A Case Study in the ROI of Online Virtual Tours

By Joseph Ortiz President, IPIX InfoMedia | January 27, 2012

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).

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.