Hospitality and Meetings: Finding Ourselves in the Social Media Picture

It’s a research finding that Mark Twain, the irrepressible American author and humourist, might have described as “interesting if true, and interesting anyway.”

But it still caught our eye when Netprospex Social Business Report published its annual review of social media use by U.S. businesses. Working from a database of 12 million companies, Netprospex cross-referenced its contacts’ presence on Twitter, Facebook, and LinkedIn and came up with an index based on two criteria:

• Their social presence, based on the number of online profiles registered to a business address
• Their social connectedness, based on the number of Twitter followers, Facebook friends, and LinkedIn connections they’ve accumulated.

We can start by acknowledging the limits to the analysis. It’s a beginner’s mistake to assume that social media connectedness is all about quantity, when it’s really a matter of bringing together the quality contacts who can benefit from your product or service and help you advance your business.

Still, hit counts do matter, since your online voice disappears if you have no visibility or presence. So it’s useful to look at how our two favorite and related industries rated against others: hospitality & tourism and meetings & events.

• Event-related jobs were tied with product management as the fourth-most social job, ahead of advertising, communications and public relations, marketing, and sales. That actually struck us as being a bit high, but it may finally signal that meeting & event planners have adopted social as part of their event marketing mix.
• Hospitality and tourism fared quite badly in the survey. The industry’s top-rated social company, in a tie with Best Buy for 11th place, was The Walt Disney Company.  The next hospitality company was Starwood Hotels and Resorts in 66th place, well behind brands such as Campbell’s Soup, Hasbro and Clorox Corp.
• Overall, hospitality ranked as the 42nd most-social industry.  If we consider “tourism” in terms of travel-related companies or destinations, it didn’t even make the top 50.

Whether this is good news or bad depends on what you’re trying to achieve online. If you think hospitality and tourism should strive to reach the widest possible population with an undifferentiated message, we have a long way to go.

If you’re more interested in targeted outreach to a set of clearly-defined audiences, the numbers might tell a different story. One thing is clear though, if event planners are the fourth most social group out there, maybe it’s time hospitality and tourism organizations focus their social media efforts to this highly influential group.

Ready for a conversation about your inbound marketing and social media efforts?  We're ready to help you navigate the waters.

The Permanent Fire Sale - Latest Hotel Trend Towards Commoditization

Imagine if you bid unsuccessfully on a piece of business, then found out that your own revenue management system had encouraged a competitor to undercut your price.

It sounds crazy, and it probably is. But that’s pretty much what’s happening with a new website called backbid.com.

“BackBid is a hotel booking website that revolutionizes how travelers book hotel rooms,” according to the company’s website. “BackBid empowers you, the traveler, to find the best possible hotel room, for the best price, with no elaborate or time-consuming searches necessary.”

Here’s how it works. After booking a room and receiving a confirmation number, the guest posts the details on BackBid. The site distributes the information to competing hotels and invites them to come back with counter-bids. Participating properties are encouraged to offer services and concessions, like free breakfast or wi-fi, rather than price reductions. But they’re free to use the system as they see fit and, in any case, a higher-end facility that matches a published rate may already be discounting. If the customer accepts the new bid, the reservation is prepaid and non-refundable.

BackBid says the system is opaque to individual properties: if a customer puts a reservation out to competition, then cancels the original booking, the first hotel in line never knows why. But the system still puts hotels in the position of cannibalizing each other’s rates, and they’ll all see the impact in the aggregate.

If the system works, it will be because some properties have nothing to lose: if a small, independent hotel is trying to stretch a limited marketing budget, a deeply discounted rate or upgraded package may still be better than an empty room.

Currently the site only caters to individual travel. But if this system became a factor in the group market, hotels would take a double hit. Sales managers would negotiate volume discounts with planners, but participants who initially booked inside the block could easily stray after “backbidding” their reservations.

One scenario is that the lost revenue will force hotels into a downward competitive cycle of cutting rates and service. Another possibility is that properties will refuse to play, offer their best rates the first time, and do their best not to cannibalize (or be cannibalized). But if the trend really catches on, we could be in for an era of permanent fire sales, in which no rate is the absolute lowest and few properties can count on the revenue they need to put their best product forward.

What will hoteliers do to counteract this push towards commoditization?  Weigh in and tell us what you think!

The End of the Hotel Room Block as We Know It?

The rumblings are just beginning, in informal conversations with industry suppliers, and with some of the associations and corporate groups that host conferences. There’s no research data to support it.

But we’ve been considering the possibility that we may be witnessing the end of the hotel room block for major meetings and events. If it happens, it’ll be hard to imagine a more seismic shift for the hospitality side of the industry.

You may have already seen the scenario in your own business. A major event reserves space for a large meeting or trade show, but organizers only commit to an official block of 500 or 1,000 guest rooms, saying they’ll take their chances with regular room rates. They still approach the CVB for deep concessions on convention centre rentals, arguing that participants will still book accommodations in the city. But the official hotels lose the certainty of having a large block of guaranteed room nights.

The problem is that the planners have a point. By making discount rooms available through an array of online booking sites, the hotel industry has eroded organizations’ ability to direct participants into their room blocks. A few years into the world Expedia, Hotwire, and getaroom.com, participants are savvy enough to shop for the best rates, and planners have a message for CVBs: if your idea of a successful city-wide convention includes a large room block, we’ll just move on to the next city. A few CVBs have told us they have no choice but to play along.

There may be a solution for hotels that are willing to offer more realistic rates for professional planners offering large blocks with longer lead times, then shift the rate as the supply of available rooms gets smaller. But with online distribution channels bringing hotel rooms to a new level of commodification, it may be a tough sell. One of the basic rules of pricing is that it’s hard to take a discount back once you’ve offered it. The question is: if this really is the end of the block as we know it, what will hoteliers do next?