Brand Erosion or How Not to Market Your Hotel on the Web
By Max Starkov President & CEO, Hospitality eBusiness Strategies Inc | January 27, 2012
9/11 created a major shift in how consumers book travel. The crisis created a dramatic drop in demand, which forced travel suppliers to introduce unprecedented discounts. Airlines, hotels and all other travel suppliers struggled to sell seats, rooms, car rentals to a significantly shrunk leisure and business travel market. The Internet allowed for smart and proactive suppliers to connect with their customers, move inventory and stay ahead of the competition.
At the same time it punished those suppliers who had no clear Internet strategy and understanding how the Web and online distribution works.
The Internet: the greatest direct-to-consumer channel
Over the past six months all major airlines adopted, once and for all, the "Direct Web Distribution Model" i.e. direct consumer sales via the Internet. The abolishment of base travel agency commissions by the major airlines now, six months after 9/11, was no coincidence. The airlines needed this time to squeeze whatever they could from the old distribution system and enhance their new Web distribution strategies. It is a direct result of the newly gained realization that Direct Web Distribution Model works.
The airlines have perfected website and precision e-mail marketing to promote their special offers and sell seats. Actually, eMarketing has become the airlines' preferred marketing tool. Why? It is cheap and it works! For example, precision e-mail marketing offers up to fivefold increase in response rates and tenfold lower conversion costs than direct mail (IMT Strategies). The Internet has saved the airlines tons of marketing dollars since 9/11. In place of full-page newspaper ads, the airlines used, extensively, precision e-mail to target specific market segments with unparalleled accuracy in their Web-only fare promotions and special offers campaigns. The Internet has firmly established itself as the airlines' distribution channel of choice. Over 18% of all airline sales in 2001 were done via the Web.
As a result, over the past six months, leisure and business travelers alike realized that all of the very good travel deals were to be found not through a travel agent, or calling a supplier directly, but on the Web.