Social media not a priority for hotels, says survey

A resarch paper by Ecole Hoteliere de Lausanne, Switserland and Rate Tiger shows hotels are going back to basics by increasing focus on offline and direct sales to reduce third-party costs instead of new social media techniques.

According to the survey, hotels are putting social media on hold as a marketing and selling mechanism while they focus on driving direct bookings in response to their continuous struggle for better margins with the Online Travel Agents (OTAs).

The six-month qualitative study, The Distribution Challenge 2012 (download full report), was conducted in five countries. It found that while social networks including Facebook, Twitter, TripAdvisor and YouTube are recognised as new forms of digital marketing, hotels are still unconvinced about the impact these channels will actually have on bookings, and are therefore deterred from implementing strategies in the short term.

One in three of the hotels have no social digital media strategy, and only one in eight use any form of social media as a marketing tool. Hotels have insteadfocused on the development of offline strategies to build more corporate contracts that deliver more predictable business, and to diversify their online distribution mix to generate additional revenue opportunities.

The research findings also showed that while a few hotels have used travel deal platforms like Travelzoo and perceived it as an opportunity to stimulate demand, more hotels aim at optimising the use of Google (both PPC and Adwords) and SEO. Their goal is to bring more direct bookings and take potential bookings away from high-commission OTAs.Hotels are looking to reduce the cost of distribution by directing bookings to their own website but also by increasing the share of smaller third-party websites within their distribution mix.

Horatiu Tudori, senior lecturer, Revenue Management of Ecole hoteliere de Lausanne, Switzerland said that hotels worked with more travel agents and consortia contracts for the corporate segment, apply BAR to walk-ins, and develop special offers for returning customers, including the introduction of loyalty programmes.

“This is an interesting turn-around from the unbalanced and heavily online-focused sales strategies of the past few years, which are not bringing the yields independent hotels so much need right now. We also found that hotels just don’t see the true revenue value in social networks, opting for more traditional methods to engage customers.”

Rate Tiger CEO, Michael McCartan (pictured left) added that hotels are increasing direct booking and creating more relevant packages and promotions for their customers by engaging in social media.

“Hotels need to look at how they can save time through technology and not just see additional tasks as an uphill struggle. It’s time that hotels start to get the balance right and ensure the conversation is flowing between revenue, sales and marketing managers.

Research methodology: The intention of the review was to collect feedback from three and four hotels evenly distributed in five geographical markets – France, Germany, Spain, UK and the USA. Among the 72 hotels participating in the survey, 65% were chain and 35% individual properties with between 25 and 392 rooms. All the interviewees are in charge of managing pricing and distribution, two thirds being revenue managers and the others general managers or directors in either sales or reservations.