Recently Martin Soler and Sebastien Felix published the 10th edition of the Hotel Marketing Benchmark looking what the future of hotel marketing holds. This is excellent timing for us to dive a bit deeper into the trends with Martin and learn more insights. Martin has a long history working in hotels and hotel marketing strategies.
Going back 5 years in time and looking at the recently launched benchmark report, which trends were expected which were completely new development that you did not see coming?
The evolution that had started then and is finally coming to fruition is the drive towards direct bookings. This has been a lot slower than expected as I really believed hotels would make that a big deal sooner. It seems to have taken the longest time for the chains to work out global strategies for direct revenue without upsetting their partnerships with the OTAs. Independent hotels have been working on direct revenue strategies for a lot longer.
The advent of meta-search sites was a great evolution as it gave hotels a direct advertising channel to a super targeted audience. What I didn’t see coming was the shift these sites made to commission-based models, effectively putting them in the same group as OTAs even if they prefer not to be associated that way.
I was also surprised by how hotel chains are evolving from being brands and distribution channels to becoming technology and know-how companies for the hospitality industry. This is a great move for chains as they have huge amounts of data, know-how and technology so putting that to use with other hotels can only help. It might also help them focus more attention on their technology stack which in many cases is ageing and not holding up (think of CRS systems like Holidex and TARS which need middlemen such as Derbysoft to handle the server loads of channel management).
As for completely new developments, one that has yet to become a reality is Artificial Intelligence (AI) powered voice and chat reservations. While this is slowly happening it is more than likely that it will take over as the main reservation channel in the near future.
What technology excites you the most from all that is happening and why?
Undoubtedly AI powered voice and chat booking is the most exciting upcoming technology for the hospitality industry. The booking experience today is quite painful: between research, comparing, booking etc this is a field that is a time and experience killer. I believe the frustration on the research and booking levels also hurts hotels as guests arrive with huge expectations (considering the pain they had to go through to book) and the smallest mistake at hotel side is “unacceptable.” Business travelers for example have less of that because they often don’t book their accommodations themselves and if it wasn’t good they’ll ask someone to book elsewhere. They aren’t as emotionally involved in finding and booking the hotel.
With the rise of affordable and better technology for hotels do you think the marketing challenge has become easier or more challenging?
On the one hand the tools are leveling the playing field but otherwise hoteliers have to learn a completely new skillset to compete with the large chains and OTAs.
There are two challenges here one from each side: on the one hand because it is easier to build technology solutions for hotels, there are more tech products being made. This poses the question, does this new technology really solve a problem? Does the industry need yet another PMS or yet another channel manager? What is the real benefit to hoteliers?
On the other hand at hotel level, because of the increasing number of solutions hoteliers have a harder time finding a solution that fits for them. Add to that the fact that integrations are not easy, the choice becomes difficult (since the risk is early high). So even small cheap solutions become huge costs once you factor in the time and money involved with integrations. In summary, yes, the advent of new technology is a challenging issue for hotels. But I think the market will find a way to fix that soon.
On the skillsets hoteliers must have to leverage this technology, I don’t think this will affect the fundamentals of the hotel business. OTA brand relationships with consumers can’t replace the actual experience of the hotel. At the end of the day, hotels are still about the guest experience, and it is up to hotels to make that experience amazing, and then make sure others can easily find out about it. It’s the same with chains – while they can create standards, those experiences still have to be delivered at the property level. Only general managers and great staff can deliver that.
When talking to hotels what common challenges do you see and how do hoteliers solve these?
Technology solutions for hotels are still a tough sell in the industry. We have an incredibly closed industry that doesn’t allow for easy data transfer between platforms either due to old technology or hoarding for financial reasons. This is choking the tech scene in hotels and to some degree travel.
I recently read an article about all the AI and Machine Learning tools that exists on the market per vertical and stunningly there were none for travel at all. Yet travel is approximately 10% of the US GDP. We need to open our technology indiscriminately to whoever wants to connect. I’m not saying free, but open and automate so anyone who wants to build a better tool can come in and do it.
Hotels aren’t technology companies, they are service companies who take care of people, so when technology becomes difficult they stay away from it. There are wonderful solutions out there that hotels don’t use because of the complexities and problems involved with integrations. It’s a huge waste.
On a really simple level, look at hotel websites. These are revenue generating websites, that generate more revenue than many e-commerce websites. Yet still, hotels have a “brochure website” which links to a “e-commerce website” (the booking engine). No other industry works that way, at least not when dealing with that kind of money.
But that’s because the issues with integrating the booking engine into the hotel website are so high, nobody really bothers integrating it except a few very forward-thinking hotels.
From your expertise how do can hotels be smarter on data collection and taking action on the data they already have?
I think what hotels need to do smarter is that instead of searching for “the main providers” on the market they need to search for the most open providers on the market. They need a PMS or Booking Engine, or what have you, that is open and ready to rapidly integrate at acceptable costs. This is hard to find these days – did you know that some PMS companies ask hotels to pay upwards of 5000 USD just to open an account for integrations? That is a deal killer right there.
If they have a provider who is willing to open their API, a hotel can easily find someone to build the features they need (if individual applications don’t already exist). But if they want the fully featured system that has slow or few connections, they’ll probably be missing features one day and getting them built will be unviable.
So instead of thinking with “the safest and most expensive solution” think with “the most flexible solution” and build the technology stack bit by bit.
Any predictions on what we will see in future editions of the Hotel Marketing Benchmark?
It’s hard to say. I think we’re going to see hotels looking for tools that improve the guest experience at the human level. Things that will make the staff appear magically great at what they do.
Not too long ago, I walked into a hotel for the second time in about 10 months. It was about 22:00 and I was there for business. I had worked all day and traveled in the evening and just wanted to rest before meetings next day. As I came to the front desk a couple was standing there before me doing their check-in and I dreaded the waiting, filling out forms, photocopy of ID etc (after having properly waited at the airport). The lady at the front desk (whom I had never met) looked up at me and called me by name, handed me my keycard and off I was. That was a brilliant hotel experience. Not because there was a bunch of technology but because the people managed to make it awesome.
So I think we’ll be seeing a lot more tools that help “magically” make hotel experiences amazing. Hotels should be magical, that’s what makes them who they are.
About Martin Soler
Martin Soler is a former hotelier, a hotel marketing advisor and works with hotel technology companies and startups on optimizing products and marketing strategies to best fit the needs of hoteliers in the most efficient ways.