REPORT FROM THE U.S.—The intense focus in the industry on creating a strong presence and thriving online and mobile channels can be telling of just how much hotel marketers believe consumers are evolving.
Last month during a general session at the EyeforTravel North American Distribution Summit in Las Vegas, Clem Bason, president of the Hotwire Group, said at some point the “traditional TV market will die,” while Jack Feuer, founder and president of Digital Marketing Works, said he believes “TV advertising is in trouble.”
Leisure and business travelers are shifting their focus to online media to research hotel information, according to a Google Travel Study released in May. Of leisure travelers, 82% use the Internet as a source to research hotels, while 6%, 5% and 3% primarily use TV, magazines and newspapers, respectively. The statistics for business travelers weren’t much different, varying no more than two percentage points for each source.
Google spokeswoman Sandra Heikkinen highlighted that the reliance on mobile devices for travel activity continues to increase year over year. She said 27% of personal travelers and 51% of business travelers use mobile devices to access travel information. “Both numbers are up (approximately) 10% over last year.”
Offline versus online at the property level
At The Hotel Group, Katherine Steed, director of marketing, said offline channels tend to get expensive, and it is nearly impossible to track the return on investment of them at the property level.
The company has more than 25 properties from different brands in its portfolio throughout the U.S., which means marketing to consumers has to be more specific.
With TV advertising, “it’s nearly impossible to target a specific audience. It’s just a little bit big for us,” Steed said.
As for radio, “we rarely use (it) and if we do, we usually do it in some form of trade out,” she said. This form of marketing only works for specific and time-sensitive events, she said, such as a New Year’s Eve party at a property.
Print does sometimes work for the company’s properties, but because markets tend to be so large, print advertising gets lost in the smaller publications and then too costly to hit the majority of the population within a market. Each year, Steed said she tries to determine the ROI on print marketing, but it’s too difficult.
Mobile marketing is nonexistent for the company, she said. The investment is too much of a risk because of where executives believe the public is in terms of usage. “I don’t know if everyone is reliant on mobile advertising,” Steed said. “I don’t think they’re there yet to justify the cost.”
That only leaves online marketing, which Steed said the company relies on heavily because they “get a bigger bang for (their) buck.”
It’s expensive to be on the first page of Google search results, she said, but franchise fees and brand resources help cover the costs. For example, for the company’s Hilton Worldwide-branded properties, Hilton would match 50% of whatever the company would put into pay-per-click costs.
Misconception about online ROI
Some hotel marketers still are not ready to put all their eggs in the non-traditional marketing basket just yet and do not see themselves doing so for the foreseeable future.
David Young, senior director of online marketing at Hotels.com, said while the company has put a lot of effort and money into developing its presence on the mobile channel because of the tremendous interest from travelers who want to interact on mobile devices, he remains unsure about the return on online channels, particularly pay-per-click marketing.
The problem is marketers can’t gauge consumers’ post-click behaviors online, he said. “It’s comforting for people to say, ‘I can track this because it drives a click,’ but there’s a difference between what people click on and what they do … People tend to focus on these online behaviors, so the (ROI) is believable.”
Data from Google appear to back up Young’s thoughts regarding online clicks versus behavior. While search engines help travelers learn more about hotels, the information listed on an online travel agency or the hotel’s website itself is what overwhelmingly helps travelers decide where to book.
Source: Google Travel Study, May 2012
Hotels.com’s Young sees “there’s still a lot of value and a lot of message” in TV and radio marketing, he said. “We’ve been pretty well invested in traditional offline media, and we continue to be at a pretty healthy rate. We still invest a (significant) amount of money in TV and radio.”
These are not channels the company is convinced it will walk away from anytime soon, he said.
To better understand how all the channels, online and offline, are working together, Young said marketers need to look at things from an econometric perspective.
Marketing to different generations
The shift to online marketing from offline marketing could be attributed to a generational gap.
Younger people generally want their information faster, Steed said, but “I think there are people that still like to touch and feel it.”
She believes there are large portions of the older population who might not like to go online and that there will always be a smaller segment of people from all generations who prefer to have information handy in print form.
This could cause offline marketing spend to slow significantly during the coming years, but “I don’t think it will ever die out,” she said.