The sharing economy and its impact on hotel brands - Insights

The sharing economy and its impact on hotel brands

Sharing EconomyThere’s no denying the Internet has transformed hospitality ecommerce within the past decade. The good news for hoteliers is there are many new opportunities to effectively compete for online presence and guest loyalty. This news is coupled with a universal reality that prospective guests are constantly online and connected, evaluating where to stay and how much to spend.

Google and Facebook are now well developed and commonly understood acquisition channels. Other mediums like Twitter, Snapchat and Periscope are emerging as viable opportunities to attract, acquire and convert online guests. Within these entities there is a new reality hoteliers must understand and manage. According to a recent TravelClick poll, 56 percent of hoteliers said they were improving their property’s mobile website and nearly 70 percent said they were increasing their social media presence.

What is this new reality and what can hoteliers do about it? This article will explain the opportunity and threat, offering insight for hoteliers to effectively compete throughout this new environment.

Does brand still matter?

The simple answer is yes, brand certainly does still matter. However, the relative value of a hotel brand changes within the Sharing Economy and The Internet of Things.

First, these terms are relatively new, and for many people require definition. Think of both as being interrelated, a community of shared interest facilitated through an always on, always connected audience of current and prospective guests. With this understanding hoteliers quickly realize there is simply no place to hide, good or bad. Guests know within a local market what brand and independent hotels offer competitive rates and quality service. Major hotel brands work diligently to manage their online reputation. However, independent properties now have a growing list of online channels to compete. This dramatic change is leveling the playing field.

What’s the importance of a “push” versus a “pull” audience?

Understanding the vast difference in push and pull mediums is an important part of creating a competitive advantage. For decades “push” mediums were used to drive demand and engage prospective guests. Newspaper, radio and television are all examples of push mediums. Think about the inefficiency of advertising to a person who is never coming into your market and has no need for a hotel room. For many years there simply were no choices other than to use traditional push marketing channels to entice consumers who, in the vast majority of cases, had absolutely no interest in overnight accommodations.

Conversely, Facebook, Google and the GDS offer “pull” audiences. These channels connect to consumers and travel agents actively searching for, or “pulling,” information to make a decision about purchasing a hotel room. The conversion value of pull mediums is consistently higher than traditional media and is vastly more measurable.

Now, let’s take this opportunity a step further. Think about on demand media; YouTube, Netflix and streaming video content. These channels provide the ability to tap into an audience that one minute ago was checking availability on your hotel’s website and now is watching a video on YouTube. How about purchasing a 15 second video pre-roll on the YouTube video as opposed to buying a traditional 30 second television spot? The key is to tap into defined intent, a consumer or travel agent actively attempting to make a hotel purchase decision.

Seize the movement to mobile and video now!

Let’s go back to the original premise. Consumers are always connected, constantly sharing experiences with friends and co-workers. Mobile video viewing is now the norm with well over half of the world’s population carrying video enabled smart phones. Do you think Airbnb doesn’t know this?

Now is the time for hoteliers to create localized video content to showcase their competitive advantage. Is your hotel in walking distance to a major tourist attraction, a trendy restaurant, or a nightclub? Do you want a prospective guest checking out your hotel rather than the availability of a nearby landlord?

It wasn’t all that long ago hoteliers debated about investing in websites. Now and for the foreseeable future the virtual hotel is as important as the physical asset. Get moving, experiment with mobile and online video content. It’s where the Sharing Economy and The Internet of Things are evolving into, and where every hotelier needs to be.

About the author

John HachJohn Hach has more than thirty five years of travel industry ecommerce experience. He currently serves as the Senior Industry Analyst for TravelClick, a global provider of innovative cloud-based solutions that enable hotels to grow revenue.

 

 

 

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