Travel 2.0

By Karyn Strauss, Senior Editor -- Hotels, 6/1/2007

Is it a Web of challenges or Web of opportunities? So in lies the question in the complex world of generation Internet “2.0,” where the rules of customer engagement are changing more so now than since the advent of the World Wide Web. In the midst of this paradigm shift in how and why customers access the Web, hotel e-marketing strategists have been given a whole new arsenal of tools to fight the commoditization of the hotel industry. Yet part of this shift is a change in power, as mediums like consumer-generated media put customers in the driver’s seat. No longer can hotel companies expect just talk to customers; today they must facilitate—and influence—conversations.

Getting From Web 1.0 To 2.0
“Make no mistake about it, price drove online adoption,” said Philip Wolf, president and CEO of travel and hospitality research firm PhoCusWright Inc., in addressing an audience of hotel marketers at a recent conference of the Hospitality Sales & Marketing Association International. “Today price is one component of an Internet strategy, but not the entire game. It’s the evolution from customers seeking to find the lowest price to finding the perfect trip.” Wolf went on to discuss how the first adoption of Internet, such as the hotel companies’ “lowest price guarantee,” was all about “better sameness,” a 1.0 strategy. Today, he says, it is about going from considering the Web as just the lowest cost distribution channel to a tool for communicating value-added services that foster loyalty.

“Five years ago it was all about the transaction and helping someone make a reservation, but with the evolution of the Web, and more and more people going online, the opportunity has become much greater,” adds Chris Holdren, vice president of global Web services for Starwood Hotels and Resorts Worldwide. “Price is still very important to all guests—it’s still a critical element—but the evolution has been able to show what kind of experience you get for the price.”

Selling the experience of travel: With nextgeneration Web sites, no longer does the booking engine have to go on the homepage, as seen here with Travelocity.

Indeed, over the last few years hotel companies have gotten smarter about leveraging the power of the Internet to drive room sales. As a result, this year more than one-third of all hotel bookings in North America will be generated from the Internet, making it the No. 1 distribution channel. And by now seasoned hoteliers are well aware of the need for a completely integrated electronic marketing strategy. They have made the online travel agencies their partners rather than their enemies; they have measured click-through rates and done their due diligence in learning about Web site optimization, algorithms and paid versus organic search. Web site content as been modified as such, paying attention to keywords and meta-tags. And e-marketers have learned through trial and error the best ways to send out effective e-mail campaigns or launch online promotions. The industry has come a long way; 2.0, however, takes the whole game to the next level by assuming that the basic tenants of Web surfing have become easier— sites are easy to navigate, information is readily accessible and transparent and the speed at which that information is transmitted is faster.

In the 2.0 world, hotel marketers now are using technology to engage customers in more meaningful ways and in new places—even beyond the browser. And via user-generated content like blogs, discussion forums and social networking sites, in essence giving those customers more power in how their property or brand is perceived, and therefore how they hope future bookings will grow.

THE GIST

From Bill Marriott’s personal blog, to the growing number of travelers who have uploaded their vacation photos onto Disney’s Photopass Web site, to Starwood’s development team trying out its new aloft brand in the virtual universe of Second Life, Travel 2.0 is changing the rules of customer engagement

2.0 strategies assume the basics are covered: Web sites are user-friendly, easy to navigate and searchable; information is both transparent and generated faster

No longer is the Web just a low-cost distribution channel; today it is all about experiences that add value, community and foster loyalty; no more sameness

Power of the little guy: 2.0 embraces the power of a hotelier’s reputation over his/her marketing budget

As PhoCusWright’s Philip Wolf says “People are digging each other more than ever before.” As such, understanding both the importance and implications of online social networks is a fundamental principle of 2.0.

2.0 also is about creating niches—selling less of more; era of greater personalization

From Transactional To Experiential
Before getting bogged down in whether or not to have a blog, a good way to start adopting 2.0 principles is to make the most of your Web site. Hotel companies can sell the dream of travel by creating more engaging visuals and better content. While hotel Web sites of the past made the often cumbersome and not very attractive booking engine the most prominent part of their homepage, only to be accompanied by a jarring headline of some great discount deal, today using tools like streaming video and advanced satellite mapping is a much more engaging way to get customers to experience all your property has to offer. “It’s about leveraging things like video, adding destination content, making it more about the trip customers are about to take,” Holdren says.

A standout example of this new evolution in Web sites is the MGM Grand, Las Vegas. Capitalizing on its locale in the heart of The Strip, the marketing team wanted to use its site to give customers a taste of what the experience at their property could be like. Last summer it introduced a revamped Web site with a “ MaximumVegas” feature—a polished, highly stylized 75-second video that moves seamlessly from accommodations (the property’s upmarket Skylofts) to dining to nightlife to amenities to entertainment by following one guest through each aspect of the hotel’s offerings. “We wanted to create an experiential site. Our previous Web site was simply organized, retail focused and easy to navigate with a big price on homepage—a deal grabber, and in that regard it did very well,” explains Michael Perhaes, assistant vice president of advertising for the property. “But it was missing a couple components. With Vegas heating up again we wanted to differentiate ourselves. And the site was not optimized for search. It was hard to find us.”

So the team set out to accomplish an idealized experience available at the property while promoting “stickiness”— a retail strategy to engage users to stick around longer on a Web site, with the thinking being that the longer they stay, the more likely they are to book. “So you come online, and you are immediately grabbed. The movie is the hook. It is idealized to showcase the very best of everything the hotel has to offer,” Perhaes says. At any time users can “jump off” the movie to explore the different sections. And because it was created as singular flash movie with source code behind it, it is more easily searchable. “That’s what helps your rankings, also outbound links, which we have via our strong affiliate programs, which helps with your ranking [in organic search] too,” Perhaes adds.

In addition to the movie, the site also features a well thought-out mapping feature for meeting planners, who can virtually deconstruct the meeting facilities and build their own floor plans. And now Perhaes says the company is looking into adding more audio for download, be it music featured in the property’s clubs or a soundbite from a comedian featured in one of its entertainment venues.

“When the site first launched, people were falling down. It was far and away most compelling within the [MGM Mirage] organization. But people were a bit skeptical—is this really going to help sell rooms?” Perhaes says, adding that the biggest challenge with this project was convincing executives that it was OK to build a site that was for a more technologically advanced audience. “Time has showed that it has [helped sell rooms]. We’ve seen significant increase on time spent on the site and online bookings have increased month over month.”

Looking to add an expanded sensory experience, Starwood’s Westin brand is engaging users online with rich audio and video content that better reflects its renewal messaging. Its interactive site promotes health and wellness. For example, users can create their dream travel experience or take a virtual fiveminute vacation from their computers—all thanks to enticing graphics, content about relaxation techniques and calming music. Users also can download music playlists from Westin’s resident “eMusicologist,” to continue that sensory experience offline. “We’re leveraging new technologies to build engagement and keep them engaged,” Holdren says. “The type of compelling experiences we can deliver online today can bridge the gap between online and the experiences guests can have in our hotels.”

Beyond The Web Site
In addition to creating more engaging Web sites, items like RSS feeds—which allow users to receive updates about your property on their own Web browser—and software that can be downloaded to a desktop, PDA or MP3 player to communicate special offers and features of a hotel are other 2.0 ways to better connect customers with your property or brand. More and more hotels, including Starwood’s brands and MGM Grand, are adding RSS capabilities to eliminate the need to send customers e-mails about special promotions or happenings at their properties. It benefits customers by not clogging up their inboxes and allows them to better control what messages they are interested in learning more about.

Westin extends experiential reach beyond the Web by offering music downloads that support its renewal brand positioning.

Another way to help customers stay on top of the latest deals and special happenings is branded desktop applications. In the travel industry, Expedia.com was one of the first to offer such capability with its fare alert application. Southwest Airlines also introduced “Ding,” a live update communication tool about new low fares and specials. More recently, the first hotel company to introduce this model is Best Western International’s “KnockKnock” tool. Customers can easily download the application from the Best Western Web site. The feature allows consumers to reserve hotel rooms, retrieve information on the brand’s loyalty program, receive special offers, even check the weather. “From our perspective, the Web is our No 1. distribution channel, so we’re always looking to innovate. With KnockKnock, we want customers to have more engagement with our brand,” explains Dorothy Dowling, senior vice president of marketing and sales. “It provides the opportunity for us to communicate specials and will be very rich with promotions.” Such a tool is a retention strategy, she says, adding that it is just one of several new tactics the brand is exploring to foster loyalty. For example, this summer Best Western will launch a family-friendly micro-site with partner Nickelodeon that will include streaming video advertisements as well as travel tips for parents. “Today the Web is about more than just reservations,” Dowling says. “We want to add interactive elements, including some gaming applications where customers can win prizes. All these enhancements take the Web to the next level.” Looking ahead, the brand also is looking at more ways to leverage the Internet for PR opportunities. For instance, the company is planning to award a prize to the “best vacation at a Best Western property” uploaded onto the popular video sharing site YouTube.

Another growing 2.0 application is podcasting. Hotel companies now can engage customers wherever they are with rich audio and video content that can communicate hotel and destination information. Users can listen in direct from their computers or download the content to their computers or mobile MP3 devices. Companies such as Kimpton Hotels & Restaurants and Jumeirah are among those exploring this communication tool. Jumeirah launched its JCast video podcast series last year with content geared toward its “Stay Different” brand positioning. “We launched JCast because we recognized both the growing popularity of iPods in use by our guests and the broader trend for information lust and rich video content,” says Kristie Goshow, Jumeirah’s group director of e-commerce and consumer development. “The JCast presented a natural extension to our existing marketing communications platform. We want the consumer to ‘choose Jumeirah’ rather than us solely selling to them, and we wanted to continue our commitment to making the brand a personal experience. JCast was the perfect medium.” Further, she explains, the company was attracted to the concept because of its viral marketing capabilities to further grow brand awareness among travelers. The latest JCast features information about H2O, the men’s spa at the Jumeirah Emirates in Dubai. Other JCasts explore individual properties and amenities. New “episodes” are produced every two weeks.

Power Of The People
“Guess who is winning the battle of the star ratings? Is it AAA that is rating 10,000 U.S. hotels, or Expedia or TripAdvisor, whose users are rating 60,000 or 70,000 hotels across the globe?” facetiously asks Max Starkov, chief e-business strategist for Hospitality eBusiness Strategies, an Internet marketing consulting firm for the hospitality industry, in citing the power of usergenerated content. “In the past it worked to have a nice brochure and some nice print ads about a hotel. And people bought our message because there was nothing else. With the Internet and especially with consumer generated media, the power structure has changed. We’re seeing a shift in the credibility of official content to peer sources.”

Best Western International recently rolled out KnockKnock, a new desktop application tool highlighting special offers.

User-generated content is probably the biggest buzz-worthy component of the 2.0 landscape because of this power shift. That is evidenced by the surge in popularity of sites like TripAdvisor.com, which offers unbiased, travel-related reviews in a social networking setting. While TripAdvisor is the best known, it is only one of a growing number of such sites. And the credibility of peer content over “corporate speak” on these sites is changing the way people plan and book travel. “People are digging other people more than ever before,” Wolf says, adding that as a result hoteliers need to adopt a posture that all messaging cannot come from the public relations people because customers will be cynical if that’s the only voice they hear. “It only gives a company story and that will be off-putting,” Wolf says.

Looking to counter that fear, Starwood’s Sheraton Hotels & Resorts brand last year became the first in the hotel industry to feature user-generated content on its Web site. Accessible from its homepage is a social network application where visitors share stories, photos and advice about a particular destination. “The most exciting thing in social content is that it has such a natural synergy to the travel industry. People love to talk about travel experiences and share tips about how to make it special,” Holdren says. “We always start any new initiative asking what the core needs of our online guests are, and how we can better serve that. And it’s wrapped up in the unique attributes of our brands. Our Sheraton brand is all about connections and belonging.” The site marries that message of connecting with an online application similar to those popularized by Web sites like MySpace.com or Flickr.com (where people can share photos). “It’s all about engagement—bringing the brands to life,” Holdren says. “And it starts with us online. From a loyalty perspective, we’re building that engagement.”

MGM Grand Las Vegas entices would-be guests to its property with an engaging 75-second video showcasing “Maximum Vegas,” a tour through the property.

Another approach Starwood is taking toward user-generated content is TheLobby.com, which features blogs about travel destinations as well as happenings within the Starwood brands by a team of writers. Rich with travel tips, reviews and gadgets, it is Starwood’s own travel portal and reads like an online magazine.

As Starwood facilitates its own travel content via Sheraton’s Web site and TheLobby, New York-based boutique operator Affinia Hotels decided to link with category leader TripAdvisor. Reviews of its hotels are now available directly on its own homepage. “Users are influential. Anyone who is a custodian of a brand needs to respect and appreciate that. That’s the gist of the Affinia story,” Wolf contends. According to John Moser, chief marketing officer for Affinia, the idea to link up with the review site was a natural progression of a corporate mandate that said all general managers must monitor these sites on a daily basis. “When TripAdvisor came along, we started monitoring it. Our GMs look at it every day, and what’s great about it (in addition to the mostly very positive reviews) is that they are helping with our product development by telling us what we should be doing next or doing better.” Moser likens the effect to focus groups, but says it is even more useful because of the free-flowing nature of the discussion where the public isn’t asked to respond to certain questions. “The customer is not only king in the hotel, but when talking about something on these forums he or she becomes part of the development plan,” Moser says. “In my mind I want our GMs and operations people to really look at the consumer to better run our hotels. That’s the direct impact of the customer.”

Monitoring peer review sites has helped Affinia develop new programs and amenities, from its pet-friendly policy and pampered pet package to adding rooftop garden lounges to more of its hotels. In terms of any negative comments, Moser says GMs “know how to address any problems quickly and leave the customer satisfied. It’s standard operating procedure for them to post a response and ask the reviewer to contact them. And they respond equally to positive comments, too,” he says.

Jumeirah has introduced video podcasts (its JCasts) to showcase its properties’ and destinations’ special features and amenities.

Such careful monitoring of these sites is what Starkov calls a necessary defensive strategy for approaching usergenerated content. “Monitoring TripAdvisor and Frommer’s peer reviews or HotelChatter makes sense. You have to monitor, and then you have to react. The sooner you react, the better,” he says. “People know things go wrong all the time, that’s life. The same thing can happen at a hotel, but if you can react to a negative posting, identify the issue, discuss how you corrected the issue, the smart hotelier can turn negative into positive.”

And the beauty of the Web is that unlike the comment cards of the past, changes a hotel makes can be communicated immediately. But therein too is a note of caution: “Today if something happens in the lobby of your hotel, it will be on TripAdvisor within half an hour—that’s the power of consumer-generated media; the instant content delivery and the instant effect it has on a would-be customer is a very important implication,” Starkov says.

As a result, sites like TripAdvisor also can level the playing field in the hotel business more than ever before. The Internet has been a great tool for the small operators to get their names out to the public in a more cost-effective way; Travel 2.0 takes that idea to the next level. With Forrester Research finding that only 6% of consumers today trust marketers’ ad claims and people turning to peer review sites, even the smallest hotel can make the most impact. “Never before has the power of your reputation been able to combat the size of somebody else’s marketing budget,” says Wolf, emphatically. “That’s probably the biggest takeaway from this 2.0 era.”