Four digital challenges for hotels and how to solve them

Traditionally, hotels have focused their efforts on providing a superior in-hotel customer experience. Hiring the best people to service their guests and providing luxurious facilities to promote their venue used to be enough to ensure customer satisfaction and loyalty.

Now they face a multitude of challenges which mean they must reinvent their internal strategy. As digital becomes omnipresent and "tech-first" businesses threaten market-share, large and independent hotel groups alike are looking to digitally transform and make their businesses more customer-focused.

So, what are these challenges and how are hotels solving them?

  1. OTAs are reducing direct bookings and taking a cut from hoteliers margin forcing them to spend more on online via customer acquisition techniques such as SEO and display advertising. Hoteliers are on average losing 12-35% of every booking because of commission paid to OTAs.
  1. Travellers are becoming more speculative as comparison between hotels is made easy by metasearch engines such as Trivago,  Booking.com and Priceline, so hotels are forced to compete on price rather than brand differentiation to secure a sale.
  1. Booking a hotel is a considered purchase with travellers spending more time booking hotels than flights. According to Millward Brown stats, booking a holiday takes on average 45 days and Econsultancy reports that guests might visit up to 38 travel sites when planning a trip. You may only travel three to four times a year if you are lucky, and for luxury hotels the customer expectation to provide an exceptional online and offline experience is a lot higher.
  1. Once considered the most popular feature of hotels’ marketing strategies hotel loyalty programs are diminishing as chains devalue their points programmes in an effort to improve profitability. Travelers are also bombarded with blanket loyalty credit card offers and promotions, creating a disenfranchised and disloyal customer accustomed to switching brands regularly.

How are hotels solving these challenges?

While large hotel groups such as Hilton and Marriott have launched multi-million pound advertising campaigns to inspire direct bookings with the promise of securing the lowest rates, not all hotels can compete on this level with vast marketing budgets behind them. Instead there is now a move to drive bookings by providing a first-class, personalized digital experience for the customer.

To stop customers shopping around, hotels are looking to make the online journey as seamless and engaging as possible.

The best digital customer experiences help users:

  • Conduct research more effectively and encourage guests to return to their site. Personalization techniques such as saving search history, customer preferences and suggesting relevant recommendations to the user makes the process more efficient and persuades guests to return and book a room

  • Find inspirational content to inspire their booking by pushing relevant blogs, reviews and recommendations to their view when users search a particular hotel or destination. Delivering personalized emails with their search history, and suggestions for trip itinerary are also popular ways hotels are differentiating themselves against the competition and reducing lead-time

  • Quicken the path to purchase by adopting persuasive techniques utilized by competitive metasearch engines such as urgency and room scarcity messaging, and also badging rooms as ‘best for families’ or ‘best for couples’

  • Find the add-ons they need to make their trip a success by targeting relevant ancillaries such as room upgrades, spa breaks or golf lessons to customers who have displayed certain search behaviors online

  • Feel loved by the brand by recognizing and rewarding loyal behavior by presenting them with timely and relevant offers and promotions while they are browsing onsite

  • Feel like a VIP by identifying them without them having to log-in - welcoming them back, asking how their previous stay was and highlighting rewards they are eligible for

What is clear is that delivering an excellent customer experience is not a new concept to hoteliers - businesses have been doing this offline for years. But now, with their key audiences living and engaging online it’s time for hotels to bridge the expectation gap and deliver personal and engaging experiences that digitally match their in-hotel offering.