Recently, Revinate sat down with Dan Wacksman, founder of Sassato, LLC to discuss trends in the hotel industry and to get his thoughts on where hotel marketers should be making investments for success in 2020.
Wacksman is a long-time veteran of the hospitality industry. We first met Dan Wacksman in 2009 when he was the Senior Vice President of Integrated Marketing for Outrigger Hotels and Resorts in Hawaii. This year, after a decade with Outrigger, Dan left to start a company, Sassato LLC, with the goal of filling the gap experienced by most hospitality organizations; Too much to get done and lack of the right resources to do it.
What are some things that marketers need to be paying attention to this year?
The thing that will have the biggest impact in the short term is the launch of Google Trips, Google’s new centralized approach to travel, which I know you have covered on the Revinate blog. Google Trips is going to have a significant impact on metasearch and marketing overall, so hotels need to pay attention and understand the functionality, how OTAs are participating and what the impact will be on hotels to determine their strategy, including the potential need to shift more of their marketing dollars to Google (or not).
Over the past few years, we have seen some really interesting and effective targeting technology for display. Today, companies like Sojern and ADARA allow you to get really specific with targeting; For example, hotels can target those who have shown specific intent to travel to their destination and this will only get better with AI technology. Five years ago I would have predicted marketers’ display spend to be lower today but with these technologies, I think more marketers will be spending on display and social since you can much more effectively target travelers.
How should marketers be allocating their budget this year?
The only general rule is that budget allocation should be based on returns that you’re seeing and you should be flexible to change that allocation as the performance of different marketing vehicles changes. In other words, what works today might not work tomorrow. That said, it’s so important for organizations to have an attribution model that everyone agrees on because you will be using this to allocate your resources. If you’re working with agencies or third parties, you also need to really understand their model and/or ensure that they are tracking in a way that you are comfortable with. I am also a big proponent of having some money set aside for testing new things.
Every year Mary Meeker publishes her internet trends report. The 2019 report just came out so I’m wondering if there’s anything you saw that struck a chord?
Well, the one trend that I always look at is hours spent with digital media and it’s still growing. In 2018, adults spent 5.9 hours in digital media versus 5.6 hours in 2017 (and only 2.7 hours in 2008!), and mobile accounts for all the growth and then some. Most hotels have already done this, but just in case, mobile is the strategy and where people are doing their searches today. If you do not provide consumers with an effective mobile experience, you will struggle. This may very well change with voice search, but today it is still all about mobile.
OTAs are obviously on everyone’s mind today. Have you seen any interesting, new techniques to drive direct bookings?
The data that I have seen shows that the direct booking messages have had a positive impact and it is important for hotels to continue to create and highlight to potential guests the benefits for booking direct, but this needs to be consistent. If you are claiming that your rates will always be equal to or better on your website, you better be sure that this is always true, because if it is not you risk losing the trust of the guest. The one message I always try to convey when I talk to hoteliers is that while you may not get the direct booking for the first stay you should develop a strategy to ensure that the next visit comes direct.
We saw you at the Revenue Optimization Conference a few weeks ago. What were people talking about?
Over the past few years, a key point has been the need to move from Revenue Management to Revenue Optimization and Revenue Strategy, with the revenue team becoming a more integral part of the overall strategy for the property. Consistent with this, another big theme was that revenue management needs to be more tightly integrated with marketing. There needs to be much more collaboration around pricing, packaging, messaging and targeting. In fact, in my presentation, I talked about the traditional 4 ‘P’s of marketing (price, product, promotion and place) and how price should not be pulled out and determined in a silo. But that’s changing today. I’m seeing tighter integration today. In fact, in some organizations, the overall responsibility for revenue and marketing is under one person, whether it is the Chief Commercial Officer, Chief Revenue Officer or Chief Marketing Officer.
How should marketers think about loyalty today?
I think it depends on your scale. By all accounts, programs like Marriott Bonvoy appear to be a success. Marriott and other large brands have the scale to make it work. Smaller and independent hotels need other tactics to drive loyalty. There are plenty of technology companies getting in the game and one thing we’re seeing with millennials is that they’re not necessarily looking to collect points. They would rather be targeted for immediate rewards when they come to the hotel. Hotels with smart CR solutions can do this without necessarily needing to implement any additional solutions.