GLOBAL REPORT—Somewhere, someone, somehow is devising cutting-edge technology to sort through big data, succinctly target customers in real time and increase conversion to further cut into dwindling hotel-chain and online-travel-agency margins.
The speed and complexity of such technology and the prizes it offers has attracted the sharpest minds from such companies as Expedia Inc., Orbitz, Google, Facebook and eBay.
According to attendees at advertising, search and trends data provider Adara’s Europe Partners Conference held in Barcelona last month, the hotel sector trails significantly in technological advancement shown by other sectors in the booking journey.
Understanding data, formulating apps, retargeting consumers, integrating tested technology on as many devices as possible, keeping abreast of the goings on at the Googles and Facebooks of the world and not being afraid to come up with yet more ideas to push distribution and revenue are all at the heart of such innovation.
To risk not doing all of the above is to be left far behind, experts said. Such a vast amount of information is being produced, sent and acted upon, and the likely winners will be those who understand how to use data to win qualified customers.
Sources said consumers increasingly are booking hotel and travel on the same day, yet further pushing the need to get products and messages in front of them on as many devices as possible, but especially so on mobile.
“Today, 2.5 quintillion bytes of data are generated daily, which is 18 zeros after the number, if you are wondering, and hoteliers and marketers need to make sense of it all,” said Bill McKimm, senior consultant to such travel companies as Flybe, eBay and EasyJet—the latter also being where he formerly was director of ancillary revenue.
The future is now
According to Don Birch, a partner at Travel Innovations Partners, an investor in booking technology, a founder of HotelRezExpress and a former CEO of Abacus, the future of distribution will require working with a combination of cheaper, more reliable computer systems, the latest mobile technology and more relevant and contextual big data.
Bobby Healy, chief technical officer for car-rental booking system CarTrawler, formerly founder of Eland Technologies and a programmer of Nintendo computer games at the age of 16, said new innovations such as Google Glass, which can provide consumers a 360-degree travel experience, will further widen the marketing and booking landscape.
“It is a free-for-all where we get to play with all the new toys. The next 10 years will be critical to who and who is not left behind,” Healy added.
The Holy Grail is streamlining technology that targets the right person at the right preference at the right price at the right time.
“Mobile, savvy travelers tend to do more research, with video being the most evocative tool at their disposal,” said Scott Garner, chief commercial officer for Adara.
“Already, 50% of travel bookings in China are done via mobile, and we have not seen anything yet,” Birch added.
“Leverage everything you know about the customer. The more you do it, the better the results,” said Kit Simon, executive VP for Adara and formerly VP of global partner marketing at Orbitz Worldwide.
Hotel catch-up
Hotels are mostly behind in the race to be in front of consumers, but there does remain hope, according to sources.
“Hotels need to quickly comprehend the notion that data has to be monetized, and customer behavior is far more comfortable today booking via travel verticals where marketing meets intelligent pricing,” Garner said.
“Another goal is how to drive revenue on top of bookings via the logic of customer preferences,” Healy added.
Hoteliers, in addition to providing marketing campaigns with real-time information, should also get out of the mind-set that loyalty will win out.
“Simply, customers are not as loyal as suppliers believe them to be. Status trumps loyalty every time, and even millennials will catch up to that, which is a marriage made in heaven as they have far less expectation of privacy,” Simon said.
Computer game plan
The sharp minds in the room agreed that the distribution game changers would be mobile and the speed in which data is being created—a speed set to triple in the next three years, according to sources. To succeed, hoteliers need to have their distribution game plan down pat.
McKimm’s six-prong list of what hotel chains need to consider are:
- Will you be willing to have full transparency?
- Will you be brave enough to experiment?
- Will you be fast enough?
- Will you intervene if you believe you are cleverer than the data?
- Will you allow data to shape your strategy?
- Will you have anything in your kit bag that is different to that of your competitors?
“In the next five years, the landscape, which is more fragmented than ever, will be about how hotels and other travel providers master their data and how they can build prescriptive data that they inherently trust. Yes, historical is good, but recent is better,” Birch said, adding that the method to reach future consumers is “not about personalization, but persona-lization.”
Alex Gisbert, chief marketing officer of travel provider lowcostholidays and formerly director of online travel marketing for Expedia, said that his five-year crystal-ball view was one where branding and direct marketing would be far closer to one another—an especially important consideration in Europe, because, in his view, hotel brands there are increasing.
“Go multichannel, or you might as well not bother, and adopt a creative approach to drive demand. For example, revenue managers have now to become marketers. They cannot just sit back,” Gisbert said.