Brand Erosion, or How Not to Market Your Hotel on the Web / Critical Online Distribution Issues Revisited a Year Later / Max Starkov / June 2003

Brand Erosion, or How Not to Market Your Hotel on the Web / Critical Online Distribution Issues Revisited a Year Later / Max Starkov / June 2003: "Surveys show that overwhelming majority of customers will not stay at a hotel with a poorly done website that does not reflect well the hotel product and the destination. It is becoming a common belief now that if your hotel website is not up to par there is something wrong with the hotel itself.

Conclusion first but loads of meat here for selling totaltravel to small businesses...

Online distribution is here to stay. The Internet has changed the way travel is being negotiated, managed and purchased. By 2005 over 20% of all hotel bookings will be completed on the Internet. This year alone 13%-14% of all hotel bookings will come from the Web and 53% of them will be direct-to-consumer. How does your hotel company compare to these national averages and where are your competitors? If you do not fare better than the national average, you are already behind your proactive competitors.

It’s not just about selling over the Internet at any cost. You have to know that the Web can be either your best ally or your worst enemy. If your online distribution is skewed toward the online discounters, this can permanently damage your brand and price integrity. The direct-to-consumer model should become the foundation, the centerpiece of any hotel company's online distribution strategy. It provides the hotel with long-term competitive advantages and lessens dependence on intermediaries, discounters and traditional channels about to become obsolete.

There has never been a better time to embrace the Internet and Direct Online Distribution in particular. An experienced eBusiness hospitality consultancy can help you navigate and utilize the Internet to its fullest potential.


On the Search Engines:
Search engines are considered major brand builders on the Web. Hotel listings or paid advertising on Search Engines, Directories and Portals (e.g. Google, Yahoo, MSN) contribute directly to the brand building of the hotel itself. Due to the nature of these services and their perceived impartiality, the branding interaction is exclusively between the Internet visitor and the hotel. A natural (algorithmic) listing of the hotel website, paid hotel banner ad or pay-per-click sponsored listing directly contributes to the brand building of the hotel, not of the search engines.

Hotel listings and paid banner ads on the Online Intermediaries:
Some hoteliers claim that by positioning their hotels on the online discounters like Hotels.com, Travelocity or Expedia.com they are �branding� their hotels. We believe that this is a very na�ve justification for a very unhealthy Internet distribution strategy. And here is why.
When the Internet user lands on an Expedia.com page, due to the nature of this service as an online intermediary, the branding interaction is exclusively between the Internet visitor and Expedia, and not with the hotel-advertiser on Expedia. In this sense if an Internet user sees a merchant hotel listing or a paid hotel advertising banner on Expedia, the visitor considers this as a positive branding experience benefiting Expedia (“Wow, these guys even have the Waldorf Astoria! Good for them! I made the right choice to visit Expedia!”). Website users tend to view hotel listings and banners in the same manner as pop-up ads and promotional features such as “Featured Hotels” or “Hotel of the Week” and treat them as yet another marketing gimmick employed by the online intermediary to sell them more stuff.

The direct-to-consumer distribution model should become the foundation, the centerpiece of any hotel company’s online distribution strategy. Why? First of all, The Internet is the ultimate “Direct Distribution Medium”. Why direct distribution is so important? It provides the hotel with long-term competitive advantages and lessens dependence on intermediaries, discounters or traditional channels that are about to become obsolete.

Direct-to-consumer online distribution has the following benefits:

Puts the hotel in control of its Internet presence and exposure
Prevents brand and price erosion
Lessens dependence on online discounters and intermediaries
Is the shortest path to establishing interactive relationships with customers
Provides long-term opportunities to benefit from the lifetime customer value
Is the least expensive way to distribute hotel inventory--direct to consumer!
Direct online distribution is not just a theoretical, “ideal scenario” approach. Many surveys show that online customers prefer dealing directly with the travel suppliers, including hotels, when purchasing travel online.

Though some of the major brands have done a good job with their global websites, none of them fares particularly well on the local search engine level. For example, in order to be picked up by the search engines, a local Hilton property has to implement relevant copy and destination content with specific target keywords, description tags and meta tags that are completely different from the global Hilton.com website. It has to achieve link popularity on its own. Hence, the need a local branded hotel to pursue its own website and search engine strategy...

Online Lookers vs. Online Bookers

Another interesting phenomenon is the purchasing habits of online travelers. Jupiter Media Metrix estimates that nearly 60% of the online population in North America (192 million in 2002) uses the Internet to research travel. 50% of those researching travel information online (online lookers) actually make their purchases online (i.e. become online bookers). The other 50% look online, but book offline, due to privacy issues, security concerns, purchasing habits, or need to speak with a live agent to finalize the travel booking, etc.

PhoCusWright also reports that 50% of US Online Travelers looked online, but booked offline in 2001 (52% in 2000).

Simply put, if 100 people book on your website, at least another 100 will be influenced by your website to book your hotel, but will make the booking offline (via phone, walk-ins, etc). This underlines further the critical importance of your hotel Direct Online Distribution Strategy and your hotel website visibility to the bottom line.