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Revenue Management Webinar Series
What is the Future of Distribution?November 29, 2011
This webinar series is brought to you by This webinar series is brought to you by HSMAI University, HotelNewsNow, and STR, and HSMAI University, HotelNewsNow, and STR, and
sponsored by IDeaS Revenue Solutionssponsored by IDeaS Revenue Solutions
Overview of Format and TopicOverview of Format and Topic
Kathy Tindell
Program Director
HSMAI University
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POLL QUESTION #1POLL QUESTION #1
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this webinar at your location today?
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We are very grateful to our sponsor for this
Revenue Management Webinar Series:
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Panel Moderator:
Jeff Higley, VP,
Digital Media &
Communications
HotelNewsNow/
STR STR/STR Global
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TodayToday’’s Presenters: s Presenters: Panel Moderator: Jeff Higley, VP, Digital Media and Communications, HotelNewsNow.com/STR/STR Global
Panelists:
Jan D. Freitag
Senior Vice President,
Global DevelopmentSmith Travel Research
Scott van Hartesvelt
President, Gcommerce
Solutions
Amy SeversonDirector, Industry
Relations
Expedia, Inc.
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Michelle Wohl
VP, Marketing Revinate
2011 Smith Travel Research, Inc. 7
USLodging Overview
Jan D. Freitag
Senior Vice President
2011 Smith Travel Research, Inc. 8
Agenda
• Total US • Major Markets• US Forecast
Smith Travel Research, Inc. and/or STR Global, Ltd. (collectively for these purposes, “STR”) are the e xclusive owners of all rights in these Industry Presentations and t heir content. Reproduction of all or a portion of th ese presentations for any purpose without prior approval of STR is st rictly prohibited.
2011 Smith Travel Research, Inc. 9
www.hotelnewsnow.com
Click on “Industry Presentations”
Smith Travel Research, Inc. and/or STR Global, Ltd. (collectively for these purposes, “STR”) are the exclusive owners of all rights in these Industry Pr esentations and their content. Reproduction of all or a portion of these presentations for any purpose wi thout prior approval of STR is strictly prohibited.
2011 Smith Travel Research, Inc. 10
Happy Thanksgiving!
*Total US, ADR & OCC % Change, YTD and Weekly through 11/19
2011 Smith Travel Research, Inc. 11
Total US - Key StatisticsYTD October 2011
% Change• Hotels 52k• Room Supply 1.4 bn 0.7%• Room Demand 908 mm 5.1%• Occupancy 61.8% 4.4%• A.D.R. $102 3.6%• RevPAR $63 8.2%• Room Revenue $92 bn 8.9%
2011 Smith Travel Research, Inc. 12
On An Annualized Basis: Most Rooms Sold - EVER
*Number of Rooms Sold, 12 MMA, 1/89 – 10/11
2011 Smith Travel Research, Inc. 13
ADR Grows Slower Than In 07- 09
*Total US, ADR $, 12 MMA, 1/07 – 10/11
2011 Smith Travel Research, Inc. 14
Group Rates (Will) Hinder Faster Rate Growth
*Transient vs Group ADR$, YTD October, 2007 - 2011NOTE: Data is for upper tier hotels only (luxury chains, upper upscale chains, and upper tier independent hotels).
2011 Smith Travel Research, Inc. 15
Major Markets
2011 Smith Travel Research, Inc. 16
Small Supply Growth (Except NYC)
* Top Markets, Supply % Change, YTD through 10/11
2011 Smith Travel Research, Inc. 17
Strong Demand Growth Across The Board
* Top Markets, Demand % Change, YTD through 10/11
2011 Smith Travel Research, Inc. 18
Absolute Occupancy: Large Markets Win
* Top Markets, OCC %, YTD through 10/11
2011 Smith Travel Research, Inc. 19
Healthy ADR % Growth Across The Large Markets
* Top Markets, ADR % Change, YTD through 10/11
2011 Smith Travel Research, Inc. 20
Top 25 ADR Premium: $33
* Top Markets, ADR $, YTD through 10/11
2011 Smith Travel Research, Inc. 21
US Forecast
2011 Smith Travel Research, Inc. 22
Total United StatesKey Performance Indicator Outlook (% change vs. Pri or Year)2011 - 2012
2011Forecast
2012Forecast
Supply 0.7% 0.9%
Demand 4.7% 1.1%
Occupancy 4.0% 0.2%
ADR 3.6% 3.7%
RevPAR 7.7% 3.9%
2011 Smith Travel Research, Inc. 23
Hotel Industry Forecasts – STR Revisions
2012
Demand ADR
Jan 11 2.2 6.8
Jun 11 2.5 6.0
Aug 11 2.5 4.9
Nov 11 1.1 3.7
2011 Smith Travel Research, Inc. 24
Total United StatesChain Scale Key Performance Indicator Outlook
2012F by Chain Scale
Chain Scale
Occupancy
(% chg)
ADR
(% chg)RevPAR (%chg)
Luxury 1.3% 5.5% 6.9%
Upper Upscale -0.6% 4.0% 3.4%
Upscale 1.4% 4.2% 5.7%
Upper Midscale -0.2% 3.8% 3.6%
Midscale 1.0% 0.8% 1.8%
Economy 0.6% 2.3% 3.0%
Independent -0.6% 3.0% 2.4%
Total United States 0.2% 3.7% 3.9%
2011 Smith Travel Research, Inc. 25
2012 Year End RevPAR Forecast(as of 3rd QTR 2011 forecast)
-5% to 0% 0% to 5% 5% to 10% 10% to 15%
Nashville St Louis
Los Angeles-Long Beach Miami-Hialeah
Philadelphia Detroit
Anaheim-Santa Ana Boston
Orlando Minneapolis-St Paul
Washington DC New Orleans
Atlanta San Diego
Norfolk-Virginia Beach Oahu Island
Tampa-St Petersburg
Seattle
Phoenix
Houston
Dallas
San Francisco-San Mateo
Chicago
New York
Denver
2011 Smith Travel Research, Inc. 26
Top 10 US Market PerformanceForecasted Occupancy/ADR % Change2012
Occ. % change
AD
R %
change
2011 Smith Travel Research, Inc. 27
www.hotelnewsnow.com
Click on “Industry Presentations”
Smith Travel Research, Inc. and/or STR Global, Ltd. (collectively for these purposes, “STR”) are the exclusive owners of all rights in these Industry Pr esentations and their content. Reproduction of all or a portion of these presentations for any purpose wi thout prior approval of STR is strictly prohibited.
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Amy Severson
Director, Industry Relations
Expedia, Inc.
Expedia Partner Services Group | 29
Stay
Online Customer Purchase FunnelOnline Customer Purchase Funnel
Collect/Compare information
and rates
Book
Customer reviews / UGC
Initial Search -
Coordinate family/friends
© Expedia, Inc. All rights reserved. Confidential and proprietary. Expedia Partner Services Group | 30
Potential Transactions
BUSINESSRETAIL
PACKAGEOPAQUE
PRIVATESALE
LUXURY PREMIUM
DEMAND
PR
ICE
DEMAND
PR
ICE
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Why Mobile?January February March
April May June
July August September
October10
Novembe
r11
December12
2010
1 2 3
4 5 6
7 8 9
Smartphone Sales > PC Sales
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36 EI Travel Apps
downloaded every minute
65% monthly growth in
bookings
40% book on weekend
65% bookings are for same
or next day
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Social Media> 800 million active users globally
> 75% of users outside of US
Average user has 130 friends
25% of all Internet page views in US
38% of all social media traffic in US
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Comments
• Reduced from 13 required fields to 8 required fields
• Enabled UGC photo collection
• Repositioned reviews from “reviews written by” to “reviews written for”
• Content experiments to collect pros and cons and location tips
From this…
… to this
Comments
• Reduced from 13 required fields to 8 required fields
• Enabled UGC photo collection
• Repositioned reviews from “reviews written by” to “reviews written for”
• Content experiments to collect pros and cons and location tips
From this…
… to this
New partner Opportunities
to touch 1 million+
Expedia fans
Investment in
Facebook Sponsored Stories & promoted Tweets on
TwitterConnect with fans/followers
via virtual travel events
Product IntegrationCommunity
ManagementMarketing
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Source: PhoCusWright’s Global Online Travel Overview Second Edition
21%YE 2012
36%YE 2012
39%YE 2012
2010 valued at $256B30% of the total travel market.
2012 expected
valuation: $313B33% of the total travel market.
Global Online Travel
Marketplace
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As of October 2011
Expedia, Inc.’s Global Reach 100+ localized branded sites
60+ countries
Source MarketsTravellers to the US
© Expedia, Inc. All rights reserved. Confidential and proprietary. Expedia Partner Services Group | 41
US
LatAm
CANAPAC
EMEA
Leng
th o
f Sta
yBooking Window
(Bubble size indicates ADR)*Bookings made 1/2011 – 9/2011, Expedia, Inc. bookings, International is all bookings made outside of the US
TipsTips
Expedia Partner Services Group | 42
Consumers are shopping everywhere, is your hotel everywhere?
Ensure your hotel has a mobile distribution
Customer engagement through Social Media
Implement an International Strategy
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Michelle Wohl
VP, Marketing Revinate
Introduction
• What does ORM have to do with distribution?
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Why Social is Key to Distribution
• Goal of engaging people where they naturally
hang out online
• Acquisition costs are low
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The Rise of Social
• Direct Online > Reviews and Engagement
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The Rise of Social
• OTAs > Reviews, Engagement
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The Rise of Social
• Social Buying/Flash Sales > Social Sharing
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The Rise of Mobile
• Mobile
– Hand-held computer with perk of LBS
– Leading to shorter booking windows
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Goal of Distribution
• Lowest cost of acquisition
• Protect price
• Reach your targeted audience
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Scott van Hartesvelt
President,
Gcommerce Solutions
Primary Points of Emphasis
• Distribution today – Structuring for the future
• Fluidity is key
• The customer is still the king in the distribution landscape
• ZMOT and Distribution – The implications
• Mobile will continue to matter more and more
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Distribution Today
• Pricing and Distribution Strategies have Matured and the basics
have been covered
– Price parity practiced
– Hotel/resort websites selling live, consistent inventory
– OTA distribution established
– Interfaces between key systems in place
– Review sites have high number of reviews for most hotels
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Zero Moment of Truth• Jim Lecinski from Google has coined new marketing theory called
ZMOT
• Essentially say that there is a new paradigm in consumer behavior.
– Stimulus
– ZMOT (new)
– Shelf
– Experience
• ZMOT covers hundreds of different actions (searching, comparison
shopping, reading reviews etc)
• 99% of travelers surveyed reported being influenced by ZMOT
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ZMOT Continued
• Average consumer used 10.4 sources of info in 2011, up from 5.3 in
2010
• 84% of shoppers use online channels to help them decide on a
purchase (ZMOT)
• Find your zero moments, strategize and optimize for each of them.
Be deliberate but fast
• Every Source of Info, Every “moment” can influence your target
consumer’s decision. The best of the best will optimize them all.
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Distribution Mindset
• In the future, we will move from “channels” to “ecosystem
• Supplier focus will be on participating in the conversation, or the
ZMOT, instead of “directing” customers to narrow channels
• HTML5 and complex booking engines will change calls to action
• The billboard effect will become more pronounced
• Hotel Booking Engines need to progress their technology and play a
huge role in the future
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Mobile
• 79% of consumers say they use a smart phone to help when
shopping
• 51% of business travelers use mobile devices to get travel
information, more than double the rate of two years ago.
• Social gets all the attention, but mobile is a major trend that must
be embraced by suppliers
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#1 Key to Future Distribution
• Customer Experience – Reviews
• Reviews are not all bad. According to Google the average product
score worldwide is 4.3 out of 5
• Passionate customers leave reviews – 80% of reviews are written
by the top 20% of a business’s customers
• Don’t be afraid of bad reviews unless you are running a bad
business
• 70% of consumers say they look at reviews before making a
purchase
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Attribution• In the future, attribution will become far more sophisticated
• The average customer will look at over 10.2 information sources in
the travel vertical before making a reservation, often with multiple
visits to the same site. What marketing channel gets credit?
• Current attribution models only credit the final site where the sale
is made
• Future tracking models will allow for far more sophisticated
tracking…be ready. Think Group Sales…we know meeting planners
are researching properties online, but sales are made in person by a
sales manager
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Questions? Questions? Panel Moderator: Jeff Higley, VP, Digital Media and Communications, HotelNewsNow.com/STR/STR Global
Panelists:
Jan D. Freitag
Senior Vice President,
Global DevelopmentSmith Travel Research
Scott van Hartesvelt
President, Gcommerce
Solutions
Amy SeversonDirector, Industry
Relations
Expedia, Inc.
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Michelle Wohl
VP, Marketing Revinate
Upcoming Webinars:
The HSMAI University 10-part 2011 Revenue Management Series –
Next Session:
•What Will the Revenue Manager of the Future Look Li ke? – December 20, 2011•Watch for our 2012 Revenue Management Series – start ing February!
•December 8 – Taming the Email Beast, with Randy Dean•December 13 – Digital Marketing webinar with expert panel
To register for these and more, please go to
www.hsmaiuniversity.org.
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TodayToday’’s webinar is copyright 2011 by the Hospitality Sales & Marketings webinar is copyright 2011 by the Hospitality Sales & Marketing Association International with All Association International with All Rights Reserved.Rights Reserved.
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