Given the fast altering dynamics of the digital space and rapidly transforming consumer behaviour, hotels will need a sharper focus on strengthening digital infrastructure and look at enhanced investments in digital PR, argues Arif Patel. In an exhaustive interview, he reflects on OTAs, innovative promotional strategies and relevance of loyalty programs in the current milieu. Excerpts:
The discussion on OTAs as a platform for hotel booking is not a new one. How has it been for your group off late? How critical are they for your overall reach out? What percentage of AccorHotels booking come from OTAs?
Online travel agencies (OTAs) are great for customer acquisition. A potential guest in Nagpur who wants to stay at a Novotel hotel in Kolkata probably would have never heard of Novotel Kolkata Hotel and Residences if OTAs did not exist. They are providing us with a first-time client, at a cost which is cheaper than us creating a sales engine in Nagpur. Basically, when the guest visits our hotel, we need to ensure that they feel welcome. We need to also identify him or her, and invite them, whenever they visit the AccorHotels network, so next time around they don’t have to go back to an OTA. We call this the retention program.
We are doing it in a very transparent manner, even vis-a-vis OTAs. They know we are doing it, and they are fine with it. Because most of their volume is first-time customers, which means we don’t have common interests, but we have common ambition, which is to develop the travel and tourism world. My thoughts may vary from that of a small independent hotel owner and operator, because if I have a retention program, that means I want that customer to benefit from other brands, and the other 3,999 hotels (besides the one he stayed at), which is my strength. If you are an independent hotel, and you only own one hotel, and every time you are going to have to pay an OTA, because you don’t have something else to offer.
In the Indian context, brands and OTAs need to work together to change people’s buying behaviour. In India the net ADR driven by OTAs is still more profitable than traditional static rate business. Hotels will have to work and improve their share of voice through the digital front. They need to be more agile. The key dots such as digital infrastructure and social media are becoming increasingly relevant and therefore, investment in digital PR along with engagement and display campaigns is very crucial.
Some industry stakeholders believe that hotels need to take a more concerted approach to be able to sell better. It could be lesioning with state tourism boards and promoting the larger destination and benefitting from increased footfalls, something that has already been initiated in Goa. Do you think hotels will have to constantly innovate to reach out, especially on the international inbound side?
Innovation is the cornerstone of success for any industry and hotels are no different. We are operating in a highly competitive business environment, with technology disruptions and changing guest behaviours creating newer and more complicated challenges for industry players. Of course it is important to promote tourism, especially inbound travel, to ensure steady inflow of guests to help sustain and grow businesses. Hotels also need to innovate and reinvent on a daily basis in order to stay relevant and distinguish themselves amidst intense competition.
Take Goa for example. AccorHotels is the largest hotel operator in the beach state with three properties. However, the competition in Goa is intense with plenty of standalone properties as well as branded hotels to choose from. So how do we stay relevant and differentiate ourselves? The key lies in innovation. For the launch of India’s first ibis Styles hotel in Goa, we not only invested in content that markets the property but also content that evokes and appeals to the audience the hotel targets.
Through the creative use of popular channels, including social media, we were able to reach as many as 20 million potential guests through Facebook alone. Promotional videos we created, including “Fake a Vacation to Goa” and “Things parents NEVER say about Goa”, went viral as they attracted as many as 5.5 million views and over 80,000 shares. The key to their success was not in promoting the hotel or the brand alone but the destination itself, thus boosting inbound tourism and helping increase footfalls and recall over a period of time.
With so much on offer– discounts and rates that are tough to beat, retention techniques like cashbacks and free stays– how much does a loyalty program really mean for the discerning consumer? How important is it right now for hotels to concentrate on?
For OTAS and even e-commerce companies in general, all players essentially sell the same stuff from the same merchants to the same customers at the same prices. With no difference in merchandise, they often resort to price variation to attract customers. But in my opinion, burning cash through discounts is not a sustainable model.
While it may help with first time customer acquisition, a very small percentage customers acquired through discounts stick. AccorHotels has taken a tough stand on pricing parity as we promise “best rate guarantee” for our guests. If you book an AccorHotels property online on any AccorHotels Internet site and find an equivalent offer within 24 hours on another website for the same hotel at a lower price, we will honour the lower rate and give you a further reduction of 10%. This goes on to demonstrate our commitment to price parity and how it is a non-negotiable point for us.
While consumer behaviour and their booking patterns continue to change, evolving with time, the importance of building loyalty programs that are relevant to guests is crucial to hospitality industry, given that loyalty and reward programs have the potential to account for more than half of the hotel’s total reservations. With changing consumer behaviour and introduction of newer channels, loyalty programs can be a key differentiation to building customer engagement for the hotels.
Consumers are developing a vigorous appetite for mobile-based platforms. You have over a million downloads on Google Play Store. How much are you going to focus on mobile-based platforms in the coming years? It is a priority?
Technology is not merely concerned with adding ease to the guest experience, rather we take it a step ahead by aiming to provide a perfect amalgamation of technology along with the warmth of personal touch at AccorHotels.
We are investing $225 million into a digital plan that will not only enhance every part of the customer’s journey but also improve the service experience of the staff, owners, franchisees and partners. As a part of this plan, we recently launched our new digital strategy – ‘Leading Digital Hospitality’ with the key objectives to rethink and incorporate digital technology throughout the customer journey. The plan is based on two essential pillars – IT infrastructure and data management.
Mobile is an important ingredient of this strategy and we have taken bold steps in this direction with our One App. Over two billion people currently have a smart phone and as many as 65 per cent of travel searches are made through them while almost 42 percent of travellers around the world use a smartphone to plan or book a trip, thus making smart phones the preferred device for finding, preparing and organising a trip. In the light of this growing trend, we recently launched a new version of our mobile application. As part of the rollout, various brand applications are now united in this single app which features all of the Group’s hotels. The AccorHotels app aims to be among the top three travel apps offering an enriched experience at every stage of the customer journey, starting from the pre-stay right up to the post-stay stage.
In the recent years, we have noticed that customers are more interested in trip inspiration tools than they used to be because the tools are now, finally, at the right place at the optimal time: in their hand. My Web Valet app is a great example of how AccorHotels is leveraging technology to offer more personalised services and enable a seamless customer journey, helping guests plan and experience their trips better. The app is currently being rolled out at select properties around the world, including India at Pullman New Delhi Aerocity.
In simple words, the app is an in-hotel digital solution that provides guests with faster and easier access to hotel services and facilities at every touch point. Not only does the platform offer access to essential services and hotel teams such as housekeeping, in-room dining and real-time view of due bills, My Web Valet helps guests discover their surroundings, gaining insights on local attractions and also learning crucial information.
