In Newsletter #18: Expedia takes us back to the 90s | Choose text reviews over stars | On-demand expense management.
Sadly, I missed the Adrian Awards on Tuesday, due to travel delays caused by bad weather in New York. For those who don’t know, this is the yearly awards for the best hotels in the marketing and sales space; rewarding those at the forefront of innovation. So, it should not come as a surprise that I was shocked to learn the Pennsylvania Hotel won the digital campaign award for offering free breakfast and a selfie stick. Yes, the campaign had good numbers but come on, a selfie stick…!
We are looking forward to our first ever HTNG conference. We joined HTNG initially just to support the hotel space, but as we have learned more about HTNG we have become particularly enamoured of the work this non-profit does for the industry. Mike Blake has been such a supporter of our young company and I am sure he helps other companies in a similar fashion.
If you are going to Amelia Island yourself we would love to meet, so let us know.
HIGHLIGHTS FROM THE WEEK'S NEWS...
Expedia takes us back to the 90s.
Why it matters: Expedia’s “pay for display” move takes a page from the pre-Google search landscape of the late 1990s.
Back in 1997, a company called GoTo.com commercialized the notion of paid search, sending intrepid Internet users to sites that paid GoTo.com the most money. A few years later, Google, with its revolutionary PageRank algorithm changed the nature of searching on the Internet entirely - by providing users not with sites that paid the most for listing, but with sites Google thought users would find the most relevant.
Expedia’s move is a very interesting response to the increased competition in the booking space, which we have written about before. For hotels, it’s potentially a game changer - giving hotels more control over the ranking process and more opportunity to edge out their rivals.
If, as Skift suggest, this bidding-for-listings becomes the OTA norm, hotels will have to get savvy to automated bidding quickly. Just as the paid search landscape of the early 2000s created an entire sub-industry of automated bidding bots to continuously manipulate bids with arbitrage opportunities, one can imagine a similar surge of technology funding in this category arising tomorrow.
So too, revenue management for hotels won’t just be about benchmarking your rates, but also about managing your Expedia (and every other OTA) listing. Right now RevPar is static. Bidding for listing brings about a whole new dimensionality to the equation - and with it a whole new dynamic to market share gain (and loss).
Sure, a 5-star review is nice, but what can you learn?
Why it matters: Hotels that solicit numerical ratings from their guests in lieu of text reviews are leaving valuable data on the table, says a new report from Cornell’s Center for Hospitality Research. In fact, hotels are also missing out on insights for quality and process improvement if they don’t leverage text analytics to review their written reviews, the authors add.
For hoteliers, useful findings from the study, which applied text analytics to thousands of hotel reviews and numerical ratings, are numerous. For example, negative comments have a heavier weight in a guest’s rating of a hotel than positive comments do. This uneven weighting means a simple average of positive and negative scores - perhaps a common practice at your hotel - might not actually provide a clear view of guests’ opinion. So too, the report found guest’s bad feelings from poor service were generally submerged their favorable feelings from good service. This finding underscores the necessity for hotels to provide consistently exceptional service, as even one snafu can make an outsized (negative) impact on a guest’s review.
Also of note is that the researchers found a difference in focus between more overtly negative and positive reviews. The former tended to be more focused on value and transactions, while the latter took a wider view of the hotel and the guest experience. In order to solicit more favorable reviews from your guests, it might be worth experimenting therefore with prompts within the review format itself for guests to consider the entirety of their stay.
We’d definitely recommend giving the report a quick lookover for other ways in which you might improve the review process at your hotel.
On-demand expense management.
Hotel News Now | How to Manage Expenses at Independent Hotels
Why it matters: As HNN columnist George Jordan points out, the biggest expense in hotel operations is labor.
As a company with on-demand DNA, we’re partial to the concept Jordan proposes of better managing your hotel finances through on-demand labor. It makes perfect business sense to level-up your staff with “combination positions” - bellman/doorman, front desk/PBX, room service/cashier - as well as training your staff to be proficient in multiple roles as a way to weather changes in season, occupancy and economic environment. If all your guests are at the bar why aren’t your front desk agents helping pour them drinks...
However, we’re less on board with a literal notion of on-demand labor, which while potentially practical from a business standpoint, is seen as unfair to workers and might well backfire - exacerbating tensions within a segment of the workforce already plagued by high turnover.
It’s also worth remembering, says Jordan, that achieving profitability is not only waged by “cost-cutting,” but can also be achieved by driving revenues.. How might your hotel achieve revenue in a similarly on-demand style? In short, empower your staff to maximize their time on property, but don’t take away their already challenged work life balance.