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McLEAN, VIRGINIA

2012HSMAI Chief Digital Officer EXECUTIVE ROUNDTABLE

HSMAI Foundation

Thank you to our SPONSORS

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From the FOUNDATION

Dear Hospitality Professional:

The HSMAI Foundation is very proud to publish this second in a series of “Leadership Insights” gleaned from HSMAI’s Executive Roundtables. This edition includes insights and interviews from the Chief Digital Officer Executive Roundtable held in McLean, Virginia on December 11, 2012. The Foun-dation will continue to publish “Leadership Insights” throughout 2013, including valuable intelligence from HSMAI’s Chief Sales Officer Roundtable, Chief Revenue Management Officer Roundtable, Lodg-ing Chief Marketing Officer Executive Roundtable, and the 2013 Digital Marketing Officer Roundtable.

These roundtables bring together top executives in the industry in a non-competitive environment, allowing industry leaders and decision makers an opportunity for a candid conversation. The goal is to provide a safe, confidential space in which senior executives can talk about their successes and challenges and learn from other thought leaders.

While the “Leadership Insights” series will protect the confidentiality of individual exchanges and floor discussions, much of the information shared in these venues is not confidential and is truly priceless. In the interest of lifting the level of expertise and understanding, and contributing to the continued future success of the industry, the HSMAI Foundation Board believes it is crucial to provide the guidance and analysis brought out in these sessions with hospitality executives. We hope you will find it helpful and welcome your feedback.

Established in 1983 to serve as the research and educational arm of the Hospitality Sales and Marketing Association International, the HSMAI Foundation’s mission is to develop knowledge and insights for the future to fuel sales, inspire marketing and optimize revenue. The Foundation also provides scholarships to students in university-based hospitality programs that focus on the study of sales, marketing, and revenue management.

The HSMAI Chief Digital Officer Executive Roundtable was made possible in 2012 by the support of Google, HotelMe, and VFM Leonardo. We thank them for their support.

Sincerely,

Vail Brown Fran BrasseuxVice President, Global Strategy & Marketing, Executive VP, HSMAI, STR and Executive DirectorChair, HSMAI Foundation HSMAI Foundation

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Chief Digital Officer Executive Roundtable 5

HotelNewsNow article:

Hotels can supplement brand marketing efforts 12

HotelNewsNow article:

Emerging channels spark fear of rising costs 14

Table of CONTENTS

HSMAI BOARD of TRUSTEESCHAIRMAN:Vail BrownVice PresidentSTR

IMMEDIATE PAST CHAIR:Susan ThronsonSenior VP Global MarketingMarriott International, Inc.

CHAIR ELECT:Dorothy DowlingSr Vice President, Marketing & SalesBest Western International

Douglas AbbottDirector Sales Effectiveness, Worldwide SalesIntercontinental Hotels Group

Victoria BortonGeneral Manager/SVPTravel Media GroupUSA Today

Cindy Estis GreenCo-founder & CEOKalibri Labs

John Fareed, CHME ISHCPrincipal of John Fareed Hospitality Consulting

Rick GarlickFounder and Principal ConsultantPopulus Primo Consulting

Christine HightSenior Director, Market ResearchHilton Worldwide

Nick JohnsonPresidentGotham

Gary Leopold, CHME President & CEO ISM

Theresa LewisVice President, Market ResearchWyndham Hotel Group

Brian PayeaHead of Industry RelationsTrip Advisor

Andre RichardsVice President, Brand Strategy & ResearchPortfolio Strategy & ResearchMarriott International, Inc.

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Chief Digital Officer Executive ROUNDTABLE

INTRODUCTIONFaced with a turbulent ecosystem in travel dis-tribution over the last decade, HSMAI recently convened an inaugural Chief Digital Officer (CDO) Roundtable to discuss the challenges and oppor-tunities in this dynamic environment. Some of the finest minds in digital marketing and distribution participated in the daylong event and discussed current trends and the future of digital marketing and distribution for the hospitality industry.

The Roundtable included the heads of digital marketing (CDOs) for a broad and diverse set of attendees, including the heads of digital marketing, distribution and branding from companies such as Best Western International, Destination Hotels and Resorts, Fairmont Raffles International Hotels, G6 Hospitality, Hilton Worldwide, Hyatt Hotels & Resorts, La Quinta Inns and Suites, Marriott International, Outrigger Hotels & Resorts, Starwood Hotels & Resorts, The Leading Hotels of the World, and Wyndham Hotel Group. Cindy Estis Green, Co-founder and CEO of Kalibri Labs and Tim Peter, President of Tim Peter & Associates facilitated the discussion.

The group was also joined for part of the afternoon by representatives from Google, HotelMe and VFM Leonardo, who outlined various changes in con-sumer behavior and provided their insights about the marketplace for 2013 and beyond.

During the course of the day’s discussion, the following key themes emerged:

n Digital is in a period of transitionn Consumers are well along in a move from the

traditional single channel of the 1990s and early 2000s (voice, e-commerce, online travel agency) to a multi-channel experience in their shopping and buying behavior

n Online travel agencies currently vie with hotel suppliers for consumer bookings in the online and mobile space, while hotels still control rates, inventory, content and the in-hotel experience

n This shifting marketplace offers an opportunity to re-engage with customers across segments in a deeper, more meaningful way using social media, mobile, reviews, and rich, immersive experiences

n Determining how to allocate resources across these various channels remains challenging

n Hotels and brands can work together to rein-force their value proposition to consumers and to work more effectively with channel part-ners.

This recap of the Chief Digital Officer Roundtable will convey the discussion of these points in some detail.

by Cindy Estis Green, Co-founder & CEO, Kalibri Labs and Tim Peter, Managing Director, Tim Peter & Associates

The Chief Digital Officer Roundtable participants left to right: Gareth Gaston, Wyndham Hotel Group; Dustin Bomar, Hilton Worldwide; Anne Lawrence, G6 Hospitality; Shafiq Khan, Marriott International, Inc.; Bob Gilbert, HSMAI; Dan Wacksman, Outrigger Hotels & Resorts; David Doucette, Fairmont Raffles Interna-tional Hotels; Bill Bernahl, Hyatt Hotels & Resorts; Phil Koserowski, Leading Hotels of the World; Cindy Estis Green, Co-facilitator, Kalibri Labs; Fran Brasseux, HSMAI; Karmela Gaffney, Best Western International; Ted Schweitzer, La Quinta Inns & Suites; Isaac Gerstenzang, Destination Hotels and Resorts; Tim Peter, Co-facilitator, Tim Peter & Associates; Clay Cowan, Starwood Hotels & Resorts. Participated but missing from photo: Robert Simon, Four Seasons Hotels & Resorts

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A CHANGING MARKETPL ACEFor most of the last decade, marketing and distribution within hotel companies functioned separately. Increasingly, however, those lines have blurred. Few view Google solely as a marketing/media channel or Expedia solely as a booking channel. Instead, CDOs increasingly look at marketing spend, OTA margins, commissions, and technology spend as part of the total cost of distribution.

Changes within the marketplace itself have enabled this view. No longer do CDOs only see the means to gain ad-vantage in this world as divided between direct channels and OTAs. Instead, multiple categories of intermediaries and direct channels have emerged. There are those sites that are transaction-based like the OTAs and the rest that are largely referral sites and often combine some element of social inter-action and search capability. These include:

n “Traditional” OTAs, such as Expedia, Booking.com, Travelocity, and Orbitz;

n Ratings and reviews sites, such as TripAdvi-sor, the review sections of “traditional” OTAs and new vendors such as HotelMe;

n Desktop web, tablet, and mobile sites, with mobile visitors often crossing between web (for shopping) and call centers (to consum-mate bookings);

n And the so-called “meta-mediaries.” This last category includes major players in travel today such as Google, but also those with a growing footprint in the online travel space—such as Facebook, Apple, Microsoft and possibly Amazon— who have the potential to be consumer gatekeepers for travel in the future.

It is these “meta-mediaries” who engender both hope and concern for many CDOs. Named for their similarity to “meta-search” or travel-specific search, there is a mushrooming range of vendors who have realized that consumers needs have not yet been met with respect to travel-oriented search engines. Why else would it take 8-10 website visits on the sales path to a hotel book-ing? Many distribution partners, OTAs and meta-mediaries alike are attempting to make it easier for consumers to customize their search and

make it quicker and more convenient to get to their preferred hotel choice. With Google at the head of the pack, this mar-ket leader remains a valued source of traf-fic and revenue for al-most all hotel brands, but the reality is that the cost of finding customers through all third party channels

continues to rise. Additionally, Google’s recent changes such as HotelFinder and Hotel Price Ads highlight hotels companies’ ongoing struggles in maintaining rate parity and determining which channels are most productive for them. Other recent moves including Facebook’s appointment of a head of travel and Apple’s iTravel patents shed some light on the importance of the travel industry generally to these large media and technology companies, and the hospitality seg-ment specifically, to this growing category of meta-mediaries.

Finally, the rapid adoption of mobile by consum-ers offers another challenge and opportunity to hotel digital marketers. Consumers currently use mobile in a more task-oriented fashion than the desktop web, focused on addressing their imme-diate needs. The proportion of same-day book-ings made via mobile illustrates the immediacy consumers expect of a mobile experience, and increasingly, of their desktop experience. Dave Pavelko of Google noted how sites lose consum-ers for every second those consumers must wait for a search result or page load.

For most of the last decade, marketing and

distribution within hotel companies functioned separately. Increasingly, however, those lines

have blurred.

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However, according to John McAuliffe of VFM Leonardo, consumers view 40% of all virtual tours provided by the company and consume 50% more visual content via mobile than through a traditional desktop web experience. No doubt as both smartphone and tablet usage grow, the range of usage will also get deeper and wider.

This combination of immediacy and immersion provide hotel marketers an excellent opportunity to engage consumers. For instance, hotels still offer the richest experience to consumers for two reasons:

1) Rates and inventory. Intermediaries, whether of the “traditional” sort or emerging “meta-mediary” class cannot offer consumers much value without first receiving rates, inventory and content (text, photos, video) from hotels.

2) On-property experience. Consumers ulti-mately enjoy the deepest, most relevant brand experience after arriving on-property.

As the Roundtable participants noted, hotels and intermediaries can and should contribute to each other’s success in this changing marketplace. To accomplish this, however, will require a variety of approaches.

R ATE AND INVENTORY FOCUSRoundtable participants welcome industry play-ers intent on creating true incremental revenue for the industry. How the various market partici-pants work together presents a range of options. The attendees discussed nuanced approaches for working with distribution partners, under-

standing that opportunities for partnership exist alongside areas of competitive differences.

Distribution and marketing teams must work internally and with external intermediaries/meta-mediaries partners to track the true cost of reservations and work to both lower costs and increase incremental revenues. The cost of developing direct connects and similar technolo-gies drive up the cost of acquisition. However, hotel owners often don’t see the true cost of a reservation due to the longer-term trend in the U.S. towards net rates and away from commis-sions. Owners, in the words of one attendee, don’t “…realize how much they’re paying [for the merchant model business]… because they’re not cutting a check.”

The attendees proposed industry standards for measuring incremental business and to aid with true attribution modeling across multiple con-sumer touchpoints. Additionally, the attendees noted the utility of highlighting best practices for new third party entrants while offering flexibility for each company and partner to pursue their own shared objectives.

The Chief Digital Officers also discussed cost-saving alternatives for connectivity to the growing number of distribution partners. There was discussion around ways to speed time-to-market for new entrants, improve accountability and measurement, lower distribution costs for all parties across the many distribution channels (currently available and emerging) and improve the overall consumer experience.

Finally, most noted that hotel owners would appreciate actions that contribute to identifying, standardizing, and reducing distribution costs. An effort around the outlined approaches would help demonstrate commitment towards hotel ownership goals and provide welcome relief to hotel owners still facing economic uncertainty.

Robert A. Gilbert, CHME, CHBA President and CEO, HSMAI

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R ATINGS, REVIEWS, AND RELEVANT CONTENTAccording to Paul Peddrick of HotelMe, greater than 60% of consumers start their travel search with review sites or OTAs, most of which fea-ture reviews on each property. The Roundtable participants discussed the importance of reviews to aid in the consumers’ purchase decision and debated various strategies for incorporating reviews into the guest shopping experience. While most agreed that reviews play a valuable role in the booking process, some lively discus-sion emerged around the real purpose of reviews on sites. Do hotel companies offer reviews as a competitive differentiator, to keep consumers on-site, or some combination of these objectives?

One attendee noted that his company sees higher conversion rates among guests seeing re-views on his brands’ sites relative to those who leave the site (and often don’t return). Others in attendance shared similar experiences. And still others highlighted increased ADR among hotels experiencing as little as “… a 1-point increase” in hotel ratings.

Participants noted that relevant reviews provide consumers necessary information to guide their purchase decision. Many brands also find that consumers seek additional information beyond the review and that the brand itself contributes that additional information. For instance, The Leading Hotels of the World’s Phil Koserowski notes, “One of the interesting things as [LHW] looks at [reviews] is who’s on the other side of that review… How is the [future] guest going to consume that and surface those reviews that are from “people like me?” There’s a value that we can unlock…” by creating a community among the brand’s guests”.

In the aggregate, hotel companies collect as many or more reviews as the dominant third party play-ers in online reviews. The participants indicated a keen interest to explore opportunities in collecting and sharing reviews with consumers.

CONTENTJohn McAuliffe of VFM Leonardo talked about how effectively “…stories trump [factual feature] content… [and] the future of digital marketing is visual storytelling.” Whether that proves true remains to be seen. However, it’s clear that the emergence of smartphones featuring still and video cameras leads to significant amounts of visual content creation among consumers. In fact, McAuliffe also notes, “…when it comes to content, consumers no longer look at ‘profes-sional vs. amateur.’ The consumer buckets are: It’s interesting or it’s not.”

Consumers seek visual information about guest rooms and suites, lobbies, and pools. If a picture is worth a thousand words, each picture contains as much information for guests as several re-views. Almost no one in the hospitality industry is able to answer a key customer question: “Is this the room I’m getting?” Digital officers seek continued opportunities to help answer that question for consumers.

Despite the growth of visual storytelling, cus-tomers also value service and digital officers also are exploring ways to highlight their service offering, understanding that often it’s what the guest can’t see that matters. One attendee noted how effective Pinterest is at telling a travel story visually well (while also noting that most of those visual stories are created by consumers, not brands). Still, many brand marketers and

Dustin Bomar, Hilton WorldwideDavid Doucette, Fairmont Raffles International HotelsGareth Gaston, Wyndham Hotel Group

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digital teams can learn from popular Pinterest users how to tell their story more effectively online.

Content creation sparked a lively discussion among attendees. In some cases digital officers must work with brand teams to create content and put the right information in front of guests. In others, the digital team takes the lead role. In almost all cases, however, the attendees noted the need to offer customers relevant informa-tion that is high quality and current, presented from the viewpoint of someone similar to the customer.

THE GROWTH OF MOBILE AND ON-PROPERTY DIGITALMost of these attendees, as market leaders, have been “in mobile” for at least 2 years. And from this early experience, they have seen a number of trends. The first is the large number of same-day bookings. As one participant stated, “they’re often sitting in the parking lot.” Another is the rapid growth of the channel, with many in attendance seeing mobile account for 10%-20% of traffic and “… a chunk” of bookings. Google sees similar results. Dave Pavelko of Google stated, “mobile will account for a ‘staggering’ percentage of all searches. This year it’s going to be 25% and next year it will be in the 40% to 50% range… Desktop search vol-umes are flat to low single digit growth. Almost all the growth is from mobile and tablet.”

The last, perhaps counter-intuitive trend is the large number of mobile users who choose to call when ready to book. The reasons vary. For some it’s the requirement to book using a credit card, a much more challenging effort than when using a standard keyboard and larger screen. For oth-ers, it’s the fact that they’re driving towards their destination while researching via mobile and its just easier to click-to-call.

However, most in attendance agreed that mobile provides the industry a reset and that we are at an important inflection point. While many OTAs have invested heavily in the mobile space, and the new global media/tech players like Apple

and Google, with their device dominance, and Facebook with its mobile focus, are intent on gaining the upper hand, no one player yet owns the mobile travel shopper in a meaningful way. And many are working to take advantage of that fact. For instance, David Doucette of Fairmont Hotels and Resorts sees “…mobile as an exten-sion of in-room. We’re looking at as many ways of creating content regardless of device or situa-tion. We look at the [company’s mobile-delivered magazine] as a way of fitting the lifestyle.” He also notes that the company incorporates mobile into the on-property experience, providing both relevant and unobtrusive merchandising of its on-property offerings. Other attendees noted similar efforts and the ability of mobile to enrich the guest experience on-property. Given the large numbers of travelers using their mobile devices and tablets on-property, digital is begin-ning to make the transition from a solely pre-stay activity to surrounding the guest throughout

the process.

Finally, despite many moving resources away from call centers, the growth of mobile highlights the continuing importance of this channel. The call center expe-

rience offers hotels another excellent opportunity to differentiate themselves and to begin develop-ing a deeper, customer-centric and importantly, direct relationship with the guest. The attendees seek to engage customers through this channel in a cost-effective manner, while also providing excellent customer service and to take advantage of the rich branding opportunities.

RESOURCE ALLOCATIONOf course, none of these digital leaders have the unlimited resources to do all the things they want to do. In fact, many commented on the increasing need to track the benefit of each activity more fully to ensure they’re deploying the right resources against the most effective efforts. And all continue to face “tight budgets” due to ongoing economic uncertainty, despite the variation in what each might consider “tight.” In other words, no matter how large or small the

Most in attendance agreed that mobile

provides the industry a reset and that we are at an important

inflection point.

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attendee’s company, all felt they could deliver greater value to their organization with more resources deployed against company-owned digital channels.

Two topics discussed to address these chal-lenges are (1) more sophisticated attribution models to determine what stops along the sales path actually trigger a booking and (2) methods to increase direct business at the lowest cost knowing that many of the new meta-mediaries will send business “direct” to a hotel’s book-ing engine, but the tollbooth-like costs will be media-based as consumers pass through these growing number of referral sites on their way to the hotel’s booking engine.

The first speaks to ensuring the teams align resources to the channels that have the great-est influence on the consumer’s ultimate booking choice. The second ensures that digital efforts drive the greatest contribution to profit from a blend of a hotel’s many channel sources, and that long-term customer value is taken into account. As noted previously, these leaders welcome true incremental business, but seek to spend less time and money enabling others to compete for the same customer in the marketplace.

CONCLUSIONChief digital officers at hotel companies of all sizes face myriad challenges in delivering exceptional guest experiences. Increased com-petition and support from intermediaries and meta-mediaries, the growth of social media influence in the guest purchase decision, and the rise of mobile all contribute to a dynamic and continually evolving marketplace. However, from each of these challenges emerge opportunities. Whether by focusing on efficient access to rates and inventory, offering improved guests insights, information and other relevant content about properties and rooms, or using mobile to engage with customers at every stage of their journey, this changing landscape allows digital marketing and distribution teams to connect with custom-ers and illustrate their brand’s value. The Chief Digital Officer Roundtable shared best practices and potential opportunities to reduce costs and deepen guest relationships in the coming years.

and HSMAI members for their support of the HSMAI Foundation.

THANK YOU to HSMAI CHAPTERSn Arizona

n Dallas

n New York

n Philadelphia

n Mid-South

n Washington DC

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All photos David Hathcox Photography

leadership insights 12 HSMAI Foundation

By Jason Q. FreedNews Editor-AmericasHotelNewsNow.com

WASHINGTON, D.C.—THE IMPORTANCE OF PAID DIGITAL MARKETING EFFORTS—SUCH AS SEARCH-ENGINE OPTIMIZATION, SEARCH-ENGINE MARKETING, EMAIL AND DIGITAL ADVERTISING—IS INCREASING RAPIDLY AS MORE AND MORE GUESTS SHOP FOR AND BOOK HOTEL ROOMS ONLINE. BUT AS THEIR SUCCESS GROWS, SO DO THEIR COSTS.

Among other challenges highlighted during a private roundtable prior to HSMAI’s inaugural Chief Digital Officer Executive Roundtable was the implementation of such efforts. Brand representatives and consultants alike agreed the brand should lead the effort with com-plementing support from the local and property level.

Karmela Gaffney, director of e-com-merce at Best Western International

“For this year especially, we have more of a focus on (search engine optimization), obviously with the cost-per-click increasing significantly in the double digits as well as the proliferation of all the (online travel agencies) bidding on even branded terms. …

“From an email and digital advertising side, display is huge to us because you need that brand consideration and sort of awareness before you can convert to the lower funnel like paid search would be. And email of course is very important, especially for our rewards program because that is the bulk of our business as far as revenue. And keeping them engaged with the brand, whether it’s special offers or packages or promotions or seasonal promotions, is a very effective way and a very smart way of doing business because the return on investment is significant.”

Cindy Estis Green CEO of Kalibri Labs

“A big decision a lot of hotel owners are making is whether they want to create their own website and their own online marketing function. And some (owners) are actually hiring a digital marketing manager, which is kind of an extension of their sales and marketing effort locally, because some have opportunities for a lot of local campaigns and local business that would never be able to be done in a central way. And they feel they have enough business that they can do that.

“The trick is always to coordinate and not replace what the brand is doing but provide supplementary support.”

Hotels can supplement brand marketing efforts

Story Highlights

“Display is huge to us because you need that brand consideration and sort of awareness before you can convert to the lower funnel,” said Karmela Gaffney of Best Western.

“Some hotels are actually hiring a digital marketing manager,” said Cindy Estis Green of Kalibri Labs.

“One place where I think the brands are doing a real good job is focusing on the email programs for the hotels them-selves,” said Tim Peter of Tim Peter & Associates.

Editor’s note: HotelNewsNow.com was invited to Washington, D.C., to conduct a private roundtable prior to HSMAI’s inaugural Chief Digital Officer Executive Roundtable. Present were six digital marketing thought leaders—four brand representatives and two consultants. During the 45-minute discussion, top executives shared their best practices, challenges and perceived opportunities in the digital marketing space.

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By Jason Q. FreedNews Editor-AmericasHotelNewsNow.com

Tim Peter, managing director at Tim Peter & Associates

“I’m sure there are brands where it’s fairly controlled and fairly structured and there is a lot of support from the brand. And there may be brands where things are more open and left to the needs of the hotel themselves—so it does vary widely.

“If you think about the number of franchised properties in this country alone, there’s pretty much a situation for everybody there. One place where I think the brands are doing a real good job is focusing on the email programs for the hotels themselves, largely because of things like data security issues and the like and making sure that when someone opts out at the specific hotel level, it’s actually opted out across the brand to protect the brand from that perspective. So that matters a lot. …

“I have been helping a lot of folks on how they can improve (average daily rate) through email. You see email consistently as a channel where we offer lots of dis-counts, and then hotels are curious why their ADR is so low from email. Well if that’s all you’re offering is a discounted rate, of course you’re going to get a lower ADR.”

Shafiq Khan, senior VP of e-commerce for Marriott International

“We’ve been in this game long enough now that our owners understand it, our franchisees understand it and we understand it. So now, by and large, we do it centrally because it’s the most efficient way to do it. Otherwise you would have one hotel competing with another hotel in the same market, and it’s wasted resources.

“So, by and large on the paid side, there’s no question we are completely centrally controlled. At the same time on the search engine optimization, we actually provide a service to a lot of our hotels, a very large number, we do it for them, and then if anyone wants to work with their own vendor, they can from a SEO perspective.”

Gareth Gaston, Sevior VP of Global eCommerce at Wyndham Hotel Group

“Where we’re at on that journey is a balance really between trying to do as much as we can centrally but also having the ability for the hotels that want to do something on their own to do something. … There’s a cost of acquiring a customer and there’s no such thing as a free lunch anymore.

“So where the industry has gone, and in some cases is in the process of going, is turning that into a distribution model, and we are certainly in the early stages of that path to deploy a pay-for-performance program where we do as much as we can for all the hotels in order to fully maximize and buy all the demand that we can and then still offer the opportunity to top that up even further because there will always be more they can do.

“The key is when there is still so much demand to buy, why compete against each other for the same demand? Let’s try to figure out how to complement. It’s easier said than done.”

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Reprinted from HotelNewsNow.com

By Jason Q. FreedNews Editor-AmericasHotelNewsNow.com

WASHINGTON, D.C.—WITH TRAVEL BEING SUCH A BIG MARKET ON THE WEB, IT’S NO WONDER LARGE INTERNET BUSINESSES ARE SLOWLY BUT SURELY CREEPING INTO THE HOTEL RESEARCH AND BOOKINGS GAME. GOOGLE, FOR INSTANCE, HAS DIPPED ITS TOES IN THE WATER AND IS CHANGING THE WAY HO-TELIERS LOOK AT DEMAND GENERATORS. WITH FACEBOOK, AMAZON AND APPLE PERHAPS NOT FAR BEHIND, HOTELIERS REALIZE THE POTENTIAL TO PARTNER WITH THESE ORGANIZATIONS BUT FEAR THE ESCALATING COSTS INVOLVED.

So far, much about how some of these large-scale emerging demand drivers will operate is unknown, so hoteliers—particularly brands watching out for their own channel—tend to fear the worst.

Cindy Estis Green CEO of Kalibri Labs

“Google, Apple and Facebook—and anyone else who has a presence on the Internet—is going to be getting into travel in a big way. They’ll do it in different ways, but everyone is trying to build a search engine now. ….

“At one time, everyone came in through Google. That will be very much diversified now because people are going to be coming in through many social sites, they’ll be coming in through the con-sumer review sites, there’ll be points of entry in many other places. And it’s always the hotel brand trying to get those travelers to come over to their website, ultimately directly. There will be lots of stops along the way. Google will just be one more vying for the rights to direct that traffic.

“And I have to point out one really, really crucial factor and that’s no matter how anybody decides to play with those guys: You can’t have metasearch without rates and inventory. And, therefore, we still control rates and inventory, or hopefully we do. And the way we, from a hotelier’s point of view, control that inventory will determine how we operate going forward.”

Emerging channels spark fear of rising costs

Story Highlights“Google, Apple and Facebook—and anyone else who has a presence on the Internet—is going to be getting into travel in a big way,” said Cindy Estis Green of Kalibri Labs.

“I am surprised that Google and Face-book and Apple haven’t played yet,” said Shafiq Khan of Marriott International.

“To me, crossing the line would be taking ownership of the customer experience completely,” said Gareth Gaston of Wynd-ham Hotel Group.

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By Jason Q. FreedNews Editor-AmericasHotelNewsNow.com

Tim Peter, managing director at Tim Peter & Associates

“Google will always be there. Apple is increasingly becoming a big player in that re-gard as well. As hotel companies and travel companies as we have discussions with Google, as we have discussions with Facebook, as we have discussions with Apple, as we have discussions with other players down the road, it’s going to be taking a more nuanced approach to say, ‘Here are the areas where we need concessions and here are the areas where we are able to make concessions to come up with a work-ing partnership.’ Because fundamentally, Google with the scale they have, Facebook with the scale that they are likely to have, Apple with the scale that they are likely to have, we are going to have to play with them.”

Shafiq Khan, senior VP of e-commerce for Marriott International

“I am surprised that Google and Facebook and Apple haven’t played yet. I think that is the single biggest challenge for marketers in this industry. I do think we need to recognize that as an industry.”

Karmela Gaffney, director of e-commerce at Best Western International

“I think the biggest challenge I have with our hotels is that many of our hoteliers feel Google is a public service to our customers, and we all know it’s not. And obviously it’s a business, and it’s an effectively run business. I think through some of the changes—and we were talking about the change in algorithm—can change everything you’re doing, even at the local level with Google Places and all of a sud-den your call center numbers are going through the roof because the phone number is wrong.

“And Hotel Finder and (Hotel Price Ads) are a huge impact for our brand because it really brought home the challenges we have with rate parity. We don’t have a brand dealing with certain (online travel agencies) and our hotels are not prohibited from having extranets with OTAs. So when you start looking and seeing at how ef-fectively we are undercutting the brand without understanding what they’re doing. It’s changing, and I think we need to be aware and we need to be thinking ahead to not allow these things to blind side us.”

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Reprinted from HotelNewsNow.com

Gareth Gaston, Sevior VP of Global eCommerce at Wyndham Hotel Group

“All arrows of the Internet are pointing at the hotel world. And so I think the two considerations that companies like Google and TripAdvisor have is how much margin can I take out of there in order for me to elevate my quarterly results.

“And then the second thing which I am always looking at, especially because we have a very close relationship with TripAdvisor, to me, crossing the line would be taking ownership of the customer experience completely. If they were to become an OTA, you would have to look at them entirely dif-ferently.

“Now, thankfully, both of them are saying, ‘We’re lead generators.’ But both of them continue to en-croach on that experience a little further every time. And so along that continuum, the hope is they don’t cross that line because that does change the dynamic of the relationship entirely. And I think it would potentially be detrimental to them as well.”

Ted Schweitzer, senior VP of ecommerce at La Quinta Inns & Suites

“You have to work with these folks in some capacity, right? You can decide to what level you want to. But what we as hoteliers can’t really do, besides from the experience on site and on property, is control that consumer behavior.

“So I need to be on pretty much every shelf that I can conceivably be on as long as I get the right terms so I can reach those consumers that I may not be able to. I have a healthy marketing budget, but it’s never enough. I am one of those who can attest to never having enough money to spend. But I certainly can’t compete with those folks who have hundreds of millions of dollars and are spending it to acquire those customers. So if I don’t get on some of those shelves, I’m doing my hotels a disservice by not using and not being able to be on those sites.”

The CHDM certification is focused toward those who want to maximize online revenue through lead generation, customer engagement and loyalty, online brand awareness and product exposure, as well as those who desire to become more proficient in the myriad key digital areas as the importance of this field is rapidly growing in the hospitality industry. The program is designed for hospitality sales and marketing and revenue management professionals who are interested in expanding their current role; executives seeking to understand digital marketing; and digital marketers looking to understand the hospitality industry. Get more information and download an application at www.hsmaicertifications.org.

HSMAI CHDM Program

HSMAI Foundation

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2012 HSMAIChief Digital Officer EXECUTIVE ROUNDTABLE