found a lot of them to be either pig ugly or not very useful.

In general, widget-based start pages like myYahoo, netvibes and iGoogle tend to be front-runners in the ugliness stakes. A page full of widgets can quickly turn into an an eyesore, and you get sick of starting with a page that isn't so easy on the eye. Unless you really want news, weather, and stocks every time you open your browser or a new tab (I sure don't) you tend to use these start pages to jump straight to your email, in which case they're not very useful either, and setting http://gmail.com as your homepage is a better option, which is what I often revert to doing.

Don't forget most browsers will give you the option of setting your browser start page and subsequent new tabs to different settings. So setting your homepage to gmail and subsequent tabs to a more useful start page, might be a good option.

One start page I did like for a while was http://myfav.es/ but it's just that bit too minimal, and lacking some functionality that other start pages offer. It started off as fav4.org, with only four favourites on the page, but now you can add lot more. Though you can only choose from their list of options, so it can be a bit limiting.

I tried symbaloo more recently but again I tired of the design very quickly, and Symbaloo is now on my ugly scrapheap along with the others. They really could do with a few themes to pick from rather then the one dated-looking design.

A very useful option that a lot of these Start pages miss out on is a dynamically generated set of your mostly used, or recently visited web pages. And that's where plug-ins tend to work a bit better. Which brings us to my current favourite choice for my start page - The Incredible Start page, a plug-in for Chrome. If you don't use Chrome, consider using it as I do; I use chrome strictly for personal use and Firefox for work. Many people assume they should only use one browser but using different browsers for different situations has many advantages.

The Incredible Start Page ticks all the boxes for me; it looks good, it creates an editable list of links from your favourites, it has a column of recently used sites, and another for external bookmarks like Delicious. And it loads very quickly in a new tab.



A similar plug-in available for Firefox is New Tab Jumpstart it has all the functionality, but unfortunately none of the eye candy.



So - it's useful to set for the home page / new tab, but only a bit better than what you get with a new tab in Internet Explorer, or Safari. And it just adds a bit more functionality to the popular Speed dial plug-in for Firefox.


Bonus: Minimal bookmarks

There's a bookmark hack I've been using for years now that I find quite useful to keep a big list of favourites on display. It works on all browsers and is very quick and easy. If your bookmarks/favourite toolbar is displayed, right-click one of your favourites and select properties or edit. Then completely delete the title/name. Most sites that you use regularly will have an easily recognizable icon.



So my recommendation is either use the Incredible Start Page with chrome, for your home page and new tabs, or in Firefox use my minimal bookmarks method above in combination with New Tab Jumpstart. And try to keep your personal browsing & favourites out of the way in a different browser.
John Braine

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Monday, August 1, 2011

Playing Catch-up - The Hotel Star System

Bookassist's Paul Dooley discusses hotel rating systems fit for the internet age

Irish hospitality operators, due in no small part to the celtic tiger decade, now preside over hotel stock that is of an exceptionally high standard and is rated as such. However service, delivery and the intangibles in many cases either exceed or fall below the hotels' designated star-rating. Far from being alone, worldwide the anomalies are even more stark. However Europe is playing a lead role in changing the status quo and seeking alternatives to the traditional approach to start rating.

The System Is Broken
The question of Hotel Star Ratings has always been a contentious subject among hoteliers and consumers alike. Too often the criticism from both parties relates to the fact that current star-ratings place undue emphasis on the physical product (buildings/facilities) and too little on subjective criteria related to ambience, charm and the service element.

Hotel star ratings are general quality indicators and should be regarded as just that - broad guidelines in measuring a hotel’s general quality, amenities, and customer satisfaction. Ratings are not meant to be perfectly precise critiques. All of the amenities and services that a property offers may not necessarily be reflected. Due to differing parameters and criteria from hotel to hotel, along with the incredibly wide range of customer preferences and individual expectations no system can guarantee exact accuracy in every element of all ratings.

A failure over time to fully appreciate the fact that consumer expectations have undergone a fundamental shift has led to the undermining of the current star rating system. A number of factors have contributed to this disconnect.

Consumers don’t understand how they are determined
The process behind hotels getting evaluated is not very clear and in most cases known only to hoteliers.

Many Ratings systems just tick boxes
Old habits die hard and hotel rating systems even now continue to put great emphasis on ticking off big checklists resulting in a star rating. What matters to today’s consumer is very different than what general factors ratings organizations assume will matter. The meaning of "standard" has changed. Arguably, free Wi-Fi has more appeal now than whether a property has two restaurants or a lift.

Ratings Systems are fragmented
Accreditation systems can come from a wide variety of sources, including the government, tourism bodies, commercial industry organizations and sometimes even the operators themselves. How and by whom the rating standard is applied varies widely as there is no global standard despite an attempt through the World Hotel Rating (WHR) project, which notably aims to set international classification standards and rating criteria along the lines of a world star-rating system.

For example, here is the state of play in some of the main world regions:
Asia - No Common Rating system.
Latin America - Government ratings in many cases are for life or hotels are self rating.
USA - No national rating standard
Europe - HOTREC as an umbrella organization in Europe has attempted to bring order in hotel rating to the continent through it’s European Hospitality Quality Scheme (EHQ) and has accredited the existing national inspection bodies for hotel rating. Under the patronage of HOTREC the hotels associations of several european countries have created the Hotelstars Union whose classification system has now been adopted by 10 European countries. The harmonized criteria set by the Hotelstars Union is based on customer research and combines traditional offline and modern online criteria. See http://www.hotelstars.eu

Disparate Specifics are used
While adherence by accreditation bodies to the general principle of written standards or established criteria regarding the property’s facilities and services is the norm, the specifics vary greatly.

Star ratings have been devalued
There is a recent worrying trend of hotel marketing departments trumpeting the fact that they are 6,7 star (or even one 10 star hotel in the Middle East) even before opening their doors. As no organization or formal body awards or recognizes any rating over five star deluxe such claims are meaningless and predominantly used for advertising purposes.

Service is not properly assessed
A lack of clarity in measuring the “service” provision by hotels has always been the failing of ratings systems. They usually assess service in a formal and out-of-date way. Fussy overly-attentive service standards have been exchanged in all types of hotels for informal, friendly, non-intrusive service. In most cases this change is being driven by a customer-centric focus from the hotel.

Guest reviews or a single inspection?
If hundreds of recent guest reviews tell you how a hotel is performing, isn’t that more convincing than the fact that an inspector ticks a checklist annually at best?

Social Media - The real game changer
Since the advent of social media, the way consumers make decisions has changed dramatically. Increasingly consumers are not accepting hotel marketers spin or officialdom (in the guise of hotel star ratings) at face value. Instead, they are turning to peers - other travelers and third party-retailers - for information and advice, particularly in relation to the “service” aspect of their hotel experience.

The void left by the undermining of hotel rating systems is increasingly being filled by the consumer. Hotels must now revisit how they are perceived and proactively manage their reputation through social media channels and review sites.

It’s not enough anymore to simply "Join the Conversation". Hotels should be tracking feedback, RoI and conversions with insight tools such as Facebook Insights, TripAdvisor’s Owners Center and Google Analytics among others. The next level up is a social media monitoring tool which collates and analyzes reviews across the web. TrustYou is one such analysis tool which Bookassist has integrated into its Reputation Alert suite of services. Used properly, a social media monitoring tool will help you turn guest feedback into a competitive advantage to be used to improve daily operations, organizational culture and best practice.

Conclusion
Where hotel star ratings certainly have value is in validating if a property maintains its quality standards or not over time. Whether this is aligned or otherwise with the new direct sources and weight of independent evaluation of services, facilities and most importantly user experience is the key.

The ultimate measure of a hotel’s quality may perhaps be assessed by posing the question "would you be willing to recommend it?". Are the current star rating systems best positioned to answer this or do guest review sites by their nature deliver a more compelling reply?

Star ratings may be outdated but that doesn’t mean that a better system could not be designed which incorporates the best of both worlds, merging objective criteria with user generated reviews. The industry body in Switzerland, Hotellerie Suisse, is already following this dual path. A radical overhaul announced only last month of the star classification system by the Organization of German Hotels & restaurants (DEHOGA) will now also include a mixture of expert opinion and customer reviews.

Earlier this year the UK’s Tourism’s minister stated that the UK Government is considering phasing out government-sanctioned star ratings of various lodging accommodation in favour of traveler-written reviews. The idea may be a little before its time but it's a clear sign of the change that’s afoot.

In today’s ever-changing competitive world, hotels need above all else to rapidly elevate the visibility (offline or online) of whatever credible ratings and reviews that do exist for their businesses, along with the established star-rating they have earned. The customer is no longer just assessing your rating, the customer is actively determining it.

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Paul Dooley is Director of Client Services for Bookassist in Ireland

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