Mr. Kistner

Reservations / Online Pricing / Booking Engines

Control Issues: Taking Back Your Website

By Mike Kistner, President, Chief Executive Officer & Chairman of the Board, Pegasus Solutions

The hotel industry is continuing its recovery with strong growth in both global hotel revenue and bookings, according to data we’re reporting in Pegasus Solutions’ monthly report, The Pegasus View. Driven by demand and assisted by rate growth, leisure hotel revenue jumped nearly +15% early this year over the same period in 2010. With growth in business and leisure bookings expected through mid-year, it’s more important than ever for hotels to maintain control of their websites in terms of the look (design and branding), the feel (booking process) and availability (mobile and metasearch).

Bookings to-date made online through the alternative distribution systems (ADS) show increases of more than +10% over 2010 through summer. Average daily rate (ADR) in this channel will continue a slow and steady climb, as look-to-book ratios, a product of online consumer comparisons and transaction processing inefficiency, continue to grow by over +40%.

Consumers will travel as much or more in the coming year, while a strong, but slightly smaller majority will also spend as much or more on travel than in 2010. They plan to spend, but spend wisely by shortening trips or aggressively shopping rates. Hotels would do well to examine their websites to ensure they don’t risk losing any of the business or revenue to be had from this discerning shopping audience.

The Look

The website design and online booking process is the experience your hotel sells at its virtual doorstep. Today’s travelers are savvy, shopping more extensively and deeper than ever before. They peruse metasearch sites, online guest reviews, Tweets, Facebook fan pages, and, most importantly, hotel websites before booking, which they’re still not guaranteed to do on your site. And, even if they’re not booking through your brand site, they’re still visiting it during the shopping process and the trip “sharing” process, especially through social media.

The question becomes how your brand and your website is going to intelligently capture online shoppers, and provide value in visiting and booking on your site as opposed to third-party sites. It’s not as simple as selling the plush beds and thread-count, but rather it’s about producing unique online content, distributing it across various online platforms and engaging with perspective, current and past guests.

For the design of www.thompsonhotels.com, it was about creating and sharing an experience online similar to one a guest would receive at one of Thompson’s 10 hotels – personalized and service-oriented.

Site design should create and share an experience online, similar to one a guest would receive at the hotel, that screams “we give you personal service” throughout the booking process. The Thompson lifestyle sold in-person translates online not only with the overall site design, but also with its interactive technology. In this day of rate exploration, the company uses Pegasus’ NetBooker® NG. This Internet booking engine allows the group to maintain control of the brand throughout the booking process, keeping the entire transaction on their site and selling according to their standards. Prior to NetBooker NG, booking transactions were taken to a third-party site not controlled by Thompson.

The Feel

Forrester Research has found that many online sites fail to simplify an increasingly complicated travel booking process, or to meet a guest’s specific needs. Potential guests expect “one click to rates,” accurate and updated rate and availability information, rich content and dynamic packaging options.

In the case of Montana’s scenic Buck’s T-4 Lodge, the hotel realized an increase of +61% during its peak season following the implementation of its booking engine. The property also credited the tool with helping achieve nearly 30% occupancy and $5 rate increases coupled with a rise in more profitable direct bookings.

Before taking control of its website, Buck’s T-4 was represented online through the online travel agencies (OTAs), as well as on its own site, www.buckst4.com. The hotel integrated its booking engine into the site for the first time, which had an immediate and dramatic increase on online booking. The resulting reservations reduced the cost at the property level – lessening time on the phone and removing fees paid through other online channels. Net revenue and occupancy increased accordingly, as did time spent on the site following a customized redesign.

Booking engines like NetBooker NG offer hotels the functionality of a private-label site without the responsibilities and overhead of in-house website design, development and hosting. They combine a proven advanced booking engine with integrated Web marketing services, allowing hotels to create a site customized according to the property or brand.

A controlled website should bring guests from your carefully designed virtual doorstep to your hotel doorstep. The significant results Buck’s T-4 Lodge realized by enhancing the virtual guest experience also yielded more profitable direct bookings, giving staff more time and resources to deliver on the actual guest experience.

The Availability

Tomorrow’s website will be quick, easy and accessible for a wide range of shoppers. And, hotels would do well to take that virtual doorstep to mobile devices soon.

Warwick International Hotels currently offers 27 of its distinctive hotels for booking with any mobile device at www.warwickhotels.mobi. The renowned international collection of hotels and resorts leverages mobile to remain both competitive and relevant.

Research from Deloitte shows that one in 10 people have used a hotel application on a Web-enabled smartphone to book a room, access a loyalty program account, view/modify/cancel a reservation, pay a bill, check-in or check-out. Warwick’s booking engine, implemented initially in 2009 for the primary site, proved scalable and flexible to new uses, helping the brand appeal to the growing number of travelers who are comfortable booking with their mobile devices in 2010.

Utell® Hotels & Resorts has also recently increased the mobile site’s offering from 150 to 2,000 hotels, and enhanced it to improve the user interface for several smartphones, including iPhone, BlackBerry and Android, while still remaining accessible for traditional Web-enabled mobile phones.

A hotel’s mobile site should take into consideration the growth in mobile travel booking by allowing users to generalize searches and view descriptive content more easily. Utell Mobile offers consistent branding with Utell.com, and allows users to search by city, country and state. Users can also utilize the “find a hotel” feature when seeking a specific hotel and then book via their mobile device. These enhancements to Utell Mobile have introduced mobile booking as a tool to thousands of hotels that may not otherwise have the resources to enter, much less compete, in the mobile space, which has become a well-established distribution channel.

Hotels also need to seize control of the revenue opportunities available through metasearch. We recently completed beta testing of our MetaSearch Services with several major hotel chains during which they achieved a return on investment of up to 5:1 for every US dollar spent. The product increases the revenue opportunity for hotels seeking business through online search by displaying and linking directly to hotel information, rate and availability in metasearch results. This allows metasearch engines to shop hotels and travel suppliers through Pegasus, but sends the booking directly to the hotel chain or hotel website. We kicked off 2011 setting a new record high for the number of booking transactions processed in a single month as the online shopper returned. As this consumer starts buying again and is willing to pay escalating ADRs, hotels need to be able to reach consumers wherever they choose to shop, whether they prefer to book through an online travel agency or directly with the hotel.

Those who shop directly with a hotel will likely do so because that hotel has maintained control of their website by presenting an appealing, simple and accessible booking option. Those hotels that have lost control risk losing something far more valuable – the business.

Mike Kistner is Chairman, President and Chief Executive of Pegasus Solutions. He joined Pegasus from Best Western, where he was CIO and SVP of distribution. Mr. Kistner holds a BS from Northern State University, Aberdeen, S.D., and a MS in Information Systems from Colorado State University. He is the past Chairman and current member of the e-commerce committee of the AH&LA. From 2000 to 2005, he served as Chairman of the Open Travel Alliance (OTA) and has been recognized as one of the leading CIOs in the hospitality industry. Mr. Kistner can be contacted at 480-624-6450 or mike.kistner@pegs.com Extended Bio...

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