Mr. Boni

Reservations / Online Pricing / Booking Engines

What Every Hotelier Should Know About How Consumers Shop Online

By Paolo Boni, President & Chief Executive Officer, VFM Leonardo, Inc.

Co-authored by John McAuliffe, Chief Marketing Officer, VFM Leonardo

The internet has changed the way people around the globe research and book their holidays. There are more channels, more offers and more opportunities than ever before. Amidst all of this, how do you know where and how to connect with shoppers and get them to book your hotel?

According to a recent study by eConsultancy, nearly 53% of consumers are purchasing their vacations online. The same study stated that the Internet is involved in almost 85% of vacation purchases. This underlines the importance of the web to the travel sector. The flow of web traffic and bookings is becoming increasingly complex and success today hinges on a multi-channel and multi device marketing approach - a reflection of the changes that are happening all around us, driven by consumer behavior. Numerous studies of online consumer-behavior have found that consumers today are in a shopping mentality. Travel shoppers are in the multi-channel game, are you?

Hotel marketers can no longer ignore the reality that consumers are conducting extensive hotel research on multiple sites. Asking guests the age old marketing question, “Where did you hear about us?” doesn’t give us the depth we need to know exactly how they came to book. It has become far more complex than that.

Transactional websites are only part of the story

What many marketers fail to realize is that both transactional and non-transactional websites are being used by travel shoppers for research purposes which ultimately impacts booking decisions. In the world of online travel, transactional websites are only part of the story – two-thirds of the story, to be exact. Supplier and online travel agency websites (OTAs) combined attract two thirds of all travel category visitation, while non-transactional categories receive a third, according to PhoCusWright's Online Traffic and Conversion Report, Second Edition.

Among non-transactional categories, planning and review sites have had the steepest and most stable growth over the past few years, led by TripAdvisor. Planning and review sites may soon become the largest category of non-transactional sites. It’s not only the hotel and travel industry that is experiencing this shopping mentality. The majority of retail customers use several channels before they buy (around 86% apparently, according to a recent study by Leo Burnett).

It’s important to keep in mind that although OTAs are the most popular sites for travel research, they are not the only sites used for travel research. Over 40% of travel shoppers spend one month or more researching for a typical holiday online. During this time, they typically consult a number of sources, including search engines, travel review sites and social media sites in almost equal amounts.

A common misconception in this industry is that OTAs are only used by travel shoppers as booking engines. Consumers are telling us differently. Over half (53%) of online travel shoppers indicate they have used travel agency websites to research holidays online. According to this poll, OTAs are the most popular source for travel research, trumping both search engines and TripAdvisor.

Travelers shop differently for business and leisure

Although we know that there’s a lot of shopping on a lot of different sites going on, the actual path that a travel shopper takes to conversion can be difficult to track for a number of reasons. One reason is people shop differently for business than leisure.

When planning for leisure travel, a consumer is more likely to consult their friends and family compared to when the trip is for business. Business travelers rely first on their company’s recommendations (perhaps because they are required to do so), although many check with search engines.

For most people, a holiday will be one of the major purchases of the year, so it's understandable that consumers will take time considering their options. While just under 10% take less than a day to research their purchase, the majority (64%) take two weeks or more, while 26% take a week or less.

Over half of respondents to a recent eDigitalResearch travel study said their choice of holiday destination is inspired by friends and family. It reinforces the powerful influence of recommendations from friends and word of mouth, stating “The most powerful promotional tool is word of mouth from a friend, and social media are an extension of this.”

Social media is starting to rival online travel sites

PhoCusWright found that Facebook is one of the top three most frequently consulted social media and customer review sites. Further, two-thirds of travelers who use the internet are also on Facebook. That figure jumps to 90 percent in the 18 to 24 age group. Most critically, conversion rates from Facebook referrals far exceed those from other online travel sites.

Our own hotel e-business study found that hotel reviews, comments and ratings, combined with rich visuals is the most effective mix of conversion tactics. “Combining robust imagery with customer reviews/comments has shown to be the ultimate, preferred experience.” From this, and the data from PhoCusWright, we can infer that conversions from Facebook referrals should be highest when video is also available.

Offline bookings are influenced by online research

53% of respondents say they research AND buy their holidays online while 30% research online and buy offline. So when someone calls your hotel to book, it’s likely that their decision to book with you came from online research. This is consistent with a study by Cornell University last year that concluded a hotel’s presence on OTAs impacts bookings on other channels, including offline. What does it mean for you? First and foremost you should ensure that the information available for your hotel online (on every channel) is accurate and informative (more on this later) and most importantly compelling.

Visuals are becoming more influential in the buying cycle

Since we know when and where most travelers are making their purchases, the obvious question is, what exactly should we be doing to get their business? From research to booking, the opportunities to capitalize on rich visual experiences are abundant. Hotel marketers are faced with a target audience of discerning online travel shoppers. Despite this, many online marketers make the mistake of putting out generic, dull content -- or simply don't put any content ‘out there’ at all. As a result, they reduce what could have been their share of bookings.

Almost 59% of respondents said that photos of the destination and accommodation help them to choose a holiday, while 25% would like to see videos. This makes perfect sense, and a well produced video or set of high quality images can do more to sell a holiday than pages of sales copy. However, the quality and availability of image and videos are ? what is the rest of this sentence?

Research proves that images have a direct impact on bookings. A study recently completed by Expedia revealed that “…hotels with at least 15 photos sold 3x more room nights than hotels with fewer than five photos.”

What’s most important to note is that throughout this whole holiday research phase, there are a couple key features that help the consumer choose a particular hotel or travel product. Photos (59%) and reviews (58%) are pretty much tied for first place as the most influential features.

And 24% of travel shoppers say video helps them choose a particular travel product from a website. I expect that this number will grow throughout this year and next (not that 24% of all online travel shoppers is a small number!) as more and more hotels and channels make video available to shoppers.

19% of travel shoppers would abandon a travel purchase online due to lack of information. Interestingly, Forrester research found that 40% of travel shoppers would not stay at a hotel if they did not see visual or written information that made them comfortable. What these stats indicate is that travelers want relevant information in multiple formats – written and visual. There is an opportunity for hoteliers to enhance their online listings with merchandising techniques that showcase the hotel and provide that rich and compelling experience consumers are looking for.

The time to align your marketing with consumer demands is now

Online marketing is a big and often times overwhelming task but there are many opportunities for the savvy and focused hotel marketer. Certainly knowledge of how the consumer shops for and make decisions for travel online will help you focus and make you more savvy… and now having a bit more knowledge courtesy of this poll you should ask yourself are your online marketing activities aligned with how travel shoppers research hotels?

If you're waiting to start improving your visual presence online for whatever reason, you’re missing out on many, many opportunities to turn researchers into bookers right now.

This article was co-authored by John McAuliffe, Chief Marketing Officer, of VFM Leonardo. Mr. McAuliffe joined VFM in August 2008 after a successful tenure, as Chief Marketing Officer, of a Silicon Valley technology firm where he implemented a web based demand generation program and helped turn a stagnant company with limited revenues into a sales and marketing innovation company that experienced significant growth and profitability. As a 20+ year marketing veteran Mr. McAuliffe is a professional with hands on experience in leading market-driven strategies for disruptive technologies. Mr. McAuliffe was the President and COO of a mid-size Canadian advertising agency which he transformed from a provider of production and creative services to a professional services firm focused on delivering integrated communications consistent with its clients' brands. He is a graduate of the University of Western Ontario and has taken post graduate studies in Strategic Marketing Management at University of Toronto and Harvard University.

Paolo Boni has lead VFM Leonardo’s vision and strategic direction since 2001. Under his leadership, the company has expanded globally and now has over 80,000 hotels, over 30,000 travel related website partners worldwide and the largest online visual content distribution network for the travel industry. As a recognized travel industry expert, Mr. Boni frequently speaks at major travel conferences on subjects relating to online travel marketing, online hotel merchandising and rich media. He holds an LL.B. from Osgoode Hall Law School and a B.A. Economics from McGill University. Mr. Boni can be contacted at 1-877-593-6634 or press@vfmleonardo.com Extended Bio...

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