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Marketing Mayhem in the Hotel Booking Space

If there is any more dynamic and competitive marketing niche online than travel and hospitality, even the casual observer would have a hard time noticing it. If only there was a way to discern just where the many online business are headed. Well, maybe by noting some significant ones, along with their latest news, we can begin at to understand better.

Roomkeylanding Marketing Mayhem in the Hotel Booking Space

Zooming in on the hotel booking segment, since flights and flight search will apparently be a zero sum revenue game for third parties at some point, we see a hotel room revenue game as the next market (and marketing) shift. Take a look at some significant players and moves, to maybe see where the coming trend takes travelers (and investment).

The Contestants

  • Hotel or Service Provider SitesThese channels, with the right marketing and visibility initiatives, could be the best price and “connect” solution. The problem is the high cost of conventional or SEM marketing, on top of a steep adaptation/learning curve in using social media and other support channels. Bottom line is, Mom and Pop hotels need a viable helper channel. The Mix of marketing is crucial.
  • The OTAs – Expedia, Orbitz & the myriad big channels rule the roost so far. Google is making inroads and worrying the market, but so far the hotels still have to depend on these brands. The downside could end up killing these though, they take a high commission for diminishing returns. Hotels cannot afford it, nor are high commissions wise for the mid or long term. (See the Expedia move below for the latest)
  • Google – With the ITA and other acquisitions, the launch of flight and hotel search, and especially the Motorola aspect, Google Travel may not be labeled as such, but the search giant has all but arrived. The first time I looked for hotel pages on g+, I found two, today there are hundreds (yes, with the g+ button on their site) – Google could rule this roost too, but regulators may have a say – best bet here is they’ll play along for their best result.
  • Roomkey – Started by 6 of the world’s biggest hotels. The potential is in the vast inventory that can be levied because of these brands – as well as the potential to undercut the big OTAs. So far, other metasearch or even direct OTA room search can win on price. (This article detracts) Roomkey may also be counterproductive for the big players, detracting from their home sites. Some suggest it is just an attempt to test the water and scare the OTAs.
  • Global Hotel Exchange – Simplicity and free to hotels as a marketing channel/visibility portal – potentially cheaper than most other distribution channels (Expedia gets up to 30 percent of “gross” booking fee). Coming March 1 (world has it, so many hotels joining, scale postponed release?) GHX, as the developers term it, is a dark horse offing the best of both worlds, maybe.
  • Mr & Mrs Smith & Luxury – Specialized & Boutique agencies make up a significant part of the industry, particularly for luxury and package vacationing etc. These channel master utilize the range of distribution channels rather than actually being one. They will likely navigate the coming price war well, staying out of trouble. There’s always a spot for the chic boutique.
  • Other Independents – Groups of hotel owners such as the Asian American Hotel Owners Association (AAHOA) and their Besthotelrates.com effort will likely continue to try and assert themselves. Like the niche luxury and boutique players, they too can engage the market. To see their latest movements, check out this press release relating to mobile, voice, and ancillary hotel revenues.

mms Marketing Mayhem in the Hotel Booking Space

Just to illustrate the critical, fast moving impact new disruptors have on markets, as I write this Expedia has announced yet another ancillary revenue solution. Smart Cross Sell, as they call it, is gauged to entice the airlines to “buy in” to the hotel booking game, big time. Then, this article at Eye for Travel highlights a bit how the big hotel players view the dynamics of hotel marketing. While there is no mention of competitors by Hilton Worldwide’s marketing guru James Harrower, it’s clear the shakeup in social and Google’s presence in the space impact every hospitality player.

So without hammering out a 200 page whitepaper on free markets and their operands, anyone can quickly tell Google, Global Hotel Exchange, and especially the vast list of independent hotels out there are on the move. Make no mistake, this industry is worth hundreds of billions in revenue worldwide, maybe even trillions when all is accounted for. While there is clearly room for many players and niches within the market, it’s also apparent some will lose out big time in the months to come.

Racing for Billions

If you’re looking for differentiators among the choices for online booking, several segments appear more clearly. Luxury remains luxury, the big brands seem to be segmenting themselves, and the so called “little guys” including the budget segment all require slightly different marketing and business development concepts. With Facebook’s IPO out of the bag now, the smart money has to look at players like GHX and some others as potential offerings upcoming. This release alludes to this very thing.

I find it interesting that since Magnuson announced Global Hotel Exchange, and AAHOA announced drastically different revenue and booking models, that so much movement is taking place in the space. Marketing wise, Google, dynamic content, and other SEM strategies seem in flux. Meanwhile, the other critical channels like social spheres and conventional digital strategies (ads and so on) would seem to be being affected similarly by economics and style.

It’s going to be interesting to see where we all fit in into this and other rapidly changing markets. No matter what, it looks like the competition will eventually reward the hotel guest – and in turn all travelers.

Screen Shot 2014 04 15 at 7.21.12 AM Marketing Mayhem in the Hotel Booking Space
Loren Baker is the Founder of SEJ, an Advisor at Alpha Brand Media and runs Foundation Digital, a digital marketing strategy & development agency.
Screen Shot 2014 04 15 at 7.21.12 AM Marketing Mayhem in the Hotel Booking Space

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2 thoughts on “Marketing Mayhem in the Hotel Booking Space

  1. Another interesting player in a related space is <, which is well-funded and seems to be gaining traction rather quickly. Interesting article.

  2. You’re right, Loren. The travel and hospitality is getting more competitive and dynamic as more people tune into their desktops and mobile devices when booking reservations. Businesses big and small are realizing that just getting ranked on Google is not enough – they have to be engaged with customers through social media and manage negative reviews as well.