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Research Reveals Hotels Still Lagging in Making Social Media a Priority

According to research by Ecole Hoteliere de Lausanne (EHL)  and RateTiger, hotels are putting social media on hold as a marketing and selling mechanism, while they focus on driving direct bookings in response to their continuous struggle for better margins with the Online Travel Agents (OTAs).

The six month qualitative study, ‘The Distribution Challenge 2012’, was conducted in five countries and found that while social networks including Facebook, Twitter, TripAdvisor and YouTube are recognized as new forms of digital marketing, hotels are still unconvinced about the impact these channels will actually have on bookings and are therefore deterred from implementing strategies in the short term. One in three of the hotels have no social digital media strategy, and only one in eight use any form of social media as a marketing tool. Hotels have instead focused on the development of offline strategies to build more corporate contracts that deliver more predictable business, and to diversify their online distribution mix to generate additional revenue opportunities.
Google 36%
None 32%
TravelZoo 20%
Social Media 12%
“We have found that hotels work with more travel agents and consortia contracts for the corporate segment, apply BAR to walk-ins, and develop special offers for returning customers, including the introduction of loyalty programs,” said Horatiu Tudori, Senior Lecturer, Revenue Management, Ecole hoteliere de Lausanne, Switzerland. “This is an interesting turn-around from the unbalanced and heavily online-focused sales strategies of the past few years, which are not bringing the yields independent hotels so much need right now. We also found that hotels just don’t see the true revenue value in social networks, opting for more traditional methods to engage customers.”

According to the research findings, while a few hotels have used travel deal platforms like Travelzoo and perceived it as an opportunity to stimulate demand, more hotels aim at optimizing the use of Google (both PPC and Adwords) and SEO. Their goal is to bring more direct bookings and take potential bookings away from high-commission OTAs. Hotels are looking to reduce the cost of distribution by directing bookings to their own website but also by increasing the share of smaller third-party websites within their distribution mix.

The intention of the review was to collect feedback from 3-star and 4-star hotels evenly distributed in five geographical markets: France, Germany, Spain, UK and the USA. Among the 72 hotels participating in the survey, 65%were chain and 35% individual properties, with capacity spread between 25 and 392 rooms. All the interviewees are in charge of managing pricing and distribution, two thirds being Revenue Managers and the others General Managers or Directors in either sales or reservations.

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