e-commerce strategic plan - 101 hotel e-commerce

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Andy KhenHotel E-Commerce101

E-Commerce Strategic PlanHotel E-Commerce 101

Andy Khen

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Goals

Short-term

Revenue Generator

Online Exposure

Long-term

Sustainability Loyalty

GoalsShort and Long Term

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AIM

Room and Non-Room Revenue

Offline and online

Expanding the Online Revenue

Find the most cost-effective channels to distribute the room inventory

Decrease the Distribution Costs

“Always aim for achievement. Forget about success.” (Helen Heyes, n.d.)

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The FocusFocusing on the Basics

“Concentration – Important to our success.” (Ingvar Kamprad, 1976)

ACCOUNT MANAGEMENT CONVERSIONVISIBILITY

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Account ManagementRevenue Sources

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Online

Channels

Description

(RTB & USP)

Photos

Reviews

Content ManagementImproving online presentation

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Brand.com

Higher

ARR

Increasing

Loyalty

Better

Presentation

Direct DistributionFocus on high yield channel

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Partner

Partner with banks, airlines, Railway, etc by providing their clients and employees with special rates when booking online

Each partner is provided with specific booking code

Shared marketing efforts such as LED, Billboard, e-blast, etc

Increasing bookings from brand.com via 3rd parties

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Best Rate GuaranteeFocus on high yield channel

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Rates

BAR

Premium

Published

Discounted

Rate FencesProviding wider options as to grab wider market segments

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Rate WarAnticipating rate ware in over-supply situation

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Dynamic & Multi-Pricing ApproachLeverage Rate and Time

Maximise Occupancy Maximise ARR Maximise RevPAR Maximise Revenue

Room Guest Time Location

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Andy KhenHotel E-Commerce101www.swiss-belhotel.com

BAR:

dynamic based on occupancy

Discounted Rates: advanced purchased, etc -discounted based on BAR

Premium Rates:

packages, added-value offers

Published Rates:

static

Rates

Multiple & Dynamic PricingMaximising RevPAR

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Demand & SupplyOccupancy versus ARR

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Multiple Pricing ApproachMaximising Revenue

Revenue 1€250 x 150 €37,500

Revenue 2€350 x 100 €250 x 50€200 x 50---------------€57,500

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UpsellingIncreasing average booking amount

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Prospect Theory

Professor Kahneman (Nobel Prize winner) & Amos Tversky in 1979

It is easier to get customers who have already committed to purchase to spend an additional amount (the amount of an upgrade, for example) than it is to get them to make the more expensive purchase at the initial decision point.

Upsell & Upgrade

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Cost Effective

Protect Rate Integrity

Generate More

Bookings

OTA’s ManagementThe 80/20 Rule

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Group Priority List of OTA’s Local OTA’s Note

A High ABC

Available at all times

B Medium DEF

GHI

Medium – low periods

C Low JK

LMN

Low periods

OTA’s GroupingImproving inventory management

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Fixed contracted

rates

Minimum online selling

rates

Fully controlled allotments

Online WholesalersLeveraging the networks of wholesalers

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• In 2012, online bookings in APAC were still dominated by online suppliers accounted more than 60% from the total online production

• List of online wholesalers: Hotelbeds, GTA, Jactravel, Transhotel, DOTW

• Local online wholesalers (Indonesian): Mandira Abadi, MG Holiday

• Autralian wholesalers: Flight Center, The Travel Corporation (Creative Holidays & New Horizons), GOH holidays, Qantas Holidays & Asia Escape Holidays

Wholesaler Account ManagementExpanding the wholesaler accounts

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Marketing exposure

Segmented market

Excess rooms, low

period

Coupons, no

allotments

Flash Sale SitesUsing group buying sites during low periods

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Billboard EffectOTA’s and social media channel as online marketing tools

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Chris Anderson (Cornell, 2009): Billboard Effect

JHM Hotels in the US , 4 of 35 properties taken as study objects

Listed on Expedia on and off in a circle of 7 – 11 days for 3 months

Findings: reservation on non-OTA channels (eg. Brand.com) increased by 7.5 – 26% when being listed on Expedia

OTA’s and their indirect impact to direct channels

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UPC or Prepayment

Connected to channel manager

Cost-effective

commission

Rules for New OTA AccountEvery contract is a cost; hence we have to ensure production

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Sky Scanner

Trivago

Wego

Meta Search SitesLeverage the meta search sites to increase visibility

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Affiliate MarketingPaying for result only

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Social MediaSales, marketing & guest interaction tool

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• Customer Contact Management

• Multiple Online Payments

• Competitor Monitoring

• Review Scores

Competitive Rates

Constant Availability

Informative Hotel

Description

Sufficient Photos

Conversion

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How It WorksCost-effective marketing and sales tool

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Affiliate MarketingRegular campaigns on Brand.com

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Guest Interaction:

Quizzes

Complain handling

Inquiry

Marketing

Sales

Social MediaFreebies, quizzes, etc

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TripAdvisor

Online Banners

Google Map

SEMAs a supplement to SEO

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Online Reputation ManagementLeverage online reviews to increase brand competitiveness

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Main Factors People Book A HotelMost people choose a hotel because of the reviews

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”If a hotel increases its review scores by 1 point on a 5-point scale (e.g., from 3.3 to 4.3), the hotel can increase price by 11.2 percent and still maintain the same occupancy or market share”.

Professor Chris Anderson, Cornell University,,2012

Relation between Reviews & ARRStudy from Cornell University

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Reputation Management“More than 70% guests read reviews before booking a hotel…” (Michael Menis, IHG)

o Monitor and response reviews in timely manners;

o Use Reputation Management software when possible;

o Adopt pro-active approach (as opposed to passive approach) to get reviews from guests;

o Measure and monitor NPS (Net Promoting Scores) of each property and or brand.

Online Reviews Word of MouthIn-hotel Reviews NPS

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Guest ReviewsMaintaining all reviews both offline and online

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Weekly

Monthly

Quarterly

Monitoring, Reporting & Reviewing

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Thank You

[email protected]

e-commerce strategic plan - 101 hotel e-commerce

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