Disruption 2017: Three Major Trends in the Global Hotel Business

By Daniel E. Craig

We can certainly say that 2017 is poised to be a year of disruption in American politics. Does the same apply to the global hotel industry?

Disruption can be defined as a radical change in an industry, especially involving the introduction of a new product or service that creates a new market. It often brings disorder and confusion, and companies that don’t adapt risk becoming obsolete.

In my next webinar with ReviewPro, we explore three major disruptive forces in the hotel industry:

1. Rise of Megabrands
In recent years we have witnessed massive consolidation among hotel companies and online travel agencies, and in 2017 we’ll start to see the full impact of these changes.

According to Lodging Econometrics’ Q4 2015 report, the three biggest hotel conglomerates, Hilton, Marriott and IHG, accounted for 37 percent of worldwide hotel construction, with 11,130 development projects in the pipeline. Snapping at their heels is AccorHotels Group, with more than 4,000 hotels in its portfolio and ambitious plans to grow and diversify.

On the OTA front, Priceline Group and Expedia Inc. continue to grow at a much faster pace than hotel companies, commanding a virtual duopoly on an international scale. Yet Ctrip.com is proving to be a veritable force as it extends its reach beyond China.

“To stay competitive in a mega brand and OTA-driven world, it’s really a matter of personalized vs. one-size-fits-all,” says Simone Puorto, director of global accounts and quality manager at WIHP. “Hoteliers have a number of tools at their disposal, from opaque rates to metasearch advertising, and from tailor-made services to AI travel assistants.”

Puorto will be one of my co-presenters on the webinar, along with Fiona Gillen, vice president of marketing at ReviewPro.

2. Growth of Private Rentals Sector
As much as some hotel executives may be in denial, the rapidly-expanding private rentals sector represents another disruptive force in the hotel industry today. You can read more on this topic in my article, The Incredible Shrinking Hotel Industry.

3. Digital Customer Service
A third disruptive force that’s still in its infancy is the rise of digital customer service. Increasingly, travelers are turning to digital platforms to plan trips, make inquiries with businesses and share experiences.

Whether it’s online check-in, messaging apps, chatbots, voice-activated technology or even humanoid robots, an increasing number of tasks in the hospitality business that were previously performed by humans now have the potential to be performed by computers.

Join us on Tuesday, January 31 for this free one-hour webinar, when we’ll discuss what these trends mean and how hoteliers can adapt and stay competitive in 2017 and beyond.

If you miss the webinar, you can download it and all previous webinars and guides in ReviewPro’s Resource Hub.



The Incredible Shrinking Hotel Industry

By Daniel E. Craig, Founder, Reknown

The hotel industry isn’t known for being quick to adapt and evolve, and it often finds itself scrambling to catch up with changes in technology and traveler behavior.

Online travel agencies are a perfect example. Rather than impede the growth of OTAs by maintaining tighter controls on rates and inventory, hotels threw open their doors and continue to fuel their remarkable growth to this day.

The hotel industry is in a similar state of denial in regard to the latest threat to its well-being: the private rentals sector. And yet the threat is far greater. Whereas OTAs help to fill hotel rooms, private rentals lure travelers away from hotels entirely. And their growth is probably unstoppable.

Growth of Alternative Accommodations
Vacation rentals have been around for decades, but in recent years the sector has moved from niche market to mainstream, expanding into urban markets and attracting both business and leisure travelers. The great disrupter has been Airbnb, which launched in 2008 and now reports over two million listings in 191 countries worldwide.

A recent survey of 4,000 consumers in the U.S. and Europe from Morgan Stanley Research found that Airbnb is “almost double the threat” to hotels than previously believed, with 19 percent of leisure travelers and 18 percent of business travelers having used Airbnb in 2016. In 2017, those numbers are expected to increase to 25 percent and 23 percent respectively.

But we don’t need surveys to tell us that travelers are changing their habits. Simply ask friends, colleagues, family members – even hoteliers – where they stayed on their most recent trips, and an ever-increasing number will cite private rentals.

The growth has been precipitated by digital innovation and transparency. Airbnb alleviates many of the concerns travelers have about staying in a stranger’s home by allowing them to view photos of homes and maps of the local area, compare listings and pricing, check out host profiles and reviews, and book instantly.

Many of the concerns homeowners have about renting their homes to strangers have been alleviated, too. It’s easy to create a listing, and hosts can check out profiles and reviews of travelers before accepting them, implement strict cancellation policies, and take advantage of property damage protection.

Then there’s the user experience, from Airbnb’s sleek, uncluttered website, a breath of fresh air compared to OTAs and hotel websites, to the personalized communications from hosts, to the stay itself—the extra space, free Wi-Fi, kitchen and laundry facilities, and residential touches. All for less than the price of a typical hotel room.  Read more »

Online Reputation Management for Hotels: To 2017 and Beyond

By Daniel E. Craig, Founder, Reknown

After over a decade of social media in the mainstream, the online reputation management function has reached a maturity level in the hotel industry. As we look to 2017 and beyond, we can draw from past experience to develop our future strategies.

The online reputation management function grew out of the explosive popularity of social media, which connected consumers, gave them a voice, and facilitated the exchange of purchase information and advice at scale. Today, most travelers check out online reviews as part of trip planning, and a hotel’s reputation can significantly impact its ability to attract business.

Social media has elevated the travel experience by obliging hotels to be more transparent and accountable. The old “bait and switch” tradition so common in travel marketing in the past is much riskier today. Hotels that fail to meet the expectations they set for guests face a backlash in bad reviews. Today, it’s about reality marketing: setting realistic expectations.

All types of social media tend to be lumped together, but it’s important to distinguish between online reviews, as found on TripAdvisor, Google, online travel agencies and other travel sites, and content shared on social networking sites like Facebook and Twitter.

As a marketing channel, social networking sites are crowded and inefficient. On Twitter, it feels like everyone is talking and few people are listening. Facebook, having all but shut out brand posts from user news feeds, has become an advertising platform for hotels. Yet these channels can’t be ignored because they are used by travelers as a customer service channel to make inquiries with hotels and share feedback.

Hoteliers are easily distracted by the interactivity and instant gratification of Facebook, Twitter and Instagram, whereas online reviews can be raw, bruising and disruptive. It’s easier to disregard or downplay online reviews as extreme, unfairly biased or fraudulent.

But online reviews must be the top priority, serving as both an operational tool for measuring guest satisfaction and guiding improvements and a marketing tool for building awareness and driving demand. Whereas people go to Facebook and Twitter to socialize and catch up on news, they go to Google, OTAs and TripAdvisor to plan trips, where reviews and ratings are listed alongside rates and booking options.  Read more »

Google Reviews: Ubiquitous, Powerful and Flawed

By Martin Soler and Daniel E. Craig

From TripAdvisor to Airbnb, the big players in online travel want to offer it all: booking capabilities, tours and activities, and traveler reviews. Google is no exception. But while Google has made significant moves to grow and improve its offerings in the travel sphere, it’s still finding its way in the realm of user reviews and ratings of local businesses.

Search a hotel on Google, and guest ratings from TripAdvisor, online travel agencies, Facebook and other review sources are populated in both paid and organic results. But as with its flights and hotels products, Google gives higher prominence to its own reviews, placing Google ratings just below paid results in mobile searches and at the top of the Knowledge Graph in desktop searches.

Earlier this year, Google confirmed that Google review count and score are factored into local search rankings. Google ratings are also populated throughout Maps, Trips and Destinations.

Given the ubiquity of Google reviews, their role in search rankings and their influence on consumer decisions, Google bears responsibility for ensuring the quality of its review product. But Google reviews are unsortable, inconsistent and unverified, and while the ratings of businesses are usually comparable to other review sources like TripAdvisor, Yelp and OTAs, a large proportion of Google reviews are anonymous, outdated and sparse in detail.

Google’s challenges with reviews started long ago. A few years ago, Google began scraping hotel reviews from TripAdvisor and Yelp without their consent and was hit with a lawsuit. Third-party reviews were pulled from business listings, but have since been reinstated for select businesses as “Reviews from the web.” Early this year, in an attempt to improve review volume and quality, Google began licensing reviews and review summaries for select hotels from TrustYou, which aggregates scores using reviews from across the web.

But Google, being Google, wants to own reviews. The value in reviews is unique to the search algorithm. In the early days of the internet, Google relied on backlinks as a measure of the importance of a website, among other factors. But as Google emerged as the unavoidable giant in the location business, backlinks were not enough. Reviews have become critical to the algorithm, indicating to Google the quality of the business and helping to ensure that it delivers optimal search results to users. And not only that, reviews are rich with keywords to feed the index.

Recent evolutions in Google’s applications suggest that Google is edging toward achieving its potential as a review behemoth. It is now easier than ever for users to write reviews. Thanks to GPS on mobile phones and Google Maps data, Google knows where users have been. Rather than require users to enter the business name and location, Google suggests places to review. Recently, Google started offering its Local Guides incentives to contribute reviews, including badges and Google Drive storage.  Read more »

Trump Hotels and the Reputation Problem

By Daniel E. Craig, Reknown

Given that so many people have a stake in the Trump brand, was it responsible or prudent for Trump to run for the presidency on such a contentious platform?

Early last year, when a recruiter asked if I was interested in putting my name forward for a soon-to-open position as general manager of Trump Hotel in Toronto, I was conflicted. Donald J. Trump hadn’t yet announced his presidential bid; he was merely an outspoken, controversial character. And his hotel company was fast gaining a reputation for exceptional hospitality.

The year prior, I had lunch at Trump New York with a friend who was an executive with Trump Hotels, and he had nothing but praise for Trump and his family. After lunch, he took me on a tour, and the property wasn’t over-the-top and garish, as I expected, but tastefully designed and relatively understated.

Nevertheless, I had enough distaste for Trump’s politics to know that I couldn’t work for him. But before I could decline the opportunity, the company decided I wasn’t “the right fit.”

It was no sweat for me. I didn’t want or need the job. But what about the thousands of employees who depend on the Trump brand for their livelihood and now find themselves caught in the cross hairs of an ugly presidential campaign?

Trump has lent his name to a range of products, including wines, clothing and golf resorts, but it’s perhaps the hotels that stand to suffer the most. Why? Because Trump’s campaign rhetoric contravenes the spirit of hospitality.  Read more »

Does It Really Pay to Book Direct?

By Daniel E. Craig, Reknown

These days, hoteliers talk a good game when trying to convince travelers to book directly. “Stop Clicking Around,” Hilton urges in a current campaign. “It Pays to Book Direct,” Marriott promises. “The Best Place to Book is Right Here,” proclaims Hyatt.

Most major hotel brands and many independent hotels now offer a best rate guarantee and incentives for direct bookings. It’s part of an industry-wide movement to change traveler behavior and reduce the amount of commissions hotels pay to online travel agencies. The underlying message of these campaigns is, “Trust us. Skip OTAs and book direct for the best deal.”

But can travelers really trust hotels to uphold this promise? As a traveler, time and again I’m dismayed to find better offers on OTAs than on hotel websites.

Most recently, while planning a five-night stay in New York, I found a great deal on Booking.com for a five-star hotel, part of a well-known brand. Like a good ex-hotelier, I went to the hotel’s website to book direct, but the rates were much higher there, so I called the hotel. The reservations agent was reluctant to match the offer, questioned its validity, and asked me to email a screen shot. Eventually, she agreed to match the rate.  Read more »

Is your hotel safe from reputation threats?

In Reknown’s next free webinar with ReviewPro, we discuss how to protect your hotel’s online reputation from everything from a bad review to a full-blown social media crisis.

Topics include:

• What to do if a guest issue goes viral
• How to respond effectively to social media attacks
• What to do about detractors, trolls and review threats
• Brandjacking: how to stop OTAs from bidding on your hotel’s brand name
• Policies, procedures and prevention
• Strengthening your hotel’s online reputation

Join Fiona Gillen of ReviewPro and Daniel E. Craig of Reknown for this fun, interactive webinar, and gain insight and practical tips to help your hotel weather any social media storm.

Click here to register for this free one-hour webinar on Tuesday, September 27, 2016.

If you miss the date, visit ReviewPro’s Resource Hub to view the webinar on demand.


Our Next Webinar Is About Taking Control of OTA Business

Webinar - Optimizing Your Hotel's OTA Strategy ReviewPro Reknown 2
As more hotel companies devise strategies for attracting direct business away from online travel agencies, one thing remains clear: OTAs will continue to play an important role in the channel mix.

In my next webinar with ReviewPro, Optimizing Your Hotel’s OTA Strategy, instead of the usual OTA-bashing being undertaken in the hotel industry, we’ll focus on how to get OTA business working for your hotel.

Topics include:

1. The Role of OTAs in Hotel Marketing

2. Costs of Acquisition & Channel Mix

3. Negotiating with OTAs

4. Optimizing Your OTA Presence

5. Converting OTA Guests to Direct Bookers

6. Managing Reviews on OTAs

Webinar - Optimizing Your Hotel's OTA Strategy ReviewPro Reknown

We’re excited to announce a panel of seasoned travel industry experts: Cindy Estis Green, CEO and Co-founder, Kalibri Labs; Max Starkov, President & CEO, HeBS Digital; and RJ Friedlander, Founder & CEO of ReviewPro. This is a rare opportunity to hear these respected industry veterans share their top tips and strategies.

Click here to register today.

Hope to see you there! If you miss it, you will be able to view the recorded webinar on demand by visiting ReviewPro’s Resource Hub.