May 9, 2016
Global luxury travel remains the fastest-growing of all the tourism and travel sectors, with luxury hotel chains experiencing significant worldwide growth in 2015 (Travel Market Report, World Travel Monitor). The luxury hotel market is expected to reach \$195.27 billion by 2021 as upscale hotels emerge as a key hospitality focus in Asia-Pacific, Middle East, and other regions. Additionally, leisure travel is anticipated to be the category of largest growth for affluent and luxury consumers (Transparency Market Research).
Though the economy travel landscape continues to change, luxury hotels are as prosperous and popular as ever. In today’s always-connected and ever-competitive environment, where 55% of hotel bookings occur online (Google), it is crucial that luxury hotels maintain a strong digital presence.
The need for dynamic luxury hotel digital marketing in 2016 is more important than ever. Whereas in the past, hotels may have been able to rely on word of mouth and travel reviews to generate bookings and revenue, these antiquated marketing techniques are not effective in engaging the 21st Century traveler.
Affluent consumers often choose experience over items, and are looking to have new experiences when traveling (Skift). How can you convert the luxury traveler’s dream into a reality, at the lowest cost of sale per booking for your property? Here are ten tips for luxury hotel digital marketing to turn the hotel experience into bookings and ROI.
1. Curate an Online Experience Through a Multi-Channel Digital Marketing Approach
‘Content marketing’ isn’t just a buzzword; it’s the key to selling anticipated experiences. Luxury hotels, typically with higher-than-market ADRs, need to ensure they tell a story that will entice consumers to spend more and book stays at their higher-end properties. Painting a picture with a story engages consumers, and the only surefire way to capture all potential consumers is to utilize a multi-channel approach to digital marketing.
The average travel consumer’s journey to hotel reservations takes about 17 days, and includes eight research sessions, 18 website visits, and six clicks before a booking is confirmed. Users go through 15.5 touch points just within the week before they actually make their hotel reservation (Google, eMarketer).
Your multi-channel approach must include the full digital toolkit including your core, proven revenue-generating marketing initiatives, like SEM, SEO, email marketing, display, retargeting, and Dynamic Rate Marketing, as well as seasonal or business need-focused campaigns. A luxury hotel should choose a marketing message that speaks to its ideal audience, and broadcast it through all of these relevant channels.
A historic, luxury New York City hotel with over 700 guestrooms and suites exhibited this ongoing multi-channel approach in 2015. With a concise message touting the hotel’s ideal location, spectacular views from each guestroom, and spacious suites, as well as a robust digital marketing budget, the hotel increased bookings by over 16% YOY, generated a high ROI of 2,816%, and had a low COS of 3.55%. The hotel’s core message reached luxury travelers through every step of their travel planning journey, and they profited from an increase in direct bookings.
2. Maintain Exclusivity – Add Value, Don’t Discount
Though it may sometimes seem unavoidable when the market has no compression, a luxury hotel should not default to discounting the rates or ongoing flash sales. With so many tools and research at their disposal, affluent consumers are becoming less brand-loyal and are willing to spend more to get the best experience/product (Time Inc.). By discounting rates, luxury hotels are not getting their full potential or reaching their target traveler.
OTAs utilize “slash-through pricing” to showcase the ‘original’ price of a booking versus a new, discounted rate – but this can be misleading and devalues the luxury hotel’s overall consumer perception, reaching a less-affluent audience, and/or conditioning a consumer to always look for that lower price. Luxury hotels should maintain exclusivity by having strong value propositions for all of their special offers. Instead of discounting, entice prospective guests with value-adds like discounted suite upgrade, late check-out, free Wi-Fi, and dining credits.
A luxury hotel in downtown Denver has a section on their vanity site for ‘website exclusive’ offers that are only available by booking directly through the hotel’s website or reservations desk, as opposed to the OTAs. By booking the offer featured below, the Signature Inclusive, a user gets amenities like a daily dining credit, complimentary valet parking, free Wi-Fi and gym access, and access to the hotel’s town car for downtown travel.
If a rate does need to be discounted for a last-minute and urgent need, utilizing terminology like “exclusive offer” and showing the rate through a special link only valid to website users and email subscribers is recommended. In marketing psychology this tactic is referred to as “anchoring” which is simply showing consumers the value of the overall product and experience.
3. Ensure Your Staff & Guests Understand the Importance of Booking Direct
When a hotel embraces a “direct is better” top-down strategy, the primary goal becomes generating as many bookings as possible via the direct online channel, the most profitable channel today. This helps limit OTA dependency, drives brand recognition, and ensures that you control the information about your website users and guests.
An important part of any luxury hotel experience is the personalized service guests receive on-property. By spending time on your website and booking direct, a new guest’s information becomes a part of the hotel’s small data. Information about the guest’s interests and hobbies, website browsing behavior, and booking preferences are collected, all of which can be used to help better the guest’s stay by allowing the hotel to add that personalized touch upon check-in. For a luxury hotel, this can be the difference between guests booking the basic suites, or those luxury, higher-ADR suites with add-ons.
Utilizing “book direct” messaging throughout the website can make a big difference, especially with the added emphasis the major brands have been giving to such messaging over the past few months. A luxury North American hotel chain has “Book Direct & Save” messaging on the website booking widget, enticing users to book right from the website.
When a guest books through an OTA, the only information the hotel collects is the reservation details. Many times, even email addresses are not shared with the hotel, removing that one-to-one communication and future retargeting opportunities between the hotel and consumer. If a luxury hotel starts to see increased OTA dependency and/or commissions, the hotel should implement a strong win-back campaign on-property so guests appreciate the value of booking direct. The direct online channel presents limitless opportunities to the hotelier!
4. Personalize Content
The luxury travel consumer has higher spending power, and is expecting a personalized experience, not just upon arrival at your hotel, but while on the purchase journey as well. Many luxury hotels have dedicated concierges and attachés available on-property at a guest’s leisure, but what if your website could offer a similar experience online?
What if your website could display the most enticing special offer to a user based on his past browsing history on the site? What if your website could remember a user who booked in the past and is part of a loyalty program, addressing him by name? What if you could upsell amenities and ancillary revenue for the hotel by showing someone who is interested in dining the restaurant mini-site right away? All are possible through a Smart Personalization Engine.
Not only will having personalized content allow the luxury hotel’s website to stand out amongst competitors and OTAs, it will also allow for the travel planning journey to reflect that personalized on-property experience. Additionally, studies have shown that companies that personalize content report uplifts of over 40% in sales (Forrester).
A US hospitality corporation with over 125 multi-tiered hotels personalized website content in 2015. The booking engine widget was personalized to the website visitor so it remembered a user’s previous selection for dates. This eliminated any extra steps or clicks to get to the booking widget. Additionally, the hotel chain utilized visual, textual, and promotional content on the website to showcase different messages and value-adds to in-state vs. out-of-state visitors and repeat vs. new website visitors. Total conversions increased 50% from the launch of the content personalization, and the conversion rate for the targeted segments was 6%, double the conversion rate from just regular website visitors.
Ongoing online reputation management is also important. Responding to social media posts and photos from guests, having a dedicated post-stay survey with feedback, encouraging reviews on social sharing platforms and responding to both positive and negative reviews, and utilizing paid social media advertising with deep targeting abilities allow the hotel to personalize a guest’s experience, before, during, and after a stay.
5. Invest in Digital Marketing Technology
Under-spending by independents in digital marketing and technology has been a problem in the hospitality industry for many years. This is especially problematic for luxury hotels, as the ADR is higher and the travel planning journey can take longer as the affluent traveler evaluates all options and potential experiences.
Here are a few ways that technology can play an integral role in the travel planning journey:
- Utilize full-responsive or adaptive website design to optimize presence on the three screens: mobile, tablet, desktop.
- Serve the correct content on the appropriate device to maximize user experience, relevancy, and conversions
- For luxury hotels, with abundant content on services and amenities, scaling content appropriately for display on mobile devices will greatly improve the user experience
- Ensure the design is modern, showcases high-res images, and follows design best practices, as this could be one of the final touchpoints a potential guest sees before booking their stay
- Utilize a website technology platform built specifically for hotels
- A Website Technology Platform must be user-friendly and conversion-minded to allow merchandising opportunities at every step on the site
- HeBS Digital’s proprietary smartCMS v7 technology, winner of a second consecutive Gold Stevie® Award in the Best Software Programming/Design Category in the American Business Awards, offers hoteliers complete control over their websites and direct online revenue streams
- Technology additions like the Guest Portal, a mini-site that is custom-designed to show on-property guests key information like check-in/check-out time and events and is only served to users on-property, is a great way to upsell dining, spa, and other ancillary revenue stream amenities in an organic and seamless way
- Engage with a Smart Personalization Engine
- As mentioned, content personalization is so important in engaging your hotel website users and guests. Marketers agree that technology is making it more straightforward to personalize at scale, which is the key to higher response and engagement rates, as well as increased conversions and customer retention
- Utilize a smart personalization engine, like the smartCMS v7, to serve custom content (textual, visual, promotional) to target audiences, and take it a step further by serving personalized pricing and promotions to individual visitors based on user profiles, business rules and real-time room availability
6. Engage with a Mobile-First Strategy
Mobile is an increasingly fundamental part of everyday life and travel planning, and the luxury hotel experience is no exception. Affluent travelers utilize all three devices (smartphone, tablet, and laptop) to research travel products/prices, spending anywhere from 3.5 to 8 hours on one or multiple devices each day (Skift). In fact, we are witnessing skyrocketing year-over-year growth in the mobile and tablet device categories, while desktop traffic, bookings and revenue continue to lose ground. Within HeBS Digital’s portfolio, revenue from mobile/tablet devices increased by 71% from 2014 to 2015, while desktop revenue decreased by 2%.
Luxury hotels must ensure their mobile websites follow best practices in mobile functionality/user-experience and design. For example, all phone numbers should be click-to-call directly to the reservations desk or concierge, there should be mobile-optimized booking widgets and booking engine links, and the site should be visual and concise, showcasing the most important information first.
Mobile marketing opportunities are also becoming more prevalent. Luxury hotels can take advantage of mobile-specific SEM ad copy and targeting, mobile GDN text ads/HTML5 banners with mobile bid-modifiers and targeting, mobile landing page optimization, dynamic rate promotion tiles featuring tonight’s rate, and responsive emailers to engage with mobile users.
A boutique luxury hotel in NYC has a mobile-only “last-minute” special offer that is promoted through a multi-channel approach. This has been successful since research shows that the majority of mobile reservations for hotels are made for the same or following night. The hotel offers 15% off BAR, a complimentary room upgrade upon arrival (based on availability), free breakfast the next day and late checkout. This also helps combat last-minute hotel availability apps like HotelTonight and lastminute.com.
The affluent luxury traveler is looking for personalized, one-on-one service, and mobile devices present an effective channel for delivering custom content. Read our 2016 Action Plan to Maximize Revenue from the Mobile Channel for more recommendations.
7. Showcase Rich Photography & Video
The word “luxury” is used so frequently to describe products and amenities that a truly luxury hotel could get lost amongst the competition and crowded online space. Having beautiful, high-resolution images will help the hotel stand out from the competition. And because experiences are so important for luxury leisure travelers, high-end properties can convey the experience of their luxury hotel through rich hotel and destination photography instead of cookie-cutter stock photos.
Psychology studies show that sharing high-value experiences helps users display their status, so expect guests to utilize social platforms like Instagram and Pinterest during their stays. Consider deploying a dedicated hashtag and pulling all guest photos through a feed on the website.
Videos are also very engaging and have been an important medium for hoteliers to reach website users. According to Think with Google, as time in front of the TV declined last year, 18-to-49-year-olds’ time on YouTube grew by 44%. Facebook now sees 100 million hours of daily video watch time (TechCrunch). Luxury hotels should invest in brief videos that exude the brand tonality of the hotel, showcase the high-end products and key amenities, and have strong openings to drive engagement.
A luxury boutique hotel in New Hampshire has a video on the homepage of the website which showcases a walkthrough of the unique property and its different rooms and suites. The video walks a user through the on-property experience and utilizes soft music to match the hotel’s personality.
8. “Make New Friends, But Keep The Old”
As the age-old saying goes, a luxury hotel must achieve a balance between acquiring new guests and maintaining its loyal database.
Attracting new users to a website is important because it adds more potential consumers to the purchase conversion funnel. Here are some ways a luxury hotel can generate this brand awareness and target the desired audience:
- Engage in “interest category” or “contextual select” targeting on the Google Display Network
- Have a healthy Search Engine Marketing non-brand keyword budget
- Run brand awareness marketing initiatives like YouTube TrueView advertising or Gmail Ads
- Utilize in-depth targeting strategies on social media platforms like Facebook and Instagram
- Launch a highly-targeted affluent user display campaign through a travel ad network
Maintaining a database of loyal and repeat guests is also important. Loyalists, hotel guests that come back time and time again, are reliable. Here are some ways a luxury hotel can ensure it maintains healthy relationships with past guests:
- Engage past guests with ongoing email marketing, keeping them abreast of hotel news and special offers
- Utilize a strong eCRM tool that automates emailers to past guests
- Run retargeting campaigns through the Google Display Network and Remarketing Lists for Search Ads
- Collect “small data” from the user’s website browsing habits and past purchase history, and ensure this is stored on the PMS for the front desk team
Balancing the strategy for reaching new guests and maintaining loyal guests will also allow for the convergence of the two. Luxury hotels should convert first-time website visitors and guests to loyal, repeat visitors. This can be accomplished by:
- Creating and promoting a loyalty or perks program for direct bookers
- Implementing content personalization to welcome back repeat guests and loyalty program members by name
- Encouraging post-stay feedback and social media reviews upon hotel check-out and through the post-stay eCRM templates
9. Reach The Business Traveler
Though leisure is the fastest-growing segment of luxury travel, it’s important to consider the business traveler as an ideal target. A business traveler typically has high spending power, is looking for the comforts of home while traveling, and travels frequently depending on the job/client.
There are several ways in which to target a business traveler:
- Utilize a Dynamic Rate Marketing campaign with a Travel Ad Network like Sojern and target business-class or first-class weekday travelers
- Promote amenities important to business travelers, like free Wi-Fi, through a robust merchandising toolkit on the website
- Target users by ‘job title’ and company on LinkedIn and Facebook
- Include SEO-optimized website content targeting business travelers, supported by rich imagery and videos
A luxury New York City hotel devotes an entire section of its website dedicated to Business Travel (as well as separate Meetings, Events, and Weddings site sections), which includes content tailored to the business traveler, higher-ADR suites with more relevant amenities, an extended stay request form, and information about groups looking to plan their next New York City stay.
Business travelers, typically booking higher-ADR suites with a longer-than-average LOS, should become a key part of everyday strategy.
10. Partner with a Luxury Hotel Digital Marketing Expert
Any hotel with a high revenue-generating website and a strong digital marketing strategy that drives direct online bookings usually has a great hotel digital marketing agency behind it. With lower cost-of-sale and overall greater value to the hotel’s strategy, direct bookings will continue to be a huge focus for years to come. Digital marketing and technology advancements continue to change rapidly and luxury hotels would benefit greatly from partnership with a firm that has proven to be forward-thinking, results-driven, and experienced in the luxury hotel space.
With the strong growth in the luxury hotel market, it’s important now more than ever to have a strong, robust digital marketing and advanced technology strategy to drive bookings from your website. Don’t underestimate the value of the luxury travel consumer. Get started today, and contact HeBS Digital, your luxury hotel digital marketing and technology partner.
About HeBS DigitalFounded in 2001, HeBS Digital helps hoteliers drastically increase direct bookings and lower overall distribution costs by deploying industry best-of-breed digital technology, consulting and marketing (www.hebsdigital.com).
The firm has won more than 400 prestigious industry awards for its digital technology, website design and marketing services, including numerous Adrian Awards, Stevie Award in the American Business Awards, W3 Awards, WebAwards, Magellan Awards, Summit International Awards, Interactive Media Awards, and IAC Awards.
A diverse client portfolio of top-tier major luxury and boutique hotel chains, independent hotels, resorts and casinos, franchised properties and hotel management companies, convention centers, spas, restaurants and bars, DMO and CVBs are all benefiting from HeBS Digital’s direct online channel strategy and digital marketing expertise. Contact HeBS Digital’s consultants at (212) 752-8186 or firstname.lastname@example.org.