Social Media: Hoteliers “Down Tools” on Social Media
New research from Ecole hôtelière de Lausanne (Switzerland) and RateTiger seems to suggest that the social media revolution is far from underway in the UK hotel industry.
In fact, data suggests that many hoteliers have put their social media strategy to one side in the short-term to focus on offline and direct sales.
One suggested reason behind this trend is an attempt to reduce third-party costs incurred by the Online Travel Agents (OTAs).
Social Media: Down Tools!
The six month qualitative study, ‘The Distribution Challenge 2012’, conducted in five countries, found that while social networks including Facebook, Twitter, TripAdvisor and YouTube are recognised as new forms of digital marketing, hotels are still unconvinced about the impact these channels will actually have on bookings and are therefore deterred from implementing strategies in the short term.
One in three of the hotels have no social digital media strategy, and only one in eight use any form of social media as a marketing tool. Hotels have instead focussed on the development of offline strategies to build more corporate contracts that deliver more predictable business, and to diversify their online distribution mix to generate additional revenue opportunities.
“We have found that hotels work with more travel agents and consortia contracts for the corporate segment, apply BAR to walk-ins, and develop special offers for returning customers, including the introduction of loyalty programmes,” said Horatiu Tudori, Senior Lecturer, Revenue Management, Ecole hoteliere de Lausanne, Switzerland.
“This is an interesting turn-around from the unbalanced and heavily online-focused sales strategies of the past few years, which are not bringing the yields independent hotels so much need right now. We also found that hotels just don’t see the true revenue value in social networks, opting for more traditional methods to engage customers.”
“We’re not at a point where we can track social media. There must be a point of sale for it to really become a valuable resource, but even then we need to master the techniques,” said a Revenue Manager in charge of an 82 room 4-star property in Paris, France.
RateTiger CEO, Michael McCartan added, “We’re seeing hotels increase direct booking and create more relevant packages and promotions for their customers by engaging in social media. Hotels need to look at how they can save time through technology and not just see additional tasks as an uphill struggle. It’s time that hotels start to get the balance right and ensure the conversation is flowing between Revenue, Sales and Marketing managers.”
Moving Away from OTAs
According to the research findings, while a few hotels have used travel deal platforms like Travelzoo and perceived it as an opportunity to stimulate demand, more hotels aim at optimising the use of Google (both PPC and Adwords) and SEO. Their goal is to bring more direct bookings and take potential bookings away from high-commission OTAs. Hotels are looking to reduce the cost of distribution by directing bookings to their own website but also by increasing the share of smaller third-party websites within their distribution mix.
The full report can be downloaded here.