Struggling Travel Marketers Get Social23 Nov, 2009 By: Jacqueline Renfrow Response
As leisure and business travelers slowly return to the road, airline and hotel marketers and their partners look to new DR technologies for a boost.
Travel is one of the many industries that have taken a hit during the recession. A recent Travel Industry Association (TIA) report shows that leisure travel is down 1.3 percent and business travel is off 2.9 percent in 2009. And the airline industry is projected to lose $4.7 billion in sales this year, according to the International Air Transport Association (IATA).
However, the fact remains that many people need to travel to conduct business, even if it is less frequently or more inexpensively than in past years. And travel still ranks among the top luxury expenditures for many Americans.
So those working in the travel marketing industry have spun the negative of the recession into a positive by creating attractive incentives for travelers — from lower airfares and free stays at hotels to loyalty points and VIP perks. Marketers are also focusing in to target niches such as business travelers, families, honeymooners and more. Though advertisers are reaching consumers through traditional DR, one of the strongest marketing tools in the vertical in 2009 are online social media networks — taking the power of word-of-mouth marketing into the digital age.
Points, Perks and Incentives
Although it depends where in the country you go, most cities are struggling to match normal tourism levels. According to Peter Gorla — vice president of marketing for Hospitality Marketing Concepts (HMC) and vice president of program strategy and E-commerce for VOILÀ — most hotels are only at 40-60 percent occupancy this year and are looking for ways to stimulate demand.
HMC, based in Newport Beach, Calif., has been hosting loyalty programs for more than 22 years — and 20 of those have been focused on paid membership in the hotel industry. Paid membership is usually based on geographic location around a hotel or groups of hotels in a network.
Most of HMC’s customers are small to mid-sized businesses — a demographic not usually touched by other loyalty programs, which target either personal travel or large businesses. HMC uses marketing to target the owners, CEOs, sales reps, etc., of these small to mid-sized companies, often through sales calls. Offers include 10-20 percent off the daily rate of a member hotel, coupons for food and beverage, VIP access to amenities, and even free nights.
“This is not your traditional points program,” says Gorla. “Our databases are between 1,000 and 3,000 people. Within three months, we can make an impact on an initial database. We’ve seen a lot of growth lately. With the recession, we’ve picked up a lot of new hotel partners — more than 300 new hotels this year.”
HMC has advertised itself as a way for hotels to introduce their properties to a new market of customers. Currently HMC’s partners include hotels across the United States; the Intercontinental in Australia, Asia Pacific and China; and the Hilton in the Middle East, among many others.
HMC’s partner hotels abroad do offer a more traditional points system, which varies with each market, to drive consumer interest. The points-based system, VOILÀ, was launched a few years ago and links 100 hotels, made up of six hotel groups. “Loyalty is a big thing, and we have a well-rounded solution right now,” says Gorla.
In order to handle the downturn, there are two schools of thought used by hotels and hotel marketers. One believes if demand is down, then a company should lower rates. The other concept centers around keeping rates higher and dealing with lower occupancy. Gorla says studies show that hotels keeping rates up and not discounting are actually doing better than those lowering rates. Why?
“Today, what we’re seeing is people are traveling out of necessity, rather than for leisure. So if they need to go, they’re going to go no matter what,” says Gorla. “If you discount it, then they’ll pay that price instead and you’ll lose money.”
Basically, a hotel still has minimum costs, such as keeping staff on in the dining room. So if a hotel offers meal coupons and brings guests into the dining room, it can help offset the costs of lower occupancy. These are the offers, incentives and add-ons that HMC works with its hotels to offer consumers as a way to get customers in the hotel before upselling them on services.
How does HMC market its incentives directly to both consumers and its hotel partners? The company does a mix of both online and offline communications, such as E-mail, direct mail and welcome packages. While throughout a customer lifecycle, E-mail is important, telemarketing is a large part of the company’s initial marketing communication with potential customers.
“Most memberships are sold over the phone, so we do call people quite a bit for promotions, or if a hotel has a strong demand for something,” says Gorla. As for its VOILÀ division, in 2010, the company will send campaigns through paper-based communications for the points division.
Also, while many of the annual membership renewals are done via E-mail, some are done through SMS texting to mobile phones. “We’ve also used mobile as another promotions channel,” says Gorla. “We allow people to opt into it because it’s more sacred than other channels. People want a lot of control around phones.” In 2010, HMC plans to launch some mobile Web sites for both Clubhotel.com and VOILÀ. And VOILÀ will definitely have an iPhone app in 2010.