Moving from online channels to ecosystems

The future of online distribution lies not through channels but through ecosystems, distribution experts report.

Online travel agencies, brand.com, social media, mobile apps and websites—they’re all interconnected parts of the booking process. Revenue managers who fail to understand this broader perspective risk losing business and customers, concluded a panel of distribution experts Tuesday, 29 November during an HSMAI University webinar titled “What is the Future of Distribution?”

“Consumers have no concept of ‘channels.’ They just want to book a room where they are naturally,” said Michelle Wohl, VP of marketing for Revinate, a San Francisco-based company that specializes in social media solutions for the hotel industry.

And where they are “naturally” is increasing in scope. Panelists shared the following data points during the 90-minute webinar:

• Facebook has 800 million active users, 50% of whom visit the social-media giant daily.
• Review site TripAdvisor draws 65 million unique visitors every month.
• Smartphone sales have overcome PC sales during 2011, and 51% of business travelers use mobile devices to get travel information, which is more than double the rate two years ago.

“Consumers are shopping everywhere,” said Amy Severson, director of strategic accounts and industry relations for online travel company Expedia.

Attempting to be “everywhere” might be a little extreme, she added. Hoteliers, instead, should analyze where they can make the biggest impact in the consumer decision-making cycle.

Zero moment of truth
In the early 2000s, Procter & Gamble spent millions of dollars in just such an analysis, said Scott van Hartesvelt, president of Gcommerce Solutions, a Park City, Utah-based digital marketing company for the hospitality industry. Headquartered in Cincinnati, the pharmaceutical and cleaning supplies giant discovered the best brands elicit two moments of truth from customers:

1) at the short shelf where a customer sees and decides to buy the product; and
2) at home, when the product either delights or disappoints.

But the Internet has changed this dynamic, van Hartesvelt said. Citing an updated analysis of the customer “moment of truth” conducted by Google, he said the new point of greatest impact in the buying cycle is called the “zero moment of truth” or the online information-gathering stage that precedes a purchase.

Customers today research purchase decisions more than ever before, van Hartesvelt said. They visit online review sites, consult with social networks, read articles and blogs, as well as visit company home pages. By the time they hit the “shelf” to actually buy a product, they are more educated and have a clearer understanding of what they want to buy.

For example, the average consumer in 2011 used 10.4 sources of information compared with 5.3 in 2010 before making a purchase, he said. Hoteliers need to make sure their brand is present in other Internet sources to reach customers and influence their decision making.

“Think about what are each and every one of those zero moments of truth that you can identity that would impact your hotel,” van Hartesvelt said.

A good place to start is a simple Google search for a property and its competitors, he said. Revenue managers should analyze how their properties are represented and whether they positively influence the booking process.

“It’s a function of understanding where might somebody go to research my hotel and my location,” van Hartesvelt said.

Those information sources are becoming more and more fluid and interconnected, he added. Facebook posts links to TripAdvisor, which links to brand.com, which increasingly is showing customer reviews. It’s no longer about channels, van Hartesvelt said, it’s about ecosystems.

Reviews and the buying cycle
Reviews are everywhere, the panelists said, and that means they’re becoming an increasingly influential part in the booking process.

In addition to TripAdvisor, many OTAs are implementing reviews as part of hotel search results. Brand.com sites are doing the same.

The goal, Revinate’s Wohl said, is to give customers the information they need and to encourage a purchase. If reviews are posted directly on Hotel A’s website, customers no longer need to jump to TripAdvisor or an OTA to search for them, thus increasing the likelihood that travelers will book directly on Hotel A’s website—or at least in theory. The phenomenon is relatively new, and it’s unclear how the incorporation of reviews will impact the booking cycle, she said.

What’s clear, however, is the importance hoteliers are placing on reviews.

“The No. 1 key to the future distribution is going to be customer experience. A lot of times that gets drilled down to reviews,” van Hartesvelt said.

More than 7% of hoteliers now respond to reviews on OTA and other travel sites, Wohl said.

Doing so is a good way to positively influence the conversation, the panelists agreed.

“Don’t be afraid of bad reviews unless you are running a bad business,” van Hartesvelt said. “… the cream of the crop will rise to the top.”

Key takeaways
Moderator Jeff Higley, VP of digital media for HotelNewsNow.com’s parent company STR and editorial director of HotelNewsNow.com, closed the webinar by asking each panelist to share a key takeaway:

Scott van Hartesvelt: “The biggest thing to understand is the interconnectedness of the different channels. Each channel does not live on its own. … they’re all interconnected. Being insular in your point of view to only looking at, ‘What can I do to make my hotel website better?’ … you’re going to miss out on where your customer are engaging.”

Michelle Wohl: “People do want to validate their booking decision by reading reviews. Make sure reviews are very visible on your direct site, the Facebook page or wherever people are going.”

Amy Severson: “You need to be approachable where your customers want to reach you … Think about being visible where your customers want to book.”

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