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Hotels and the Changing Online Leisure Guest

Smarter targeting key to making bookers of price-sensitive, brand-agnostic lookers.

Friday, January 17, 2014
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As the U.S. hotel industry advances through 2014, it should be cautiously optimistic over the continuing upward trendlines in occupancy rates and average daily room rates.

The landscape for the sector is shifting dramatically, particularly when it comes to the leisure market. It’s marked by a fragmented guest demographic of largely brand agnostic travelers, along with an increasingly complex network of channels to reach them. With challenge comes opportunity. Hotels willing to put in the investment in understanding their guests and using tools to reach prospective guests effectively will be able to establish their relevance and solidify loyalty.

Such were the implications of a deep dive that Adara took into three months of its behavioral data (over 1 billion travel transactions collected from its more than 60 leading travel company partners) and demographic data provided by travel industry consultancy Hudson Crossing.

The resulting report, “Who’s Sleeping with You? A Detailed Look Into the U.S. Online Hotel Guest ” maps the changing landscape and outlines the kind of thinking and resources that the hotel marketers should consider putting into play to outperform the competition.

The deal, not the brand, trumps with younger guests
Hotel marketers should think again if they’re still considering Baby Boomers (ages 49 to 67) as their primary targets. In fact, hotel guests are increasingly fragmented and skewing younger: the median age of a U.S. leisure hotel guest is 42, but the largest block of guests, 33 percent, is Generation Y – between 24 and 36.

Leisure travel’s important to them all, but so are their budgets. Despite a median household income of $78,200, the biggest block of hotel guests (38 percent) takes home a more modest $50,000 annually or less.

Moreover, they care less about the brand than the deal. Only two in five hotel guests are loyal to any travel brand. And they all shop around. Those shopping hotel websites will chalk up six search sessions across multiple sites before making a choice. OTA shoppers are right behind them at five searches.

Surprisingly enough, the purportedly most loyal guests – those belonging to hotel loyalty programs – will search more extensively than hotel guests in general: Adara’s data showed loyalty program “elites” averaged nine searches outside the brand they booked. “Basic” members? An astonishing 11.

No surprise: Mobile rules
With one in four hotel guests saying they’d opt to bring their smartphones on a trip over their significant other, it’s hard to escape the increasing influence of mobile.

When it comes to devices, two in three hotel guests have a smartphone and 44 percent own a tablet. Ownership of both is skewed toward the younger and wealthier travelers. Increasingly, mobile (and tablets more than smartphones) is the dominant guest gateway, whether to plan and book hotel stays, to pay for destination services, or to pay for purchases.

Not surprisingly, true mobile-based booking (not a click-to-call link on an app or mobile-optimized site) is responsible for an increasing amount of traffic and revenue. One hotel brand, for example, credits mobile devices with driving 23 percent of its digital traffic.

Making bookers of lookers: Data, actionable insights matter
In this environment, how effectively hotels hone their ability to target and stand out to prospective guests will make the difference in their ability to meet desired business, sales, and marketing objectives.

The study’s findings point to several practices that will help marketers make more bookers of lookers, and do it a lot more profitably.

First, the prevalence of brand agnostic, deal conscious online travelers makes audience segmentation critical if conversion objectives are to be met. Loyalty program members, for example, are ripe for retargeting, especially since they already pay a lot of attention to hotels. Adara’s analysis showed hotel loyalty members that were remarketed offers were 2.5 times more likely to take action than a control group of loyalty members who did not see remarketing messages.

In this hotel environment, establishing relevance through dynamic advertising is another important success factor. With dynamic advertising, the message changes based on who is seeing the ad. It helped one international hotel brand exceed its booking goals by 56 percent, and reduce its cost per bookings over a 12-month period by 73 percent.

Finally, it’s important to understand that all targeting is not the same. Adara has found that the more data that’s added to a campaign, the better the campaign performs. Messaging becomes more relevant when travel sellers leverage previous purchase history, recency of visit, geo-targeting and other data points, enhancing both campaign efficacy and performance.

In fact, richer contextual data like geo-location data will be increasingly important with mobile’s dominance as a consumer tool in researching and booking travel. For example, a hotel can use a guest’s location data to fine-tune a rate message. A close-by traveler doing a last minute availability search may want just a low room-only rate.

While the hotel economy continues to improve, the landscape continues to undergo major shifts requiring the industry to adjust and rethink how it’s responding to move forward successfully. Making use of insights on guest behaviors will play a major role in how effectively the hospitality industry will be able to reach and convert today’s dynamic audience of leisure travelers.

Layton Han (layton.han@adaramedia.com) is CEO of Adara. Adara connects brands to people who are going places. Adara partners with many of the world's largest airlines, hotels, and travel distributors to help them leverage their online data while protecting consumer privacy, personal information and purchase data.

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