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The changing face of distribution

Jürg Siegenthaler, SVP Sales & Marketing, Kempinski Hotels on Rate Parity and Integrity.

Electronic distribution is an ever- changing platform including constantly differing players, from small-sized online travel providers to global players. On these pages, we ask the point of view of a specialist in navigating the minefield, Jürg Siegenthaler of the Kempinski Hotels.

While today’s online travel portals employ Meta-Search engines, which make pricing all the more transparent for the consumer, this also changes life for the hotelier, as we are constantly striving for rate parity. We have had cases where we have been approached by customers who say, “Going via such and such a channel is cheaper”… This is something that is important to address. Where we want to be flexible is with the group business, and we have to establish base business in certain hotels. It is also important in the opening of new hotels, when we try to generate a certain layer of base business, which has to come in at a lower rate. You have to start off somewhere and this is the only way to do it. Besides that, it is essential to go for rate parity and ensure it works as well as possible.

Do you try any other models? For example, do you propose value-added services or put a price/rate guarantee on your website to guarantee that their price can’t be beaten elsewhere?

Yes, we give a rate guarantee, and if the customer proves that he can buy cheaper through another channel, we will not only refund the difference, but will often offer a complimentary night at the hotel, or give another form of compensation as appropriate.

It is essential to keep track of the constant changes and also be able to quickly adapt to new technologies. The Novell Teaming collaboration tool enables us to establish a knowledge base, which is shared amongst all properties. This tool facilitated the implementation of a "wisdom of the crowd" and ensures that industry best practices are adapted where possible.

What techniques do you use?

There is a system called EZyield, which enables hotels to check all competitors’ rates through e-distribution. They can see if their main competitors are full, for example, and can go for the business.

How can your member hotels benefit from kempinski’s international network of marketing?

Hotels are distributed via the central systems infrastructure of Kempinski Hotels, including distribution to all GDS, Pegasus, ADS and other connected channels. Additionally, we are constantly exploring new XML connectivity with selected Online Travel Agents, and give member hotels the opportunity to subscribe to these. Hotels using a revenue management system as well as a channel manager have the option to activate the decision to upload to Third Party Sites via the channel manager. As a result, manual user intervention is minimised and productivity is greatly increased, allowing revenue managers the time for competitor performance analysis, as well as focusing on long-term strategies.

How do you support your member hotels in terms of reservations and sales services? Is there any difference between the different regions you operate (Europe, Middle East, Asia, Africa)?

Kempinski’s Corporate Office in Geneva functions as first level support in terms of technical issues from the technological as well as the operational side, regarding central systems or distribution-related topics. Kempinski’s Global Sales Offices function as an extended arm of the Sales force on property, and drive additional business to the regions. I also have an e-commerce team, which is made up of four people. Two deal mainly with web operations, and two are mainly dealing with search engine optimisation. This includes mobile marketing projects and other promotions. We concentrate as much as we can on search engine marketing and optimisation, with the individual hotels, as well as with the brand.

How do you brand your website?

With the re-launch of our website in December 2009, we focused strongly on emotional imagery, and focused on SEO and SEM. As a result, we saw a sharp increase in search engine ranking, as well as booking conversion

How do you assess the online performance and your campaign’s success? 

We use web analytical tools in our websites that allow us to measure the frequency and the paths that our customers follow. Using these tools, we optimize and enhance the booking process in an ongoing process. For Kempinski’s web campaigns, we use different APIs to link them directly to our analytical tools, in order to calculate the ROI and use the different KPI as bounce rate, visit, and exit pages. This is used to calculate whether the campaign managed to create interest in our brand and our hotels.

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