Can Social Media Marketing HELP Hotels stop the growing operation costs?
I previously talked about pain points Hotels experience with Social Media Marketing, such as content, engagement, and online visibility.
For many Hotels, Digital Marketing Ain’t Easy. And we know it will impact areas such as operation, security, and platform.
When it comes to operating costs many Hotels deal with challenges such as discounts, fees, commissions, and free services.
And many Hotel owners fuel the success of online travel agencies, with the vast majority of online travel agencies revenues from Hotel booking-related compensation that typically ranges upward from 15% of the revenue booked via online travel agencies. Some major brands may pay slightly less.
Marriott has paid Expedia 12% and been pushing towards 10%. And the argument often is that the costs don’t match the value of the business that online travel agencies deliver.
Fees paid by the hotel owners are, also the lifeblood of the hotel brands.
When the only battleground is Rate Parity
Price has for many Hotels and customers played a key role in the booking process.
And often from a customer perspective, their perceptions is that they are getting more value for their money when they book via an online travel agency.
The principle behind rate parity is for Hotels and online travel agencies to provide the same rate for the same room on all distribution channels.
And this is where the challenge starts for any Hotel. The Hotel Industry see this as a process where they are required to provide the same price for a room, no matter where the customer book. If the booking comes from an online travel agency the Hotel also will have to pay a commission.
Many Hotels also see this as a weapon for online travel agencies to prevent Hotel to discount rooms and limit direct booking opportunities.
Direct booking the Nemesis for Hotels
Hotels have over the years tried multiple approached to attain more direct bookings.
In the beginning online travel agencies excess inventory to help Hotels during the slow season. And the online travel agencies would profit from reselling these excess rooms for a commission. The Hotels would receive revenue for rooms they otherwise might not be able to sell.
Hotels could pay between 5%-10% in commission. Over the year commissions have increased to 15%-30%, and in some cases even higher.
Online travel agencies shifted their processes towards the customer experience, providing customers with bundling alternatives. Hotels were now starting to lose direct bookings to online travel agencies.
So, the online travel agencies shifted from being a friend and now becoming a foe.
Can Social Media Marketing HELP Hotels stop the growing operation costs?
A solid marketing strategy is critical for any Hotel where the primary purpose is to attract new customers and maintaining loyalty. Because customer loyalty is key, the marketing team, sales team, and executives devote a lot of time and resources to building brand awareness and creating ongoing, interconnected campaigns.
Often a Hotels will provide both tangible and intangible products. In many cases, this means that they are marketing services rather than goods, and success hinges on appealing to the right state in the customer.
For example, a Hotel will want to cultivate a relaxing, fun atmosphere that is recognizable to customers and inspires those same feelings.
Hotels that implement effective Social Media Marketing Frameworks will take actions that will impact operation, security, and platform.
Social Media Marketing is in some way that much different than Hotel Marketing. To key is to tie to the elements together and create new ways to add value to your existing customer, and more importantly, identify new ways to tap into uncontested markets.
Within effective Social Media Marketing Frameworks, we take advantage of data that is gathered through;
- Research – customer choose Hotels for different reasons. Today we have a unique set of Social Media Marketing tools and resources available that will help the Hotels marketing team identify critical micro-moments in the customer journey.
- Awareness – if your Hotel limits itself to your current market, you are missing out on new uncontested markets that don’t know about your Hotel yet. The research will help Hotel with new and more effective Value Innovation and incentives.
- Campaigns – implement the local community and your Hotels brand ambassadors to help promote your Hotel during slow seasons. Often, we marketers get it wrong believing we need to provide exclusive marketing incentives when inclusive marketing incentives are more effective.
- Relationships – today we utilize Social Media Marketing to help Hotels with acquisition and retention costs. We do this through Hotel experience ambassadors that help build a community of raving fans.
It is critical today that Hotels start to understand Value Innovation. One of the reasons for the rising operating costs is because many Hotel marketers have not started to focus on perceived value. This cause customers to treat their offerings as commodities where price becomes the primary driver. Hotels that compete on price alone with online travel agencies are fighting a battle they never will win.
Social Media Marketing Frameworks will help Hotel marketers create a more powerful story in the minds of potential guests and convert lookers to bookers at a higher percentage, and their marketing costs would decrease.
Is your Hotel struggling with getting started using Social Media marketing to grow your business?
Are you looking for a way to move your Hotels Social Media marketing efforts from good to great?
Do you want some insight into your strategy, content and how to optimize your efforts?
Do you want to learn how Social Media Marketing can help grow your Hotel with increased direct booking?
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Try something new it will magnetize your Hotel!
Be flexible and identify new ways to make guests happy.
As guest behavior and pattern continues to evolve, expectations will continue to rise. Navigating these changes can be challenging. Learn more about how we can help your Hotel.
About the author
Are Morch is the founder and owner of Are Morch – Hotel Marketing Coach. Get more from Are on Facebook | Twitter | LinkedIn | Pinterest | Instagram| Podcast
