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NetLink and Hospitality

Are Hotel Brands Beating Online Travel Agencies at Their Own Game?

At one point, Online Travel Agencies (OTAs) played a key role in the initial booking process for travelers – being the first online destination for securing a room.

But, are the times changing?

It turns out that OTAs are playing a much smaller role in booking a room with numbers declining as the entry point to the booking process.

Over the last few years, World Independent Hotels Promotion (WIHP) has been analyzing where direct bookings come from and how guests heard about the hotel they booked.

This year’s survey had a surprising finding. While TripAdvisor was 2013’s first position in how guests booked hotels, this year recommendations from friends and family took first position.

While OTAs are still high at 16.2 percent, the numbers are declining, which could be an indication that the hotel industry’s strategy to retain guests is working.

“Considering that Priceline reports that 30 percent of its revenue is spent on marketing, it arguably needs optimize this as much as possible to retain visitors and ensure it remains the ‘first port of call’ in the hotel ecosystem,” said Martin Soler, vice president of marketing at WIHP.

By building loyalty, hotel brands are beginning to beat OTAs at the current price war with guests. As such, we are seeing that many travel searches now include a brand’s name in the search string, which is an indicator of loyalty.

But are OTAs headed out to pasture? Not necessarily. OTAs are still being used to research hotel properties, just not to book the actual stay.

The bottom line is that hotel brands must be doing a few things right. By being price competitive with OTAs, while also increasing Search Engine Optimization (SEO) efforts, hoteliers are slowly chipping away at OTAs.

Again, the largest factor is that hotel recommendations are coming from friends and family. This means that guest loyalty is increasing, and word-of-mouth is driving more bookings – something that OTAs can never achieve.




Pushing Innovation and Role of IT to Forefront of the Hotel Industry

In every industry sector, we are seeing the pace of innovation moving at fast speeds. Fully leveraging all of the mobile- and cloud-based solutions – in ways to help organizations stay fully ahead of the curve – can be tremendously challenging.

The hospitality sector is going through its own information revolution where new innovations make it possible to not only mine guest data more effectively, but also serve up offerings that please guests in highly individualized ways.

This is all very exciting, but how can large hospitality providers keep up with the pace of innovation?

According to a recent Harvard Business Review article, the new ‘digital title wave’ should cause organizations to move the function of IT from the ‘back of the bus to the front seat.’   The article also underscored how this hypothetical bus is moving very fast.

For many years, we have believed and supported client projects that only provide direct business value to an organization.  This new fast-paced digital frontier reinforces our long-held philosophy about IT being a business catalyst, but takes it to the next level.

Rather than just pushing for IT to have a seat the management table, it is time for this role to be the ‘bus driver.’ This requires IT professionals to have a strong business knowledge base, along with the ability to embrace and procure the most bleeding-edge innovations.  Simply put; IT leaders needs to wear many hats – some that will push them out of their comfort zones.

This is no small challenge for hotel IT professionals.  The stakes have become much higher for technology and everyday we are seeing new examples of how it can be the foundation for true business differentiation.

“The challenge for every business is to look across the enterprise to see how silo-based operations are impacting the guest experience,” said Tobias Bray, Innovation Strategist at NetLink Resource Group.  “Guest expectations are being shaped by the efficiency and innovation they find in personalized interactions on mobile platforms outside hospitality.  Brands are making the transformation, but have to walk carefully around the deep cultural expectation of high-touch services that are common today.”

We believe that this is one of the most exciting times in technology.  Yes, things are moving very fast, but it’s time for all of us to adapt and take a ‘smart, fast’ approach to implementing the most cutting-edge innovations.

Should Hospitality Providers Replace Front Desk Staff with Mobile Solutions?

There’s been plenty of news about the hospitality sector embracing new innovations in the area of mobile solutions.  From the development of new mobile applications for guests to manage their experience to providing iPads in every guest room, this new horizon will play a major role in allowing hoteliers to offer enhanced services.

One area of advanced mobile solutions recently caught my attention: niche hotels actually replacing their front desk staff with mobile and communications solutions that allow guests to pay in advance, as well as receive correspondence with the security codes to access their rooms.

While this seems like an innovative and cost-saving idea, the reality is that mobile solutions should be used to augment current service offerings.  I don’t believe that larger hoteliers should or ever will fully abandon having staff at the front desk because a guest’s need needs must continually be met and human interaction must always to be an option for a hotelier to assist with unforeseen challenges.  In some cases, a hand-held device could never replace the convenience and personal touch of highly trained front desk staff.

In the past, we have seen similar situations where organizations have tried to supplant people with technology, only to learn the lesson that they instead should have supplemented them.  Some examples that come to mind are automated phone attendants and websites, where some organizations believed they could cut off communication with their customers only to find that they wanted the option of both means to improve their interaction and experience.  The use of mobile technology by hospitality providers will be no different: there will be times when guests will want to do things on their own via the technology and other times when they want to interact with someone.  What hoteliers need to provide is guest-friendly technology that guests want, as well as staff available to assist.

The use of mobile technology to manage a guest’s experience holds great promise, but it brings with it some potential challenges.  For example, does this new frictionless check-in method help these niche hoteliers retain guests?  Without having any measurable goals – or even testing this concept out in one or two properties in advance of a full-scale roll out – hospitality providers can actually run the risk of driving these guests away.  They will need to tread cautiously to ensure they strike the right balance between technology and human interaction that their guests ultimately desire.

The concept of service is the driving differentiator for any hospitality provider.  Many of the largest hoteliers can trace back their overall business success to providing the best services on the market.  And, in today’s competitive landscape, hospitality providers cannot risk losing guests due to service issues.  Information technology should be used to improve the guest experience and the reality is that it will always supplement, and not supplant, the people that ultimately provide service to guests.

Hospitality Providers: Top Five Tips for Achieving Maximum Technology ROI

As we head into 2012, it is important for any sector to maximize its technology investments to ensure the most effective business outcomes.  And, in no other industry is this more important than the hospitality world.  With fierce competition to capture guests’ attention, coupled with the ongoing challenges of a lagging economy, it is vital for hospitality providers to make the most of their IT spending.

Based on our experience in working with leading hospitality providers, we have provided the following top five tips for maximizing IT in 2012:

1. Align IT with Business Goals: When embarking on a new IT initiative, it is critical to align these efforts with business goals.  As such, hospitality IT leaders need to be fully connected to the C-suite and have deep insights into the overall business goals and strategies and use these to guide all efforts.

2. Use IT for Competitive Advantage: Hospitality providers need to gain competitive advantage by providing unique offerings, which will allow them to be differentiated from their peers.  In essence, every IT project has to support efforts to eclipse the competition – whether it is building out a new CMS, simply enhancing your core web site with more features and functionality or developing a mobile version of your web site.

3. Use Innovative Project Management Approaches: When working with IT vendors and integrators, it is important that your technology partners offer a project management approach that is highly effective and mitigates any risk of derailing a project.  One key approach is to make sure that your partners provide results early and often throughout the project management process – as opposed to presenting a solution at the end of the project lifecycle.

4. Be Realistic About the Level of Complexity and Associated Costs: When considering going for Commercial-Off-The-Shelf (COTS) as opposed to a custom IT solution, it is important to be realistic about the costs and complexity associated with this decision.  The greater the complexity, the greater the chance that custom solutions are required, though as we have highlighted before, this is not always a “black and white” decision.

5. Remove Any Barriers Between Hotel Technology, Marketing and Operations: As highlighted in a recent white paper by Amadeus and RockCheetah, hospitality providers should consider creating the “IT Pathfinder” role.  This person can create a greater alignment between corporate business and technology objectives, as well as identify appropriate solutions and implement the initiatives that create the greatest economic value.  In addition, it may be more cost-effective to rely on an outside partner to serve as the “IT Pathfinder.”

Information Technology is clearly a major business driver for the hospitality sector.  When used appropriately, it can create major competitive advantage and ultimately drive additional revenue.  The key is to use your IT investment wisely, align IT with your business goals and make sure you are using the right partners and solutions to meet these objectives.

Posted by: Diann Turner, Director, Business Development, NetLink Resource Group