Briefing: Digital innovation improves customer targeting

According to Forrester, by 2020, 47% of Western European advertising spend will come from digital advertising. This kind of advertising allows for very specific targeting of customers. There is a great advantage to knowing who you are reaching and why, and knowing your customers well enough to be able to implement a targeted strategy. According to Forbes, 84% of companies are expecting to increase investment in audience targeting.

Our experts discuss the power that comes from digital and data use:

Whilst digital advertising is increasingly popular, research from Forrester points out that this may be less effective for older age groups who are less likely to consume these ads.  So targeted campaigns for this group may require a different tack.

The Forbes report “Reaching the Right Audience: How Brands Are Using Audience Targeting in Digital Advertising”, which was published in May 2015, found that; “90% of companies spend at least 25% of their digital advertising budgets on specific targets, and 43% of companies spend more than half of their budgets reaching specific targets.”

The report also shows that there is increasing use of digital video campaigns, and that 46% of the companies that use these are careful to validate that they reach the right audience.

Social media sites including, Twitter and Facebook offer ways to make ads that are posted on their sites targeted, and as discussed in a previous briefing, Google has developed hospitality specific ways to improve advertising reach.

Companies will continue to find new and effective ways to reach the right customers. Research from Gartner found that 71% of Marketers have an ‘innovation budget’, whilst Digital Commerce, Social, Marketing Analytics and Customer Experience, were the top-ranked Areas of investment for marketing technology in 2015.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: How the world is adapting to the sharing economy

Airbnb has met a need on both the consumer and host side of its business model. It is up to date with the latest technology, and has even recently created an app for the Apple Watch. But regulation of this, and similar sharing economy business, has been an ongoing discussion. A trade body for sharing of economy businesses was started in the UK last year, and in January the New South Wales government in Australia, announced plans for a new regulatory framework for businesses like Airbnb.

In these videos an Airbnb executive and three hospitality experts discuss the success and future of Airbnb:

Tourism Accommodation Australia has announced strong support for new regulations to be created in New South Wales. They have emphasised that the, “’Collaborative’ economy must be about ‘contributing’ to the economy.” Airbnb offers 15,000 listings in New South Wales.

In the UK, according to Airbnb, 52,500 hosts shared their homes in the past year. The typical host earned £2,000 by sharing their homes for 46 nights a year.

Last year in the UK a law was passed making it easier for people to share homes. Also in March 2015, the trade body, Sharing Economy UK was launched following the recommendation of the Wosskow 7 Report, a Government-commissioned independent review.  SEUK has a code of conduct that members must sign up to, which according to the website, “was designed to enhance the operation, image and reputation of the sharing economy industry.”

A recent report on the SEUK website highlights statistics that show the growth of the sharing economy in the UK:

  • The number of businesses with no employees has risen by more than 70% since 2000.
  • 3% of the UK workforce is providing a service through a sharing economy platform.
  • A quarter of the UK population has engaged in a sharing economy activity.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Digital support, OTAs, and the Billboard Effect

The latest report from TravelClick has found that so far in 2016 brand websites have had the largest share of rooms sold (34.7%) of all booking channels in North America. OTAs have had 14.9% of the share. Both segments grew in the last quarter of 2015, brand channels grew 4.3% and OTAs grew 3.8%.

Online booking continues to dominate distribution and despite recent discussions in the industry questioning the continued relevance of the ‘Billboard Effect’, relationships between smaller hotel companies and the OTAs remain important.

These videos discuss the importance of online channels and what OTAs can offer:

The Billboard Effect was made famous in 2009 when Chris K. Anderson of Cornell University published the research report ‘The Billboard Effect: Online Travel Agent Impact on Non-OTA Reservation Volume.’

The reported look closely at four hotels (three branded, one independent) and noted changes in the Average Daily Reservations on their own websites as their visibility on Expedia.com was switched on and off over a three month period. All four hotels saw an increase in direct reservations when displayed on the OTA. The highest difference was found with the independent hotel which had a direct reservation increase of 26% when visible on Expedia. The lowest difference was a 7.5% increase.

However, as reported on tnooz, research is now suggesting that customers who look on OTAs are more likely to ultimately book on the OTA site regardless of where they start their booking journey.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Convenience now key to customer loyalty

According to research from J.D. Power, 41% of loyalty members chose a program that was most convenient for the locations they travel to. The report also found that satisfaction with loyalty programs is highest among Gen Y members. However, in a separate survey Software Advice found that only 14% of Gen Y (18-34 year olds) participate in a hotel loyalty program. The industry is now finding new ways to define and encourage loyalty.

In these videos experts discuss how loyalty fits it into hospitality today:

Digital disruption has meant that loyalty is now lacking across many industries, not just hospitality. According to Accenture we now live in a “switching economy” that accounts for an estimated $6.2 trillion in revenue opportunity for providers across 17 key markets today.

Loyalty programs are still popular where the purchase is part of everyday routine i.e grocery shopping. Rewards that can be used routinely are also more popular. According to an Excentus consumer survey 37% of consumers prefer fuel saving rewards. Whereas only 17% prefer Airline miles and 14% prefer hotel points.

Staff communication is still driving much of loyalty participation in hotels. The J.D. Power 2015 Hotel Loyalty/Rewards Program Satisfaction Report found that 41% of members learned of their rewards program from a hotel employee during check-in/check-out.

Software Advice’s survey found that 51% of millennials who do participate in loyalty programs use their rewards on free or discounted stays. 51% said they would find a loyalty app useful, although 49% of respondents say they prefer to learn about their loyalty points via email.

The Switchfly Hotel Reward Payback Survey conducted by IdeaWorksCompany looked at “rewards payback”, reward value returned for every dollar spent on hotel rates. It looked at Starwood SPG, IHG Rewards, Hilton Hhonors and Marriott Rewards and found that Marriott Rewards had the highest average rewards payback at 9.4%. Value did vary depending on location and dates of the stay, and the highest payback result found in the survey was 24% for a stay in Hilton Beijing in February.

If you’ve been sent to this page and you’re not yet on the circulation list to receive these regular briefings and you would like to sign up, you can do see here. It’s free.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: New entrants keep industry in flux

Last year Amazon entered and left the hotel booking sphere in a matter of months. The hospitality industry is in flux with new players of all kinds entering the hospitality industry at different angles.

Google has also made several ventures into hospitality with its now defunct hotel finder page, and more recently added hotel booking function on Google Maps.

When companies from outside the industry enter hospitality, this brings new challenges and opportunities. In these videos hospitality experts share their reactions to new entrants:

In April 2015 Amazon opened its amazon.com/destinations page, on which customers could browse and book accommodation form a variety of brands. However, this service was stopped just six months layer on 13 October 2015. No reason was given but a message was placed on the website and booking that had already been made where honoured. This was not the only change in Amazon’s business last year, in December Amazon Local also stopped its daily deals.

Google has made several ventures into hospitality with its hotel finder, and Google Hotel Ads through which hospitality companies can buy ad space that appears globally on google.com and Google Maps, wherever customers look for hotels.

A search for a hotel on Google Maps brings up a list of hotel and price estimates, in the side bar and on the map. An extra search bar allows the user to select holiday dates and then click through to a hotel site to complete the booking.

With these frequent changes, and more sure to come from big digital players, the industry must continue to keep its eyes open and be ready to adapt.

Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

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