Mr. Ortiz

Website / Online Mechandising / SEO

A Case Study in the ROI of Online Virtual Tours

By Joseph Ortiz, President, IPIX InfoMedia

Intuitively, it is easy to see the damage a lack of a simple Internet presence can have on even the smallest bed & breakfast. Conversely, the marginal cost of developing a one or two page website is comparable to a days' utility bill or less. Clearly, the vast majority of the hospitality industry has embraced the power of online content. The question is: have we all harnessed its full revenue-generating potential?

Large companies with larger marketing and business development budgets generally offer a more complete Web presence as a matter of course. These companies' web presences include a wide range of value-added features, including driving directions, city links, weather, and current events. For these broad reaching companies, the return on investment may be even more difficult to quantify due to scale, and as a result, there is not always an appropriate level of investment made in creating a high-level of user-driven interactivity on the site. Quantifying customer-pull and sell-through because of online content is often seen as a complex, if not impossible, task. However, the quality of a compelling and user-friendly hospitality website is simply apparent from the first click to the last.

Virtual tours, which can provide stunning full-360o color photography of properties, allows business and leisure quests, conference organizers, wedding planners, and other prospective guests to appreciate the amenities and ambience of your unique establishment. Even so, hotel management often considers providing compelling, interactive web site content as just a "nice-to-have" due to inherent costs. In a down economy, this perspective stalls out web site renovation and makes it difficult to justify upfront costs and to quantify ROI afterwards.

The reality is that virtual tours can be the perfect interactive content in which property owners can wisely invest. According to research by G'omez (www.gomez.com), travel-related products and services are the #1 purchase made by consumers over the Internet. Additionally, while only 15% of all hotel bookings are made over the Internet, 65% of all travel bookings are researched online. The Internet has become the top choice for consumers to investigate travel destinations, whether for business or leisure. For property owners, virtual tours are compelling and cost-effective interactive content to market to these potential guests.

Many top tier companies, including Carlson Hotels Worldwide (www.carlson.com) have embraced virtual tour technology. Carlson Hotels Worldwide includes Regent International Hotels, Radisson Hotels & Resorts, Park Plaza, Park Inns and Country Inns & Suites by Carlson. Radisson, in particular, has actively embraced virtual tour technology as a way to market better than the competition online. They are aggressively moving forward with dynamic and interactive content to make their sites user-friendly and informative. Even more so, they have been able to measure and quantify the high ROI for virtual tour photography. Tying the benefits of interactive online content back to revenue is not as difficult as it might seem.

Gino Giovannelli, Sr. Director, e-Business Strategy for the Carlson Hospitality Group explains that they have now done virtual tours for over 165 Radisson Hotels in 11 countries, consisting of over 3,000 iPIX images. Consumers expect rich media from hotels and resorts and the Radisson.com web site has become an online brochure with lead-forward content that draws visitors into the web site and supports the dynamic brand of the company. Mr. Giovannelli has said that they are now doing virtual tours for our other hotel brands as well (Country Inns & Suites and Park Inns & Park Plaza).

Radisson actively measures statistics on their web sites and have a clear view of what its return on investment is:

One of the ways Giovannelli has been able to achieve a high rate of return in the use of virtual tour technology has been through the use of a full service professional virtual tour service provider.

Professional virtual tour service providers nearly always do excellent work, both on property and in their backend support. The hotels are generally more than pleased.

Giovannelli chose PhotoWeb (www.photowebusa.com) as Radisson's preferred vendor for virtual tours back in 1999. He chose them because they were the only vendor who was willing to be a "full service provider" to the Radisson brand. This was key because they had many vendors bidding the work, but most only offered photography services, which would cause the rest of the development work (such as web site development and hosting) to fall in the lap of hotel management. PhotoWeb said they would be a one stop shop for shooting the tours, hosting images, building and hosting virtual tour web pages, creating CD Roms, and setting up all the tracking for each hotel. PhotoWeb said they would take care of everything...and, according to Giovannelli, they have.

The return on investment for virtual tours is high for companies that embrace them, and the startup cost and complexity can be effectively managed with a full service provider like PhotoWeb. Measuring the actual return on investment can be made easier since full service companies like PhotoWeb capture raw statistics on page-views, unique visitors, and virtual tour views.

When managed as a business tool, virtual tours are more than just compelling images. They are an effective visual technology for creating demand and generating incremental bookings.

Joseph L. Ortiz is a technology development and commercialization consultant. He most recently was Officer and VP at IPIX Corporation, managing the InfoMedia unit. Mr. Ortiz defined the strategic vision and business plan, restarting the IPIX Virtual Tour Photography and Movies business. He was regional business unit manager at Philips Consumer Electronics and has held various senior technical and business positions. Mr. Ortiz holds an MBA from Arizona State, an MS in Computer Engineering from the University of South Carolina, and a BS in Computer Science from Georgia Institute of Technology. Mr. Ortiz can be contacted at 865-220-6544 or joseph.l.ortiz@gmail.com Extended Bio...

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