The Top 3 Challenges Facing Hotel Companies in 2016

In General Marketing, The Digital Marketing Blog by Scott0 Comments

Top 3 Challenges Hotel Industry cover

*Updated for 2017, to include our Internet Marketing Podcast with Chip Conley, Strategic Advisor for Hospitality & Leadership at Airbnb.

In this post you’ll learn about:

  • The Growth of Airbnb
  • The impact of VR/AR on the hospitality industry
  • The importance of Reputation Management

Introduction

I’ve just wrapped up an eBook on the topic of Airbnb vs. Hotels.

It was a mammoth topic to try and cover.

In the closing section of that eBook, I note that I was met with immense dissatisfaction.

That’s entirely true.

Airbnb is just ONE of the major changes happening in the hotel industry at this time.

What I didn’t get to explore are the equally fascinating areas of technology and customer engagement.

If you’re a professional working in the hotel industry, I can only imagine how much life has changed for you in recent years.

Should you be treating Airbnb as competition?

What exactly are Airbnb doing to grow so quickly?

Should you invest in VR? Do your customers even want a VR solution?

How do you keep on top of all the Tweets, updates, reviews and online sentiment around your brand?

There are a wealth of questions that are critical to making your customers happy and to inform your marketing strategies.

Perhaps you struggle to keep up to date with everything that’s happening in the industry? Maybe you just want an overview of how some companies are approaching Virtual Reality? Maybe you just want to set yourself up for future success in the industry and stay ahead of your peers or competition?

One day, perhaps I’ll write a book on the topic. Let me know if you’d like to read that @ScottColenutt.

For now, this article explores 3 of the major challenges faced by hotel companies in 2016.

I’d love to know your thoughts on the points below, so do email me with your feedback and opinions.

1.    The Growth of Airbnb

In less than a decade, Airbnb has developed into the most valuable hospitality brand in the world. Airbnb is now worth an estimated $30 billion. They have a higher valuation than established hotel operators Hilton, Intercontinental Hotels Group and Hyatt.

This dominance translates into their online marketing where Airbnb are performing exceptionally well in organic search and across major social platforms.

Airbnb’s success is not limited to just the US market either.

They now operate in 34,000 cities across 191 countries.

They have over a MILLION Instagram followers. To put that in perspective, Marriott Hotels has 157k.

So this begs the question. A very big question.

Should I be treating Airbnb as competition?

I cover that question fairly extensively in the eBook linked below. The eBook contains a tonne of research on the growth of Airbnb and plenty of actionable recommendations for hotel professionals to consider. Please download it, I promise it’s worth it.

Front Cover Hotels vs Airbnb

One thing I do know is that this is a question that makes people in the hotel industry uncomfortable. I can sense it. I’ve seen this first hand.

Let me tell you a quick story.

I was at a conference recently where a marketer from a hotel operator started to talk to me. I told her about my eBook and asked her for her thoughts on the topic.

She said, “Let me tell you a secret. I always use Airbnb when I travel. I just want the freedom. I don’t want to have to deal with hotel receptionists.”

“Please let me quote you on that”, I said.

“No way! I will download your eBook, though”. She was laughing. She clearly didn’t want to go on record and have her bosses and peers know that she loves Airbnb.

Do you know whether your customers see Airbnb as a viable alternative?

How about your staff and peers?

Are you uncomfortable talking about the topic?

Tell me your secrets.

2.    VR/AR

I love VR. I think it will have a bigger impact than the Internet.

We’re on the cusp of a huge boom in VR uptake. Up until this point, VR has been fairly restricted to the entertainment, gaming and healthcare sectors.

That’s going to change, and I think we’ll see a host of companies across a variety of sectors start experimenting with VR solutions in the next 6-12 months as a barrier to entry becomes a lot easier to overcome. Production costs are decreasing, platform and headset options are increasing and Android Daydream, Google’s mobile VR platform, is set for release before the end of the year. I expect Daydream to boost general awareness of VR and spark plenty of new experiments.

One of the sectors I expect to see heavily invest in VR is the travel sector and in particular, the hotel industry. In fact, there have been plenty of hospitality brands who have been experimenting with VR in the last couple of years, and we’ll look at some examples below.

If you’re responsible for acquisition, conversion or satisfaction in a hotel brand, virtual reality and augmented reality need to be on your radar.

This is an industry where there are obvious and immediate benefits for the customer.

The crucial questions you need to answer are:

  • Do you have the budget, or have you considered the budget you’re going to need to invest in VR/AR?

Every company should have an experimental budget. Get sign off for this as soon as possible.

  • Do you have an awareness of which companies are experimenting in VR/AR?
    • Do you know what the results were?
    • Do you have a system in place for monitoring VR/AR news in this industry?
    • Do you have someone in your team whose responsibility it is to keep your company informed of the latest developments?
  • Do you know what your customers want from VR/AR?
    • Do they even want anything at all?
    • Are they already searching for solutions?
    • How can you go about finding out what they want?

I’m not going to leave you hanging on this.

Let’s jump into a few examples of hotel companies who are already experimenting with virtual reality and then I’ll give you some tips on how you can start finding out what your audience wants from a VR experience.

Examples of hospitality companies experimenting with VR.

Here I’m going to introduce you to a few of the companies who are already experimenting with VR in the hotel industry and hospitality sector.

I won’t go in-depth into each project. Instead, I recommend you explore the links below and start to familiarise yourself with some of the projects that have already been undertaken in this space.

The future benefits early adopters.

Marriott VR Postcards

Read: http://travel-brilliantly.marriott.com/our-innovations/vr-postcards

Marriott links to this project via their Facebook page. So clearly, it’s front of mind, and they want their audience to know they are embracing VR technology.

Announced in September 2015, this project captures the global journey of 3 travellers and allows VR users to revisit these journeys via “postcards”. The experience was initially available to guests in Marriott Hotels who requested VRoom Service (smart) or VR users who had access to Samsung’s Milk VR service.

I also recommend reading this article from Forbes which details more about the VR Postcard project: http://www.forbes.com/sites/scottkramer/2015/09/18/marriott-vr-postcard-how-to-travel-afar-from-your-hotel-room/#1dc66c3553c1

I think Marriott’s approach is excellent.

Having an entire site dedicated to their innovations and user suggestions is something I would encourage any hotel company to replicate.

Crucially, just having a site like this highlights that Marriott understands that they need to consider how they make a difference to their customer’s entire travelling experience and this is not limited to the four walls they choose to stay within.

I think this is a point that all hotel operators are going to have to consider to be successful in the future.

Hilton 360 Video

Read: http://www.campaignlive.co.uk/article/hiltons-first-360-video-ad-puts-mobile-viewers-barbados/1392589#

Ok, forgive me. This isn’t strictly VR, but I thought it was worth including, given Hilton are one of the biggest hotel operators in the world.

In March 2016, Hilton piloted their first 360 video ad in which they immerse viewers in their Barbados resort.

It’s a little less adventurous and user-centric than Marriott’s campaign, but it’s an indication they are experimenting, and we are likely to see further 360 videos before the end of the year.

Thomas Cook and TUI

Read: https://www.marketingweek.com/2015/07/07/the-future-of-the-travel-agent-virtual-reality-digital-screens-and-smell-generators/

The July 2015 article referenced above explores how travel agents Thomas Cook and TUI are adapting their in-store experiences using virtual reality headsets.

All of the evidence seems to suggest that virtual reality can help boost sales and is going to become a critical component for travel agents into the future.

thomas cook quote

Also – smell generators?

Shangri-La Hotels and Resorts

Read: http://www.shangri-la.com/corporate/press-room/press-releases/shangri-la-launches-global-sales-tool-of-the-future/

In October 2015, Shangri-La hotels and resorts announced their foray into virtual reality with a clear commitment to adopting virtual reality on a global scale.

In the press release linked above, Shangri-La note they have already produced VR videos for over a quarter of its hotels and that VR videos would roll out for all hotels in 2016.

You can see the full range of their 360 and VR videos here.

Steven Taylor, Shangri-La’s Chief Marketing Officer, acknowledges their commitment to VR:

“Shangri-La is investing significantly in technology and the future of travel content, which is why we are embracing virtual reality on this scale,” said Steven Taylor, chief marketing officer of Shangri-La International Hotel Management Ltd. “VR is a revolutionary new sales tool. The technology has evolved so that it is now affordable, light and portable; virtual reality is on the cusp of becoming more mainstream.”

What does your audience expect?

In this section, I want to provide a few practical tips about how you can keep on top of what’s happening in virtual reality within the hotel industry and how you can start researching your customer’s thoughts around the topic.

1.    Twitter search, Tweetdeck and Social Listening Tools

If you don’t have a huge budget for social research or listening tools, start out by saving Twitter searches or setting up Tweetdeck columns for keyword queries related to VR and AR.

Here are some searches I would start with:

·       [your brand name] VR

·       [your brand name] virtual

·       [your brand name] 360

·       [your brand name] augmented

Now, set up more columns but replace your brand name with the industry name, sector name and competitor names.

If you’re already familiar with Tweetdeck, set up some additional columns to follow publications and professionals in the industry who talk about the topic.

Already have social listening tools in place? Or perhaps you have the budget to invest in social listening around this topic?

Great. Follow the same concept above but put your keyword searches into tools like Brandwatch and SproutSocial and get more granular data around the topics.

2.   Web Mentions

Take the keywords/phrases noted in the previous section and follow a similar process but this time for web mentions.

Use tools like Google Alerts or Fresh Web Explorer, plug in your keywords and then find out when content related to your queries are posted online.

But don’t leave it there.

Once you find websites, journalists and bloggers who are writing about the topics you are interested in, make sure you follow them on social and subscribe to their RSS feeds.

Build out your network and keep yourself in the loop of when new, related content is posted.

3.   Keyword Research

Again, you can use the concept I’ve noted in the previous sections by breaking down keyword queries into the categories of brand, sector, industry and competitor. Append your related topic (e.g. virtual reality) and use these as seed keywords for further keyword research.

My two favourite keyword research tools right now are the Moz Keyword Explorer and AnswerThePublic.

Here’s the kind of things you’ll start to find.

virtual tour keywords

4.   Ask your customers.

The easiest way is simply to ask.

Run focus groups. Speak to your customers. Survey their interest inside the hotel (as Marriott did with VRoom Service).

From an online perspective, invite questions from your customers. Run surveys through tools like Google Forms or SurveyGizmo.

Put up a landing page (Unbounce) asking users to register their interest for your VR pilot (even if you don’t have one yet).

Take all the influential professionals writing about VR in this industry, group them into a webinar, a podcast, a roundtable and invite your customers along. Invite questions at the end.

Do anything you can to surface the ideas and reservations (no pun intended) of your customers.

3. Reputation Management

For me, this is one of the most difficult hotel industry challenges as it requires staff with a user-centric mentality and logistical changes within hotel companies.

People are hard to please. They are quick to share their good and bad experiences. They expect super-fast responses.

There’s so much noise.

I have 40 apps on my phone. I’ve signed up to maybe ten social media platforms. I occasionally leave sarcastic reviews on Yelp.

I am your worst nightmare.

Customers have a wealth of options at their fingertips, and you need to be in a position where you can service them at any given moment.

Last year, when I was booking a hotel in Amsterdam, one of the key reasons I chose The Albus (great hotel btw), is because of their responses to customers on TripAdvisor. They came across as genuine and were willing to respond to positive and negative reviews.

A few days ago, I needed to correct an order from ASOS. They run pretty much all of their customer services through a Twitter account (@ASOS_Heretohelp). They offer 24/7 support (great) but were slow to respond to me (not so great). I sat, phone in hand for about 2 hours, constantly swiping to refresh my DMs.

My expectation levels were sky high. I wanted an immediate response. Though their actual engagement with me was pleasant, I ended up dissatisfied because I was made to wait. Now I am writing about it in a blog post.

Like I said, I am your worst nightmare.

Travellers, in particular, want immediate service and response. Nobody wants ambiguity or anxiety when they are travelling.

Hotels need to be able to offer round the clock support to manage their reputations on social media and external platforms like TripAdvisor and Yelp. More importantly, hotels need to be there to make the difference to their customers in the exact moments that matter to them.

Here are some tips on how you can get started.

  1. Invest in social

Understand the keywords, topics and sentiment used in the context of your brand. Find ways to identify existing customers and potential customers as well as influencers in your industry.

Try Brandwatch and SproutSocial.

Consider also MeltwaterSysomos and Agorapulse.

  1. Check your latest brand mentions.

Try the tools above Google Alerts and Fresh Web Explorer. Consider also mention.com and socialmention.com.

  1. Invest in social media management tools.

Create, schedule and management social content at scale across a variety of platforms using tools like Hootsuite, SocialOomph and EveryPost.

  1. Invest in reputation management software.

There are specific reputation management tools for the hotel industry such as GuestRevuRevinate, ReviewPro and Reputami.

These tools will help curate, manage and respond to customer reviews all in one place. Some also feature additional sentiment and social analysis features.

  1. Commit to round-the-clock community management.

Perhaps you need to change the working hours of your team to ensure you can offer 24/7 support for your customers? Maybe you need to consider the option of remote workers in different time zones to offer this level of support?

Perhaps you can get hotel staff, on the ground to commit to your online reputation management efforts?

Investing in the solutions above will put you in a position to curate, manage and respond at scale.

However, there is no substitute for user-centric mentality and a commitment to responding and making a difference to customers in the precise moments that matter to them. Good or bad.

Conclusion

Airbnb is more than just competition for the hotel industry; they are influencers. I’ve written an entire eBook on why. I’d love to know about whether you agree with this and how much attention you’re giving to Airbnb. I think there’s plenty that hoteliers can take from Airbnb’s customer focused culture to help them evaluate their propositions and relationships with customers.

VR is about to boom, and there are plenty of hotel brands who have been experimenting with VR solutions in the last 12-18 months. To date, the pilots have been fairly small scale. If hotels are going to succeed in utilising VR, they need to view it as a medium through which they can make a difference to their customer’s experience, not just create a different experience.

How do hotels know what customers want from VR? Well, they have to build deeper, more meaningful relationships and have a true understanding of what their customers think about them. Though data can help, it’s the relationships built from one to one interactions that are going to matter to customers.

There are plenty of social media and reputation management software solutions that can help support the surfacing of feedback and ideas for hotels. However, reputation is always going to be easier to manage when you’re proactively trying to be the difference for your customers.

Thanks for sticking with me to look at some of the problems facing hotel companies in 2016.

Do you agree with me?

Are there other higher priority challenges for the hotel industry?

Tweet us @SiteVisibility/@ScottColenutt

Update 2017 – Chip Conley, Airbnb, Podcast

In December 2016, Chip Conley, Strategic Advisor for Hospitality and Leadership at Airbnb, gave us some great feedback on our ebook and shared it on Twitter:

As a result, we invited him to join us on our Internet Marketing Podcast and in April 2017 he joined us on the show to discuss psychology in marketing and why hotels need data scientists. it’s well worth a listen and you can do so using the player below:

If you’d like to find out how SiteVisibility can help to deliver digital growth for your business, get in touch using the form below. 

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