Let's look at at a specific example of how email marketing can reduce reliance on OTAs and discount offers while generating revenue.
In this case, we have three very different properties operating under one flagship luxury brand:
- Hotel A is a true luxury hotel, which also offers private villas
- Hotel guests are Luxury travelers who book direct or through travel agents. They include families and couples.
- Villa clients are UHNW travelers who book through high-end travel agents. They include multi-generational families and celebrations.
- Hotel B is an intimate, boutique luxury hotel
- Hotel guests are Luxury travelers who skew to a mature demographic. Boomers use hotel websites for research but call in to book. ("Millennials vs. Boomers," info.247.ai)
- Hotel C is a premium hotel
- Hotel guests are Affluent travelers, particularly families. They book through OTAs.
We have three opportunities for increasing revenue:
- We can use email to reduce reliance on OTAs and third parties.
- We can cross-sell between Hotel A and Hotel B.
- Hotel C does not fit the profile of the Luxury traveler.
- We can use pre-arrival and on-site email to produce incremental revenue at dining and spa venues.
Most hotels use the website as a landing page for their email campaigns. Let's say this particular hypothetical brand is relaunching its website.
- We are looking at several months of lost revenue due to problems with the current site, including a page load speed of 5.6 seconds on desktop.
- Although the new site will look nicer, it will have the same functional issues as 90% of hotel sites.
Hotel websites are generally built to provide a brand experience. This means that these sites do very poorly as an e-commerce (booking) channel.
- Hotel websites do not convert well, especially on mobile.
- Website conversion rate for a luxury hotel is 1.9% on desktop but just 1.5% on tablets and 0.20% on smartphones.
- More than 50% of hotel traffic is mobile, but accounts for only 21% of website revenue. ("Mobile Booking Trends of Luxury Hotels," Hotel Speak, April 2018)
- Booking engines perform poorly on mobile.
- Once a user is in the booking engine, conversions are 6% on desktop but just 2% on mobile. ("Booking Engine Conversion Rates," TripTease, January 2018)
Hotel website solutions
- The first solution is to solve the most common hotel website fails.
- This goes beyond creating a responsive website. The content should be stripped down and optimized to work well on mobile. The menu should avoid dropdown items. Further, many mobile users will not come in through the home page. The booking engine should be changed to the most mobile-savvy option available. The website should also include prominent phone and chat reservation channels.
- Website lead forms should be added along with enticing lead magnets. We can then use email to nurture these leads into paying guests.
- We can use email to bypass the website altogether and get better results. Here's why:
- Dedicated landing pages produce 200% to 400% higher conversions than websites.
- We don't need the booking engine. In fact, our Luxury guest prefers to book by phone.
- Affluent guests (Hotel C) rely on OTAs not travel agents or booking direct. But why? They prefer to retain control and do their own research online, but hotel booking engines are unwieldy on mobile – and a large segment of this group is on mobile.
One-third of people now book on mobile. OTAs own 45% of mobile bookings compared to 16% for hoteliers. And while OTA mobile bookings are increasing by 61%, hotel mobile bookings are barely moving forward at 11%Travel Flash Report by Criteo
So, What's The Strategy?
Replace one-time offers with automated campaigns
Like most hotels, our hypothetical example sends out e-bast offers on an as-needed basis. This is a bad idea for many reasons, but the most serious consequence is that it erodes the brand and ultimately drives down pricing.
Automated emails place less of a burden of hotel marketing staff. They also have a much higher ROI than e-blast offers, especially if list segmentation is used.
- First, the data points in the guest profiles that can be used for segmentation must be identified.
- Two, an engagement email should be sent to clean out list deadwood
- Three, then it is a matter of sitting down and mapping out a list of automated emails that will work together to be the backbone of our email revenue generation.
Add cross-selling and incremental revenue emails
- We can cross-sell guests of Hotel B on booking the more expensive Hotel A. Again, this group prefers to book by phone – so we simply need an unique phone number in the email to capture and track reservations.
- We can build out pre-sell and on-site automated emails to capture incremental revenue at dining venues.
Together, these strategies will require three to five months to implement.
Layer on content-rich emails and storytelling
This is where hotel email marketing goes from being about driving sales to building profitable relationships. Sales emails are important, certainly, over the short-term, but they do not create guests with a high lifetime value.
- Content-rich emails include information on local sights and events.
- Brand storytelling presents the human side of the brand with insights into the people who provide service and why they love to create unique guest experiences.
And how is this accomplished?
Strategies paint the big ideas that drive results. Tactics outline how those strategies are executed. There are two ways to implement tactics.
- Follow Plan A, which is based on hard work and organized staging, or
- Follow Plan B, which depends on the powers of pixie dust.