NASHVILLE, Tennessee — How consumer make purchases online is changing, and hotel distribution and content needs to evolve to match this shifting consumer behavior.
Speaking at the 17th annual Hotel Data Conference, Nicole Di Maio-Kennedy, vice president of revenue maximization at EOS Hospitality, said the online buying experience is "moving from transactional to intentional."
And that means hoteliers need to change the ways they measure success.
"I think the topic of return on ad spend, we've kind of thrown that out the window," she said during the "Tune in to buyer behavior for smarter distribution" session. "If you're not achieving positive [revenue generation index], if you're not achieving your revenue goals, you're not achieving your budgets, a high return on ad spend means absolutely nothing."
One example of the shift in behavior is consumers are no longer booking travel directly in response to email blasts.
"So I think in terms of distribution and how we target, one of the things we're really focused on is what is going to make the most impact," Di Maio-Kennedy said.
Other panelists agreed that email blasts are unlikely to lead to immediate bookings, but they are still valuable as a marketing tool particularly for inspiration and brand awareness.
"It's still the least expensive way to reach a large audience, but you're absolutely right, and it changes your content strategy," said Scott van Hartesvelt, founder of GCommerce.
Shawn Jereb, senior vice president of revenue management and distribution for Montage International, said the shift in booking behavior has also meant a change in what luxury hotel operators communicate to their potential guests, especially since they have more options than ever before.
"We're super focused right now on experiential [travel] because people are super intentional, and there's so much luxury supply out there and rates are higher than they've ever been, so the expectations are super high," he said. "So for us, we're really focused on the content, and we're focused on unique experiences and authentic experiences, which is very challenging in today's labor environment to deliver."
So much of hotel distribution and digital marketing today comes down to knowing who your audience is and finding niches where you can be particularly successful, said Dorothy Dowling, managing director at Horwath HTL. But at the same time, that is growing more difficult and expensive as more third parties move into the business travel segment.
"About 70% of [business travel] is new business," she said. "Think about all the new intermediaries that are focused very heavily on that segment, so we've had a tremendous growth in intermediation. We learned today about the middle of the [profit and loss statement], and the stress that our owners are seeing. The cost of sale in terms of customer acquisition has gone up about 35%, and a lot of this had to do with the intermediation."
The biggest elephant in the room in terms of how distribution and digital marketing can evolve seems to be how consumers engage with artificial intelligence going forward, panelists said.
Van Hartesvelt said it's still early days in terms of adapting to this space, but eventually content will be optimized for AI and it will be monetized just like search engines.
"This is a significant change and shift in the way in which people experience information and experience your brands," he said. "So we have to pay attention to it."
Part of the problem for hoteliers currently is there's not an advertising model built up around AI, at least for the time being, van Hartesvelt said. And there's "no visibility into what's happening" in terms of guests seeking out your information, he added.
"So people on ChatGPT do a search for and ultimately come in contact with your property, but they're not actually visiting your website," he said. "They're not going to your social media. It's a black hole. So what we see is a decline in overall visibility through our websites, and we can assume that it's because all of these use these channels, but we can't actually measure it."
For now, hoteliers should be focused on search engine optimization and content because AI large-language models "have voracious appetites for this content," van Hartesvelt said.
Once advertising models do launch around AI, it could be a huge opportunity for hoteliers to get bang for their buck, he added.
"I lived through Google AdWords taking off. I lived through Meta launching their advertising models. They were cheap when they started. It was a really inexpensive way to efficiently find your customers. As that monetization comes to LLMs and ChatGPT, we're going to be pretty aggressive about being there," he said.
Jereb said Montage International has already observed a drop-off in traditional online search, and that's caused some companies to react in the exact wrong way.
"We're trying to fix search through paid, and that's not really working," he said. "I think it all comes down to content. I really encourage everybody to go on to whatever your chosen AI tool is and search your property and try to see if you see it at all."
This is a "back to the basics" moment for the industry, Jereb added.
"I do think this is a content issue we're going to be faced with in a really big way in terms of how it's going to be consumers and what we need to do to show up," he said.