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This is how your hotel should approach loyalty for top results

Posted By HEDNA Brand Journalist Nick Vivion, Wednesday, February 6, 2019

Loyalty is big business for hotels: an analysis across the top five publicly traded hotel companies that report loyalty program participation, the brands had 375 million members combined in 2018, with reported growth of 4 million members per month.


Despite the raw interest, the average consumer rarely redeems loyalty points. A study by PcW on modern loyalty for hotels found that most leisure travelers (58%) didn’t redeem points once this past year. For business travelers, that figure was 30%. This low redemption rate leaves a large liability on the balance sheets, causing consternation among CFOs and CEOs. These balances also represent an opportunity to bring these customers into the fold for revenue-generating stays.

 

PcW report showing how often travelers redeem their loyalty points each year.


In a recent whitepaper on loyalty, Deloitte points out the primary challenge for hoteliers: Identifying which guests are the ones that will deliver on the promise of the high-value repeat guest.


“The tipping point that converts episodic guests into dedicated loyalists is the place where a hotel’s loyalty program transforms from a cost center to a revenue engine. The challenge is finding it—and knowing how to drive your most important customers across the line.”


The design of a hotel loyalty program defines exactly how a brand expects to make this transformation from “loyalty as cost center” to "loyalty as revenue engine.”

 

To prepare for success with your hotel’s loyalty approach up for success, first decide which type of loyalty program you want. Next, outline the steps necessary to either pivot or create that program. Finally, plan at least 12 months of detailed promotions to deliver the promise of your hotel loyalty program. Cost centers have far different structures and support systems than revenue engines, so plan accordingly.


Business versus leisure


The distinction between business and leisure loyalty is familiar to most hoteliers: business travelers are less price sensitive and more status oriented. While this is generally true, there's an emerging trend towards alternative types of loyalty. Some OTAs now have their own loyalty programs, such as Hotels.com’s “stay ten nights, get one free” and Expedia’s extensive Expedia+ rewards program.


Hoteliers should be concerned about these programs because they disincentivize loyalty among leisure customers, who may not travel often enough to be brand loyal.


“A customer who becomes actively loyal to a portal that provides consistent low prices is not likely to have any loyalty left over for a single brand, especially if the portal’s enticements are “portable” from one brand and one stay to the next.” -Deloitte


There may also be some leakage for business travelers, who may have less choice when it comes to which brands are bookable via a corporate travel tool. An OTA offers a wide variety of global supply across hotel types and price points. This can be quite appealing to business travelers as well, especially those that are unencumbered by a corporate travel policy.


A survey from Phocuswright/Acxiom bears this out, showing significantly higher penetration for OTA loyalty programs among business travelers than leisure travelers. The low rate for leisure travelers is a positive sign for hoteliers, as there’s much more of a membership base to activate.


The gap between business and leisure travelers when it comes to loyalty membership. [source]


When orienting your loyalty approach towards these two demographics, be surgical. Not all business others are the same and neither are all leisure travelers. Leverage your data to deeply understand your hotel’s appeal to different guest profiles. And then create sub-campaigns to more precisely target those needs.


Members-only rates


Hotels have been encouraging loyalty program adoption by offering exclusive rates to members. Initially, this promised to drive more direct bookings, as hotels train travelers to visit their websites first for a “best available rate” guarantee. Now, these rates are being distributed in some cases to OTAs -- the very channels hotels were looking to circumvent. In other instances, rate parity becomes much more complicated to manage successfully. If members can’t see these lower rates when searching on third parties, there’s a reduction in impact since members never a clear view into the members-only benefit outside of the hotel’s ecosystem.


Today’s reality is complicated; shifting channel mix isn’t as simple as promoting direct booking rate as “best available.” Hotels must also add sweeteners to boost adoption, such as free WiFi, late check-out, complimentary bottled water, and discounts on rooms when booked direct. Technology is also a differentiator: Hilton’s Connected Room initiative aims to use app-based room personalization as a member benefit.


“When a hotel brand uses analytics to pry insights out of the massive customer data available to it, it can identify and target different types of customers to get them to the tipping point more quickly.” -PcW


In addition to enrollment efforts, loyalty must be marketed comprehensively and thoughtfully. The goal for a “revenue engine” approach to hotel loyalty is to be the only stop in a member’s search. Loyalty benefits must be made top-of-mind regularly so the member recalls these benefits before starting their next search. Data is how to get to the sweet spot. Know your guests, target intelligently, and deliver personalization that offers a clear benefit to each of your segments.  


An alternative to members-only rates is to expand the number of opportunities to convert an episodic guest into a repeat one. Some tools help deliver these touchpoints, such as StayWanderful, RocketMiles, and TheGuestbook, which offer data-driven solutions to increase direct bookings, encourage loyalty from new audiences, and reduce reliance on discounted members-only rates. Since these solutions integrate with existing booking systems, they become complementary to ongoing loyalty efforts by contributing to a “loyalty as revenue engine” approach.


Look to retail and restaurants


Per a 2017 study by CrowdTwist, retail and restaurants are the most common loyalty memberships of consumers. The common sense answer is that consumers earn points more often due to purchase frequency across many outlets, and thus have more benefits to the consumer. Personalization and cost savings are also appealing when it comes to retail and restaurant loyalty. In these cases, consumers don’t mind trading behavioral data for those benefits.


Travel and hospitality underperform, especially with 18-22 year-olds. [source]


Even so, hospitality has been encouraging redemption of points in non-travel outlets, such as hard goods with retail partners (the “sky mall” approach). In surveying customers, credit card brand Discover found that 26% use their points for non-travel purchases. This behavior actually works against the “revenue engine” approach to hospitality,


If you approach loyalty as a cost center, then it makes sense to reduce points liability by encouraging members to spend points in many channels. However, with loyalty as a revenue engine, then it’s advisable to limit redemption opportunities to channels with direct incremental revenue benefits. It’s a fundamental difference to account for at the plan design stage. To maintain the perceived value of earning in the program, it’s important to carefully manage redemption channels as well.


Bringing it all together


To get top results with your hotel’s loyalty program, use a “revenue engine” approach that encompasses the following:


  1. Segmentation. Don’t paint your guest with broad strokes. Narrow and segment so that you can target loyalty promotions and inititatives more effectively. Guests expect it -- and the revenue upside is worth the time.

  2. A data focus. Always rely on Data to drive decisions around segmentation, promotions, and optimization. Design your operations software and train your staff to support your ongoing loyalty efforts.

  3. Experimentation. Try new things! Technology moves rapidly, as do consumers. You won't know if something is a revelation without a structure that supports small experiments. Test and learn should also apply to loyalty marketing.

  4. AnalyticsThread a practice of analytics throughout each layer of your loyalty program. Measure the results, and codify the things that work best. Continuous improvement makes a loyalty program lucrative.


As Sloan Dean, COO of Remington Hotels said in a recent conference session on the ROI of loyalty, success is about leveraging personalized and channel-specific promotions to grow revenues -- and maintain relevancy:


“Partnerships with Uber, for instance—a free ride immediately. The highest loyal guests will give you 10 times return, and are by far your most profitable revenue stream, so you have to continue to innovate. Like anything, our old loyalty schemes will die out.”


Tags:  hotel marketing  loyalty 

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Hoteliers: What you need to know about the breakthrough success of eSports

Posted By HEDNA Brand Journalist Nick Vivion, Wednesday, January 23, 2019

The rise of eSports has been extraordinary. Within the last decade, the competitive gaming industry has matured to the point where players make six-figure incomes from playing in front of massive audiences that watch both live and remote. Players travel all over the world to compete, and some fans follow them to the more prominent events sponsored by the world’s largest gaming companies.


Sports has proven resilient to some of the technology headwinds challenging other entertainment properties, such as movies. The live component creates an urgency that’s hard to replicate. People generally want to know the outcome of a live sporting event as it happens, rather than watching it on-demand after the fact.


eSports benefits from this same “fear of missing out” on a live event. This builds demand similar to a traditional sports event, and thus can be tapped by the hospitality industry.


To better understand how the success of eSports impacts hospitality, let's consider first the size of the industry, then explore some best practices, and close with some tips for your hotel’s eSports approach.


How big is the eSports industry?


The size of the industry is massive -- and growing. A recent Newzoo report pegged the size of the eSports economy at $905.6 million, which is 38% more than last year. The growth continues to accelerate, catching up to the explosive popularity of playing and watching online games.


 

The level of attention is also staggering. The most-watched eSport in 2018 was League of Legends, which captured viewer attention for 240 million hours. For comparison, the top three shows on TV per Nielsen netted 60.2 million viewers per episode cumulatively.


Competitive gamers also capture quite the number of hours on streaming services, with millions of viewers watching the most popular channels on live stream service Twitch each week. Competitive gaming is especially popular with younger demographics and sees much of its future growth from Asia Pacific.



What are other hotels doing?


There are two epicenters of eSports: Las Vegas and Taiwan. The existing infrastructure is ideally suited to competitive gaming: plenty of hotel rooms and a local industry familiar with events and entertainment. Another important factor: sports betting. For Las Vegas, eSports is essential, says Fifth Street Gaming CEO Seth Schorr


“For Las Vegas to maintain its position as the entertainment capital of the world, we as a city and industry need to constantly embrace new forms of gambling, entertainment, and sports. Esports is one of the few platforms that really embraces all three.”


Here are a few examples of what other hotels are doing:


  • Las Vegas: eSports Arena. The Luxor, owned by Casers, hosts one of the world’s first dedicated arenas.  The arena spreads across 30,000 square feet with dramatic LED lighting and broadcast space to showcase high-profile events. The arena is also a revenue center, with per-hour charges to gamers.


  • Las Vegas: The Downtown Grand. A few years back, a renovation added a dedicated eSports area, as well as bunk bed rooms for gaming teams. Its location just off the casino floor reflects the similarities of eSports with traditional casino gaming: Interactive entertainment that encourages lingering -- and betting.


  • Taiwan: iHotel. Dubbed the first eSports hotel, the iHotel addresses the unique needs of competitive gamers: each room features a high-powered gaming rig for competitors, and the lobby (below) welcomes guests with a 16-person LAN center open to all guests. A few “capsule rooms” also provide minimal sleeping quarters for team living; sound-proof, these capsules make it possible for teams to go 24/7 without disturbing each other.



  • Panama: Alienware @ Hilton Panama is a clever partnership resulting in a dedicated gamer room full of best-in-class technology. For hotels who want to craft an offering targeted specifically to gaming enthusiasts, one or two rooms can be a sufficient experiment to test demand.



What can my hotel do?


As each hotel’s infrastructure and demographic appeal vary, there’s no set playbook for leveraging eSports. With that in mind, here are some steps that your hotel can take towards welcoming eSports enthusiasts:


  1. Promotions. The easiest thing to do is to create a promotion around any local competitions. Similar to the way that you may offer discounts to traveling sports teams, create relevant discounts for this community.

  2. Relationships. Don't neglect local eSports organizers. Reach out to show your interest and support for the community. Organizers can also help you understand how best to serve as a partner and potential venue.

  3. Sponsorships. Consider sponsoring a local event or even a local competitive gamer. Enthusiasts are loyal to the brands that support this emerging sport. And with significant audiences watching remotely, there's a chance to expand brand awareness beyond attendees.

  4. Venues. You don't need a massive arena or dedicated eSports space to host an event. Often, events take place in ballrooms. If your hotel has ample meeting space, it can transform into an eSports venue. One caveat: eSports is bandwidth-intensive, so be sure to align your IT to ensure adequate speeds.

  5. Development. Certain markets, such as Las Vegas, have existing entertainment infrastructure that can extend to eSports. As your hotel looks to the future, consider how eSports fits into the plan. The reality of more people seeking out live eSports events means that there’s growth ahead. Diversify your sources of demand to best position any future development.


With these five steps, hotels of all sizes can begin to support the emerging eSports traveler demographic. There's plenty of growth ahead -- and those hotels that appeal to this new type of travel stand to gain a loyal fan base.

Join your HEDNA colleagues in Los Angeles for the first major travel event of 2019. Register here.


Tags:  hotel marketing  trends 

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1,053 hoteliers share their struggles with data and analytics

Posted By HEDNA Brand Journalist Nick Vivion, Wednesday, January 16, 2019

This article focuses on a few salient points from the Hotel Analytics whitepaper from our Hotel Analytics Working Group. Read the full white paper for more on hotelier attitudes towards data and analytics.


In one of the most far-reaching surveys on the state of data and analytics in hotels, our Hotel Analytics Working Group surveyed 1,053 hoteliers representing over 40,000 hotels and management companies. The sheer number of responses shows that the topic remains very much top-of-mind across the industry.


The objective of the survey was to quantify current practice in data collection, storage, and usage across independents, chains, and management companies, as well as test respondents’ overall data satisfaction. The survey reveals an industry still finding its footing with data. Here are three of the most noteworthy findings around the ongoing opportunities and challenges of data in the hospitality industry.


Quality data and systems integration remain elusive


When looking to unlock commercial value and data, the top two challenges identified by hoteliers were the quality of data and systems integration. These two issues are inextricably linked; one of the greatest challenges of integrating both internal and external systems is the quality of data shared between them.


Hoteliers identify the most significant challenges to data availability in their organizations.


When one system doesn't directly connect with another, data must be routed through an integration; this complicates adoption as it requires time and capital. And when data is routed back and forth from internal systems to external systems, there is data drop off that affects data quality.


Take a single booking as an example. Since a reservation goes through multiple systems, it’s often the case that essential data, such as time of reservation, channel or guest preferences, never makes it through the process intact. The PMS loses essential details, and the data is now problematic to integrate into other sources for further insight. This affects the guest experience and, in the short-term, eliminates opportunities for additional revenue. In the long term, it skews data and makes it less useful for aggregate trend tracking.


Data captured but not always used


Data inundates most hoteliers -- from internal systems, social media platforms, vendors, and third-party channels, there is data overwhelm. In fact, only 3.89% of respondents across categories identified having sufficient data infrastructure as a challenge to data availability.

 

Yet, it remains much easier to capture data than it is to use it; availability isn't analysis. This is partially exacerbated by the staying power of spreadsheets, as seen in the graphic below.


Survey data showing which tools hoteliers use to store and analyze data.


Without the right tools to analyze multiple data sources quickly and easily, the allure of using data to drive decisions is diminished. While powerful for analyzing ad hoc data, spreadsheets with stale, out-of-date data can make insights less relevant and representative of the current state of business.


This temporal disconnect between a spreadsheet and real-time data is a “perfect storm” for bad decisions made from faulty data, says Ash van der Spuy from Altis:


“The perfect storm is the scenario where a spreadsheet contains both good data from a data warehouse and bad quality data and incorrect formulae input by analysts, which is then used by Management to make decisions. Since some of the data is from the data warehouse, the results are taken with high regard and decisions are made with confidence.”


The first step toward better data usage is understanding the limitations of specific data storage techniques:


  • A spreadsheet is easy-to-implement but has less robust analytical capabilities and risks inaccuracies through irregular updates of data.

  • A database is familiar and accessible but doesn’t usually provide a multi-faceted view into business performance.

  • A standalone data warehouse stores large amounts of data from many sources/databases and offers a deeper relational framework to analyze data. Data warehouses are optimized to perform complex queries across massive data sets that would otherwise max out a database’s resources.

  • Business intelligence tools layer analytics and visualization capabilities on a given collection of data sources.


Data warehousing and business intelligence tools are the most robust, but also require a relatively sophisticated data practice.


As revealed in the survey, independent hotels and management companies still have room to grow their own analytics capabilities. The distributed nature of analytics at chains underscore some potential blind spots when analytics sits at the property, regional, and departmental level. Also, with some chains handling all analytics from HQ, there may be some capability disparity between the home office and individual properties.


Survey data showing the analytics capabilities across hotel categories.


More collaboration -- and transparency -- needed


Collaboration is necessary to transition from capture-only to a capture-and-analyze approach. Moving to a data-driven decision process has plenty of upside: hoteliers can adapt quickly, in real-time, to changing market dynamics.


A chasm exists between third-party channels provide and hoteliers when it comes to sharing data. The survey found that many channels provide low-to-no data reporting. Hoteliers thus grapple with blind spots in their data and often must extrapolate demand trends based on incomplete historical data.

Data shows low data penetration of other distribution channels with over a third reporting No Access of Metasearch, late Booking or Wholesale platforms.


To resolve this issue, more collaborative relationships can bring the transparency that delivers data-driven results. This is an ongoing challenge, as certain vendor categories either prefer to withhold data or have under-invested in data capabilities of their own.


Hoteliers are also seeking solutions to deliver on the promise of interconnected data sources, requiring focus to shift more on how to collaborate across data sources -- and put available data to work. This complexity requires collaboration, says Luis Segredo of HAPI:


"Data and system complexity in the global hospitality market has undergone exponential growth in recent years. Traditional sources of operational data from property systems like the PMS can be augmented by the vast volume of data from an array of outside sources, such as IoT systems, social activity, and publicly available data points."


Without data transparency and collaboration across technologies and vendors, there’s less power in data captured by hotels.


Looking ahead


When vetting vendors, available integrations and data strategy should be a core part of the conversation.


Hoteliers should leverage whatever pressure points available to encourage more data sharing among channel partners -- and to reward those partners that provide at least weekly reports. Anything longer than a week and the data gradually loses some of its power to help hoteliers price more profitably.


At HEDNA, we strive to be an active forum for dialogue and collaboration between the suppliers and users of hotel technology. Such a constructive environment leads to more formal standards in data management from a distribution perspective. To keep this conversation going, we need further engagement between subject matter experts from the vendor and hotel groups. Only once we have a common language and approach can we make begin to unlock the latent commercial value of a hotel’s data.


To see the complete results of the hotel analytics working group’s survey, download the white paper.

Contribute to the discussion with vendors and hoteliers at our next conference in Los Angeles. More info here.

Tags:  analytics  hotel data 

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Who will win the bright future of AI in hospitality?

Posted By Nick Vivion, Wednesday, January 9, 2019

There’s a high-stakes game afoot in the hospitality industry. From robots to software, vendors, brands, and platforms are all vying for a piece of the data-drenched future of artificial intelligence in hospitality.


Thanks to plummeting costs of data storage and processing, it's now possible to both capture and process large amounts of data at a reasonable cost. Nearly every hotel uses data to make decisions, streamline operations, and improve performance.  The growing importance of data puts pressure on hotel brands to optimize performance better than their competitors.


In order to achieve peak performance, hotels have a few options. They can turn to vendors for off-the-shelf software, outsource innovation to third-party booking channels, and/or invest in bespoke solutions. As technology reaches across all parts of hotel operations, most choose a blend of these approaches when building a tech stack.


So, as the tapestry of hospitality technology weaves wider, who wins the future? Is it the vendors that become the inseparable backbone of hotels? Or the third-party platforms that invest much of their commission income into innovation? Is it the major hotel brands that can afford to build technology as a competitive moat? Or perhaps it's the independents who aren’t beholden to parent brand’s technology prescriptions? Let's explore.


Vendors


Choosing a vendor is akin to a marriage -- an intertwining of fortunes that’s difficult to unravel should things go sour. This is especially true of mission-critical systems like the PMS and CRS. Once implemented, it can be a nightmare to switch vendors.


This means that vendors are in a strong position to own the future of AI in hospitality. These are the systems that sit at the center of the hotel operation, pulling in disparate data sources into one centralized channel. The access to data places power in the hands of those who control the mechanisms for making sense of that data.


Why they win: Given the stickiness of these deep integrations, vendors are well-positioned. If hotels rely too heavily on vendors, with no internal capabilities, vendors could take advantage of this dependence. Vendors also have data from across customers that can be anonymized to uncover behaviors that individual brands or other platforms might not be able to.


Platforms


The major OTAs, as well as alternative accommodations platforms like Airbnb and metasearch players like Google, position themselves as innovation leaders in hospitality. The standard brand position from most of these players is that hoteliers pay commissions to fund innovations that increase bookings. The alignment incentives are there: platforms make money when a customer books a room. The greater the value of the booking, the higher the commission.


The narrative of innovation is powerful. Many consumers actually start their searches on OTA and metasearch platforms; most believe that these channels provide the best deals, per the AHLA:


“An overwhelming majority (79 percent) of consumers believe these “digital middlemen” will yield better deals – a belief fueled by misleading marketing practices such as extreme discount pricing that is not based on an actual room rate set by the hotel.”

The verbiage from the AHLA shows how contentious the battle for the guest can be. Many hotel brands were at a data disadvantage, as the platforms took advantage of their massive data sets to improve conversions, optimize marketing, and incentivize end-to-end travel bookings.

 

Graphic from Expedia's 2018 Generations on the Move research.


Many OTAs are even bridging the gap between channel and vendor, offering software services that reflect a desire to be both a booking engine and technology partner for hotels. Expedia’s “tech platform for hotels” is perhaps the most direct example of how booking platforms are positioning themselves for the future.


Why they win: Platforms have far more data on consumer browsing and booking patterns than any one vendor or hotel brand. The valuable insights within this data can be leveraged to convert lookers-to-bookers more effectively than other channels. The focus on conversion delivers guests to hotels, and the data on both consumer behavior and marketing optimization keep consumers coming back. And a “one-stop travel shop” has great appeal with many travelers.


The majors


The guest experience is in the hands of the hoteliers. When it comes to affecting how a guest flows through a property, and which technology a guest interfaces with, the hotelier controls all of the levers.


There are fruitful opportunities to use sensors and algorithms to optimize hotel operations, understand the dynamics of a guest’s stay, and to experiment with emerging technologies (like robots). By customizing existing solutions, such as IBM Watson for Hospitality, major hotel brands leverage sophisticated knowledge into customized solutions without ceding complete control to an external vendor.


The majors also have a huge loyalty advantage: keeping guests within its closed ecosystem lowers customer acquisition costs and furthers guest relationships.


Why they win: Hotels have something vendors and platforms don’t have: control over the actual guest experience. Technology investments can be far more integrated into the hotel, meaning that hotels have a chance to complete circumvent vendors and platforms. It would be costly, but major hotels could focus on direct booking, building proprietary technologies, and using loyalty incentives to keep guests in a closed loop. Then the data is all theirs, as is the ownership of the future.


The independents


Last -- but definitely not least -- are the independent hotels. These brands, which range from smaller budget operations to single property luxury boutique hotels, do not come with larger tech budgets or the support of a global organization.


What they do have is a focus on the guest experience that benefits from being far closer to the guest. Smaller properties can deploy new technologies more quickly, so independents have a speed advantage when it comes to experimenting with new technologies. If done at a rapid pace, independents might learn faster than the majors when it comes to if new technologies belong in their hotel, and how best to implement them.


Why they win: Cover your ears, technologists: Technology might not be the right answer for all problems. The independents might actually win the future by focusing less on artificial intelligence and data, and more on direct experience with guests.


It’s all about the blend


The truth of travel is that everyone needs one another. The blend is the answer. A smart GM approaches distribution and guest experience technologies with a cohesive mindset that mixes and matches the best solutions for a given property. Continuously tinkering with the blend is really the way to win the future of data-driven artificial intelligence in travel.

Influence your own opinions on who will win the future of hospitality technology at our upcoming conference in Los Angeles. Register here!


Tags:  AI  emerging tech 

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Member Spotlight: The practical benefits of provenance from IHG

Posted By HEDNA News team, Wednesday, January 2, 2019

The HEDNA Member Spotlight features the many interesting things and compelling developments with our members. Given our global scope, there's always something worth writing about! Want to be featured? Email us!


Each year, global hotel brand IHG does an in-depth review and analysis of one major trend impacting hospitality. Its most recent Trends Report identified the concept of “provenance” as a significant driver of change in the industry.


The concept of provenance, initially used in the art world but now extended across archaeology and other fields, is about tracking the history of an object. Provenance acknowledges that the heritage of a given thing -- whether object, brand or person -- is at the core of the thing. Provenance provides a historical record and suggests how that past influences the future.


For a hospitality brand, provenance is a philosophy of nurturing a brand’s heritage as a long-term asset, as a farmer might tend to a field. Provenance builds authenticity in a guest’s mind, offers a foundation for marketing, and unites employees with a clear brand story. These qualities deepen trust and encourage sustainable growth, says IHG CEO Keith Barr:


“In today’s uncertain and fragmented world, a brand’s provenance links its past, present, and future, delivering an assurance of expertise, authenticity, and authority that can deepen consumer trust. We believe provenance in a brand is an essential foundation for industry leadership and enduring success.”


The report identifies five stages of the “provenance chain.” When taken together, IHG believes that provenance provides a foundation of “consistent, relevant, and distinctive heritage” that ensures sustainable success in today’s hotel business. Here are the links in IHG’s provenance chain.


Stage 1: Provenance


The obvious first step is to define a brand’s heritage; its past becomes the “brand's legitimate source of expertise, authenticity, and authority. It is familiarity, quality, leadership, and trust.”


To successfully “sell” a brand’s provenance, It must come from a place of authenticity and honesty. There's no point in faking it; consumers will catch on and it will have the opposite effect, reducing trust.


So why develop provenance? It comes down to loyalty as an effective marketing tool. In an era of rising customer acquisition costs across third-party channels, brands must find techniques that keep existing high-quality customers coming back.


“The provenance of a business is its consistent, motivating, relevant, distinctive heritage from its past theme. The power of provenance is not about preserving everything from the past; it is about preserving the best of the past for the present and future. Companies are using provenance to help build brand preference.”


Stage 2: Perceived value


Perceived value is “the customer's assessment of the trusted quality and worth of the branded offer.” Brand managers might think one thing, yet the guest might perceive another. That’s why “trust is a critical element of perceived value.” With greater trust comes greater perceived value -- or perhaps less inherent skepticism.


“Trust is fundamental in building and maintaining long-term relationships: personal and brand-business. It enhances the quality of a relationship, and minimizes perceived risk.”


The provenance chain positions brands to take advantage of reduced trust in formal institutions. The consumer trust crisis creates tension among consumers; those brands that defy the deficit will come out ahead.


“This trust deficit presents an enormous opportunity for brands to become the ‘trustworthiest’ sources of relevant and differentiated promises. Provenance is trustworthy evidence of a brand's authentic character, expressing what the business stands for internally and externally.”


The perceived value equation also takes internal perspectives into account. When the story resonates across staff, they're more likely to live and breathe that story with guests. This improves employee satisfaction, thus reducing turnover and trickling down into the guest experience.


Stage 3: Increased preference


There's a simple equation work here: a well-defined and engagingly crafted story about a brand’s provenance builds trust. Guests think, “this brand has been around for a long time, which means that they know how to take care of their customers. I can trust them -- and that they will be around for a long time.”


As guests feel comfortable with what a brand stands for -- and its consistency of experience -- they become more loyal.  An increase in preference for one brand over another is the ultimate benefit. You’ve won big when guests choose your brand over the competitor, even if priced at a premium. This is the power of the brand.


The report distinguishes preference from merely repeat visits. Loyalty doesn’t always construe an emotional connection, whereas preference shows some level of deeper attachment to the brand:


“Preference is not the same as repeat behavior, which lacks emotional bonding and can be a result of mere convenience or habit. Preference is a result of commitment, not just convenience.”


Stage 4: Trust capital


Like a bank account, trust can be overdrawn. Trust can also grow, with the balance eventually drawn upon. Large deposits are possible; even larger withdrawals are feasible too.


Unlike a bank account, there is no written ledger of trust. It’s an invisible measure of trust earned and trust lost. And once the trust account is overdrawn, it can take longer to return it to the block. Trust is hard to win but easy to lose.


“Trust capital is a form of organizational wealth, along with financial, intellectual and human capital. Goodwill is the part of trust capital that appears on the corporate balance sheet.

 

Goodwill is the excess of the price paid for a company over its fair market value. Trust capital is the confidence stakeholders have in the goodwill of an organization to consistently deliver promises of value.”


The concept of ‘trust capital’ is the backbone of provenance. A brand’s heritage is a base of trust to build on, to leverage into further growth and stability. Every time that a hotel brand succeeds in delivering promises to customers, the trust capital it earns further strengthens its provenance. The more you do this, the more trust capital you'll naturally accumulate.


Stage 5: Revenue growth


So how does this make your hotel more money? High-quality revenue growth, of course! These aren't incremental dollars, or one-off transient business brought in through advertising. This is revenue from the perfect guest: net promoters who love your property, usually stay there at rack rates and resonate with your brand promise.


“Trust builds lifetime loyalty, which can then lead to increasing both quantity of sales and quality of sales. Revenue growth comes from having more customers who purchase more often and are more loyal. This leads to increased market share and lower price sensitivity, and helps grow revenues, profits and shareholder value, through greater loyalty.”


The virtuous cycle continues: as trust capital builds through a consistent experience, loyalty grows, and provenance entrenches further. Rinse and repeat for each hotel brand across the portfolio.


The three imperatives


Provenance is a direct answer to the question, "why should I believe the promise you are making to me?"

 

A strong, powerful provenance is a competitive advantage that differentiates individual hotel brands in a crowded hospitality market. It unites internal stakeholders with external messaging, making for a more consistent guest experience that increases guest trust and long-term loyalty.


As Edelman warns in its marquee 2018 Edelman Trust Barometer, only 48 percent of the general population in the United States trusts businesses." Highlight heritage, build trust, and be consistent -- these are the three imperatives for hoteliers navigating the year ahead.


Download the full report and the executive summary.


Hear from members such as IHG during our annual marquee conference in Los Angeles. Register here!

Tags:  member spotlight  research 

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Hoteliers: What you need to know about fake reviews and views

Posted By HEDNA Brand Journalist Nick Vivion, Wednesday, December 26, 2018

The pervasiveness of technology has collateral damage: trust and accuracy. As the digital landscape evolves, bad actors seek to manipulate. The resulting tenuous trust in online content complicates reputation management for hotels.


Consumers tend to trust user-generated content (UGC) far more than other sources of information. Nielsen Customer Trust Index found that 92% trust UGC over traditional marketing. The appeal of consumer-to-consumer content has given great power to manipulators. Fake reviews and inflated engagement have become part of the online experience.


Fake reviews


Nearly since the advent of online reviews, the hotel industry has been combating fake reviews. Without a means to verify a purchase, many sites would make it easy for anyone to leave a review regardless of actual experience with the business.


Today, the review tracking systems are far more sophisticated: reviews link to purchases, algorithms detect fraud, and hoteliers monitor vigorously. While each review platform approaches review veracity differently, the result is a filter that captures the majority of suspicious activity.


It’s this minority that gets the most attention. Most algorithms use review scores, or an internal number that accounts for review quality, quantity, and recency. So a few false reviews can skew this number, which then affects a hotel’s placement in search results on most travel booking sites. False reviews also impact a brand’s reputation.


Whether positive or negative in sentiment, fake reviews game platforms -- and foster an atmosphere of distrust among consumers forced to make their own conclusions after sifting through reviews. From blatantly false reviews to biased ones, there’s a spectrum of abuse that muddies the waters.



Navigating through the choppy waters of fake reviews is fraught. Consumers might not be able to spot a fake review, lending it more credence than it should. Only 16% of respondents in BrightLocal’s 2017 Consumer Review survey could always identify a fake review, underscoring how important reputation management is for hotels.



The threat of fake reviews is ongoing and omnipresent. When asked about fake reviews of their own businesses, a majority of business owners had experienced some level of false negative and/or positive reviews.



How to fight back:

 

  • Never solicit fake reviews or post defamatory reviews about competitors.
  • Be proactive.
  • Report any suspicious review activity.
  • Highlight your honest and transparent approach to reviews with guests.
  • Build trust and earn word-of-mouth.
  • Provide the best guest experience that attracts glowing reviews organically.

Inflated engagement


Fake reviews may receive the bulk of the attention, but inflated engagement is also on the rise. This is an issue for the hotel industry, which often invests in influencer marketing to create organic marketing moments among targeted followings.


A recent New York Times article reveals just how easy it is to inflate engagement on YouTube -- and how hard it is for the platforms to combat paid views. Martin Vassilev, a fake views entrepreneur, knows that resistance is futile:


I can deliver an unlimited amount of views to a video. They’ve tried to stop it for so many years, but they can’t stop it. There’s always a way around. The only way YouTube could eliminate this is if they removed the view counter altogether. But that would defeat the purpose of YouTube.”


This issue is not limited to YouTube. There are organized “engagement pods” that like each other's posts on Instagram, and there are firms that promise increased engagement for a too-good-to-be-true price.


While there’s little incentive for an individual hotel to pay for engagement, an influencer could quickly (and affordably) boost the perceived value of a paid engagement. Vanity metrics still have pull, duping marketers into thinking a partnership was more fruitful than it really was.


How to fight back:

 

  • Be very selective when it comes to influencers.
  • Analyze actual engagement of an influencer’s following rather than vanity metrics alone.
  • Never buy likes or artificial engagement. Report those who do.
  • Avoid paying for performance, as that can encourage artificial inflation of engagement.

Evolving regulatory framework


Recently, the platforms themselves are increasingly public with their determination to punish bad actors. TripAdvisor, which led a detailed internal investigation to snag a business in Italy selling fake reviews, won a conviction with nine months of actual jail time.


TripAdvisor celebrated a potential turning tide, saying:


"We see this as a landmark ruling for the Internet," Brad Young, an attorney for TripAdvisor, told reporter Alex Horton at The Washington Post. "Writing fake reviews has always been fraud, but this is the first time we've seen someone sent to jail as a result."


Even with this momentum, jail time is a rare occurrence for fake review peddlers. That’s why review platforms have severe consequences for those that don’t play by the rules.


The most visible consequence is visual: Hotels found to be in violation risk having a permanent badge on their listing, which warns travelers of potential distrust. There’s also a potential hit to revenue, with hotels suspected of fraudulent behavior dropping or disappearing completely.


The risks to reputation and revenue are generally not worth any benefit of stacking reviews in a hotel’s favor. Amidst this backdrop, hotels can provide more certainty and trust to guests by leaning into honest and transparent reviews and views. If the younger generation is aware of the bots that can fake behavior, how does that affect trust in travel? And trust in reviews?


Reviews are a powerful ally; the last thing we want is to cause fatal distrust in the accuracy of guest reviews.


Travelers now have personalized sifting algorithms, honed after countless hours online. These internal filters cut through the crap and drive decision-making. Be a trusted source of information, solicit reviews from guests, and respond regularly to as many reviews as possible. This is the best way to build trust in travel.

We’re “connected like never before.”

Register now for LA.

Tags:  hotel marketing  reputation 

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HEDNA thought leaders: Quick soundbites from Lisbon

Posted By HEDNA News team, Wednesday, December 19, 2018

This article is the third in a series of articles inspired by HEDNA Lisbon. Read more event coverage on the HEDNA blog. For more videos live from Lisbon, head over to the HEDNA YouTube channel.


One of our favorite parts about programming any conference is selecting the keynote speakers. The process is fairly involved but we're always pleased with the outcome. First, we define our theme, which is the result of many conversations among the executive board and key industry experts. We want to find something that is both current and helpful to structure the content.


Once that’s established, we research potential keynotes to identify speakers that align in some way with our theme. The goal is to expand our members’ perspectives while also anchoring some of the core concepts covered across the conference.


For our upcoming conference in Los Angeles, the theme is “connected like never before.” Our recently announced lineup of keynote speakers ranges from a deep dive into hospitality industry trends with Jan Freitag from STR to a helpful decoder for the emerging Gen Z consumer. We’ll be closing out the two-day conference with a look at loyalty and customer service in the age of AI with expert author Steven von BellenghemHere’s the agenda:


State of the Industry with Jan Freitag: Jan from STR will share industry insights, highlighting the biggest trends and data points for hospitality in 2019.

Cracking the Gen Z Consumer Code with Jason Dorsey: Gen Z consumers are unlike any other generation of consumer. They communicate, shop, buy and pay very differently from other generations. Jason shares what works to inspire and get Gen Z to trust and buy.

Customers the Day after Tomorrow with Steven van Bellenghem: Steven will share his insight into customer experience as it moves from mobile-first to AI-first. Get ready for hyper-personalization, faster than real-time customer service and even better user-friendly interfaces.


Looking back to our European conference in mid-2018 in Lisbon, we’ve been sharing content around our keynotes. If you're unable to watch the full keynotes, we’ve compiled short snackable videos for each of our keynote speakers from HEDNA Lisbon. We’ll be doing this in LA as well, so subscribe to the HEDNA blog for those updates in February 2019. Or better yet, join us in Los Angeles!


120 Seconds with Tali Sharot


As a cognitive neuroscientist, Tali Sharot took the mantle as the thought-provoking keynote of the conference, pushing into the psychology of happiness as applied to travel. There’s a connection between anticipation, rewards, and punishments. In order to encourage the action, travel brands should highlight the rewards; while highlighting the punishment can prevent an action from happening.


All of this ties into consumer behavior, as brands should seek to build anticipation for travelers -- and thus make the vacation experience more memorable, she says:


“We really need to give people an opportunity to anticipate. Not only when they get to their vacation, but it also matters what happens before. [We need] to enable their mind to create the anticipation.”


Watch the full clip:




120 seconds with Stephen Bartlett


In 2014, Stephen founded his digital marketing agency Social Chain on the premise that online communities were undervalued. As the engagement engines of the future, the agency unlocked the power of these communities by aggregating access through Social Chain.


Looking ahead to 2019, Bartlett advise brands to take a closer look at messaging apps in 2019. While CPC rates have risen across most social media channels, messaging maintains both its popularity and affordability. The open rates of Facebook’s Messenger, for example, reaches 90%, Stephen says, which overwhelmingly outpaces the single digit open rates for most email.


On these channels, he recommends using micro-incentives to encourage advocacy among a brand’s customers, saying that “these small incentives to turn your customers into advocates are extremely important.”


Watch the full clip:




120 seconds with Kate Ancketill


Kate Ancketill’s GDR Creative Intelligence consults brands on designing the types of next-gen retail experiences that define the modern brand. In the short thought leader video, Kate emphasizes how brands must develop relationships with their target consumers through the lens of demographic trends. This is especially important for hoteliers to understand when it comes to the shrinking middle class, which has shrunk from 60% to 48% in the West, she says:


“The problem for the travel industry, is that there’s no large middle group to sell to anymore. There are many different types of groups, entirely fragmented. There’s much more scope for a premium or a discount offer. There’s less scope for a pure mid-market offer."


Differentiation is the secret to thriving within this polarization, Kate concludes: “It’s the differentiation that counts. Do not be in the middle and be undifferentiated.”


Watch the full clip:


 

 

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Tags:  events  keynote  video 

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The remarkable power of micro-influence with Stephen Bartlett

Posted By HEDNA News team, Wednesday, December 12, 2018

This article is the second in a series of articles inspired by HEDNA Lisbon. Read more coverage on the HEDNA blog, and for more videos live from Lisbon, head over to the HEDNA YouTube channel.


The psychology of influence online


Within 35 minutes of posting a tweet about the trade of ‘legendary’ footballer Rex Secco, Stephen Bartlett saw success: thousands of people were discussing the trade, pushing the topic to the top of Twitter trends -- all without realizing they were being pranked. Indeed: the mysterious Rex Secco was not a real sports player. Bartlett was using this as an instructive example of the way information, true or not, spreads around social media rapidly.


With that case study, Bartlett’s nascent social media marketing firm Social Chain had arrived. Sharing this story on stage in Lisbon during HEDNA’s annual conference, Bartlett captivated the audience with his tenacity and enviable mastery of social channels. Often, marketers approach social media with trepidation, as if it’s something different than the physical world. It's not, Bartlett says as a reminder that influence is influence:


“People act in the same way the crowd acts. They follow the crowd. It’s a survival technique.”


Understanding human psychology is part of what it means to be a marketer; the psychology is emphasized by how much time users spend on digital platforms. The driving forces behind much of the engagement on digital channels are cultural relevance and emotional resonance.

 


Cultural relevance and emotional resonance


With U.S. President Donald Trump as a leading example,  cultural relevance creates emotional resonance. The Social Chain team actually made a bold prediction that Donald Trump was going to win the election, chiefly due to his ability to reach 22 times further with his “super inflammatory message at a time when culture cared about certain issues,” in contrast to Hilary Clinton’s more “vanilla” approach, Bartlett said.


“Emotion, making people feel, is fundamentally why things travel online.”


Some of this emotional resonance stems from the ego, which is a fundamental driving force for much of social media. Active contributors online are looking for content to post regularly; by offering a “hint of personalization...that plays to their ego,” there’s far greater emotional resonance that triggers the desired behavior: sharing the experience online for that organic marketing lift.


Social Chain saw 7x lift from simple personalization of a box sent to influencers for French Montana.


The power of distribution


For those of us in distribution, we certainly get the power of distribution. What's the point in having all the great inventory if there's nowhere to place it? The same applies to content: No matter how great your content is, it's meaningless without distribution.


Most marketers focus heavily on one or the other: Either there's a big budget for content, and none for distribution, or the campaign leapfrogs the content creation stage and goes straight to distribution.


  • Owned channels. A company blog and website are powerful tools for marketers. Pushing users to owned channels allow brands to capture the attention without having to pay a fee to a platform.

  • Paid amplification. Organic reach is difficult. When the content is strong and well-crafted, often paid amplification can push it over the top.

  • Human influencers. Individual influencers are now global tastemakers. Distribution through these key cohorts can be efficient and affordable when done with care (see micro-influencers, below).

  • Social communities. There are thousands of online communities dedicated to a variety of niches, offering both behavioral insight and potential engagement for travel brands.


Investing in distribution is really about prioritizing where to spend money, and which channels have the right blend of cost and reach. One benefit of the dizzying proliferation of channels online is that brands can now micro-target down to the individual, and avoid wasting money on “spray and pray” mainstream campaigns with expensive media outlets or global influencers.


The rise of micro-scale


Friends are the most influential force in most peoples’ lives. Now that technology has developed to the point where micro-targeting is both simple and measurable, it’s easier and more useful to leverage micro-influencers rather than major celebrities.


Bartlett used the example of his company’s campaign to get students to download the new Apple Music app. The goal was to make existing customers influencers for the brand, or to become Apple ambassadors.

How Social Chain identified potential ambassadors, offered a gift and then enticed them to share with their social networks.


The steps were simple: the social media campaign pointed to a landing page which asked three music-focused questions, which built goodwill and put the person in a musical mindset.

 

Following the questions was a button offering three free months of Apple Music in exchange for one post on the person’s social media -- all automated, and at the time of Social Chain’s choosing. The results? A staggering 97% of students clicked yes, exchanging three months of Apple Music for one relevant social post to their network. The keyword here is relevant, says Bartlett:


“We have that custom information that they’ve just filled in to make sure that the post is completely relevant and specific to them. And then all at once, you have 1,700 students all posting that they love Apple Music, they listen to it in the gym while they’re listening to Drake, Adele, Kanye, which makes them feel XYZ.”


According to Bartlett, it’s the single most signups Apple Music has had since launch.


Like music, many hotel brands benefit from an emotional connection with guests. There’s a strong attachment to hotels among many guests, so the key question is: how do you make your existing customers influencers for the brand?


The opportunity is there, it’s about engaging at the micro-level to not only encourage word-of-mouth ambassadors but also make customers feel ownership and emotional attachment to the brand itself. Nurturing this type of relationship with customers transforms the narrative and expands a brand’s organic sphere of influence without heavy marketing spend.


How to do this? By focusing on parts of the experience that might resonate more deeply and give guests a reason to become a natural ambassador for the brand.


“Make an awesome experience that’s unlike any other. In the hotel industry, it’s just all the same. The experience is the same. It’s like you’ve all read the same book. I think a little more naïveté and a little less reading about what convention says you’re supposed to do. I’d love to create a whole new experience of a hotel, using what we know about people today.”


Watch Stephen Bartlett’s full keynote



Our next global conference is in Los Angeles. Register here.

Tags:  events  keyno  social media  video 

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How to engage with tomorrow's customer with Kate Ancketill

Posted By HEDNA News team, Wednesday, December 5, 2018

During her keynote at HEDNA Lisbon, GDR Creative Intelligence’s Kate Ancketill set the scene for the fundamental contradiction facing hospitality today: reconciling guests’ dueling desires to stay connected with their lives and escape from those very same lives.


Below are some highlights and key takeaways from Kate’s presentation, which was rich with examples of how brands from inside and outside of travel address this modern conundrum. We’ve embedded the relevant clip in each section below; the full keynote can be found at the end of the article and on YouTube.


The continuity/escape conundrum


One of the most revealing topics was the impact of 24/7 connectivity on how workers vacation. There’s actually a correlation between internet adoption and the drop in vacation usage. As the internet expanded, says Ancketill, “your availability was a measure of your employability, and you needed to be on all the time.”


 

The shift to always-on work blurred the lines between work and play, creating a new work/life permeability that changed how people vacation -- and thus how hospitality brands engage with their guests.



When polled during the live session in Lisbon, there was a similar divide: 51% of the audience checked into the office daily, 35% connected only a few times, and 14% did not check in at all.


The permeability between work and play continues to have implications for hospitality. Hotels must consider how to best serve these different ways of working, offering both a space to get work done and a haven away from the pressures of work. This is an inherent contradiction that challenges hospitality to provide products that address this fundamental tension in guests’ lives.


 

Continuity: Understanding “contextual desires and needs”


Successful navigation of modern guest preferences requires understanding of contextual desires. A brand requires a thorough understanding of its customers lives to truly solve their problems. Brands reach this understanding through a firm grasp on contextual desires, needs and problems, says Ancketill:


“For us, owning the customer problem means considering the full context of the rest of their lives when we’re delivering our service or product.”


The following examples highlight how other brands have used contextual understanding of customer interests, desires and needs to solve customer problems:


  • IKEA. Using augmented reality (AR) to help customers visualize furniture placement in their home. Rather than force inaccurate measurements, the app simplifies the process of measuring and placing furniture.

  • Martine Jalgaard. The fashion brand logs each step in its manufacturing process on a blockchain, so customers can see a garment’s complete provenance -- down to the individual animal a wool garment came from, for example.

  • Buzzfeed’s Tasty. The recipe arm of the global publisher created an induction cooker that ties into a recipe library to streamline food preparation. Solves a key problem for the outlet’s main demographic: those learning to cook.

  • Virgin America app. Transitions from informational and fun in the weeks leading up to the trip to purely trip-focused in the 24 hours prior to the trip. Adjusts to the changing needs of the traveler as they prepare to travel.

  • Alibaba Supermarket. Massive food operation targets a variety of customers needs with seven different purchase paths, each targeting a specific type of food need.



Escape: Making it immersive


Next-gen retail appeals to a sense of immersivity that’s been magnified by social media. The popularity of crafting personas online, from Instagram to Snapchat, leaves many users searching for media fodder to populate their profiles.


“Instagram ready” and “Instagram bait” have become qualities of the retail experience, which itself has morphed into less of a functional industry that sells things and more of a destination-based industry that sells experiences (alongside things).


“We are seeing [retail-as-destination] filter through to all kinds of retail and hospitality spaces: the need to have extraordinary backdrop for the taking of selfies. These are fully facilitated and highly sophisticated with perfect lighting.”


Hotels are joining the retail revolution, curating pop-up experiences to attract locals and give guests a unique experience that they can’t get at other hotels. These exclusive and/or temporary events drive interest and engagement in ways far beyond what a traditional hotel space could accomplish. To be immersive, these experiences stand apart by helping participants escape from the sameness of day-to-day life.


Some examples of contextual escape to provide extraordinary experiences:


  • Castorama Magic Wallpaper. The DIY chain created wallpaper that has an interactive AR app that creates stories for children. It’s an example of a home improvement company leaning on its core -- helping people build spaces to create memories in -- and then creating media to expand this further into consumers’ lives. Not to mention building a new potential recurring revenue stream by releasing new stories and new wallpapers.

  • Mr. Simon. Secret bar that requires guests to find the entrance -- and only after being invited through a PIN code. The bar has its own fictitious founder, Mr. Simon, who has traveled the world to find the best cocktail tinctures.

  • Zhongshuge Bookstore. A whimsical approach to experiential retail. The bookstore chain takes consumers on a journey through multiple spaces. Each space has its own atmosphere, and the recommended books are placed according to the themed areas. Each store is unique with a singular standalone design.

  • Corinthia Hotel. A neuroscientist on staff optimizes both the hotel staff’s performance and VIP guests that purchase a wellness-focused package. Read more here.

  • Zanadu Travel Agency. The Shanghai-based agency receives 10,000 visitors per month, who explore potential destinations through virtual reality.

The welcome desk at Zanadu, where visitors use QR codes to try out destinations in VR.

 

How to resolve the continuity/escape conundrum


In her session wrap-up, Ancketill shared a final slide that outlines concrete steps for hoteliers to resolve the tension between guest desires for continuity and escape. It really comes down to understanding the target demographics and delivering the experience they seek.



Watch Kate Ancketill’s full keynote:




Tags:  emerging tech  events  keynote  video 

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Is your hotel ready for the evolution of in-destination?

Posted By HEDNA Brand Journalist Nick Vivion, Wednesday, November 28, 2018

Think of this as the era of the self-serve digital concierge. Travelers can find and book in-destination activities on their own before -- and especially during -- the trip. Technology has reached the point of saturation, where each aspect of a trip is bookable, trackable, and manageable on mobile.


This modernization of the tours and activities industry benefits hoteliers in one crucial way: an increase in the digital distribution brings more opportunities to match guests with in-destination activities.


This matchmaking service has another name in hospitality: a concierge.


Re-defining ‘concierge’ for the digital era


The standalone concierge is dwindling in popularity, with only 20% of American hotels employing a concierge in 2016; that’s down from 27% in 2010. And this number is slipping fast, as guests prefer more self-service, leading to reduced usage of the concierge. With pressure to reduce operational costs, all but the most upscale hotels have eliminated concierges.


On the digital side, many hotels have ceded demand to online platforms. Rather than booking at the on-site concierge, guests are turning to digital discovery tools such as Google and Airbnb Experiences. Guests are also being up-sold by the online travel agencies post-booking, which keeps the margins squarely in the favor of these third parties.


Hotels must re-claim the rightful position as local experts that can ably and accurately recommend the best things to see and do in-destination. As Jack Nargin of Les Clefs d’Or recently emphasized, human curation is a competitive advantage:


“We are human beings. We are the people who know our cities the best. So no app, no Internet, can ever replace us.”


While human-powered recommendations still matter, there’s a middle ground that effortlessly merges human and digital to build a better guest experience.


The need for curation


Calls for the death of the concierge are misguided, as travelers are bombarded with so many options. The “paradox of choice” is alive and well when it comes to tours and activities! Whether it's on Airbnb, an online travel agency, or a tour operator’s own website, travelers have many travelers to choose from. It really comes down to which brand they trust.


With this trust, hotels have an advantage: guests that book with them are already somewhat inclined to trust the brand. That means that the hotel can be a trusted source of curation for guests overwhelmed with options.


By providing curation, the hotel positions itself as an expert and stands to benefit from increased incremental revenue. This expertise can be showcased in two ways: 1) through a standalone concierge interacting with guests, and 2) a digital channel that highlights the expertly verified and recommended experiences.


Tech-enabled discovery


Today’s world of digitized commerce is the perfect backdrop for hotels to re-claim the “local expert” mantle. Now, even without a dedicated concierge desk, hotels can provide guests a curated selection of recommendations.


Here’s how that works:


  1. Partner with a technology solutions provider in the tours and activities space to gain access to mobile-bookable inventory.

  2. Verify each experience by actually going out and doing the experience.

  3. Only recommend the best-of-the-best as part of the curated list.

  4. Create content about each in-destination activity to highlight what it is and why you recommended it.

  5. Infuse recommendations throughout the hotel’s operations: mentions at the front desk, placement of in-room collateral, callout boxes on all pre-arrival communications.

  6. Ensure that all bookings can be completed wherever the guest wants: on desktop, on mobile, or even at the POS across property.


Throughout the guest journey, from before, during, and after the stay, there should be a complete integration of the “recommended for you” options. Often, there is an underinvestment in the integration needed to promote the curated recommendations through all available guest channels!


Booking sweet spot


Even if actual concierge services are on the decline, today's’ mobile-first guest is eager to engage with in-destination recommendations. Recent Checkfront research shows that hotels are ideally positioned to convert guests: the booking sweet spot is from one week prior to a trip up to the same day.


These stats underline how hotels can engage with guests both before and during the trip. Of course, this is nothing new; one of the concierge’s primary tasks has been booking in-destination activities. Even so, it bears repeating: hotels can deploy merchandising strategies to earn more incremental revenue from even the most self-serve guests.


Douglas Quinby, CEO and co-founder of in-destination conference Arival, warns against making the typical “set it and forget it” error:


"The biggest challenge is making the commitment to invest in understanding your guests, developing curated options that are relevant them and consistent with your brand, and tracking performance. The classic mistake made over and over is, the hotel or other brand resellers just plugs in a tech partner without thought to the options offered, the merchandizing, when and how they are pushed to the customer, and the special incentive for booking the experience through the hotel."


As an example of a brand doing this well, Quinby mentions Marriott Moments, which is a program done at scale and tied to the brand’s loyalty program. “But,” he continues, “there are lots of examples and even individual hotels can take advantage of this.”


Today’s technology stack empowers hotels to be more active as trusted digital concierges. To successfully capture this revenue, it just takes some investment to identify the technology -- and in-destination recommendations -- to offer a modern concierge that improves the guest experience.

Registration is open for LA 2018! Join us for actionable knowledge and real connections at our premier North American event.

Tags:  hotel marketing  revenue 

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