“The New Normal for Distribution Channel Management”
Our expert panel • Carrie Campbell, Director of Lodging, D. K. Shifflet & Associates • Richard Chambers, President, Travel. CLICKinteractive • Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts • Jim Young, Senior Vice President, Global Distribution, Inter. Continental Hotels & Resorts
Today’s agenda • Quick overview of the new landscape • Recent findings of consumers trends in online arena • Expert panel to comment on those trends • Summary of recommendations for channel management • Q&A from you
Background • Continuing Internet growth and influence • Economy recovering • Intermediaries consolidating/evolving • Chains taking action. . . challenges remain!
Internet Hotel – U. S. Growth & Share Mix Hotel Revenue ’ 03 ‘ 04 13% 20%
The Internet – U. S. Growth & Consolidation
Consumer Use of the Internet Half of online travelers look online but book offline. Source: Pho. Cus. Wright, 2003 Online Traveler Survey
The Economy An improving economy is a necessary condition for hospitality financial improvement: • Improves occupancy • Provides negotiation leverage • Sets the stage for raising ADR
Hospitality Forecast Total US Occupancy Percent Source: Smith Travel Research
Declining Travel Agent Role Agency Revenue ($b)
GDS Changing Roles Conglomerate Component vs. Distribution Core
Mega Players in the Game Inter. Active. Corp Expedia HRN (Hotels. com) Wiz. Com Rezoultions/Anasazi Travelscape Trust Thisco Hotwire Galileo Utell Trip. Advisor Cheap Tickets. com ASP-PMS Ticketmaster Trip. com Travel. WEb. com Vacation spot. com RCI Interval International Hotels Lending Tree Match. com Avis/Budget
Biggest Player you may have never heard of Liberty Media Corporation • • • 20% of Inter. Active. Corp 4% AOL Time Warner 3% Cendant Corporation 55% On Command 100% Starz 42% QVC 50% Discovery Communications (Travel Channel included here) 29% Sky Sports 1, 2, 3 56% DMX Music 30% the Wireless Group 89% True Position, Inc
The Major Sites 3 Hotel Companies Top 3 “ 3 rd Parties” 20. 13 B 28. 21 B Prices as of noon April 2, 2004
Chain Response • Chain distribution focus: • Web site • Direct connect • Best rate guarantee • Portal strategy • Intermediary negotiations • Property level support: • Strategy – Pricing & Distribution • Systems
Key Issues Intense competition for. . . • Guest eye share • Guest allegiance & market share • Price and inventory control Creates opportunities for resorts!
“The New Normal for Distribution Channel Management” Carrie Campbell Lodging Group Director D. K. Shifflet & Associates, Ltd.
The New Normal: (Overview) I. III. IV. We all know distribution has changed Room Night/Revenue Share Who Using the Internet? How Do We Rate?
We All Know Distribution Has Changed: Hotels (Total Room Nights) Resorts D. K. Shifflet & Assoc. Ltd.
Share of Nights ≠ Share of Revenue Hotels D. K. Shifflet & Assoc. Ltd.
Share of Nights ≠ Share of Revenue Resorts D. K. Shifflet & Assoc. Ltd.
Bargain Hunting #1 Use of Internet D. K. Shifflet & Assoc. Ltd.
Who Are These People? Resort Website Male Female Other Website All Other Res. Channels 56% 44% 46% 54% 53% 48% Married 68% 67% Mean Age 43. 5 years 41. 7 years Mean HHI $90, 700 $78, 200 Att. /Grad. College 70% 77% Emp. Full Time 76% 80% Prof. /Mgr 47% 44% 71% 48. 0 years $80, 200 69% 70% 38% D. K. Shifflet & Assoc. Ltd.
And Why Should I Care About Them? Resort Website Other Website All Other Res. Channels Avg. # of Trips 4. 3 3. 9 Ave LOS 3. 1 3. 0 2. 8 ADR $125 $113 $120 Avg. Total Bill $379 $344 $314 D. K. Shifflet & Assoc. Ltd.
Guests Are Getting What They Pay For… D. K. Shifflet & Assoc. Ltd.
Summary • Most Internet room nights at expense of higher ADR channels • Guests Through Your Website – Travel More – Stay Longer – Spend More • Not all guest experiences are equal – In the long run, that will hurt you D. K. Shifflet & Assoc. Ltd.
Our expert panel • Carrie Campbell, Director of Lodging, D. K. Shifflet & Associates • Richard Chambers, President, Travel. CLICKinteractive • Bill Peters, Vice President of Reservations, Outrigger Hotels & Resorts • Jim Young, Senior Vice President, Global Distribution, Inter. Continental Hotels & Resorts
Wrap up: Best Practices for Local Internet Marketing
Topics • Functional Website Design • Search Marketing • Reservations Processing
Place the booking engine on the home page • Conversion rates increase dramatically with less ‘click-throughs’.
Email Capture on Home Page • Like the booking engine, acquiring email addresses for future re-marketing is easier with less clicks
Instill Confidence on the Site • Best Value or Best rate clear in the copy – Keep the online consumer at your site rather than clicking to another site
Search Marketing • Bringing customers to your site – Need to have both organic and pay per click to optimize marketing plans
Search Marketing • Market your resort by business unit – Horizontal Marketing Approach
Horizontal Strategy www. hotel. com Accommodations www. rest. com Restaurants www. meetings. com www. golf. com Meetings Golf www. spa. com Spa
Reservations Processing • Conversion rates are higher with less clicks
Traditional Booking Engine
Summary • Build Best Practices on the site – Less clicks means more business • Best Marketing Practices – Search Engines – Market by business unit
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