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W H I T E PA P E R : G U E S T L I F E C Y C L E S E R I E S

6 REASONS YOUR PMS VENDOR IS THE RIGHT

END-TO-END PROVIDER TO IMPROVE CUSTOMER RELATIONSHIPS AT THE

FIRST TWO STAGES OF THE

GUEST LIFECYCLE (GLC)

Hoteliers and hotel managers can use their PMS data in several different ways to inform online marketing activities that improve metrics at all stages of the Guest Life Cycle.

This paper is the first in a series of recommendations on using PMS data to address all seven stages of the GLC. It specifically addresses the first two stages, which involve increasing visibility and driving reservations, as part of an overall strategy to increase occupancy rates and develop strong relationships with customers.

If you’re not using your PMS data to power your decisions about online marketing, you could be leaving rooms empty.

More guests. Better managed.

Property Management Systems do a lot more than manage bookings. Independent hoteliers, property management companies and hotel chains can use PMS data in conjunction with other analytics to drive online marketing activities that improve visibility and drive reservations.

When this analysis forms the foundation of an overall strategy to increase occupancy rates and reduce reliance on Online Travel Agents (OTAs), hoteliers can be more efficient with their marketing spend and take control of the Guest Life Cycle to boost revenue and reputation.

Guest Lifecycle Few Property Management Systems empower hotel operators and owners to improve the guest experience at every stage of the life cycle. A good PMS should ensure that hotel guests "get what they want"1 - but can a PMS help bring the guests there in the first place? Can a PMS solve some of the problems hotels face with regards to online visibility and online reservations?

1. http://www.theprismpartnership.com/assets/articles/Prism%20Article%20-%20Property%20Management%20Systems.pdf

1

Getting Found

2

Driving Reservations

3

Pre-Arrival Upselling

4 5

Efficient Arrivals

Creating Great Stays

6

Ensuring Smooth Departures

7

Managing Feedback & Controlling Reputation

The guest lifecycle has 7 steps, and each one comes with its own set of opportunities and problems. At any point in this cycle, a hotel has an opportunity to engage in activities that will increase occupancy rates in the short- and long-term.

More on the Guest Life Cycle If we address only the first two stages of the Guest Life Cycle (GLC), several problems emerge.

Hoteliers have little time for social media or Search Engine Optimization, but getting found via these channels - and more specifically, driving online traffic to the hotel web site as opposed to OTAs - is a critical step towards increasing net return and controlling customer relationships and touch points.

Next, many hoteliers implement disorganized or sporadic online marketing efforts without first gathering data to indicate which online channels will be most effective. Finally, while getting more web traffic is one way to drive reservations in Step 2, “Driving Reservations�, of the GLC, when a hotel's web site doesn't reflect the brand or tell a clear story about the guest experience, or the booking engine is not well integrated, guests may choose different accommodations or book through an OTA. The opportunity cost of these lost reservations is expensive for the hotel.

PROBLEM #1:

It's Hard to Get Found Online

PROBLEM #2:

Online Marketing isn't Strategic

PROBLEM #3:

Hotel Web Site isn't Optimized

Hotels have no time for social media or SEO Difficult to drive web traffic directly to the hotel's web site

Hotels don't analyze data from their PMS or don't know how Web analytics alone can't inform marketing strategy

Web sites don't reflect the brand or promote key messaging Booking engine poorly integrated, or doesn't work on mobile

For a hotel trying to improve occupancy rates by increasing visibility and attracting more reservations using online and social media marketing tactics, how can an end-to-end PMS vendor address the first two stages of the GLC and drive higher occupancy for hoteliers?

Getting Found & Driving Reservations We know that hoteliers can use tactics like SEO and social media to increase online visibility. But many do it without much data to guide their strategy. An end-to-end PMS vendor can combine PMS data with online analytics to provide focused recommendations that help hotels get found by the right customers and send web traffic directly to the hotel web site.

Here are 6 reasons why working with your end-to-end PMS service provider to combine PMS data and online marketing principles to overcome the challenge of getting found online and increasing booking conversion will lead to higher occupancy rates and better customer relationships for your hotel.

R

E

6

S

S IX

ASON

REASON #1

PMS data helps you establish and market your Unique Selling Proposition (USP).

To drive more visitors to your website and get them into the booking cycle, you need to have a clear understanding of your ideal guest and your unique position in the market. Using PMS information you can answer these questions, and more: What group of customers book most frequently (i.e. weekday, weekend, long-stay, short-stay etc.)?

What type of travellers do you attract more of (i.e. Leisure, Corporate, Family etc.)?

What is the typical length of stay? (i.e. do you have more long-stay vs. short-stay)?

What is the booking cycle? (i.e. by season, how far in advance do customers usually book)?

Where do your most profitable guests come from (i.e. what locations and regions)?

Once you know what kinds of customers stay with you the most, you can evaluate what times of year you should be doing your marketing, where you should be focusing your marketing, and most importantly, what type of customer you should market to. With your PMS reports, you can also discover what really makes your hotel unique by finding out what your best customers are saying about you. A great way to supplement your PMS data is to use reputation management software, which offers a goldmine of primary data that you can compare to your PMS reports to find out what your ideal customers are saying about you. With this information you can evaluate how your customers perceive your brand messaging, and change it if necessary.

This combined data also lets you evaluate your web site and other aspects of your online marketing so you can objectively see whether your online messaging is speaking to your best customers.

Remember that the features you think make your hotel unique aren't always the same features your guests will identify. That's why reputation management software is an important tool to integrate with your PMS data; it allows you to identify themes among your reviews, and tells you what guests find most memorable about your hotel (more on that in Reason #5). You can then sell these features to your target guests to give them a reason to choose your hotel over a competitor. That becomes your USP.

REASON #2

Tracking from both your PMS and Booking Engine is a necessity to make good online marketing decisions and improve your web site's functionality.

Knowing your USP allows you to create and use metrics that tie your PMS to your booking engine analytics to determine what is working and what you should spend money to improve. Since guests who book directly, rather than through OTAs, tend to be less price sensitive and report higher customer satisfaction2, you must keep track of how well your booking engine is performing. Some metrics to track are: Looker to Booker - How many people get to your web site and follow through with a reservation?

Look-to-book ratios are increasing, but if yours is performing below industry standards (which can be 1900 to 1 or higher3), you may need to make your booking engine more user-friendly.

Bounce Rate and Time on Site - Once you've defined your USP, web site statistics can begin to tell you how your USP is performing in the market. If your content isn't driving more reservations, the next step is to review your content to make sure your potential guests are getting a clear message about your hotel's offering.

Bookings by Online Source - By tracking your booking quantity, average revenue per reservation, and total booking revenue, you can get a sense of what direct online channels work best and how the pattern evolves over the course of the year. You can compare this to PMS data to find out what types of guests book through which channel, and focus on developing the channel that your ideal customers use most.

83% of leisure travelers and 76% of business travelers plan online.

2. http://www.jdpower.com/content/press-release/WlL9aY5/2012-north-america-hotel-guest-satisfaction-index-study.htm 3. http://connect.phocuswright.com/2009/05/holy-pegasus-ratio-of-travel-lookers-to-bookers-is-off-the-charts/

REASON #3

PMS vendors can help hotels understand what online content will improve SEO, drive social media engagement, and establish or control reputation.

Your PMS data tells you who your best customers are. So talk to them. And give them online content that makes them want to talk back. Some key principles to consider: Define their needs – Blog posts, testimonials, reviews, lists of features, special accommodations – your customers consume all kinds of content before they make a booking decision. Armed with your USP, you can map out all the types of content your ideal guests need to decide to book with you.

Be consistent - Once you know what content your ideal guests need, give it to them regularly and in different forms. Typically we recommend creating a dozen or more articles per year that really meet the needs of your potential guests. Topics should be related to your USP and offer added value for your ideal customers. Longer articles can be broken up into shorter pieces of content like Tweets or Facebook updates, and posted a couple of times a week through your various social media channels.

Add value through your web site - You can maintain Rate Parity restrictions even when working with OTAs, but offer add-ons for customers who book through your web site. Once you use PMS data to understand your guest profile and your USP, you can reward your ideal guests based on their specific needs. For example, if your hotel attracts a lot of business travelers and you want even more, consider offering free Wi-Fi when these guests book directly through your web site, so they can easily continue working from the comfort of their hotel rooms.

Content is now the defining factor for search engine marketing. An end-to-end PMS provider can show you how to use your PMS and web analytics to empower you to produce the most relevant online content so you get noticed by the people you want staying at your hotel.

REASON #4

Comparing PMS data to your most profitable booking sources can help you decide where to spend marketing dollars.

Do your ideal guests typically book through direct channels or OTAs? If you don't know the answer, an end-to-end PMS vendor can show you how to find it. While direct web site bookings might be your most ideal booking channel, chances are you'll still want to use other channels as part of your strategy to get found online and drive reservations. So make sure you're using the channels that work best for your hotel.

Google reports that 62% of leisure travellers and 54% of business travellers use Search Engines to research their travel choices. The majority (69%) of business travellers and a large percentage (55%) of leisure travellers research Hotel Web Sites. Other commonly used online research sources are OTAs, travel review web sites, airlines web sites, and several others4.

When you evaluate your PMS data for booking sources, does it reflect these statistics? Compare your web traffic sources and booking sources to these industry trends, but focus on what works for your hotel. By reviewing your PMS data based on your most profitable booking sources, you can calculate the value of each booking channel. You’ll know what your per-booking cost is for each channel, and you can find out what channels your best guests are using.

45% of Leisure Travelers and 57% of business travelers researched travel as a result of seeing an online ad.

(Google, 2012)

Online ads can open up a direct channel to your web site’s booking engine and reduce your reliance on OTAs – but only if you do it right. PMS data can help you create online ads that reach out directly to your ideal guest. As you develop your ads, consider the following:

4. Google/Ipsos MediaCT U.S. The 2012 Traveler. August 2012. Retrieved from http://www.thinkwithgoogle.com/insights/uploads/940817.pdf/download.

1 Determine the cost per customer - Google provides free tools, like the “Adword Suggestion tool”, to allow you to find out what the Cost-per-Click (CPC) will be for specific key phrases related to your USP and the types of guests that you want to attract more of. For example, you can target ads to the specific regions where a lot of your bookings originate, and as people click through your ads and make reservations, that data is sent directly to the PMS. This allows you to determine if your CPC is higher or lower than the commissions for OTAs. 2 Test and measure - Using both your PMS reports (e.g., the flow-through of ad clicks to the booking engine) and web analytics (Google Analytics, Webtrends etc.) you can test sample ads and landing pages to determine booking return on investment. Where you get returns, crank it up.

3 Follow through on the landing page - Your advertising dollars are wasted if your landing page doesn't deliver on the promise in the ad. Customers need to be handheld from the moment they select an ad right through to your booking engine. For example, if your ad promotes Pet Friendly rooms, ensure the landing page talks about that, while also communicating the message of your total property experience (your USP).

4 Take advantage of Google - Google controls 2/3 of search engine marketing. Make sure you're using Google+ Local and Google Hotel Finder, to ensure your hotel will be found when customers are searching for specific destination terms (i.e. “Detroit” + Accommodations”).

REASON #5

Social media doesn’t work without the foundation you can acquire from proper use of your PMS data.

Too many hotels use social media as a reputation management tool rather than a branding and marketing tool. If you know what social media sites your ideal guests use most, you can start the conversation with them before they ever reach your web site.

If you've used your PMS data to define your USP, you can more easily connect your hotel brand's values to those of your ideal guests to increase occupancy rates. Not only do three quarters of travellers buy from brands that use social media to define their values, but they also spend more money - up to 40% more5. There's no way to tap into this spending in a strategic way and maximize the value of social media interactions if you don't know what kinds of guests you need to reach out to. But once you have that information, you can: 1 Tell stories - Demonstrating curiosity about your customers, sharing stories about great guest experiences, and showing the faces of the people who make your hotel great is as effective - or perhaps more effective - than promotional blasts via social media6. Good storytelling takes a little longer, which is another reason you need to make sure that the time you're spending on social media is used to distribute great content that markets your USP to your ideal guests.

2 Reward guests - A great testimonial, a re-tweet of a hotel promotion or contest, or a referral to a friend are all actions guests can take that you can reward them for. A strong loyalty program that's well integrated with social media can drive repeat reservations, as long as it's easy to participate in the program, it targets your ideal guest, and it’s consistent with your USP. 3 Create your reputation - As long as you're delivering on the promises you make via social media channels, your customers will reflect their positive experiences online after they leave your property, allowing your social media marketing to gain momentum and giving you more control over the way your property is perceived online.

Social media is about 25% of the typical content mix of your hotel's online marketing7 - so while it's absolutely essential that you use it, it won't work by itself. It also won't work if you don't know what your customer's needs and preferences are8 - so determine that first using your PMS data, and then create a social media strategy.

5. http://www.iltm.net/files/iltm_cannes_2012_bright_young_things_white_paper_guzy_12213_final.pdf 6. http://hma.hotelworldasia.com/system/files/Examples_of_How_Hotels_Are_Using_Social_Media_-_A_Guide_for_Getting_Started[1].pdf 7. http://www.evisionworldwide.com/learning/wp-content/uploads/EvisionSocialMediaStrategy.pdf 8. http://www.sabrehospitality.com/pdf/2012---Convergence.PDF

REASON #6

With PMS data you can manage reputation proactively, not reactively.

The majority of US travellers (61%) research their travel online before they book anything9. These travellers make up their minds more rapidly than ever - so if your reputation is being controlled by other people, you could be losing bookings10.

For example, the figure below, taken from a guest feedback survey from a hotel's PMS, shows that customers don’t think too highly of this establishment's bathrooms, and in fact, are unlikely to return for that reason more than any other. If the hotel is branding itself in the luxury category, then there is a clear disconnect between the brand messaging and the guest experience. This data indicates an operational issue that can be corrected easily.

Top negative survey topics in the last 90 days Loyalty Impact

Number of Mentions

Bathroom

-44

110

Noise

-18

52

Housekeeping / Cleanliness

-14

18

Lighting

-11

34

HVAC

-10

22

Billing

-8

26

Maintenance

-7

11

Rates

-6

14

Smell

-5

9

Check-in / Reception

-5

41

Once the hotel fixes its bathroom issue, it can expect those negative reviews to fade into the background as they become out of date and more recent, positive reviews emerge. For this reason, it’s critical to ensure that the information customers find online is relevant, true, and up to-date.

9. http://www.iltm.net/files/iltm_cannes_2012_bright_young_things_white_paper_guzy_12213_final.pdf 10. http://corp.marketmetrix.com/pdfs/MMx_Social_Media_Too_Little_Too_Late.pdf

To achieve this, consider: 1 Integrating Tripadvisor ratings into your web site - Travellers may check Tripadvisor multiple times before choosing a property. To help keep them on your site so that they use your booking engine (and not an OTA) when the time comes, keep Tripadvisor ratings embedded in your site11.

2 Ensuring your CMS is tied directly to Google+ Local/Places - When updating your website photos and descriptions, ensure the new information flows seamlessly to Google so that users who don’t go directly to your website still see the latest content.

3 Include other reviews on your web site - Why leave reviews to TripAdvisor alone? Using reputation management software or your CMS, build reviews right into your website, drawing from social media channels or guest surveys.

Before reacting to a negative review, compare to your PMS data to determine whether the reviewer falls into any of your hotel's target segments. If not, then the review could simply be the result of a mismatch between the guests' needs and your USP. But if you start to detect themes, it's time for another review of your data to see how your customers are evolving and what you can do differently.

Also, make sure you personally respond to both positive and negative reviews, so all guests have the most up-to-date information on your hotel, and know that you're actively addressing their concerns12.

11. http://www.prnewswire.com/news-releases/300-million-people-view-tripadvisor-content-on-sites-other-than-tripadvisor-each-month-183350371.html 12. http://www.prnewswire.com/news-releases/300-million-people-view-tripadvisor-content-on-sites-other-than-tripadvisor-each-month-183350371.html Non-footnoted Sources: http://hotelmarketing.com/index.php/content/print/how_hotel_marketers_can_shift_bookings_from_otas_to_the_hotel_website Google/Ipsos OTX MediaCT US. The Role of Loyalty Programs for the 2012 Traveler. July 2012. Retrieved from http://www.google.com/think/research-studies/the-role-of-loyalty-programs-for-the-2012-traveler.html

Conclusion Many hotel General Managers don’t know the power of the data they already possess in their PMS. But the right PMS vendor is a service provider who can show hoteliers how to capture and analyze PMS data, combine it with web analytics, and make recommendations to help hoteliers engage more travelers during the first two stages of the GLC, leading to higher occupancy and lower costs.

Now that 45% of travellers book hotels online13, there's no doubt that marketing dollars need to be spent on online campaigns. But for the same reason, that spending needs to be informed by the data your PMS can provide, or it won't get you much closer to your goal of increasing occupancy rates. By working with a PMS vendor with marketing expertise to help you develop your online marketing strategy, you can spend your money on the right online tactics and establish the online presence you want for your property, rather than waiting for disgruntled guests to create it for you.

More guests. Better managed.

roomkeypms.com

13. http://www.webrezpro.com/whitepaper/2012_02_16-PMS.pdf

More guests. Better managed.

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