Best Practices for Maximizing Your Hotels Online Revenue & ROI

Table of Contents
Executive Summary ................................................................................2 Introduction & Methodology ......................................................................3 Websites.............................................................................................4 Survey Findings The Pulse of the Industry .................................................5 Best Practices ....................................................................................7 Implications ......................................................................................8 Internet Marketing .................................................................................9 Survey Findings The Pulse of the Industry .................................................9 Best Practices .................................................................................. 13 Implications .................................................................................... 14 Measurement and Analytics .................................................................... 15 Survey Findings The Pulse of the Industry ............................................... 15 Best Practices .................................................................................. 16 Implications .................................................................................... 16 Conclusion ........................................................................................ 17

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Best Practices for Maximizing Your Hotels Online Revenue and ROI
Survey Results from Assessing the Industry Hotels Online Spend and Str ategy Deployment

Executive Summary
Forrester Research estimates that 32% of hotels revenues come through online bookings. This includes brand.com bookings and those made through third-party websites such as Expedia and Priceline. Forrester Research also estimates that the overall travel industry allocates 29% of its marketing budget to online, including search, display, mobile, social and so on. Travel allocates more of its budget to online media than any other industry. Approximately 62% of a travel companys interactive marketing budget is currently allocated to search engine marketing. This white paper dives deeper into the findings of what hoteliers are experiencing and how they are ensuring the most of their online investments. Some of the most interesting highlights of this study include the following discoveries: An overwhelming 77% of the survey participants said their website traffic is growing and 70% said their website revenue continues to grow; 70% are seeing their greatest returns in online investments; 40% of respondents do not have a social media strategy; 73% said they use in house resources for their online marketing. These findings and more are explored throughout this paper.

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Introduction & Methodology

VIZERGY, in partnership with HSMAI, devised and conducted an online survey to identify and understand how hotel marketing professionals are using the Internet to market their hotels and increase their ROI. VIZERGY and HSMAIs goal is to provide leadership in education and best practices for hoteliers in the area of Internet marketing. This white paper provides the results from actual hoteliers who shared their experiences, areas of focus as it relates to marketing, key metrics and best practices. It will highlight the good and the bad, as well as the implications of both. The goal is to provide an educational resource whereby hotel professionals can review the white paper and use it as a tool to assess current strategies, understand the areas for improvement and create a plan to action for improvement. The survey included participants representing branded and independent hotels and resorts, property management groups, as well as bed and breakfast accommodations. The respondent roles include general managers, directors of sales and marketing, revenue professionals and e-commerce professionals, as well as managers, chief executive officers and presidents. The percentages cited in the results are based on a total of 381 respondents surveyed. All questions were allowed only one response unless otherwise noted. In addition to the online survey, two survey participants were interviewed via the telephone to obtain further information about their best practices. This report provides the findings from the survey in the format of statistics, comments and quotes from the participants. Therefore, this report is a mixture of objective and subjective information. The paper is broken out into three categories: Websites, Marketing and Measurement and Analytics. Each category includes the survey findings related to the respective topic, as well as recommended best practices and implications for each.

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Websites
Hotel executives realize the importance of integrating e-commerce into their overall business strategies. Website design including content and functionality are an integral part of the overall strategies. Well thought out and solid strategies to promote customers to a hotels website can ultimately deliver higher returns to ownership. It is, however, vital to ensure the right design and content in order to attract the customer and engage with them emotionally. There are several elements that must be considered in designing a hotel website. It must include an attractive and enticing design while it is also intuitive and easy to navigate. There are five important elements that must be included in every hotels website design.

1. Visual Appeal: Every website must have a visually appealing design that will capture those who visit. This includes choosing the right color scheme. Color is very powerful and should remain simple and in line with the overall brand or image of a hotel. Colors can set the tone and mood that is portrayed for a hotel or hotel brand. It also must include quality visual content such as photos, videos and virtual tours. Creating an emotional connection with the target audience is very important. If the target audience is a corporate traveler, images of business travelers would do a nice job convincing business travelers this property is the right fit. If the hotel is more of a leisure destination, photography that supports families enjoying the property will likely have the same effect. Visitors must be able to see the quality of the guest rooms, conference rooms, spa and public spaces. They must be able to see themselves in that environment. 2. Demand Generator Content: Today, consumers want to be sure that the hotel of their choice includes the right location and area attractions based on their needs for each unique visit. Therefore, it is vital that every website include information about local attractions, area business and events. This information is used in the customers buying decisions, as well as improving the opportunity to show up in more searches under more key phrases such as Hotels near IBM Headquarters Chicago.

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3. Navigation: Website functionality must be intuitive and easy-to-use. If visitors are challenged in finding information they desire, they may lose interest and move on to another hotels site. It is also important to be sure that hotels provide the cap ability to allow customers to book via the method of their choice such as mobile and smart phone technology. 4. Flexibility: The website platform must be flexible enough to keep up with the most modern programming techniques allowing hoteliers to keep up with the rapid changes of technology. For example, the opportunity to integrate Google mashups, mapping techniques and interactivity was not available three years ago. Platforms that cannot quickly adapt to the rapid changes, such as proper viewing and the rapid influx of new browsers such as Chrome, IE9, Safari and mobile systems, will quickly outdate a hotel website. 5. Scalability: Keeping an eye towards the future and ensuring that the website platform has the ability to grow with the needs of a hotel or hotel company is another important factor. It must be able to adapt quickly and inexpensively to changes in the market place.

Survey Findings The Pulse of the Industry

The results of the survey support that hoteliers do realize the importance of ensuring that solid content is available to their customers and that they believe that content is a high priority. That translates into hoteliers understanding that solid content will help to create higher returns on investment by earning more bookings. However, it appears as though some hoteliers may need to dive deeper into the type of content that is available and targeted based on the customer type and their needs. The following are some of the specific survey questions and responses that address content. The majority of hoteliers reported that they recognize the importance of having a website that is deep in content. Does your site focus solely on your property or does it include information about the local area (events, attractions, businesses, etc.)? % respondents 19% 77% 3%

Property only Both Not sure

380 respondents

This is a very strong recognition of the importance which is a big win for hoteliers. Those that recognize this and ensure the site provides the information that is important in the eyes of their customers will find they receive a higher rate on their investment. An overwhelming 86% of respondents (out of 379) answered yes to the question: Does your website speak to your target market?
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79% of respondents (out of 305) answered yes to the question: Do you think your site has enough information for shoppers to make an informed buying decision? The questions and responses show that hoteliers are doing an excellent job in understanding their customers and providing the information they desire to support the shopping experience. The next topic addresses the components of a website. Survey participants were asked to select which website components are most critical (more than one answer allowed):

380 respondents

Content and photos were selected as the most critical components while design and area information were selected as the two least critical components. As indicated earlier, this shows that hoteliers do recognize content as very important. However, it seems that hoteliers do not consider area information to be a part of the content or necessary in the eyes of consumers. Understanding that two of the most important elements to a successful website are the visual appeal and demand generating content, hoteliers would see higher returns by focusing more on design nice designs can give customers the confidence that the property is also high quality and providing area information (while ensuring the reservation process is easyto-use). The survey results show that hoteliers selected the reservations page as the third important component. But if the design and area information are not appealing and lacking in information, the visitor may be lost (leave the site and go elsewhere) way before the reservation process begins. Of the total respondents (302), 67% of hoteliers said that meetings are a part of their overall strategy. When asked if meeting planners are looking at their website the responses include: % respondents 37% 30% 33%

Yes No Not sure

329 respondents

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Out of a total of 202 responses, 40% of hoteliers indicated that their site is not built to accommodate meeting planners. Tools such as diagrams for meeting space and RFP tools on the hotel website are not available for these customers. This information tells us that just over two-thirds of hoteliers said that meetings are part of their overall strategy. However, a large portion of hoteliers either said no or not sure to whether or not meeting planners look at their site for information in the decision process, and almost half of hoteliers said they do not provide the online tools to satisfy the meeting planners needs. This is an area that is significantly lacking and must be addressed by hoteliers. The next area relates to the platform and flexibility of a website. Participants were asked, How old is your website? 45% selected three or more years; 32% selected between one and three years; 19% selected one year or less. (329 respondents) Is your site mobile ready? % respondents 22% 41% 37%

Yes No Not sure

328 respondents

Based on the responses to these two questions, it leads to the belief that a large portion of hoteliers are not ready to implement the latest or most modern technology of today. Without an up-to-date website, hoteliers lack the flexibility to implement the latest technologies as they are introduced to the market. This automatically places these hoteliers behind their competitors and leads to a strong potential that they may lose bookings.

Best Practices
The following are recommendations on items to review to get a status check and create a plan to action, as well as some best practice recommendations that should be in place to ensure the site remains up-to-date. Ensure the website platform is flexible enough to support the latest technology options available. Review the existing websites technology and tools and identify any gaps. Create a comprehensive plan to close the gaps. For example, if the website does not currently support mobile technology and smart phones, what needs to be implemented to make this happen? Ensure that the website is easy to navigate from a smart phone device or mobile device.

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If meetings are a part of the hotels overall strategy, ensure that an online RFP tool is in place. Ensure that content is easy to update. Ensure that visual content such as quality photos and virtual tours are up-to-date and available. Be authentic and create compelling content to bring the brand to life. Work closely with the website vendor to ensure all appropriate and available tools are being taken advantage of. Create content that is tailored to the hotels target market. Conduct tests and reviews of the website from a guest perspective. Request that a family member or friend review the content and use tools such as creating a reservation to go through the booking process. Ensure that the pre- and post-stay information is also considered such as emails and messaging and confirmations. It should be easy to use, in line with the brand, clean and simple, and most of all, enticing and worth the visitors time.

Implications
For those hoteliers that do not take the time to review and ensure the most appropriate website based on their company goals and customers needs, revenue will ultimately be impacted. Without an online RFP tool, in many cases, hotels will not be considered for potential meetings. Without appropriate and up-to-date content, visitors will leave the site and go elsewhere for their information and hotel needs. Without the best visual content such as quality photos that tell a story, the visitor will not be enticed or become emotionally connected and will go elsewhere for their hotel needs. The bottom line to this is that those hoteliers that do not address these issues will fall behind their competitors. Falling behind competitors and not staying on top of issues that have a direct impact on the customer will ultimately result in lost revenues.

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Internet Marketing
Once hoteliers have created a solid website foundation, the next step is to ensure that the optimal Internet marketing strategies are created and executed. Internet marketing strategies should be created in support of a hotels overall marketing objectives and should include a breakdown of both short- and long-term strategies.

Survey Findings The Pulse of the Industry

One of the biggest topics for hoteliers today is social media. When hoteliers were asked if they have a social media strategy, 60% responded yes and 40% no (out of 378 respondents). When asked, Do you have a proactive plan to encourage guests to post online reviews, photos and comments?, the answers were split evenly 50% yes and 50% no (out of 329 respondents). When the participants were asked how often they monitor guest reviews, almost 70% responded that they review them on a weekly basis.

305 Respondents

While 40% of the hoteliers surveyed indicated that they do not have a social media strategy, it appears that more than half of the hoteliers surveyed are handling social media in a tactical way. It is anticipated that both of these numbers will grow significantly over the next several months and beyond. Hoteliers that do not have a social media strategy will realize the need to create one and those hoteliers that are not already participating in a tactical way, such as encouraging and reviewing online reviews, will need to get on board urgently as this is an area that will continue to grow. The next topic is related to the total online marketing spend compared to return on investments.
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What percentage of your marketing budget is dedicated to online marketing?

376 Respondents

Where are you seeing the greatest ROI?

328 Respondents

Of those that participated in the survey, 70% indicated that they see the greatest ROI in their online investments. Since most survey participants said that their highest ROI is online, it would make sense that more of the hotels marketing budget would be invested for o nline initiatives. In response to the question, If 30% of your revenue is from the Internet, how much should you allocate to your online marketing budget?, 61% of the respondents said that they should allocate more than 30%. Hoteliers would be well advised to compare their percentage of online business with their online investments. For those who have goals that include growing the online business, it is recommended to be sure the online marketing investments are slightly more than the percentage of business received online.

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Chris Hale, Vice President of Sales and Marketing for Shanty Creek Resorts, a four season golf and ski resort in northern Michigan, said approximately 33% of his overall marketing budget goes towards online projects. Our overall online initiatives vary from year to year and have included a complete website redesign, video production, targeted email campaigns, and analysis and maintenance of our online booking engine. He continued by saying, We know the investments we make online help increase our online conversions but more importantly, perhaps, the Web has the power to evoke emotion through words, pictures and video. As more and more people carry their email with them everywhere they goon smartphones, a trend that will continue to grow that makes websites, videos, and targeted email campaigns that much more cost effective in communicating with our customers. Online projects have longer shelf lives and better tracking [than traditional media] to measure ROI.

General marketing theory: if 20% of your business is from a particular channel, then you must invest slightly more than 20% in order to generate more business.

The following graph shows the types of marketing initiatives survey respondents typically use.

Marketing Initiatives
100% 80% 60% 40% 20% 0% 83% 74%

61%

59%

56%

44%
12%

SEO

Email

Print

Social Media

PPC

Banner ads

Mobile

317 respondents (more than one answer allowed)

Search Engine Optimization (SEO) was the number one response at 83%. SEO is extremely important as it allows a website to be continually updated, builds links and looks for opportunities to leverage the demand generators in the appropriate areas. The importance of SEO can be compared to the importance of photography on a hotel website. SEO can provide the largest percentage of traffic and the best opportunity to improve a hotels online revenue. Email marketing was the second at 74%. Assuming that there is a solid plan including tactical initiatives and solid database, this is an excellent way to communicate with customers and receive a return on investment. Print marketing (61%) was selected over PPC (56%) and
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banner ads (44%). Print is typically extremely expensive and is difficult to track the return, while PPC are proven to be much higher in returns compared to banner ads.

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Which of the following do you use?

Resources
80% 60% 40% 20% 0%
73% In House Team 49% Internet Marketing Comp 21% General Ad Agency 8% None

379 respondents (more than one answer allowed)

73% of the survey participants said they use an in house team to handle their Internet marketing initiatives. It would be interesting to find out what they are handling in house compared to what may be outsourced. There are some initiatives that make sense to keep in house such as some of the social media tasks. However, tasks such as creating emails and doing email blasts or executing PPC campaigns and ongoing SEO can be very costly from a payroll perspective. It is also difficult to be sure that the internal resources are continually on top of the latest trends and fully understand the full scope. The complexities of Internet marketing have grown significantly over the past three years; for a small hotel it could take three or four very knowledgeable and experienced people on staff to stay on top of everything. For hoteliers that are at tracking ROI, it is important that all in house resource spend is taken into consideration. Expenditures such as salary and benefits must be taken into consideration. Do a comparison of the in house resource(s) against what it may cost to select a vendor, and then weigh the pros and cons of external expert resources compared to internal resources.

Best Practices
The following are some recommendations for best practices. Invest in online marketing. Determine the most appropriate amount that will allow the hotel to make their goals. For example, if the goal is to increase online business, it will be necessary to increase online marketing investments. Ensure that expert resources are used as part of the process. Combine both internal and external resources to achieve a well rounded approach. Create a detailed electronic marketing plan for the entire year. This plan must support the overall company initiatives for the year. It will help hoteliers allocate their budgets according to the needs and in support of the initiatives. Create a social media strategy and plan to action in support of the strategy.
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Be engaging with customers and generate feedback. Recruit user-generated feedback as this greatly influences consumer decisions. Give the consumer tangentially relevant information such as things to do nearby the hotel, or tips specific to a traveler segment. This will help build trust.

Implications
More and more consumers use online resources to find the information they desire for their travel needs and to help with the decision making process. Those hoteliers that invest the time and appropriate resources towards online initiatives will see the largest returns on their investments. Hotels that receive a good portion of their business through online bookings will need to increase their initiatives and total spend in this area if they want to increase the business. For others, it is still important to realize that consumers use online resources to help in their decision making process. So while they may not book online, they certainly use online resources during their shopping experience.

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Measurement and Analytics

Measurement and analytics play a critical role in the overall process of marketing. After all of the hard work and resources that are put into building the right type of website platform, ensuring the appropriate content and then marketing towards the right demographics, it is important to know the returns received for the initiatives in which hotels invest. If initiatives are not measured, then hoteliers will not know which ones were successful or not so successful. Learning from the past initiatives will play a crucial role in determining what worked and what did not work and, therefore, what to do moving forward. There are several important factors to consider for measurement. The next section addresses the survey findings followed by some recommended best practices.

Survey Findings The Pulse of the Industry

One element to measuring success is to understand the presence of a company or hotel online, as well as understanding what is happening to visitors when they are on a hotels website. How many hours a week do you evaluate your propertys online presence? % respondents 22% 43% 15% 15% 5%

0 1 hours 1 5 hours 5 10 hours 10+ hours 0

303 respondents

Do you monitor your reservation system abandonment (people who start reservation process but dont finish)? 53% of the survey respondents said no, they do not monitor this (out of 329 respondents). When asked the same question but about monitoring group RFPs, the response was 43% of the respondents did not monitor this (out of 301 respondents). When asked the question Are individual visitors staying on your site longer than the previous year?, 33% said yes, longer, 28% said no, same but 36% indicated that they did not know the answer to this (out of 328 respondents). This tells us that hoteliers do not necessarily understand what visitors are doing when they visit. How many begin the booking process but do not finish? Could it be because of lack of adequate education on the available analytics tools? Understanding a hotels online visitors behavior once on the website is critical to improving online revenue and overall ROI.
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Best Practices
The following are some recommended best practices to ensure are implemented at the hotel.

Tracking / Measurement Monitor your hotels online presence regularly Evaluate and identify ROI by channel

Processes Establish a process and assign responsibilities that ensure regular monitoring of hotel online presence. Create a sales plan to shift as much appropriate business to the channel that brings the highest returns. Identify content that may be missing that can potentially entice visitors to follow through with the booking. Identify content that may be missing that can potentially entice visitors to stay online longer. Create a format to track all measurements and compare yearover-year growth.

Track abandonment for the reservations booking page and the RFP tool (if applicable). Track viewer time spent on the website. Year-over-Year growth

Implications
It is impossible to manage what cannot be measured. The concept behind this is simple: if you cannot measure the performance, you cannot tell whether or not there has been any improvement. Without proper measurements and tracking, hotels cannot move forward with improvements.

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Conclusion
A staggering 73% of survey respondents said they use in house Internet marketing. It is not known whether this includes a portion or all of it in house. What is known is that Internet marketing is complex and encompasses many areas such as website design, website content, reservation booking engine, email campaigns and blasts, banner ads, SEO, PPC, GDS advertising, mobile marketing and social media. It is very difficult for a hotel or hotel company to do all of this successfully and cost effectively with maximum success in house. In many cases, outsourcing to an expert team will generate more visibility and revenue and will ultimately cost less and provide higher ROI in the long run. "Those hotels looking for all the customers they can get, find opportunities in every shape, size, color, hometown, and travel reason. Today they need to find them all and know that most customers find their hotel on the Internet. Successful hotels build a diverse team including internal and external resources like VIZERGY to outshine their neighbors on the sandy beaches of opportunity," says industry veteran and partner with XLeration Services, Bill Schlack.

VIZERGY, recognized as the global search marketing leader, provides Internet marketing for hotels, resorts, luxury apartments, condos and vacation rental communities. Established in 1998, VIZERGY offers results driven hotel Internet marketing strategies, digital design services and e-commerce solutions, an online reservation system and GDS services. VIZERGYs award winning track record and proprietary software helps clients drive more revenue and aggressively compete online. For more information on VIZERGY and its services, please visit www.vizergy.com, call 904-389-1130 or email sales@vizergy.com. Join us on Facebook and Twitter.

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About HSMAI | HSMAI is the hospitality industry source for knowledge, community, and recognition for leaders committed to professional development, sales growth, revenue optimization, marketing, and branding. With a strong focus on education, HSMAI has become the industry champion in identifying and communicating trends in the hospitality industry, and bringing together customers and members at annual events, including HSMAI's Affordable Meetings. Founded in 1927, HSMAI is an individual membership organization comprising more than 7,000 members worldwide, with 40 chapters in the Americas Region. For more information on HSMAI, contact the Hospitality Sales & Marketing Association International, 1760 Old Meadow Road, Suite 500, McLean, Va. 22102; (703) 506-3280; fax (703) 506-3266, or visit the website at www.hsmai.org. Join our social networking communities on Twitter, LinkedIn and Facebook. About the author | inspire resources is a boutique strategic hospitality consulting firm. They provide expertise in call center management, distribution, revenue management, technology assessments and conversions. Hospitality is their business. Inspire partners, Kathleen Cullen and Caryl Helsel, have a combined 45 plus years of experience at the property, regional and corporate office levels. For more information visit www.inspireresources.com or call +1 847 864 1563.

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