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5 top travel moves in 2013
The industry has been rather quiet, but don’t be fooled. There’s a lot of activity bubbling that will make 2013 a year to remember, writes PhoCusWright’s Lorraine Sileo. Here are five of Sileo’s 10 moves that will make their mark on the future of online travel:
1. Travelers remain skittish, but hopeful. Although the near-term outlook is still somewhat murky, 2013 should be a record year for most travel providers. PhoCusWright projects a 5% increase in U.S. travel sales–and a 7% jump for online travel.
2. Travel and social media: changing minds. How exactly does social impact travel decision-making? That answer is finally becoming clearer. Any interaction or commentary that is “public” is also “social.” That includes a Facebook “like,” a Google+ comment in Maps, a TripAdvisor review on Bestwestern.com or a YouTube flash mob at 30,000 feet. Suppliers are getting better at using social media (e.g., user reviews) to boost conversion. As for search, no one yet supplies truly relevant social responses in travel queries–although Google and Facebook are attempting to lead those efforts.
3. Consolidation–what’s the big deal? Online travel companies haven’t been buying a lot of direct competitors to get them out of the way. Instead, they are purchasing companies that help them expand into new business models and exploit the media opportunities that exist from owning both transactional (booking) and non-transactional (search and referral) travel sites. There will be other, bigger deals announced in 2013.
4. Emerging markets–overhyped? The mistake often made is to overestimate the speed at which entrenched markets can innovate. U.S. and Western Europe represent nearly three-fourths of the world’s travel industry. With Asia/Pacific, Eastern Europe, Latin America and the Middle East comprising the rest of the opportunity, companies must assess one market at a time and understand each one’s infrastructure, local players, languages and customs.
5. Getting closer to “getting to know you.” The industry awaits true personalization. Let’s take a deep breath and let the industry understand our patterns and preferences, build the systems and software, create the algorithms and then launch marketing programs around this intelligence. Let the traveler decide how much choice they want. The travel industry has the most to gain by understanding its own data and is on the merge of smarter targeting—just in time.
Social media is transforming not just how people connect and stay in touch but also how they collaborate, plan, share information and make decisions, writes HotelNewsNow.com contributor Jay Hubbs. TripAdvisor, Facebook, Twitter and Foursquare are changing the travel landscape, and newer social entrants such as Instagram and Pinterest are rapidly coming into their own as the viral, sharing economy compounds. As the next generation of travelers, marketers and revenue managers use these sources to make decisions, it will become paramount for hotel teams to analyze the quantitative and qualitative data to capitalize on social trends.
As more people use these networks to communicate, research will go beyond places and/or prices to include channels and booking windows, which in essence means that soon we will see a proliferation of information being passed through social networks about the booking phase of the trip as well. This has far-reaching impact for both the marketing and revenue-management teams at hotels.
Cornell: strategically integrate technology
A new study from the Cornell Center for Hospitality Research finds that technology implementation is uneven at best.
Hotel firms are urged to focus on integrating their many technology solutions in a new report, "Network Exploitation Capability: Model Validation," authored by Gabriele Piccoli, Bill Carroll and Paolo Torchio.
"Our concern starts with the industry's speed in developing its (information technology) applications. We see how quickly hotels have adopted technology in many areas," Carroll said. "But the big question is how well the industry is integrating that technology across three critical areas: demand generation, multi-channel digital distribution, and profit optimization. For this reason we developed NEC Maturity Model, which describes how hospitality firms can become more sophisticated and strategic in their use of IT."
TripAdvisor rankings’ effect on roomnights
TripAdvisor rankings are based on their own metric called “The Popularity Index,” a proprietary algorithm that determines rankings based on the quantity, quality and frequency of reviews for any given property. But how exactly does ranking translate to roomnights?
It stands to reason that if a large number of people are using TripAdvisor to research properties, then ranking must play a pretty sizable role in bookings, writes Jonathan Brinksman, senior web marketing analyst with Micros.
The closer a property is to a No. 1 ranking on TripAdvisor for its given market, the greater its direct online bookings. For example, properties ranked No. 5 in their market see 9% more directly booked roomnights per month versus those ranked No. 10; properties ranked No. 2 in their market see 7% more directly booked roomnights per month versus those ranked No. 5; properties ranked No. 1 in their market see 11% more directly booked roomnights per month versus those ranked No. 2.
According to Micros data, efforts to improve a rank from the bottom 25% to the top 25% are beneficial, but additional and greater opportunity for an increase in roomnights as a result of improved ranking exists when the new ranking represents the top 20% of any market. Working to increase TripAdvisor ranking should be a key component in a hotel’s overall Web strategy.
Accor focuses on website
Accorhotels.com’s website traffic increased by 25% from 2010 to 2012 and more than 100 million people visited the website in 2012, according to a news release. Ten online bookings are registered every minute.
The site’s success is based on its adaptations to the local specificities and to customers’ expectations, Accor says. The website is available in 14 languages and through 31 geo-localized versions. Accor will launch two new language versions in 2013: a Turkish and an Arabic version.
The digital presence of accorhotels.com is mainly structured around three pillars: mobile, private sales and social networks.
In 2012, Web channels represented 27.8% of room business volume. Digital sales’ growth should continue in the coming years thanks to the creation of high value-added services. By 2016, digital sales should reach 50% of room business volume, according to Accor.
PointsHound building loyalty
Today’s frequent travelers are members of multiple hotel and airline loyalty programs, each with its own currency, rules and unique value. PointsHound, a new online hotel booking service from early Hotwire and Travelocity team members and former Switchfly executives, gives frequent travelers a streamlined way to earn rewards with every hotel stay.
Using PointsHound, travelers booking hotel stays earn airline miles from a growing roster of leading frequent flyer programs around the world. Members of PointsHound can select from more than 100,000 hotel properties globally, all backed by a low price guarantee. Each time a stay is completed, PointsHound awards thousands of miles to its members in the airline currency of their choice, with an earning potential of up to 10 miles per dollar spent on more than 100,000 hotel properties around the world.
PointsHound recently closed on a seed round of $425,000 from a group of former travel executives.
Compiled by Jason Q. Freed.