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Hotel Websites Failing to Meet Expectations

A new study shows that big branded hotel websites are not in step with how their customers shop. And it’s costing them reservations.

Tuesday, August 11, 2009
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The hotel industry is potentially losing out of millions of dollars in reservations because too many people are not looking and then booking. No, this is not a case of people using these sites for research only. Turns out technology is the main culprit here and its shooing away potential travel buyers in droves.

According to the Hospitality Industry Report Q2 2009 released today by iPerceptions Inc. (TSX.V:IPE), just 60 percent of would-be bookers actually completed a reservation during the course of their visits. While cost sensitivity plays a role in this drop off, the report data suggests that the barriers to conversion have more to do with usability and technical hurdles. Over 40 percent of would-be bookers reported that they abandoned the booking process because of a usability problem with the booking engine or because of a technical / navigation issue in another section of the web site.

It’s a damning statistic that has experts saying that major hotel companies have lost a major competitive advantage as social networking is changing the way consumers – especially younger ones—made their travel decisions.

“The online travel process is almost as clinical as a visit to the proctologist,” warns Henry H. Harteveldt, Vice President, Principal Analyst with Forrester Research. “[Travel related] companies need to invest in their websites. They failed to do that when times are good and now they have to catch up by planning right and finding things that will give them competitive advantage.”

The report analyzes real-time feedback from over 123,000 visitors on hundreds of hospitality sites to identify the most important issues and trends facing the online hospitality industry as it strives to improve bookings, customer satisfaction, and loyalty.

“Our folks went line by line to check out these sites and the feedback we are getting are related to technical issues and stuff they should have taken care of ages ago such as navigation,” said Claude Guay, CEO of iPerceptions. “There are too many booking engine problems. You would think [room] price is an issue but no they are telling us sites they visit simply don’t work.”

Guay said there are two reasons for this unexpected phenomenon. Initially the travel industry was first out of the gate with a successful ecommerce strategy, but 210 years later a new generation of travelers has come online is expecting Twitter like ease of use. “But they are not getting it. If you look at how many people go to hotel sites to book for first time it is impressive. However, people are looking for the perception of a deal at least when it comes to feeling they are getting value. They are not getting that,” said Guay.

One of the problems is that too many hotel branded websites fail to fully explain what comes with a specific rate. The end result is people make decisions based on price and not value. Harteveldt says consumers don’t live in a vacuum. They’re on sites all the time in different industries and they’re downloading applications for their iPhones. In these other arenas they are getting the full taste of customer focused websites and they like it.

The hotel industry, however, is not giving customers valuable information they need to make wise choices.

“One of the big points is the industry is focused on booking. But they have failed to evolve this and ignored the other phases of travel planning such as sharing information about the hotel brand proposition and the destination. They don’t even tell you what a standard or deluxe room means. They leave the consumer thinking about price only and ultimately no one wins,” says Harteveldt, who authored the recent Forrester report “Using Digital Channels To Calm The Angry Traveler.” He also said there should be gas calculators and a method for customers to shop based on their overall budget.

Other information conspicuously missing is basic elements such as room sizes, and the differences between room categories. A consumer may find a more expensive room a better value but without being able to understand the differences they respond by booking on price only.

The report also uncovered these surprising facts:

Low satisfaction among researchers and rate shoppers: The overall industry score for Bottom Line - the attribute that measures cost sensitivity - continued to be the lowest-scoring attribute, with a score of 6.72. With rising gas costs and rising unemployment, hospitality marketers must be more inventive with their pricing and promotion strategies. Otherwise, they will continue to struggle to satisfy researchers and rate shoppers, who collectively posted the lowest iPSI score among the leading visitor intent segments in Q2.

Customer satisfaction correlated strongly with visitor loyalty: Although they composed close to half of the visitor population, first-timers collectively posted an iPSI of only 6.85, compared to a score of 7.56 for frequent visitors. Hospitality sites are struggling to satisfy this drive-by traffic; search engines drove the most visitors (56%), so aligning site content with the top search keywords is of paramount importance.

Guay says he believes part of the problem stems from those in the trenches every day not seeing the site from the perspective of a first time visitor. “The newbie segment not happy with their experience online. The brands have to listen to their customers. They have to investigate those first timers and put in place a focus and mechanism to listen to them through online surveys, panels and focus groups. Both online and offline,” says Guay.

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