Food for thought: What is next for Distribution? Loyalty vs Data
By Martin Soler, Partner at Soler & Associates
We're coming to the end of the year and I'm looking forward to the yearly analysis of trends in hotel marketing. What picked up this year, what is fading away and what has gone mainstream. But until then, here is some food for thought on the industry as it is.
Food for thought.
What is Next for Distribution Tech?
Hotel distribution is a pretty solved problem. Getting availability, rooms and inventory to the various sales channels works. The golden age of online distribution was a few years ago, weve passed the stage of commoditizing and today most solutions work well. Where can this still go? The attribute-based distribution model could be that next step. There is no doubt that for AI systems to be able to properly recommend hotels, trips and rooms these systems will need to know more than rates and room types. It is also quite obvious that the current OTA model of recommending hundreds and hundreds of hotels in a given city will need to get phased out. But it does mean the entire infrastructure for distribution will need to change from the supply all the way to the guest.
Loyalty or Just a Way to Buy Data
AccorHotel recently announced that 80% of their guests agree to share personal information with the company. Essentially theyre saying that 80% of the guests sign up to the loyalty system and in exchange for points they are OK to give up some privacy. And thats OK. But is that really what it takes? Nobody likes spam. And yet most hotel marketing is spammy at best. Most people would be OK to give some personal information, let a system learn from their habits to present relevant communications and offers. So do we need complex loyalty point schemes for that? These systems are even incredibly archaic in their operations; one needs to carry a card or a number to be identified. One manually needs to map ones stay to get the points. And not to mention understand the rewards system... So, if data is really what its all about - arent there better ways to solve that problem?
So What Should a Hotel CRM Do?
Hotel CRMs are happening. There are several solutions on the market and more being developed. But the exact function of a hotel CRM isnt clear to everyone. The old saying that it is cheaper to get a retain customers than to get new ones isnt quite the same for a hotel. Some really good hotels have a repeat rate of about 10% - so how does a CRM fit in? Today most have associated hotel CRM with email marketing systems. Thats not a CRM. If thats all one needs then Mailchimp is probably enough. But the real question is what should a real CRM be for hotels? What should it do? And what are the numbers behind that?
Getting Off the Sugar Rush in Hotel Advertising
The down-side of tracking and great analytics for advertising is that more and more people focus only on the quick wins and clicks rather than building a brand. In hospitality that means just focusing on paid clicks that drive high ROI. While that's understandable it misses the bigger picture. Building a brand isn't a quick win. Focusing only on protecting the last clicks is a low hanging fruit and will drive revenue. But it doesn't help grow brand awareness for the long term. Hilton's CMO had some great things to say about that at Phocuswright this year. And I believe this concept applies as much for independent boutique hotels as it does for big brands.
Get ready for your yearly update on trends in hotel marketing. Simple and easy to understand. Because those who need to know, don't have the time to go through reams of opinions.