Our last webinar threw light on marketing in the hospitality industry. Floyd Tavares, Manager – Business & Digital Marketing, from Deltin Group ran the session. He was joined by Nilesh Patel, Founder and CEO of LeadSquared. In case you missed the webinar, you can watch the recording below. You will also find a short Q&A session with Floyd, talking about what has worked for Deltin and what generally works for the hospitality industry.
Nilesh: You mentioned that OTAs are an important channel for generating business. Are there any preferences from an OTA standpoint? For example, would ClearTrip would be better suited for luxury hotels versus MakeMyTrip? Is there any recommendation you have or does one work better than the other or would you recommend we use all of them?
Floyd: It’s a very difficult question to answer because if MakeMyTrip is generating maximum business for us in January, in March we would have ClearTrip generating maximum business. In May we would have Agoda generating maximum business. So there hasn’t been a consistent trend as to which OTA has generated maximum business for us.
This is also based on the relationship we have built. The ones we have met the most personally have given us the most amount of business. That’s because we have been in touch with them. The ones we have sat with and customized offers, the ones with whom we have actually discussed and spoken to – how can we grow our business together and work together. These are the businesses that have actually generated more revenue than the other ones who we have not proactively been in touch with.
Nilesh: It makes sense now because OTAs generally also invest a lot in digital marketing – some OTAs may be spending more money in a certain month versus the other, which basically will result in traffic and bookings for you.
And of course, as you mentioned, relationships play an important role. When you say build relationships, do you mean keep in touch with them regularly? Deltin is obviously one of the largest names in the business – what about hotels that are focused on a certain regions and those who are not very big chains, what would be your advice to them? They may not even have a bandwidth to build a relationship with an OTA. How would it work for them?
Floyd: When I say, building a relationship, I mean picking up the phone and constantly sending them emails every 2-3 days. You don’t need a team to do this. In a smaller region, you would have 10-15 OTAs, that’s around 5 calls a day for 3 days. Keeping in touch with the OTAs is not a major issue. Participate in whatever offers they give online. They do search engine marketing campaigns quite a bit so if you are part of any of their promotions like their summer time bonanza or their mobile special promo, these would give you special offers. So I would say, give them something more than revenue.
Nilesh: You also mentioned something about difference in cost per lead online versus taking it from 3rd parties. When you said 3rd party, were you referring to the Holiday IQs or something else?
Floyd: We have started investing in companies that provide solutions to cost per lead. We pay per lead. We do not advertise. They run campaigns for us, and we pay per lead.
Nilesh: Are they small agencies or large business?
Floyd: They are small agencies and startups who have started providing leads.
Nilesh: So we could call them agencies that have the service offering of leads on lead basis?
Floyd: Yes. You see, in Goa, search engine marketing is a tough deal because we have 100-140 hotels here searching for customers. Our cost per keyword, like ‘hotel’ (cost per click) can go up to 150-200 bucks. A cost per lead would go up to 1000-1500. So we have to find other mediums besides Google. The other thing that has worked for us is click to call. So now the calls directly go to the reservation desk which is not being tracked on Google, hence, Google doesn’t know if the lead has converted.
Nilesh: So traffic goes to the website and then there is a click to call. Is that how it works?
Floyd: No, they click it from the ad itself. I click on the ad and it comes to my phone. Now when I dial the number, Google doesn’t know whether that person has answered the call. So in that sense, click to call is really changing our industry, especially in the hospitality industry where 75% of the people want to call the reservation and close because today, people are getting more impatient. They want things to happen fast.
Whether you like it or not, everyone thinks they are the best negotiators so they call the hotel and get a much better deal than what’s listed online.
Nilesh: Could you throw light on what a revenue management agency is and what are they responsible for?
Floyd: Every hotel would have a revenue management agency. A revenue management agency plays with rates. For example, they tell you what rates to be charged on the weekend? At 80% occupancy, I raise my rate. If it’s on 20% occupancy, I lower my rate. Someone plays with numbers, someone is responsible for revenue, someone is responsible for the right price. The revenue management agency normally plays this price game.
But for smaller hotel chains, a 3rd party revenue management agency comes on a retainer basis and percentage basis. For example, I generate ‘n’ amount, I would keep ‘n’ percentage. It’s a safe model for smaller businesses because if they are anyway not generating revenues via OTAs. Now the revenue management is guaranteed, as in, you are paying them only on business.
If the 3rd party revenue management agency is generating 1 lakh of business, you are going to pay them 2%. It’s a safe model for hotels to work with.
Nilesh: So the revenue management agency will have access to your business’ traffic?
Floyd: Yes, it would. The online game is all about the price – who is lower, who is cheaper, who is more popular – they do their research. Smaller hotels may not be able to do research of the brands around them. Revenue management companies have done research on all the hotels, their prices, what has come down, what are the relevant competing brands, etc.
They would give you a price at what to sell – they would play with the price. They would see that you are listed on all the online travel agencies and key sites. And based on how these OTAs generate business for you, they will give a percentage.
Nilesh: So in other words, they are specialists in pricing the product and will see to it that you are listed in all the sites relevant to your business. I think it’s beneficial for smaller hotels who do not have enough staff to do the research, price the product and so on.
Floyd: Yes, smaller hotels who are not able to sell their inventory on a daily basis have 40-50% occupancy. So they have another 50% rooms to play with. The hotel manager would be too busy with everything else but selling.
Nilesh: The awareness bit in your presentation was pretty interesting. You showed a picture and people seemed to have latched onto it, which you weren’t expecting. I would consider that as content that you shared on social media. So from a content standpoint, what would you do for your business? Content has variety, it includes videos, photos, write-ups, etc. What kind of content can hospitality businesses produce, to connect with their potential customers?
Floyd: In the hospitality industry, user-generated content would be much more effective. My content for the hotel would be – people coming into the hotel and checking it, people sharing reviews about the product, people talking about us, sharing a review on trip advisor or any other site.
So how do I get people to talk about me?
What we have done on one of our boats, Deltin Royale is, we have started a photo booth and if they share their photo on social media, they stand a chance to win a free stay at Deltin Suites. So now we have everyone coming there, clicking a photo for free. These are already active customers who are already at the venue and they share their photos on Facebook. On an average, if they have 500 friends, they are getting 10 times the reach out of that one share. This is all free publicity. I think hotels should do this a lot – ask people to check in, talk about them, give them something in return.
User-generated content is something hotels need to push. If you are looking for generic content from the point of view of hotels, then each and every hotel should act as an opinion leader. Talk about 10 best places to eat in, 10 best places to visit. If you are in the luxury segment, talk about 10 most luxurious cars or the 10 most expensive watches in the world. These are the kind of things today that get us significant reach. A generic post about Deltin Suites and what it offers gets us no reach. On the other hand, 10 best luxury hotel suites in India – this content is shared on an affiliate website or an affiliate social media page. And Deltin Suites is one of those hotels on that list.
So we are building a content team who can write content that people would like to actually share and read.
Nilesh: In hospitality business, you would be targeting a certain kind of demographic. From a demographic standpoint, when you do content marketing and content sharing, are you saying that women of a certain age are more likely to buy or males from 30-40?
Floyd: In our business, we have a very male dominanated target segment. 80% males. But they don’t talk about the business much. We have customers who come to game and we have customers who come to experience the product. So a lot of people come to Goa and want to experience a night on the casino. Now they are the ones who will talk about it – the younger generation from 20-30. We influence these people who share things on their social profiles, and also reach out to possible gamers.
So I just look at the age group of 20-35 and I target the male segment because that works for my industry.
Gamers are not the people who would talk about gaming. But I would like to target gamers since we are in the hospitality industry. But gaming as such is banned online. I can’t boost a post that talks about poker. So I have to talk about Goa because that is really aspirational. 25% of leisure trips are dreamed of and based on what their friends have said. If you see your friends photos on Facebook from Vegas or Kuala Lumpur, that’s where you want to go. We are influencing people from 20-35 to share their experience on social media so they influence others.
Nilesh: It appears that businesses should start investing in chat but aren’t actually doing so?
Floyd: The chat person should act like a call center. The chat person should not only chat. He should be receiving inbound, at the same time chatting with people. This should be the case for smaller businesses.