Wednesday, October 1 st, :00 2:00 PM EDT

Transcription

1 The Demystifying Distribution 2.0 webinar will begin shortly. If you need technical assistance with the webcast, contact us at and we will assist you immediately. 1 Demystifying Distribution 2.0 Wednesday, October 1 st, :00 2:00 PM EDT Hospitality Sales and Marketing Association International (HSMAI) 2

2 Overview of Format and Topic Moderator Barb Taylor Carpender, CMM, CHSC Managing Director, HSMAI University 3 HSMAI University Alliance Partner 4

3 POLL QUESTION #1 How many people are participating in this webinar at your location today? or more 5 Today s s Presenter Cindy Estis Green Managing Partner, The Estis Group Hospitality Consulting Firm 6

4 Revpar Trends Source: Smith Travel Research 7 Key Trends Online penetration The role of search B2B Web 2.0 8

5 Hotel Revenue (US$M) Source: PhoCusWright and AH&LA projections 9 Online Penetration U.S maturity Europe & ASPAC acceleration 10

6 Still Playing Tug-of of-war 11 Key Trends Online penetration The role of search B2B Web

7 Expanded Use of Search 20% offline Bermuda vacation 32% made a travel purchase over the course of 8 weeks For every $1 spent online, the average 80% search-user spends $2.56 offline. online --ROIresearch Source: comscore Networks, Additional Search Opportunities Aberdeen, MD and hotel Paid map mashups Paid Search Search Engine Optimized 14

8 Key Trends Online penetration The role of search B2B Web Emerging Markets: Small Groups Offline Travel Agency Suppliers Distribution Monoliths Tour Operators Value of the small group market is bigger and growing twice as fast as large group: $50 Billion --PhoCusWright

9 Size and Nature of Leisure Groups Forecast is 40% Online by 2008 Source: PCW GDS Volume Holds Steady Production as % of reservations Top US Hotel Chains GDS Internet Voice Source: TravelClick 18

10 GDS Fighting Hard Expanding through acquisitions Moving into consumer space Competing with OTAs for unmanaged corporate accounts Offering travel agencies additional products e.g. upselling keyed to booking, improved content GDS include Sabre, Galileo, Worldspan, Amadeus 19 Transient Corporate Market Target of OTAs,TMCs, GDS Large Corporate Travel $23 Mainly controlled by TMCs using GDS systems Small to Mid-sized Business Travel $83 Business Travel $107 U.S. Travel $195 PhoCusWright,

11 Transient Corporate Market New Rewards Program 21 Key Trends Online penetration The role of search B2B Web

12 Travel Planning Funnel Pre-Market / Need Trigger Search Plan Pre-Validate Book Post-Validate Prep Experience SHARE Traditional travel marketing addressed two primary points: -awareness with image campaigns -at booking with tactical campaigns Technology now allows contact at every point in the purchase process and consumers welcome it when its helpful and appropriate 23 Source: Dale A. Brill, Ph.D., CMO, VISIT FLORIDA 23 It s s a New Game: Travelopoly 24

13 Trip Planning...highly relevant to travelers 25 New OTAs With a Web 2.0 Twist... 26

14 Channel Mix of Major Hotel Chains Source: PhoCusWright GDS and OTA expected to shrink while Supplier websites and CRS grow 27 The Hotel Distribution Network 28

15 Group and Meetings 29 POLL QUESTION #2 What is your level of involvement with online distribution channels for groups and meetings (you can check more than one)? Listing in a meeting planner site like StarCite or ConventionPlanit Have an RFP for groups/meetings on our own website Actively involved with the new small group sites like Groople, Triporama Have our own complete functionality on our own site for booking small groups 30

16 Distribution Strategy The Decision Making Process 31 Distribution Considerations What mix of business is available at any given time? Voice Brand.com GDS Property Direct OTA Retail TA 32

17 Distribution Considerations How much will it cost you to get it? (per room night)* $10 Voice Brand.com $5 Property Direct GDS $12 $25 $8 OTA $25 Retail TA $12 33 Distribution Considerations What is the long term value for each source of business? Property Direct Voice Brand.com GDS Retail TA Retention rates reduce marketing costs Engaged customers spend more money and come more often Your customer can become your voice in their community--a brand advocate OTA 34

18 Distribution Strategy Online and Offline Marketing to Stimulate Demand Flow OTA Retail TA GDS Voice Property Direct Customer Engagement to Filter, Direct and Sustain Demand Yield Management to Capture and Optimize Demand IT Infrastructure to Support Strategy 35 Benefits by Channel OTA GDS Property Direct Brand. com New customers (booking channel) Visibility in market (advertising media channel) Fill need periods and build base business New customers Deepen booker engagement Increase weekday rates w/managed corporate Voice Other issues to consider by channel: length of stay and likelihood to repeat Deepen engagement with consumers/bookers Handle more complex bookings Higher rates through upselling, multi-stay bkgs Expand pool of engaged customers Handle walk-ins Local business-corporate, leisure, group Deepen consumer engagement at each touchpoint Improve customer service New customers Rate/rn* *net of distrib costs $61 $91 $74 $70 $73 *net of distrib costs ADR and distribution costs based on industry averages for mid-priced/economy brands 36

19 POLL QUESTION #3 What is the most typical timeframe in which your hotel s channel mix is thoroughly evaluated? Weekly at revenue management/marketing meetings Monthly at revenue management and/or sales/marketing meetings Periodically when we have a pending question or issue that affects our distribution decisions Annually for the budget Not a hotel don t make distribution channel decisions 37 Proactive Distribution Management: Mid-priced Hotel rooms 60% occupancy ADR $80 ALOS: 2 nights Before Property Direct 68% Voice 5% Brand.com 10% GDS 10% Retail TA OTA 0% 7% Revenue: $1,115,011 After Property Direct 61% Voice 3% Revenue: $1,156,369 OTA 3% Brand.com 20% GDS 8% Retail TA 5% Potential net benefit to hotel in one year: $41,358 38

20 Travel Marketing in a Web 2.0 World: Driven by Distribution Strategy Stimulating Demand (online and offline marketing) Customer Engagement To Sustain Demand (loyalty, , social media, other online tools) Demand Management Yield Management To Capture and Optimize Demand 39 Supported by an IT Infrastructure Summary of Big Issues Content management/content syndication Electronic channels are no longer just conduits for transactions Strong corporate infrastructure needs to also include unit level empowerment Proliferation of channels, segments, brands 40

21 Summary of Distribution Objectives Optimize channel mix Stimulate demand Strive for sustainable revenue 41 Questions? Cindy Estis Green Managing Partner, The Estis Group Hospitality Consulting Firm 42

22 Upcoming HSMAI University Programs Forecasting for 2009 Jan Frietag,, VP International Operations, Smith Travel Research (STR) Mark Woodworth, President, PKF Hospitality Research Tuesday, October 14 th 2:00 3:00 p.m. EDT Internet Marketing Series Where Should I Budget My e-commerce e Marketing Dollars? Tuesday, November 4 th, 2008 What Types of E Campaigns Are Effective? Tuesday, November 11 th, 2008 Researching Companies Online --- What Can I Learn Before the Sales Call? Tuesday, November 18 th, 2008 How Can I Increase My Local Search Revenue? Tuesday, December 2 nd, :00 3:00 p.m. EDT 43