How Do Hotels Cope With Tech Disruption?

In my previous post, I have discussed how #Airbnb has taken a large pie of the accommodation market, leaving hotels in a lurch to cope with the disruptions.

The truth is, the hotel industry is rocked not only with Airbnb, but also with Online Travel Agents (OTAs) such as Booking.com, Agoda, C-trip, Trip, etc. These charge high commissions that leave hotels with little profit at times. So while Airbnb steals the market share, OTAs charge high for whatever’s left. It is no wonder that hotels have a love-hate relationship with OTAs and the likes of Airbnb.

Despite these disruptions, world travel for business and tourism is still on the high. Global travel and tourism spending hit USD$761 trillion in 2016 and the global hotel industry reached USD$570.18 billion in 2017 (from $562.99 in 2016). (Source: Statistica.com) This is not likely going southward until a serious global catastrophe occurs.

What can hotels do to up their game? My take is to adopt a "Tech-For-Tech" strategy. Not tit for tat.

Consider the customer journey of a consumer who wishes to book a hotel overseas:

a) consumer goes to Airbnb or OTA

b) consumer then visits the hotel’s actual website to check facilities & location

c) consumer decides if he likes the hotel

d) consumer returns back to Airbnb or OTA to book or refine search

e) consumer could also book directly with hotels, but may abandon cart to go back to Airbnb or OTA

It is at point d) that is the pivot point for hotels to grab consumers back. What can hotels do?

1)   Collect Data Via Landing Page

We al know this. Data can be a gold mine. Create an attractive landing page to collect consumers’ data or provide incentives to do so. Hotels must quickly connect with the consumer and offer an attractive deal or consumers may never return.

2)   Abandon Not the Abandon Cart

Abandon carts happen often as consumers will go to the actual website for comparison of prices or to find further information on location and amenities. Quite often, some would go the extent of keying in data to find out the actual cost compared with OTAs or Airbnb. The role of marketers and sales is to abandon not the abandon cart, grab the details in the cart, and engage the consumer with a "here's another offer you may consider". This is the best way to offer an attractive deal. Data is given willingly but in case privacy rules prevail, ensure there is way for consumers to opt out or unsubscribe, Teh engagement will likely be an email or chat box messenger.

3) Challenge Head-On With Airbnb

At least one giant hotelier said it would be blind not to notice the huge home sharing business that has taken away the hotel's global market share. Marriott International decided to start their Homes & Villas division in May 2019 with 2,000 luxury properties in 100 markets throughout North and Central America, the Caribbean and Europe. Marriott already controls more than 1.3 million hotel rooms around the world through brands like the Ritz-Carlton, W Hotels and Westin but has added this new division to compete head-on with the likes of Airbnb in the short-term home sharing business. When this rolls out to other parts of the world, the entire hospitality market will shake. It will seem, that even Airbnb has its strong competitors too.

With strong demand for business and tourism travel, hoteliers will need to rise to the occasion and embrace "tech-for-tech" solutions to stand out. Still, nothing beats the winning brand of personal touch and service. I will share more in another article.

Sandra Tan is a Digital Marketing Enabler who focuses her training on communications and marketing for the hospitality and tourism sectors. She is an avid traveller and trekker and loves the experience in every country she goes to. In her past time, she loves classical singing and supports the Very Special Arts Singapore.

Connect with Sandra Tan. linkedin.com/in/sandratan-esteem [email protected]

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