Event review: Hotel Distribution Event 2016

BHN reports from the fourth annual Hotel Distribution event, held at the Hilton London Bankside.

The Hotel Distribution event focuses on the strategy rather than the tactics of hotel distribution. Event organiser Andrew Sangster says: “We bring together the investment community and digital community and digital disruptors with hotel owners and hotel brands to give a unique insight into what is going on in the hotel industry. This is not yet another digital travel conference, this is an event focused on what needs to be understood by business leaders and investors about the digital transformation of hotels.”

A fascinating presentation entitled The Balance of Power was made by Andrew Challier of independent marketing performance analysts Ebiquity. The main thrust of Challier’s argument is that many industries are overeliant on digital marketing, at the expense of other potentially more effective channels.

“Disruption is the new black,” said Challier. “Brands seem to be built by magic these days – the biggest disrupters consolidate supply and distribute electronically which reduces the product to a commodity.”

But when it comes to marketing, TV is still the best mass communication media, he said, and getting the basics right can still work.

Moving specifically to the hospitality and travel sectors, Challier said: “Travel is a low-spend advertising category, it doesn’t shout about itself, when compared with disruptors such as Airbnb, Expedia etc. Premier Inn and Travelodge are the only two brands with a significant spend, so what is everyone else doing?”

Challier then said that reliance on digital media has become an obsession in the last few years, and quoted Professor Mark Ritson’s Morbus Digitalis, saying: “The digital emperor is only partially clothed”.

“Only 30 to 50 per cent of all digital advertising is viewable,” said Challier, meaning that 50 per cent of the ad must be visible in the first few seconds.

He also added a couple of fairly blunt takeaways: “People don’t follow brands on social media, and you can’t rely on digital media to do the job of reach and marketing.”

A panel session, entitled Combating superior forces was then oderated by Peter O’Connor, academic director and professor of information systems at Institute de Management Hotelier International (IMHI).

“The hotel industry has a challenge and it is being dominated by other forces,” said O’Connor, by way of an introduction.

Michael McCartan, managing director of Duetto, said: “Hotels aren’t looking at ‘future-looking’ data, such as ‘who is looking at my website but not booking?’. Visitors to OTAs almost invariably end up on the hotel’s website at some point in their decision-making process – this is the opportunity to offer something unique, using information that the OTAs can’t have access to.

Michael Schaeffner, director of sales and marketing at Serenta Intraware, added. “Hotels aren’t investing enough in CRM. It should be a standard feature for every new hotel.” headed: “There is too much fragmentation – hotels are using multiple systems, none of which communicate with each other.”

It was pointed out that marketing has traditionally been seen by hoteliers as a cost when it is actually and investment.

Maarten Pliesman, VP for EMEA at Revinate, said: “93 per cent of travellers look at online reviews before making a booking. Ensuring you offer a great customer experience is what we should be doing getting the basics right.”

In a legal session, Neil Baylis, partner at K&L Gates, gave an update on the legal situation regarding OTAs and the best available rate debate in various countries around the world, and said that only 8.5 per cent of hotels in Europe have reported a drop in commission rates since the EU laws on price parity were introduced. Direct bookings have gone down to an average of 55 per cent in the last year, he said.

Then came a panel called A Fair Fight, moderated by Hotel Analyst editor Katherine Doggrell. The panel debated the impact of the sharing economy on the hospitality sector and consisted of BHA CEO Ufi Ibrahim, Avvio CEO Frank Reeves and Roommate Hotels and BeMate.com CEO Kike Sarasota.

Ufi Ibrahim said: “There is an international trend to introduce laws as a reaction to Airbnb – generally in relation to the housing shortage, and health and safety. We have regulation in London but the authorities are having trouble enforcing it as Airbnb are not transparent with data.”

Frank Reeves sounded a note of caution saying: “There is a danger that the hospitality industry thinks that increased regulation of Airbnb is going to slow its growth – that is not the case. Airbnb has a very aggressive expansion plan and it has just raised another $800 million, reportedly from Google. A tie-up between Google and Airbnb will have a significant impact. Hotels ned to differentiate themselves and to deliver on hospitality. Ask yourself what can the hotel industry deliver that Airbnb can’t?”

Talking about the recent launch of the Google Trips app, Reeves added: “The curation of a stay and itineraries is going to be very important in the future. Hotels will increasingly struggle with groups and families.”

Stressing Airbnb’s growth plans, Reeves said it will eventually be forced to collect taxes from a central payment platform.

Ibrahim finished on an upbeat note, saying: “There is a direct correlation between GDP and the volume of international travel. All indicators show that global travel is going to continue growing every year until at least 2050.”

And Reeves rounded up the session with a sobering prediction: “Google will probably eventually kill the OTAs. Airbnb will be on Google soon so there will be one source for everything.”

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