A WEB BOOKING WORKBOOK: HOW TO GET YOUR SHARE

Hotel & Restaurant Technology Update, Fall 1999 By Judith P. Burns and John D. Burns

Magazines and newspapers are directing attention to the rising number of Internet travel bookings. It seems that everywhere you turn there is another article reporting the strength of the Internet as a marketing channel and reservation source for hotels. While such stories commands attention, they are little consolation to a hotel general manager whose attempts to capitalize on this growing market segment have not yet brought Net success. This article describes options available to hotel general managers who want to, and need to, reap the promised benefits and cost savings of the Internet.

Before offering specific advice, a quick look at the Internet’s growing booking volumes reminds us that the Internet is an important, rapidly growing marketplace that has to be addressed by all hoteliers and hotel marketers.

Philip Wolfe of PhoCusWright reported this spring that Internet hotel sales will reach $1.2 billion in 1999 and almost $4.0 billion by 2001. Those findings are in line with Starwood Hotels and Resorts’ report of their Internet reservations growth from $1 million in 1996 to a projected $100 million for 1999. Bass Hotels and Resorts reported at the beginning of July that their site generated $1 million in revenue during a single week in April. Similarly, Marriott reports a 200% growth in online sales so far in 1999.

These are all impressive statistics. They might, however, lead one to conclude that the Internet is only a sales channel for large chains. This is far from the case. The US-based Professional Association of Innkeepers International reports that 22 percent of its members’ reservations are coming through the Internet. Some inns are doing even better; the 1823 Historic Rose Hill Inn, a six-room inn near Lexington, Kentucky, is receiving 75 percent of its reservations through its Web site. According to Jeff Thomas, vice president of sales and marketing for Open World (a Web site development and implementation company), figures like that are becoming increasingly common for boutique properties throughout North America.

To understand how to maximize your benefit from this growing sales channel, it is useful to know that hotel companies are receiving reservations through five different Internet routes:

• GDS-powered Web sites (such as Expedia.com or Travelocity.com) that use the hotel data and booking capability of the Global Distribution Systems.Travelocity.com, for example, uses the Sabre GDS while Expedia.com is linked to Worldspan. Hotels listed in these GDSs are (generally) automatically listed in the affiliated Web sites. Hotels that are not part of a chain or a representation company — and are not, therefore, listed in the GDSs — will find it difficult and expensive to offer themselves for sale through these sites. Similarly, a hotel chain’s decision not to participate in one or more GDS will mean that the hotels in that group will not be bookable on Web sites that are GDS-powered. For example, not being listed in Galileo means a hotel chain would have no presence in the approximately 100 Web sites that use Galileo.

  Reservations received on GDS-powered sites are forwarded to the hotel using the same delivery mechanism as reservations made in the Global Distribution Systems.

• Web sites that depend on hotel chain data in either Central Reservation Systems or other chain databases. Examples are Hilton.com or Marriott.com.Hilton.com, Marriott.com and similar chain sites provide on-line bookability through real-time interfaces between their Web sites and their central data bases or reservation systems. Individual web sites of chain hotels can often offer on-line bookability by using a hyperlink to the reservation page of their chain’s site.

  Reservations from these sites are routed to individual properties in the same way as reservations made through the chain’s call center.

• Web sites that use their own consolidated databases. Examples are WorldRes.com, inntopia.com, or TravelWeb.com.Since many hotels, especially small or independent properties, perceive that they cannot participate in Internet because they do not have GDS connectivity (or use a GDS switch company), several companies have developed consolidated database and booking engine service packages which they offer to these hotels. The best known example is WorldRes.com.

  Hotels and inns using this Internet participation approach receive their reservations (and update availability and rates) through PCs and Internet connections. While some software is available to automate the entry of these reservations into Property Management Systems, hotels or inns often manually enter Internet reservations into their reservation system or PMS.

  One example mentioned above, TravelWeb.com, is a hybrid of this approach and the previous type, combining as it does access to hotel company central reservation systems and use of its own internal database to confirm reservations made at its site.

• The new, buyer-driven distribution model (exemplified by priceline.com, Expedia’s Hotel Price Matcher, and LastMinuteTravel.com’s My Travel Minder™)This buyer-driven distribution model represents a dramatically new approach to booking travel – one where the buyer indicates what they wish to pay and the seller responds with an offer.

  Individuals using priceline.com, for example, propose the price they are willing to pay for “a room”. Priceline.com compares these requests with a database of participating hotels’ rooms and, if a match is made, confirms the reservation. Expedia’s Hotel Price Matcher uses a similar approach.

  LastMinuteTravel.com My Travel Minder™ allows a user to name a particular date, location and price for future travel. When a hotel lists a “time sensitive offer” (a room available on a specific date for a specific rate), the user is notified that a hotel meets their requirements.

• Web sites operated by individual hotels.These may or may not have on-line booking engines and may or may not connect to Property Management Systems. Single property web sites operated by chain-affiliated hotels can often offer on-line bookability on their sites by using a hyperlink to the reservation page of their chain’s site.

  Many hotels, including chain- or franchise-affiliated hotels, have developed their own Web sites offering information only, e-mail reservations or on-line bookability.

Whatever form the site takes, an underlying theme on four of the five described Web routes has been the presence of group affiliation. For hoteliers, in North America at least, their chain’s or representation company’s Web site has been an effective way of gaining entry onto the Web. While hotels pay reservation fees for these bookings, they are able to take advantage of a shared development effort that delivers bigger, faster, and more elaborate sites complete with on-line booking engines and plentiful on-line content.

Such an affiliation also provides the very important benefit of “brand”. Few will dispute the value of a brand – Hilton, Holiday, or Hampton; Expedia™, Travelocity, or Preview Travel; priceline.com or LastMinuteTravel.com – as an indicator of quality and value. On the Internet brand, arguably, buys yet another benefit as well: it instills sufficient confidence in the traveler to overcome hesitation about shopping on-line, about using their credit cards or providing personal information on line.

Given the prominent role of brand names in the lodging industry, it might appear that hotels without such an identifier might not be able to achieve maximum benefit from the Internet. This does not appear to be the case. The importance of branding is balanced, to an extent by the likelihood of travelers to consider destination before they think of accommodation brand, which leads us to the critical category of Web site that uses the destination as a primary identifier.

Marcy Nisenholtz of inntopia.com feels that for independent properties the destination becomes as important as branding. She says, “without brand identity, destination marketing is a must”. Although this is important to non-affiliated, independent properties, a destination-focused marketing strategy (to complement the brand-oriented marketing strategy of a chain site) has strong relevance for chain-affiliated properties as well.

To achieve effective destination-style marketing, we need to acknowledge that travelers, particularly leisure travelers, plan trips around either a destination or an activity. For example, people plan a vacation to Colorado where they can golf. This will not come as a surprise to anyone who has ever picked up a guidebook rather than a hotel chain directory when making plans for an upcoming vacation.

The importance of destination is not lost on the major Internet travel sites. Preview Travel, for example, recently added a destination search feature that helps users gather information about a city including weather, car rental, and, of course, hotels.

How can a hotel practice destination marketing on the Web? First, by acknowledging that some hotel selections are destination-driven and then leveraging the hotel’s location by using destination sites (such as convention bureau, chamber of commerce, city or town, newspaper sites), activity sites (such as sports, entertainment, etc.) together with search engines, as will be explained later. How can you implement a destination marketing strategy? Read on.

FIRST THINGS FIRST

If you are a hotel manager just preparing embarked on an “Internet adventure”, you will receive abundant advice on what needs to be done. One easy item that many forget, according to Don Smith, Vice President of Marketing for WorldRes.com, is obtaining a Web address (referred to as a URL). This step is sometimes postponed while waiting for the right moment, or the right Web developer, or the right timing for the launch of a site. The result is can be that all desirable URLs are unavailable and one must reluctantly accept a Web address that is less appropriate for the hotel and its location.

When considering the words or phrase you wish to use as your Web address, remember to keep a destination focus. For example, “www.ourtownhotel.com” or “www.quaintinn-ourcity.com” can help identify your property with your destination. A Web site designer or your Web site hosting company can assist in finding and registering the right URL for your hotel.

Open World’s Jeff Thomas thinks that the next step should be to analyze your competitors’ Web sites. He suggests that hoteliers, “look at what their competition are offering.” Do they have on-line reservations? Do they offer wedding planning? Do they promote anything special? How much destination-related information do they offer? Thomas suggests making a simple grid that lists all the features each competitor is offering. This exercise, Thomas says, equips the hotel Web site planner with the knowledge of what features must be included in their site if it is to be competitive in the destination market.

Linda Beltran of California-based Woodside Hotels & Resorts recommends talking to hotel staff. “We’re using the Internet,” she says, “so let’s apply our personal practice to business practice.” She believes that talking to hotel staff can help a general manager to understand what people are using the Internet for — whether it is to buy books, to book travel, or to search for information. These discussions can help identify the features that shoppers seek on travel-oriented Web sites. Further, they can also help identify the key destination-driven information that should appear on for the site. Your concierge or bellman, for example, may have a wealth of knowledge that can be included in the site.

When the time comes to build a site, use a destination focus. Talk to fellow hoteliers in your city or town, review other sites in your location and find a local site design that appeals to you. Engaging a local Web site developer who has worked with destination sites or other hoteliers may give you a savvier Web designer than having a “bigger name” from outside the area. A local designer may be more responsive to your specific destination-driven needs.

If you are a member of a chain, representation organization, or an association, find out if they have an agreement with a Web developer to build sites for members of your group or if it has an arrangement with a Web site provider to host information about your hotel.

If you prefer not to have a site of your own, several organizations, such as WorldRes.com and inntopia.com, can provide an Internet presence including real-time reservation capabilities and complete property information listings with low or no start-up fees. These sites generally make their money by charging hotels for each reservation (usually 5-10%).

SEARCH ENGINES AND DESTINATION MARKETING

Another essential factor for hotels in developing or enhancing their web site is understanding the role of search engines in destination marketing. According to Open World’s research, 60 percent of all Internet site traffic arrives from a search engine rather than to the site directly. Their research also indicates that most Internet users looking for accommodation will search for hotels using the combination of the words “hotel” and the destination’s name. Effective Internet marketing must, therefore, start with skillful use of the data that search engines use to locate sites and to provide listings to their users. Two key factors that will maximize your chances of being found by search engines and, as a consequence, your potential client, are appropriate “keywords” and using the name of your destination throughout your site’s many content pages.

Keywords are words that search engines consider to be primary descriptors of a Web site’s topic. They are often names of places, products or services. Keywords can be thought of as an index to site content, helping the search engine determine how to classify sites. When considering keywords for a hotel site, the name of the city, town, or area name should always be included as well as attractions, events, or activities that appeal to the leisure or the business traveler. For example, if you are close to a theatre that features opera you would include keywords such as “opera”, “XYZ Theatre”, or “Madame Butterfly”.

Since some search engines use not only keywords for their searches but also review individual words on the pages of the site, each page of content you make available should use specific references to the destination, its attractions, activities, events, etc. Rather than saying, “We’re close to everything!” use wording such as “The XYZ Theatre, offering performances of Puccini’s Madame Butterfly, is just around the corner.”

If you are unsure how this search engine optimization can be achieved, firms are available that will, for a fee, maximize your likelihood of being found by the search engines. The 1823 Historic Rose Hill Inn bought professional assistance and they believe it has more than paid off for them.

Another key tactic in your destination-oriented marketing is to establish hyperlinks and to list your property on as many destination, attraction, or activity sites as feasible. These sites come in many shapes and sizes. For example, searching for Toledo, Ohio on the Excite search engine results in a listing of sites such as The City of Toledo, Toledo Convention & Visitors Bureau, Toledo Chamber of Commerce, ToledoWeb, TheMetroNet, toledoentertainment.com and Welcome to Toledo. An individual planning a visit to the Toledo area could use these listings to search for lodging in the area.

Begin the process of finding where you should be listed by entering the name of your destination in a search engine, then reviewing the sites that are listed. Identify those on which you wish to be listed, then contact the operators of each site. If you belong to the Chamber of Commerce, the Convention and Visitors Bureau, or an area hotel association, you need to have a presence on those sites.

Similarly, many regional tourism or hotel associations have developed Web sites that refer individuals to specific properties; for example, the Hotel Association of New York or the British Tourist Authority. (WorldRes, for example, has exclusive agreements with 26 destination-marketing organizations including the Chicago Convention & Tourism Bureau, the Colorado Hotel & Lodging Association and the Hawaii Hotel Association.) Listings or hyperlinks on these sites can generate reservations for properties.

Your city or town may have activities in the area that will draw visitors to your destination. Locate Web sites devoted to those activities and determine if and how you want to be involved.

There are additional ways in which destination-targeted marketing may be effective beyond the leisure travel market. For example, local real estate brokers may have sites targeted to people relocating to the area. Those folks will need a hotel room while they look for their new home. Hyperlinks from those sites to your hotel site can generate additional on-line bookings.

USING INFORMATION FOR MARKETING

Local information is another key component in destination marketing. Inntopia’s Nisenholtz advises hotels to have detailed destination-related information on the site including event lists, weather, and local activities. Woodside Hotel’s Linda Beltran echoes these sentiments saying their sites have become “on-line concierges” particularly suited to a clientele that visits their Napa Valley, Monterey and San Francisco area hotels from around the world.

Some hotels strive to create a “destination personality” on their site, to incorporate the flavor of their locale. One way of doing this may be to highlight a hotel staff member who can provide a personal touch. For example, does your engineer or doorman love to ski? Have them offer advice to potential guests on the best places in the area to ski and other skiing tips.

Interestingly, many people have predicted the demise of hotel brochures with the growth of the Internet. That appears not to be happening as many hoteliers report they were receiving as many brochure requests after the installation of their site as they were before. This is not necessarily bad but it may suggest that potential guests who call to request a brochure should be encouraged to recheck the Web site.

OFFERING ROOMS ON-LINE

If the capability of reserving rooms on-line is determined to be important from a competitive standpoint, there are many options available. If you are not listed in the GDSs or do not want to rely on your chain’s reservation pages, other on-line booking software is available. There are dozens of companies offering booking engines, some on a purchase basis, other for a “per booking” processing fee.

As an example, CyberDesigns offers a Internet booking engine that is targeted at properties with less than 80 rooms. It delivers reservations seamlessly to the PMS or reservations may be manually reviewed prior to entry. One of the advantages of this software, according to CyberDesign’s Donald Poirier, is that allows a hotel to use the Internet, to book down to the last available room if it wishes to.

Likewise MunsonWare’s GuestTracker™ and inntopia.com’s innSynch™ or Webervationssm (a net-based availability engine) facilitate management of reservation booking on the Internet as do PMS companies who are developing interfaces that will link to on-line booking engines.

Many hotels continue to worry about problems that seemingly prevent them from becoming involved with the Internet. Overbooking is frequently raised as a potential problem and this was a concern for the 1823 Historic Rose Hill Inn. Innkeeper Sharon Amberg reports, however, that it has never happened in the two years the site has been in operation. Likewise, the potential problem of high cancellation rates or fictitious reservations has not arisen for Amberg or other hoteliers interviewed.

DESTINATION MARKETING AND “ONWARD” DISTRIBUTION

It may come as a surprise to some hoteliers that the information they have placed in their CRS and, as a consequence, in the GDSs, is seen on Internet distribution sites such as Expedia™ (powered by the Worldspan GDS), Travelocity (powered by SABRE) or others. Hoteliers who use central reservation systems should be aware of this onward distribution and be certain that their CRS databases are destination marketing friendly – using the available opportunities to list destination oriented information as thoroughly as possible.

Similarly, information that appears on one Web site may in turn be delivered to others. As an example, WorldRes.com-listed hotels are available for sale at more than a thousand partner sites. Remember this wide distribution, to a global audience, and make the material offered on the site useful for international travelers.

Understanding where your hotel is available for sale might be difficult but having a large number of outlets, particularly for Internet distribution, is generally considered to be a good thing. Because of the difficulty of finding any site on the Web, maximizing your presence through onward distribution to other sites is important. The more places your hotel details are located, the more likely it will be that someone will find you.

COMMUNICATION AND RELATIONSHIP BUILDING

Linda Beltran of Woodside Hotels & Resorts receives e-mails every day from previous guests offering comments, both good and bad, about their stay. This e-mail can present both challenges and opportunities.

Beltran recognizes that one of the challenges is answering it. Hotels, she strongly suggests, need to have a system in place for distributing e-mails to appropriate staff and ensuring a prompt response. Appropriate follow-up is essential to turning even negative hotel stays into positive results.

Many suggest that e-mail can be highly effective means for developing relationships – for perpetuating relationships with past customers, who may be some of your most powerful promoters of future business, or for developing relationship with future travelers. To involve current customers, hotels might ask for an e-mail address at check-in and send a “thank you” after a guest’s stay that can also provide the opportunity for the guest to indicate interest in future packages or special promotions. While most individuals do not like to receive unsolicited e-mail, people do respond when their permission has been requested in advance. Use that permission to promote future stays or packages to former guests.

For future guests, ask visitors to your Web site if they would like to be advised of upcoming special events, packages, or other promotions. Ask them for advice on what additional information they would like to receive about a possible stay at your property and provide them with those details through e-mail, brochures or other mailers.

Technology is available to manage e-mail mailing lists and customer databases, but for a small property a simple, manual tickler system, some file folders, and follow-up may be all that is required to develop these communications links to past and future customers.

CONCLUSIONS

The Internet has the capabilities to offer every hotel (large or small, independent or chain-affiliated) an equal opportunity to communicate their special appeal – their facilities, character and style – in what can be a low cost manner. They can all achieve worldwide distribution without the need for a world-class promotion budget. Remember these points when developing your strategies to take advantage of this opportunity:

• • Understand where your hotel is already visible on the Web (such as through chain sites)
  • Incorporate the destination theme in your marketing efforts
  • Maximize the likelihood of search engines finding your site through keyword and content management
  • Develop a “destination personality” for your site
  • Evaluate the opportunity to make rooms available on-line
  • Manage all the locations where your hotel’s information is displayed
  • Use the Internet to build relationships with your customers
  • Try new ideas; do something even if a small step

SIDEBAR STORY

It seems that the latest rage in Internet travel is the auction or travel bid site. From Las Vegas casinos to economy chains, everyone seems to be trying these new forms of travel distribution on the Net. Priceline.com and travelscape.com are frequently mentioned but there are numerous other sites including bid4travel.com, goingoinggone.com, luxurylink.com, and travelbids.com. Hotels have used auction sites to try to sell both available rooms that cannot be sold elsewhere or to promote packages organized around special events or activities.

Marcy Nisenholtz of inntopia.com recommends that hotels should try online auctions to test whether or not they are an effective tool for promoting a package or a single night “distressed inventory”. Auctions permit hotels to designate a minimum bid (a reserve) that participants must meet or exceed. This feature allows hotels to test the auction process without fear of selling their available rooms for $10, for example.

In addition to trying to determine how to effectively use auctions hotel managers are increasingly facing the challenge of how to match available inventory to someone who is interested in buying. Some hoteliers have found, in offering rooms through an auction, that no one has been interested in buying or that the bids have been surprisingly low. While there are numerous sites offering “travel bargains,” there are still also many hotels operating at less than 100 percent occupancy.

LastMinuteTravel.com is a recent entrant into the travel bargain arena.. Since their launch in 1997, they have focused on providing an opportunity for hotels (and other travel providers) to sell what company CEO David Miranda terms “time sensitive offers”. “We’re the first stop at the last minute,” Miranda says. The site allows hotels, after a brief registration process, to try the program for 30 days. If the hotel decides to continue using the site after that period they pay on a per use basis. For example, Miranda suggests that a hotel placing one offer a week on the site would pay approximately $17 for the listing.

LastMinuteTravel.com does not depend on any GDS, switch, or CRS connectivity but rather offers are entered into an independent database. Through the use of simple fill-in-the-blanks forms, packages or individual nights can be entry into the database. For example, the hotel could offer a room on Tuesday for this coming Friday and limit the display of availability for 6 p.m. Wednesday through 6 p.m. Thursday. Listings may simply provide a toll-free number to call for reservations or link to a hotel web site for e-mail or on-line reservations. This straightforward sign-up system makes it feasible for use by a wide range of hotels from small bed and breakfast to large chain hotels.

Yet, LastMinuteTravel.com faced the same challenge as other sites in trying to attract individuals looking for a travel bargain – matching the room to someone that wanted it. In September, LastMinuteTravel.com launched its My Travel Minder™ product. This product allows individual travelers who sign up to receive targeted notices about travel offers. For example, a traveler can indicate that they are interested in receiving notice of hotel rooms in Atlanta for November 15 at a $100 rate. When a hotel posts an offer to the LastMinuteTravel.com site, the My Travel Minder™ user is notified that there is a posting that meets their requirements. A hyperlink in the e-mail notice takes the user to the LastMinuteTravel.com site where instructions are provided on how to book the accommodation they need. My Travel Minder™ is free for one year for an initial membership.

Miranda, a former vice president of brand marketing for Holiday Inns, says their role is one of “travelevangelism,” bringing together travel providers with willing buyers. He states, “we can effectively link the hotel that has rooms available at the last minute, for whatever reason, to a buyer and that benefits the seller without any last minute penalties for the buyer.”