How Hotels are Increasing Conversions: One strategic move and four key steps that are improving businesses

By Bruce Hyatt, VP of Marketing and Strategy, Sabre Hospitality Solutions

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. September 26, 2010

Mr. Bruce Hyatt

It's every executive's dream to find ways to lower costs while increasing efficiency and, ultimately, revenue. Our industry is no different. Last year's economic downturn forced hoteliers to take a hard look at their businesses, tighten the reigns, and economize. While many continued to invest in products and services to improve efficiency, we noticed at Sabre Hospitality that on the whole, hotel companies have left “no stone unturned” to achieve strategic flexibility and improve profitability.

Not all things recession need be terrible though. Through forced prudence, many of us learned to be more strategic and actually come out ahead of where we were before, just by adding more planning and creativity into the mix. As the hospitality sector cautiously rebounds, we can continue to benefit from the ways that hoteliers and suppliers were able to invent new ways to better their businesses.

One strategic move

An exciting trend that has emerged as a result of the need for greater efficiency and more profitability has been the move towards streamlining distribution and (Internet) marketing. Last year, Sabre Holdings led the industry by merging all of its hospitality solutions into one company, Sabre Hospitality Solutions. We brought SynXis, the industry leader in CRS technology and distribution management services; E-Site Marketing, the award-winning e-marketing company; Bidstork, the hotel corporate RFP tool, and Sabre's GDS hotels and media teams together to help our customers streamline marketing and distribution at their own companies.

The advantages of combining distribution and marketing are huge, but best summed up by the familiar old phrase we've borrowed from mathematics: The whole is greater than the sum of its parts. As both of these hospitality disciplines have shifted greatly to online and, I am sure few will debate me when I say, they continue to do so in dramatic proportions, the result has been that two areas of the hotel business that had once been quite different in nature have suddenly grown together. Facebook, for example, is not only a site to consider as a marketing vehicle, but is now a place for consumers to make bookings, just as TripAdvisor offers opportunities to add a booking link to your listing. The further we get into online marketing, the more the lines blur.

The whole process has happened quite naturally but, to many hotel companies we've heard from, surprisingly quickly, leaving hoteliers scrambling to keep up with the new distribution and marketing landscape. This is a process that can be greatly helped by a marketing provider who can not only help you with every phase of the marketing and acquisition cycle, but who can also offer a Central Reservation System (CRS) with a full range of merchandising and flexibility features (note - not all CRS' are created equally!). A great example is the ability to offer special promotional rates and pricing to tie in with a marketing or advertising campaign.

Four steps to increase business

Combining distribution and marketing will help you be able to come up with a good online strategy - but what are the next steps to take? When hoteliers come to us asking for help with an online strategy that will help them increase their bookings and their revenue, we work with them through a four step process:

• ACQUIRE new customers
• ENGAGE them on your website and with your online tools
• CONVERT them with a best-in-class booking engine
• RETAIN your new customers and create fans of your brand with the right communication tools

Acquire

Just like in the old days of offline marketing, the best way to start is to get prospective customers to your property. Today, that means helping potential guests find your hotel(s) online, through the right search engine and often through a targeted Pay-Per-Click (PPC) campaign. PPC works with targeted keywords to deliver a specific, controlled message to your consumer. The campaign works in conjunction with your Organic Search Engine Optimization program (SEO) to build on your search potential.

In 2009, 79% of all hotel transactions involved search. A strong SEO service will not only optimize your “findability” on all the important search engines but will also go way beyond traditional SEO and bring you to the forefront of multi lingual/global search engines and take into consideration events taking place on or around your property. Further, a good SEO manager will be able to employ techniques to build your brand and create a buzz on social media and optimize your brand through image and video search and by promoting your press releases. All of these actions ensure that consumers shopping for travel will find your property. In short - this is an essential and important first step!

Your presence online across key sites also needs to be considered carefully in acquiring new customers. According to a Google online travel behavior study, the average person visits 20 websites before making a travel transaction. Understanding where your target consumers are shopping and how they behave online will help narrow your choices and decide on your online presence. For example, the highest conversion ratios come from shoppers visiting non-transactional Websites (review sites, destination guides, etc) before visiting a supplier website. Also, even when consumers book directly with a property, hotels receive an average of 23% more bookings directly to their Website when present on online travel agents (OTAs) (Cornell Study 10/09). A targeted strategy will help spread your message to the right market segments on the right channels.

Engage

Once they have found you, how will you engage your potential guests enough to keep their interest in your brand? This is the essence of step number two. I cannot stress enough the importance of having a good Website to begin the engagement process - and today this includes a good Mobile Website as well. Looking great is only a small part of what makes up a great Website.

To really engage potential guests, a Website should be SEO accessible, provide a positive user experience and be successful in terms driving qualified traffic and converting users into guests. Our award-winning Web development team at Sabre Hospitality Solutions is constantly analyzing hotel and resort statistics to understand what components are successful in terms of page views, placement of certain items on the page (i.e. special promotions, booking links), engagement and visits to the booking engine. Using this knowledge, we create and consistently update a set of best practices that will be integrated into each Website we create.

Of course, it goes without saying that Social Media is a whole new way to interact and engage with consumers at a granular level, and should also be seriously considered with this step. Many customers have come to us with an interest in social media, but no idea how to go about it. We help them begin monitoring their brand online to find out what people are saying about them, determine the key channels for each market segment they are targeting, and then create a plan that is best customized to their business needs.

Convert

This step is where all of your marketing efforts can start turning into revenue. The key is to have an easy-to-use booking engine that will convert visitors to your Website into guests at your property. Many providers will be able to offer you a booking engine, but few of these will be able to produce the results you should be able to see after taking the first two steps. Sabre Hospitality's Guest Connect was developed after months of research and with the help of Sabre's usability lab. The result is a booking engine designed with both conversions and hoteliers' needs in mind.

For an example of how just the addition of a best-in-class booking engine can increase conversions, let's take Aqua Hotels and Resorts. They came to Sabre Hospitality Solutions looking for increased revenue, efficiency, and marketing possibilities. In the first six months since switching to Guest Connect , Aqua Hotels & Resorts has seen incredible results when measuring same-store, year-over-year statistics.

Results include:

• 32% increase in booking volume
• 41% increase in booking revenue
• And most importantly, a 38% increase in conversion rates

Amber Watt, Aqua Hotels & Resorts' Director of Internet Strategy, tells us, “Visitors to our website have found our new booking engine very easy to use as evidenced by the huge increase in conversions, bookings and revenue! We've found the multi-step booking process to enhance usability as consumers are familiar with this way of shopping. Another benefit of switching to Guest Connect has been a decrease in questions about the website booking process to our central reservations office; guests are now comfortable completing the whole booking online.”

Retain

Last but not least, customer retention is the final step in keeping your guests coming back to your properties and loyal to your brand. There are a number of tools available to help you do this in an efficient, organized way to keep your brand and communications unified. Sabre Hospitality Solutions offers customizable E-mail Marketing, E-CRM, Proposal and survey tools, and newer tools such as advanced text message communications are constantly in development.

In short - the rapidly changing landscape is hard to keep up with! Luckily, there are companies in our industry who are doing the work to help you stay on top, so you can do what you do best - serve those guests! I would love to introduce you to Sabre Hospitality Solutions and everything we have to offer, and get started on generating the attention and revenue you are looking for to meet your goals. Feel free to contact me at [email protected].

Bruce Hyatt leads the Sabre Hospitality Solutions'( www.SabreHospitality.com ) marketing and strategy team, overseeing all aspects of the product marketing process, marketing communication activities, and marketing partnerships. Previously Hyatt was with SynXis where he was instrumental in the initial acquisitions of SynXis and E-site Marketing by Sabre Holdings. After joining Sabre in 1998, Hyatt worked on numerous facets of electronic hotel distribution, including travel agency hotel booking products, supplier e-service portal applications, marketing partnerships/business development, and managing both operational and account management teams.