Addicted to Loyalty Schemes and 5 More Stories
Addicted to Loyalty Schemes
There's a funny thing in the hospitality industry, on the one hand we believe huge amounts of revenue comes in only because of loyalty systems and on the other, when one asks people about their loyalty to brands, they don't seem to have so much of it. The loyalty systems serve a certain need. The corporate travelers who accumulate points on the company to use privately most definitely enjoy it. But if we'd remove the loyalty systems would people stop staying in hotels? Probably not. It's like an expensive habit we can't kick, we believe they only come for the points, so we keep it going. Just recently the main French sports retailer shut down their loyalty system, said they'd just apply a discount to everyone instead because the points wasn't what was making them loyal. We know it needs a re-think, maybe it's time to look at how we'll make real loyalty.
Can Metasearch Survive Without OTA spend?
In a negotiation with an executive at one of the large metasearch providers where I was trying to get more features for independent hotels, said executive insinuated that only the big players get such features (i.e. OTAs). After the meeting I asked casually if it wasn't dangerous to have over 50% one's revenue come from 2 large OTAs, what if they pulled out? He replied that they would never pull out because if Booking pulled out, Expedia would reap all the reservations and vice versa so they were safe. It seems that concept is coming to an end. Booking is toning down their ad-spend and metasearch are the first to feel it. Booking famously compared hotel's OTA dependency to their Google Ads dependency. They didn't really mention metasearch. Can they survive without the huge OTA ad spend? I don't think they'll go over-night but...
Will China Eclipse America in Tourism?
The volume of revenue generated from American travelers is undeniable. As the biggest economy in the world, ensuring hotels were good for Americans was a pretty safe bet. TripAdvisor was their main source of advice and the destinations were pretty predictable. In short it wasn't that difficult, and contrary to popular belief even the French could do it. But it looks like that's about to change. China is rapidly growing to the largest economy in the world, with a rising middle-class who want to see the world. They have a different culture and they might not be using TripAdvisor to check reviews, they hardly use websites and they're way more mobile technology savvy than most of us. Things are about to get a whole lot more complicated for operations. But it going to be good news for the bottom line.
We Need to Tell Better Stories
We (mostly) know how to make good hotel websites. We surely know how to make awesome hotel photos. And we're pretty good at standing up and smiling when the guests arrive for check-in. But that's not going to be enough anymore. Airbnb has been rattling the hotel world's cage in many ways, not the least of which is marketing. Look at your hotel's photos, then compare them with this recent guide by Airbnb. We can agree or disagree with the system. The point is they're making every location tell a story. Those who do a better job make more money at better rates. Those who tell better stories aren't commoditised into beds. And as hotels, we've been accustomed to following some trend setters (normally chains), maybe it's time to find new trend setters.
Community at Booking: Work in progress
The biggest difference between Airbnb and Booking in my opinion is community. Booking has been amazingly efficient at what they've been doing. It's a well oiled machine that has grown far beyond what most people expected. But that growth is waning and now they need to work on other channels. And it seems they're working on the community part a lot more. The Click blog is a good start. The Click event looks like it's a lot of fun (and at €600 per person it should be about 6X more fun than a Monty Python live performance). What's unclear is the audience, is this like Airbnb Open for independent hoteliers, or is it for the professionals, those who bring the big bucks to the table? Which ever it is, it's great to see them working on the community building. But should they be charging the big ticket to get customers to listen to their messaging? Education is the best marketing there is, if the product is good. I'm just not sure about paying to get marketed at.
Tell Trends, an update
Tell Trends Magazine is moving along quite well. The design is complete and we're working on writing the first edition which should be ready real soon. You can get a sneak peek at the design on the website where we updated the images. If you like this newsletter you'll like Tell Trends. Each topic is written by a separate author and is divided into three parts the first is a one page overview of the topic, then the five most important news in that topic for the quarter and finally ten articles worth reading on that topic. All in all, we want to make something that can be read easily so you get the real trends, not the click bait.