Eliminating Acquisition Costs to Get Heads in Beds

By Jeff Navach Vice President of Marketing, MediaAlpha | February 26, 2017

What if I told you there was an easy and effective way to bypass the OTAs, reduce fees, and capture audiences you aren’t currently accessing? And I’m not talking about a new idea or outrageous untested concept. I’m simply talking about a change in the way you think about digital marketing. It’s a process that the OTAs have deployed for years that hotel marketers can do every bit as effectively as the OTAs.

Hotels continue to confront a familiar problem: How to attract direct bookings and reduce the impact of OTA fees. We all know how profitable it is when bookings come straight through the hotel, but there simply isn’t enough reach to drive the same demand as the OTAs. So how can hotels increase their revenue while at the same time decrease OTA fees? The answer may be simpler than you would think. Hotels can simply use some of the same tactics as the OTAs and in the process significantly reduce customer acquisition costs.

While it’s true that OTAs benefit from a tremendous amount of volume, what hotels may not realize is that they can go to the same traffic sources that the OTAs use to attract in-market consumers. Hotels can ensure that their ads appear right next to the OTAs and convert the very same consumers that an OTA would capture and sell to the hotel for a 20% commission.

OTAs know how to utilize the entire marketing funnel and make sure that they participate in comparison search channels so that they capture leads uncontested. There is no reason why hotels should not use these very same tactics and tools to bolster their online presence, monetize traffic on third-party websites, and land bookings in the same way OTAs do. Hotels can go to the same fishing pool as OTAs and hook bookings right alongside them.

In order for hotels to successfully capitalize this direct booking channel, marketers need to evolve their mindset towards digital marketing:

Focus on Lead Generation

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.