The Hotel and Travel Week #2

Monday, 26th October

InterContinental Hotel Group announces a second InterContinental Hotel in London to open before the 2012 Olympic Games.
IHG have signed a contract with Splendid Hotel Group for a 20 year management contract. The property in question is a new 254-room six storey building in the Westminster area.
Despite tough economic times IHG seem to believe in the strength of their brands. They are planning to add 5,000 rooms in the UK over the next two or three years.

Tuesday, 27th October

Hotels Magazine reports that Choice Hotels may soon have a major ally in its 'war against Expedia'. At their annual conference, Best Western has been hinting that they are prepared to take similar action against the OTA. They also said that they are working more aggressively with Expedia's competitors to define their market share.

Wednesday, 28th October

The business travel segment is growing again, according to InterContinental Hotels Group. Corporates had pulled back their investment in business travel during the financial crisis but more recently IHG see people coming back. Is this a sure sign of the crisis being over?

Thursday, 29th October

A surprise announcement that Choice Hotels have resumed negotiations with Expedia last week. Apparently Choice is not interested in leading an industry revolt against Expedia and try to end a 'messy public feud'. The reason given is that they want to do 'what's right for their franchisees'. Expedia had pulled all Choice Hotels from their website after negotiations had come to a standstill.

Friday, 30th October

Travelocity announces to be the first and only to guarantee hotel prices across the web prior to the day of check-in. Competing sites offer price protection on hotel bookings only for lower prices found on respective sites and often within the suppliers cancellation window. Travelocity customers can now claim a refund whenever they find a lower price for their booking anywhere on the web (except name your own price services). Additionally, Travelocity scrap change or cancellation fees for hotel bookings or packages (excluding last minute packages).

Search Marketing or Display Ads? Part 3

With part 1 and 2 of this series we've headed into the following direction: display ads, as we know them, are not such an effective marketing tool anymore. It is more and more about precise targeting and innovative ways of running banner ad campaigns.

How is this for an example?

Travelocity, the popular travel website, is using real-time search data for their display ad campaigns. They use an engine called Teracent which matches the marketing message to their audience on the fly. Messages are based on a host of dynamic parameters such as search intent (e.g. when someone clicks on the star ratings for hotels, this person would only see ads for luxury hotels) and how far people drill down into a certain category.

This strategy has increased Travelocity's online bookings by 203% !

Chip Hall, senior VP of sales and marketing at Teracent, tells AdAge:

"Display has to change, otherwise it's headed for failure. If advertisers don't recognize online is more challenged with the old approaches and needs to be incredibly hyper-targeted, they're going to fail."

Source: Econsultancy

The Hotel and Travel Week #1

Monday, 19th October

The news about growing tensions between Choice Hotels and Expedia breaks and everyone following hotel news channels will have heard about it by now. It has sparked off a stream of articles and blog entries over the entire week.
What it is all about:
Choice Hotels cut off negotiations with Expedia feeling that they couldn't accept the new terms and conditions and that Expedia was not ready to negotiate but merely demanded. Choice argues the new terms would effectively take away hoteliers’ rights to manage inventory and rates at their own hotels, destroy channel management and rate parity, and will eventually lead to a long-term erosion of hotel brand and price integrity.

The author of an article for Hotels Magazine pretty much aligned himself with Choice Hotels to the extent of comparing the love of hotels for Expedia (or OTAs / TPIs in general) with the Stockholm syndrom. Read the article.

Tuesday, 20th October

ebookers UK announces to have added a new package holiday booking engine to their site which provides access to millions of holiday offers. The new engine uses TravelTainment technology and is the latest attempt by ebookers to extend the range of tools and services available to customers.

Wednesday, 21st October

BAA sells Gatwick airport for 1.51 billion GBP to the owner of London City Airport, US-based Global Infrastructure Partners. The company had to sell one of their London airports after an inquiry found that customers were suffering from a lack of competition between airports. It has also been ordered to sell Stansted and either Glasgow or Edinburgh airport but is appealing against that decision.

Thursday, 22nd October

On Thursday we saw another round of discussions concerning the Choice - Expedia conflict. Adam Kirby from Hotels Magazine ask whether Choice is Leading the Revolution? He says 'Choice Hotels, whether it meant to or not, finds itself as the leader in an anti-OTA revolution. The big question now is whether there will be any followers'.

However, there are also those opposing the rebellion against Expedia such as Consultant, Marketing Coach and Author Neil Salerno. He argues that the discussion is void because the direct channel cannot compete with OTAs. OTAs spend much more for marketing and therefore have more exposure. Salerno: 'Smart hoteliers consider OTA business as a base which allows them to build occupancy.' "Growing Tension Between Hoteliers and OTA's"…NONSENSE!

Friday, 23rd October

Today, Expedia entered the next phase of the dispute by appealing to Choice franchisees directly in a letter which was obtained by hotel technology blog Tnooz.com.

Expedia clearly denies the fault for the breakdown of negotiations and suggests that it is open to continue on property level. They also claim that the terms, mentioned by Choice, which led to the breakdown had already formed part of the day-to-day relationship during the prolonged extension period and are no different to what they have in place with other long-term partners.

It seems like the discussion is heating up and this letter could potentially be explosive stuff in the anti-OTA 'revolution'.

Have a good weekend!

Search Marketing or Display Ads: the Facebook case

Ok, forget what I said about display ads if it comes to Facebook!

I've just seen a blog today saying that Facebook is now the most popular social media site in the UK. Facebook has definitely made a lot of headway if it comes to advertising after much critique about their business model last year. On Econsultancy today the question is asked: Are marketers moving their Google search dollars to Facebook's display ad business?

While this may be a bit over the top at the moment, the advantages of running display ad campaigns on Facebook are obvious. People voluntarily share information about themselves which enables marketers to target their ads much more precisely. Facebook has increased its market share and manages to engage its users more than other social media sites such as MySpace. Moreover, there is still less advertisers competing with you on Facebook than on Google AdWords and both systems are auction-based.

Research has shown, however that local advertisers are much more successful than large companies. The latter are often seenby Facebook users as being intrusive. People value information about local offers and events while they feel annoyed when they come across the same banner advertising on their community site - which they regard their private space - as they see everywhere else on the web.

For hotels, Facebook could therefore be a brilliant opportunity to advertise to the local market: meeting space, weddings, events and F&B, like those numerous Christmas parties and brunches and lunches coming up. Think about it!

Search Marketing or Display Ads?

I've just attended a webinar dealing with this question and the main argument for display ads was the time people spend browsing the web, which is much more than the time people spend searching. In percentages: 95% browsing, 5% searching. Therefore, display ads would still be an effective way to drive traffic and reach customers since search marketing only works when people actually - search. Kind of sounds logical.

Of course, search engine marketing should be run alongside because apparently click-through rates increased by 22%, related brand searches increased and conversion rates via search ads increased when search and display were run together.

Now, what's been said here is that display ads actually push traffic and conversion through search. If your site ranks high in the organic search, you are a winner. Otherwise, it basically means that you are paying advertising money twice.

Also, it has become much easier for people to avoid advertising as this blog entry highlights: Has the internet made it easier to hide from adverts? Which in turn makes for a substantial argument in favour of search ads.

Search ads are delivered at a point when people are actually actively looking for something: a solution, product or service, compared to unwanted and irrelevant display ads they are bombarded with while browsing.

Search marketing results are usually predictable, can be targeted effectively and measured to calculate the ROI (Return on Investment). However, it is true that the search market becomes increasingly competitive and text ads such as Google AdWords only contribute to branding and awareness in a limited way.

In my view, display ads are not dead as part of an online marketing mix, and especially not on the Google AdWords content network or in an affiliate programme. But properly evaluate who else you are running your display campaigns with and whether search ads may not be a more (cost-)effective way of driving customers to your site.

Webinar by AdReady and ClickZ, Oct 2009

What is the link between social media and search behavior?

GroupM Search and comScore just released the results of a study examining the relationship between social media exposure and search behavior.

Consumers were divided into 3 segments. Segment 1 was only exposed to a brand's paid search. Segment 2 was exposed to social media, relevant to a brand's category and segment 3 was influenced by social media that was specific to a brand.

Search behavior was broken into segments, based on the stage of the purchase funnel queries are made. Upper-funnel terms are usually more generic and express awareness and consideration, whereas lower-funnel terms express action and loyalty.

The findings were that consumers who searched AND engaged with social media were far more likely to search for lower-funnel terms. This was particularly the case when they belonged to group 2 and used social media exposed to a brand. In fact, these consumers were 2.8 times more likely to search for that brand's products than consumers from group 1 that were only exposed to paid search.

Even though marketers have suspected this trend, the study supports and validates those assumptions for the first time. An estimated 50% increase in click-through rates occurred when consumers had been exposed to brand influenced social media as well as paid search. While generic keywords at the top of the funnel are popular, consumers use social media to change their mind on the products and services they would consider buying further down the decision process.

For brands this is a great opportunity to influence consumer discussions about their products and services using social media, although the challenge will be understanding how to allocate budgets between social media and paid search.

Read the comScore press release.