A common topic for discussion among hotel marketing and revenue management teams is "how do we drive more direct business to the hotel website?" (to lower the cost of distribution and optimize the mix of online business), says Erik Munoz, Executive Director, Strategic Sales and Global Partnerships at SiteMinder.
TravelDailyNews: Mr. Munoz, how can TripConnect help today’s hotelier who is ‘trapped’ in the high-tech and mobile world?
Erik Munoz: Previously, TripConnect was only available to an exclusive and elite club of big-brand hotel chains (Hilton, Hyatt, Marriott, et al), but now TripAdvisor has opened up the solution to independent hotels via integration with the world’s leading hotel booking engines. TripAdvisor helps independent hoteliers identify who to connect with and how to connect (for optimal online distribution), while maintaining a profitable business. TripConnect enables independent properties to decrease their online distribution costs, by directing bookings through their own website while still maintaining a healthy mix of business from OTAs. Also through TripAdvisor, independent hoteliers are provided with other valuable resources; because of the 69 million downloads1 of TripAdvisor’s mobile apps, it becomes easy for independent hotels to solve the mobile booking AND the online booking challenge with one solution.
TDN: Why would he/she need such a tool?
E.M.: A common topic for discussion among hotel marketing and revenue management teams is “how do we drive more direct business to the hotel website?” (to lower the cost of distribution and optimize the mix of online business). Clearly, a hotel will never out-rank or out-bid the OTA giants (like Expedia or Priceline) for destination-based keywords because of the sheer size of OTA advertising budgets and their effective marketing machines; however, by using TripConnect, hotels have an opportunity to link their live rates and availability directly from TripAdvisor to their own website booking engine. What makes this digital marketing strategy particularly appealing is the demographics of the TripAdvisor website traffic – hundreds of millions of highly engaged, savvy, value-driven and quality-oriented shoppers who are already planning a trip (qualified leads!).
Before getting started, hoteliers should first evaluate the property’s TripAdvisor rating because this can have a big impact on whether or not TripConnect will prove to be a valuable tool. If your hotel is rated highly by the TripAdvisor community, then TripConnect is a no-brainer; however, if your hotel has consistent quality or service delivery issues (as rated by the TripAdvisor community), you probably won’t get as many bookings through TripConnect so you will be better to improve your rating AND THEN invest in TripConnect.
TDN: It is expensive? How do you measure the ROI (especially for a mid-sized hotel)?
E.M.: It is a simple ROI analysis based on the total cost-per-click (CPC) versus the total value of booking conversions from those clicks that land on the hotel website booking engine page. In order to determine the ROI, a hotel just needs to compare the CPC campaign cost with the average cost of their alternate distribution systems.
Let’s look at an example. If a hotel pays an average of 12% commission for ADS/IDS (Alternate Distribution Systems/Internet Distribution Systems) and has $100 average daily rate (ADR) with an average length of stay (LOS) of two nights, then the average cost from those channels is $24.00 per booking. If the CPC bid price is $1.50 then a hotel booking engine needs to covert “clicks-to-bookings” at a rate of 1 in 16 (6%) or better. In the majority of cases, a hotel with a very good TripAdvisor ranking and a low-cost booking engine solution (flat monthly fee and no transaction fees) has an extremely competitive advantage to profit from TripConnect.
In short, TripConnect is not expensive if you can drive conversion at a lower cost than your alternate booking sources.
TDN: Can you give us some examples of best practices in online distribution?
E.M.: Great question and I’m so glad you asked, because the first, foremost and most important element that relates to best practice in online distribution isn’t a digital strategy or a KPI metric or a fancy algorithm. Consistently, predictably and sustainably delivering an outstanding hospitality experience for your hotel guests is of utmost importance because your hotel’s online reputation can make the difference between a customer booking with you or with your competition. A one-point increase in your hotel reputation score (on TripAdvisor) can support a comparative increase in room rate of 11.2%2 , so the “art of hospitality” is a critical component for a successful and profitable hotel business.
1: http://www.tripadvisor.com/PressCenter-c4-Fact_Sheet.html
2: http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-16421.html
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
