BALTIMORE—Social media might be all the rage, but it remains to be seen whether it can generate revenue for hotels.
“There is an absolute way to make money out of it, but we need to crawl before we walk in the social-media space,” said Ash Kapur, VP of revenue management & distribution for Starwood Capital Group.
The challenge, he said, is figuring out how to drive the significant traffic generated through social-media platforms to the company’s brand websites.
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Ash Kapur |
“It’s up to us as revenue managers to make sure we get them to our site, we invite them back so they actually book,” he said. “What I am seeing today is that, yes, there is a way to monetize it, but so far the stage that we reached is to get the traffic from Facebook to our site.”
Though social media continues to evolve and improve, the jury is still out regarding when—and if—there is money to be made from social networking, according to revenue-management experts during a roundtable discussion conducted by HotelNewsNow.com following the Hospitality Sales & Marketing Association International’s recent Chief Revenue Officer Roundtable event.
Weighing the pro and cons
Sloan Dean, VP of sales & marketing for Interstate Hotels & Resorts, looks at social media’s potential through a different lens.
“I would emphasize that the reason I short sell Facebook stock is it is tough to monetize,” he said. “It’s very time-consuming. It’s very labor-consuming. So those are the things to always keep in mind when you step into the space.”
Dean said various social-media sites have various values as business generators. Facebook can be a “decent resource for certain pieces of social reunion or wedding business. It’s very specific in that regard,” whereas LinkedIn “is very good for salespeople to prospect on.” And a correlation exists between TripAdvisor rankings and a hotel’s conversion rate on Interstate’s website.
Neal Fegan, executive director of revenue management for Fairmont Raffles Hotels International, said his company has had “some humongous successes” in the social-media space. However, he said “being able to forecast (the success of social media) at this point impossible.”
Revenue-generating campaigns on social-media outlets aren’t always about offering rock-bottom prices for hotel rooms, Fegan said.
“Sometimes you put a price point out on something and it takes off like wildfire. It becomes viral, and you get so much business that’s above and beyond that it shuts stuff down—websites crash, and it halts everything,” he said. “Other times you go out with a very similar offer, and it does absolutely nothing. So helping to determine what those triggers are, we’re still not very smart about, (but) we’re getting smarter.”
The key is staying with it because it is a constantly changing environment and no one knows what future technological developments will bring, Fegan said.
“It’s putting a lot more power back into our guests’ hands and a lot more information,” he said. “At some point in the future we’re going to be seeing a combination of the social-media sites with search. They’re going to kind of meld into one.”
That search component is particularly important, Dean said. As search-engine algorithms become more progressive, a property’s or brand’s social-media presence can influence where it falls in organic results.
Third-party review sites
User-generated reviews are on way to influence revenue through social media as well, sources said.
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Dan Kowalewski |
Wyndham puts TripAdvisor ratings on all of its brand and hotel websites and has invested in tools that allow franchisees to respond to those ratings, according to Dan Kowalewski, VP of revenue management service for Wyndham Hotel Group.
“It’s part of the direct strategy to help that consumer on our direct sites have a reason to stay and convert, and we’re finding that it’s successful,” he said. “… They want to understand the price/value comparison of that hotel. They can see the rating, they can see the price, they can actually see other ratings and prices of our other brands around them in a cross-sell-like environment, and they can make an informed decision.”
When asked if it has improved reservation conversion, Kowalewski said the company has seen improvement. “It helps with the overall experience that a consumer has when they come to our branded sites,” he said.
Greg Cross, senior VP of revenue management for Hyatt Hotels Corporation, said implementing those third-party ratings on a brand’s websites is a good thing, but he believes consumers will question the validity of the posted comments. Social-networking sites provide a more transparent platform for guest reviews, and Cross said he sees that as the next step in leveraging social media.
“The highest level of trust isn’t from someone that you don’t know, it’s from your own network of people,” he said. “As that becomes easier to do, that’s going to make TripAdvisor irrelevant. People are going to say, ‘Well, I don’t care what other people are saying. I care about what my people are saying.’”
