In the face of economic challenges and a shifting travel landscape, hoteliers in 2003 must leverage the power of the internet to stay competitive. With U.S. hotel occupancy rates at a 59.5% average in 2002, the lowest in nearly 75 years according to PricewaterhouseCoopers, and a modest recovery predicted for 2003, an effective online distribution strategy is not just beneficial—it's essential. This guide outlines a comprehensive approach to mastering the digital domain, ensuring hoteliers not only survive but thrive in the evolving market.
The State of the Hotel Industry
The early 2000s were a tumultuous time for the hotel industry, with significant economic downturns and changes in travel behavior. PricewaterhouseCoopers reported a 59.5% hotel occupancy rate in 2002, a stark indicator of the industry's struggles. Revenue per available room (RevPAR) was expected to decline by 2.3%, and average daily rate (ADR) was forecasted to decrease for the second consecutive year, a phenomenon not seen since the Great Depression. For 2003, only a modest recovery was anticipated, with RevPAR projected to increase by 3.5%, ADR by 2.5%, and occupancy to reach 60.1% (PwC).
Crafting a Winning Online Distribution Strategy
Whether operating independently or as part of a branded chain, hoteliers must focus on an online distribution strategy that prioritizes direct-to-consumer sales. This approach not only mitigates the impact of economic slumps but also sets the stage for long-term success. The internet, in 2003, is a double-edged sword—it can be a hotel's greatest asset or its downfall.
Direct-to-Consumer Online Distribution: The Core of Your Strategy
Embrace Direct Online Sales: Aim to surpass the national average by generating over 52% of online revenues through your hotel's website. This direct distribution medium offers competitive advantages and reduces reliance on intermediaries and traditional channels.
Reassessing Indirect Online Channels
Evaluate Indirect Channel Exposure: Decrease dependency on online discounters to prevent brand and price erosion. Ensure that discounted online rates do not become the standard, which could negatively affect offline rates. Limit distribution through indirect channels to below the national average of 48%.
Total Online Distribution Strategy
Implement a Comprehensive Approach: Balance direct and indirect channel usage to optimize your total online distribution strategy. Aim to generate at least 13% of total hotel revenues from the internet while maintaining control over brand and pricing integrity.
Internet Performance Evaluation
Monitor Your Online Presence: Use an Internet Distribution Monitor Report to compare your hotel's performance with competitors. This intelligence allows you to adjust strategies and maintain pricing control without matching lower rates.
Website Optimization
Enhance Your Website: Improve conversion rates and search engine rankings by making your website user-friendly and optimized for search engines. Incorporate relevant content, targeted keywords, and effective meta tags.
Destination Web Strategy
Capitalize on Your Location: Leverage the popularity of your destination by researching consumer purchasing habits and incorporating destination-relevant keywords into your website content and search engine strategy.
Search Engine Strategy
Boost Visibility: Ensure your hotel is easily found on search engines, as 85% of internet users utilize them to find information. Register with multiple search engines and maintain a top 30 listing in your market.
Pay-Per-Click Marketing
Invest in PPC: Utilize pay-per-click marketing as a direct-to-consumer channel and a tool for managing distressed inventory. Craft a PPC strategy that delivers returns without exhausting your marketing budget.
Email Marketing Strategy
Engage with Email Marketing: Build a targeted email marketing strategy, including customer email capture, monthly newsletters, and virtual brochures. Reach past, present, and potential customers to drive direct revenue.
Partner with eBusiness Experts
Seek Professional Guidance: Collaborate with an experienced eBusiness hospitality consultancy to maximize the potential of direct-to-consumer channels efficiently and cost-effectively.
Conclusion
In 2003, hoteliers must adapt to the digital age with a strategic and multifaceted approach to online distribution. By focusing on direct-to-consumer channels, optimizing their web presence, and employing targeted marketing strategies, they can navigate the challenges of the travel and economic downturn. With the right tactics, hoteliers can not only weather the storm but also set a course for future growth and success.
