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Discover how to navigate the evolving world of hospitality with our free course "Use OTAs to get more direct bookings", now available on our website.
Below is the full transcription, but we recommend watching the video for a more engaging experience. This course equips hoteliers with the tools to bridge traditional customer relationship management and the digital landscape.
You'll explore the rise of OTAs, master KPIs, and develop effective sales strategies to thrive in today's dynamic industry.
Watch now and stay ahead in the ever-changing hospitality sector!
Below is the full transcription, but we recommend watching the video for a more engaging experience. This course equips hoteliers with the tools to bridge traditional customer relationship management and the digital landscape.
You'll explore the rise of OTAs, master KPIs, and develop effective sales strategies to thrive in today's dynamic industry.
Watch now and stay ahead in the ever-changing hospitality sector!
Module 1: The origins of OTA reliance
Hey folks, welcome to our course about OTAs, or online travel agencies. If you know who I'm talking about, there's every chance you've expressed frustration with their kind before in forums or comment sections. They charge excessively and don't care about the well-being of your business. Well, guys, let me be Doctor Phil for a second and say, if one party in a relationship is being treated unfairly, then it is a little bit on them to stand up and take responsibility. You've got to ask, what have I done to get to this point? Because you're the only one you can control.
OTAs didn’t happen overnight. They had a gradual rise to industry dominance, aided in no small part by hoteliers who were willing to have those websites of which I speak do the hard work for them. Don't worry, this will not be a finger-pointing session, more like a history lesson. Let’s have a look at how we got to where we are today.
You probably know the saying: "Insanity is doing the same thing over and over and expecting a different result." A quote often attributed to Albert Einstein—incorrect though probably. I think, no, I'm uncertain that it was from him at all. But it's commonly put down to him. And you know what? It's smart, so why not? It's common sense, and it is true, you know. Insanity is doing the same thing again and again, expecting a different result.
One thing is certain, though: what's important is to learn from past mistakes, to avoid reproducing them at all costs. Alright, that’s the conclusion we might draw from what Albert Einstein maybe said, probably didn’t say. Alright. Learn from the past and not repeat it. So let’s take a look at what we’re going to see in this video.
First point is the problem. We’re going to talk about the problem without being politically correct or polished. It’s going to be warts and all—and probably a nasty rash too. We need to define its contours very precisely. Without knowing exactly what the problem is, how in the age are we going to come up with a solution, guys?
After that, we’re going to look at the hotel industry from pre-history till now. There are only two major epochs in all of that time: before the emergence of computers and the internet, and afterwards—where we are now. We’re going to talk about the advantages and disadvantages of each situation.
Logically following on, the third point will be about the industry since that great watershed moment. Then we’re going to explore our current situation—what the heck happened. Knowing this is perhaps the most crucial information in the fight to make sure it doesn’t happen again.
Finally, we’ll answer the question, what do we do now? Yes, it’s all very well and good to understand the problem, its origin, and how not to reproduce the causes, but we are here to find a solution to the problem.
In talking with all of you over the last four years or so, I’ve noticed that the problem we’re facing is not described in the same way by everyone, even though it is indeed the same problem. The real problem is this: it is difficult to generate direct bookings because of the dominance of OTAs. There you have it. You’ll find variations and other ways of expressing it, but it’s all there.
So what do we call direct bookings? What are they? Direct bookings are when a customer books with you without any intermediaries. The OTAs—remember the definition—online travel agencies like Booking.com, Expedia, Priceline, and Airbnb, are intermediaries. There are many other intermediaries, such as traditional travel agencies, those that have street fronts with their shops on the inside and sell you rooms in packages with plane tickets and tickets for various activities. There are also GDSs (Global Distribution Systems), which are OTAs reserved for professionals.
Basically, they are platforms like Booking and Expedia, but only travel agencies and tour professionals have access to them and can buy on them and then resell the rooms at a higher price. Among the most well-known are Galileo and Amadeus. There are also gift voucher companies, such as SmartBox, WonderBox, and Groupon, that you probably know of. And there is the same idea by other names in different countries around the world.
Generating direct bookings is about getting your customer to find you and contact you directly, whether they book on your site, by email, phone, fax, or even by small signals—it doesn’t matter. The main thing is that they book directly with you because that means every cent they pay goes right into your pocket. It is, after all, money we’re talking about, and I’m assuming you are of the opinion that the more of your own you keep, the better.
Now that we know what it means to get direct bookings, let’s take a closer look at what OTA domination is. You probably have an idea, but it’s well worth defining all the same.
OTAs dominate the market of room distribution on the internet. That’s what it is, okay? They are so financially powerful that they take up all the advertising space there is and thus perpetuate their market dominance. As an indication, Booking.com spent 4.8 billion on internet advertising in 2019. I have no number for 2020 because of the coronavirus—it was a weird year, so we can’t really use that as a comparison. But suffice it to say, in the last normal year, Booking.com was spending close to 5 billion on advertising.
You see OTAs in TV ads, on Netflix, billboards, websites, Google, YouTube, Instagram, Facebook—they’re everywhere. The problem with that is travelers mentally Xerox these ads into their minds, and when it comes time to travel and book a room, they naturally go to one of the OTA websites. That’s how ads work, and they work well.
So what happens then? The OTA will sell one of your rooms and take a commission. The amount of the commission varies depending on the OTA and some other factors. To give you an example, in France, Booking.com commissions range from 15% to 22%. We’ll discuss this in more detail later.
There are obviously other problems and challenges in our industry, such as hiring, for example. But our focus will be on the direct booking issue because if we fix it, we can fix a lot of the other problems that we face in the same breath.
So the problem is it’s difficult to generate direct bookings because of the dominance of OTAs. You ask, “So what?” I say, take a look at your margins and imagine what they’d be if you got your direct bookings up by half.
And the problem doesn’t end with your low margins. It also means that you have less personal financial freedom as you need to pay yourself less, spend less, and save less. People will tell you money won’t make you happy, and that’s debatable, but those same people won’t be able to deny you need it every day.
You also have less to reinvest in your hotel, which means that it becomes more and more difficult to maintain a high level of quality, all the while the market is becoming more and more competitive. You also have less leeway to hire as you need, which increases your workload and that of your team. Therefore, you have less time to devote to each task, and even worse, less personal time.
As you can see, low margins have a big negative impact, and we could go on and on about the interdependence between your poor profits due to OTAs and the general problems you run into as a hotelier. But let’s stop here for now.
That’s not all. Because OTAs do most of your marketing and distribution, you lose control over the customer acquisition process. Basically, without OTAs, you don’t know how to sell rooms anymore. You rely entirely on OTAs. You know you do.
Since OTAs have set up loyalty programs and are also retaining customer information, you no longer know how to retain your customers. This means that very often, the same customer will come to your hotel several times by systematically going through Booking or Airbnb, and you often won’t recognize the return business in time to give them the kind of special treatment that might foster further loyalty.
As you can see, the fact that OTAs dominate the market of room distribution on the internet is a serious pathology at this point. So we need to find a cure for this virus.
Okay, we’ve identified the current problem in our industry—the one that’s ruining our lives—so we can cross it off our list. Now, let’s take a step back in time. You've probably heard it said time and time again that prostitution is the oldest profession in the world. If that's the case, hotelier must be a close second. It's probably where the phrase "get a room" comes from. More seriously, our profession, which consists of offering a room, a bed, and a meal for a period of time in exchange for a predefined sum of money, is as old as mankind.
The oldest hotel in the world still in operation opened its doors in Japan 1,300 years ago. It’s the Nishiyama Onsen Keiunkan, created in 718 A.D. Even more incredible, it has been managed by the same family for 46 generations. But, of course, the year 718 A.D. is far from being the first trace we have of hotel activity. Thanks to Jean-François Champollion and the Rosetta Stone, it’s known that in ancient Egypt—more than 4,000 years ago—travellers along the Nile River could find accommodation. It seems more than likely that humans have been offering shelter in exchange for food or services long before that.
You might ask, "Okay, we've been around for thousands of years, but how is this relevant?" The relevance lies in examining how little the hotel industry has changed for millennia. The basics of selling rooms have remained largely the same: **location, location, location**. The potential customer sees the inn at nightfall and stops there. Word of mouth was the most effective marketing tool, and it still is in many ways. Travellers would tell each other about inns with decent mattresses, good food, or pleasant service.
Then came Gutenberg, who might have started out printing Bibles, but his ultimate destiny lay in printing hotel advertisements in magazines and newspapers. By the mid-20th century, billboard advertising also became relevant in guiding customers to establishments. Back then, gaining visibility was expensive and risky because it was hard to measure the return on investment. A hotel might spend a fortune on a billboard campaign, but they had no way of knowing whether the customers who booked did so because of the ad.
During this time, the success of a hotel was primarily based on **quality**—the quality of its facilities, services, staff, and food. Quality was what generated word-of-mouth marketing, which was the most reliable way to attract guests. Hotels also excelled at **building customer loyalty**. Hoteliers knew their guests—not just their names, but their lives, preferences, and habits. This created strong personal connections that fostered loyalty, something that is rare today.
Hospitality was about more than just providing a place to sleep. It was about relationships, attention to detail, and personalization. Guests felt at home in hotels because hoteliers took the time to know them. In today’s world, people often think that lowering prices or adding extra amenities like free breakfast or a hot tub is the way to attract customers. But hoteliers of the past knew that the real key was making guests feel recognized and valued.
Now that we've discussed the hotel business from pre-history to the internet era, we can cross that off our list and move forward to the next big change—the advent of **information technology**.
The first tremors of the technology revolution in the hotel industry were felt at the front desk, with the introduction of **PMS** (Property Management Systems). These early systems digitized the manual reservation books that were previously used to track bookings, customer information, and availability. Dozens of PMS appeared in the early years, and now there are hundreds of different systems available.
As technology advanced, **the internet** arrived, and it changed everything. In 1988, the World Wide Web was created, and by 1992, one million computers were connected to it. By the year 2000, that number had exploded to 389 million. The internet brought about a huge shift in how hotels marketed themselves and connected with customers.
The first **hotel websites** were simple showcase sites that displayed photos of the hotel, its amenities, and its location. But they didn’t have the capability to take bookings. The next step was the development of **booking engines**, which allowed customers to make reservations directly on a hotel’s website. While this was a great idea, it wasn’t executed perfectly. If the booking engine opened in a new window or tab, for example, it caused many potential customers to abandon their booking process. Even today, this problem still exists on many hotel websites.
Then came the next evolution—**online travel agencies (OTAs)**. OTAs like Priceline, Booking.com, Expedia, and Airbnb created platforms where customers could book hotels without having to visit the hotel’s website. This revolutionized the booking process for customers because it simplified everything. They could browse and compare hundreds of hotels in one place, read reviews, and make reservations in just a few clicks. From the customer’s perspective, it was a dream. But for hoteliers, it quickly became a nightmare.
OTAs started to dominate the market, taking over much of the online visibility that hotels once had. And the commission fees they charged began to rise. Today, OTAs are ubiquitous, and many hotels feel like they can’t survive without them. But that’s not the whole story.
Along with OTAs came another problem—**overbooking**. Hotels were accepting bookings from multiple platforms, including their own website, without any real-time synchronization. This led to situations where a room was sold twice. The introduction of **channel managers** helped solve this problem. Channel managers link a hotel’s PMS to various distribution channels, ensuring that availability is updated across all platforms in real time. However, many hoteliers still don’t use them, making overbooking a persistent issue.
The hotel software ecosystem is fragmented, with a wide variety of PMS, booking engines, and channel managers to choose from. This makes it difficult for hoteliers to select the right tools for their business. Many choose based on price, assuming that more expensive means better, which isn’t always the case.
Okay, now you understand the historical context, and you’ve seen the industry pre- and post-internet. We can cross that off our list. But how did we end up in the current situation, where generating direct bookings feels like an uphill battle and OTAs are holding us hostage with their high commissions?
The first reason is that many hoteliers were resistant to change. They were reluctant to adopt new technologies and relied too heavily on traditional methods of marketing and distribution. When OTAs came along, they seized the opportunity and filled the space that hoteliers had left vacant.
The second reason is that hoteliers became complacent. When OTAs started sending them a steady stream of customers, they became lazy about their own marketing efforts. They thought, “Great, the OTAs are doing the hard work for me,” and they focused solely on welcoming guests. But this was a mistake. The OTAs realized that hoteliers were becoming dependent, and they increased their commissions, knowing that hotels had little choice but to continue using them.
By the time hoteliers realized what was happening, it was too late. OTAs had become so powerful and so ingrained in the industry that it was nearly impossible to operate without them.
Now, many hoteliers have resigned themselves to the idea that they can’t compete with OTAs. They think it’s too late to fight back, and they’ve given up. This has led to a situation where hoteliers have lost control over both customer acquisition and customer loyalty. OTAs have created effective loyalty programs that keep customers coming back to their platforms, rather than directly to the hotels.
The result is that many hoteliers feel trapped, but the good news is that it’s not too late. There is still hope, and there are strategies that can help you regain control of your business.
So, what can we do about it? That’s what we’ll discuss in the next section. Stay tuned.
Module 2: Rivals to allies: Leveraging OTAs
Change can be daunting, but it's doable. You ever hear the phrase keep your friends close and your enemies closer? I mean, this is not to say OTAs are our enemies. As a matter of fact, as this module aims to illustrate, they can prove powerful allies when utilized correctly. The name of the game is flipping the give and take script from a toxic relationship to bountiful collaboration, which is exactly what we'll look at doing today.
Here's what we're going to go over today. OTAs. Who are they? The goal here is to give you an understanding of the OTA market, at least for the main ones. I'm sure that many of you, apart from their names like Booking, Airbnb, or Expedia, don't actually know much about these various nemeses that are laying siege to your keep. And frankly, you need to remember your Sun Tzu and know your enemy. That's what Sun Tzu said, the man himself, the famous war artist. Well, let's go speed dating and get to know them.
Next, we'll look at the key assumptions with a tendency to hinder hoteliers harboring them. Then I'll explain why they're incorrect assumptions and why they're making an ass of you and me. Then we're going to see how to take advantage of OTAs and make them work for you.
So, OTAs. Who are they? We were going to talk about the four main OTAs you should know about worldwide: Booking.com, Expedia, Ctrip, and Airbnb. Let's start with Booking.com, which is the largest one. Booking.com made $15.07 billion in 2019. We don't have the figure for 2020 yet, but it was a weird year anyway because of Covid. But 2019 saw an increase of 18% in revenue generated compared to 2018, which is huge.
You probably remember the booking flywheel that we saw in the previous video. Here it is again. The more offers there are on Booking.com, the more customers there are. And here's the proof: with 15.07 billion USD in revenue in 2019. Hate them as we might, it's safe to say that they have a good business model, even if we feel they're a bit of a pain in the ass. But you'll see later in this training that we're actually going to put them to use. The better they do, the better it will be for us.
Booking's profit in 2019 was $4.8 million, representing a gross margin of 27%, a figure to be put in front of that booking's online advertising budget in 2019, which was higher than its gross margin, with 5.1 billion USD spent on internet advertising. Rightfully, you're thinking there's no way to compete with that. But I tell you again, we're not there to compete but to piggyback. I almost forgot: we don't know how many millions they spent on offline advertising, but we know it's a lot, making their budget even higher than the aforementioned 5.1 billion.
Another interesting figure—well, two of them: Booking.com is present in 228 countries and territories. Given that the UN lists a total of 195 countries on our planet, this gives you an idea of the platform's global presence. They are absolutely everywhere. The website itself is translated into 43 languages. So there you go.
And the last key figure on Booking.com, which dates from 2018 (the latest year for which we have the figure): 60% of online bookings in Europe were made via Booking.com. So far, they are way ahead of the competition in Europe. It differs from continent to continent, so depending on where you live, it might be different.
Let's move on to the second-biggest baby in this market: Expedia sales in 2019 were $12.7 billion in US dollars. Expedia's earnings in 2019 were $998 million, representing a gross margin of 8.5%. Not as good as Booking.com, for sure, but not too shabby either. Expedia's advertising investment in 2019 was $2.4 billion USD. Expedia represents 20% of the European online booking market, far behind the 60% of Booking.com, but by no means negligible. Another key figure: Expedia is present in 70 countries, so clearly a very strong international presence. Even if it's not quite Booking.com, it's still nothing to be sniffed at.
The third one on our list is Ctrip, which is now called Trip.com. It is the third biggest in terms of revenue, with $5.1 million USD in revenue in 2019. The most important fact to note in their case is that 80% of their revenues come from the Chinese market, which is why many of you won't have heard about them. That being said, Trip is trying to shift its efforts to become a more global player, and they announced that recently, so I would keep an eye on them for the future.
Next comes the fourth player, the newest: Airbnb. Before we plunge into its figures, a small explanation: these four OTAs have different business models. Booking is a giant in room reservations, first and foremost—it is its core business. Expedia and Trip are above all websites for travel and plane ticket reservations. Their progression into room reservations is important, but the biggest part of their business comes from travel. They have an advantage over Booking.com in that they can sell packages, like rooms plus plane tickets plus activities. For the moment, Booking.com does not plan to sell airline tickets, but they are starting to be active in the activity reservations circuit.
Then with Airbnb, the story is a bit different because the focus is not the same. Airbnb's big focus at the start was any of the rooms in the market that are not in a hotel: guesthouses, bed and breakfasts, furnished apartments, unusual accommodations like castles, villas. But then in 2019, Airbnb acquired HotelTonight to diversify into the hotel room sector. The other two seem to be expanding in whatever way they can manage. But make no mistake: Airbnb is vying for the top spot. They've got their eyes on the Booking.com crown, and they're taking no prisoners on the way there.
So with all that in mind, let's look at the figures. In 2019, Airbnb's gross revenue was $4.8 billion, with a gross profit of $167 million. We've no idea of their advertising budget because they're not on the stock exchange, and thus under no obligation to spin those particular beans, but you can count on it not being small. We do know that they're present in 191 countries, so that's wide visibility by any standard.
Another very interesting figure: 49% of customers claimed to have used Airbnb as an alternative to hotels, which contrasts with their increase of hotel room reservation market share—an increase of 9% between 2018 and 2019.
To sum up: Booking.com is the leader with a big head start. Expedia is the challenger and is working to catch up. Trip is mainly on the Chinese market but has the resources to become global and wants to. Airbnb is the little guy that grows up fast and is overrepresented in non-hotel accommodation.
Depending on where you are located around the globe, you might be in a zone dominated by one of these OTAs. You might ask about the other ones, but truth be told, these big four have gotten into the habit of purchasing smaller ones on a regular basis. So chances are, even if those you've got in mind aren't currently owned by one of the big four, they probably might be at some point.
Let's take Booking.com. The most famous subsidiaries it owns are Kayak, which is a travel search engine, and Priceline, which is in fact the parent company of Booking.com. Everyone in Europe knows Booking.com, but in the United States, Priceline is better known. There's also Agoda and Otel by Booking. There's also OpenTable for restaurant reservations and Rentalcars for car rental. In addition, there are more than 12,500 affiliated distributors, according to the official Booking.com website. Affiliate distributors are websites that resell the inventory available on Booking.com for a share of the commissions. They are a multitude of websites, small OTAs, and blogs, often with names that make you think they're independent and have no ties to Booking.com, mostly niche-oriented.
As far as Expedia is concerned, there is Trivago (hotel comparisons), Hotels.com, Essential Travel, Classic Vacations, HomeAway, Orbitz, Travelocity, Hotwire, Lastminute.com, and Ebookers, plus obviously affiliates like Booking. However, contrary to Booking.com, which announced figures, Expedia has an opaque policy on its affiliate network. Here's an example: Euroflathotelbrussels.com. Everyone can rightly think that a website like this one is very local and therefore has nothing to do with Expedia. Wrong. It's Expedia in disguise, and in that regard, it's actually very effective. To verify this, just read the terms and conditions carefully on the website, and you'll discover the name of TravelEscape LLC, a company based in Nevada, America, and dot-income, which leads directly to Expediaaffiliate.com. Then just look at who the owner is, and oh surprise, it's Expedia.
Airbnb is not using affiliates for the moment and concentrates its efforts on its main app or website, even though we've seen it demonstrated that that could change, as proven by their acquisition of HotelTonight.com.
Even without going any deeper into the meanderings of these giants, it's obvious to anyone with eyes that they're all aiming to maximize the number of rooms they sell. Each of them uses the same method: obtain maximum visibility, offer optimum ease of use, and a vast selection of properties from which to choose.
Why are these platforms so popular? Well, the first thing to note is price perception. The majority of customers are convinced that things are cheaper on Booking.com, Expedia, Trip, and Airbnb. That's a very serious problem. It means our industry
is doing a poor job of educating the customers. The fact that customers perceive OTAs as a good place to make a good deal is very bad for us.
The second advantage OTAs have is that they are 100% adapted to customers' buying habits, which they scrutinize and analyze constantly. Most small hospitality websites are not up to this standard, and the user experience is terrible. One of the most missed notions is that one's website, in this day and age, should be optimized first and foremost for smartphone users. So many of them are not.
Booking.com knows every smartphone is the present and the future. Booking via smartphone is the present and the future. If you don't have the right tools, i.e., a mobile-friendly version of your website and a mobile-optimized booking engine, you will lose many potential customers.
Let's have a look at some recent statistics from retail and internet marketing services. Up to 80% of last-minute bookings are made with a smartphone. In Europe, the average for all stays and all age groups combined is 40% of reservations via smartphone.
Not only do OTAs offer competitive prices and have the right tools to optimize sales, but they also have an infinite selection, which is their third advantage. Remember the flywheel? The larger the selection is, the higher the customer satisfaction is.
Another key factor that is an undeniable advantage of these platforms is customer testimonials, or reviews. This is one of the most important criteria to convert a site visitor into a customer. It's impossible to falsify testimonials on OTA websites. In order to post your opinion on the internet, you have to have stayed in a room and booked via one of these sites. Site visitors love these reviews so much they consult an average of nine before making a purchase decision. This is what marketers these days call social proof. I call it word of mouth 2.0.
OTAs also offer excellent loyalty programs. You probably already know about Booking Genius, and if you don't, well, you're welcome. I always say it's appropriately named because whoever came up with it is indeed a gosh darn genius, right? So for those who don't know, it's a loyalty scheme, loyalty to Booking.com, mind you, whereby the guest can avail of a discount, but the slack is picked up not by Booking.com but by the hotelier. It's madness, but I won't say I don't admire that chutzpah.
It breaks down like this: Let's say a room is $100, and Booking gets a 15% commission if the room is booked by Joe Bloggs. For those of us not mathematicians, that sees you pocket $85, and Booking gets $15. So, okay, you're getting what you put in, you could say. But next up steps not Joe Bloggs, but Joe Bloggs Genius, and the thing is, he gets special treatment because he signed up for this program, right? The price of the room doesn't change. Joe just gets 10% off the $100, so he's down to $90 and so are you. But not before Booking grabs another 15%, because their percentage is taken from the display price. So it's another $15, leaving you with $75, meaning your interactions with Booking just cost you one quarter of your display price.
Last but not least, it is obvious, but I'll just say it: OTAs have enormous financial power. They have lots and lots of money. No small hospitality company can compete with OTAs because they spend literally billions of dollars on Google ads.
Okay, I think now you have a better idea of who the OTAs are. So let's cross that off our list and move on to the next one: the assumptions.
The first assumption, which is widespread in our industry, especially among small hospitality business owners, is that the OTAs are our enemies. The second assumption, and this one really breaks my heart, is that nothing can be done about it. It's just too late.
That's it, two assumptions. Let's cross them off our list and see right away why we are wrong.
Jonathan Swift wrote that "when a true genius appears in the world, you may know him by this sign: that all the dunces are in confederacy against him." If you think I'm calling you a dunce, you'd be incorrect. I'm not naming you a genius either, though. I'll gladly name Swift, as the man mastered sarcasm long before teenagers were invented, and he knew what he was up to. The line is meant as an effective parody of the lack of nuance in a world where folks are already married to an idea in an argument. It's what I called dualism in last week's videos. It's black-and-white thinking: a genius or a dunce, a friend or an enemy, an OTA or an independent hotel.
OTAs are not our enemies. Do they take a lot of money from us with crazy commissions? Yes. Have they changed our industry forever? Absolutely. Do they have crazy terms and conditions? Undoubtedly. Are they trying to surprise us? It's game, set, and match on that point, lads.
But there's a but. There are many buts, in fact. In fact, this is a debate on which Sir Mix-a-Lot would gladly weigh in first, but you only pay OTAs when they're making you money. Remember we talked about the communication situation in our industry before the Big Bang arrival of computers and the internet, how we were shooting in the dark with marketing and advertising and had no way to measure the return on investment? Well, with OTAs, it's the inverse. You only pay OTAs if they send you paying customers. So if you're willing to pay some commission, 100% of the time you pay it, there will be a return on the investment in the form of a paying customer.
Make no mistake, guys—that's amazing. One of the reasons good advertising is so expensive is because it is so difficult to get right. Do you know how many businesses in most industries take a punt on some ads or marketing with no way to measure the return on investment whatsoever, with no way to measure what worked and what didn’t? I'll take a punt now myself and say 95.5%. Whatever it is, it's a lot of them.
If you pay a commission to an OTA, it is first and foremost because that OTA generated revenue for you, which was nice of them, actually. It was quite nice of them. It certainly wasn't the conduct of an enemy. All right, so yes, you will pay a commission on this reservation, but if the customer comes to you for the first time, 15% or even 20% commission to acquire this customer is totally within the norms. In many industries, the cost to acquire a customer is close to 30% to 40%, much higher than the average OTA commission. I'm sure you will agree.
So, customer acquisition at a controlled cost—no matter what you'd like to do beyond that point—pause for a second and be thankful. There are an infinity of other entrepreneurs that would kill to be in such a position, quite frankly, and their accountants might engage in multiple mergers.
There is, however, a golden rule: acquiring a customer with an OTA by paying a 20% commission—yes, absolutely. Letting that customer come back to you through the same OTA? No, no, no, and no again.
The second thing that makes OTAs not so bad is the international visibility they offer. You know, the owner of a small hotel, bed and breakfast, or any small tourist accommodation could never have afforded pre-Big Bang visibility in hundreds of countries at the same time. Imagine today, when you are present on Booking.com, you are visible everywhere in the world. Okay, you're not exactly killing it with the North Korean market, but you get my point. A Japanese person can book with you. An American who has never heard of you and who would never have heard of you without Booking.com can find your establishment, find it charming, and book in English from the other end of the world. Booking.com is translated into 43 languages. To that point, I don't know if you realize how much of a cutting-edge advantage that is for you.
With OTAs, you are visible everywhere to a high volume of visitors and therefore potential customers. It's absolutely gigantic, guys.
So to summarize these first two points, OTAs offer you a measurable return on investment and allow you to make customer acquisition at a controlled and relatively low cost. They also give you worldwide visibility that would have been impossible to obtain without them. I mean, come on, that's awesome.
But there's another but—a third but, and by far the biggest. Those regular visitors to OTAs are not exactly what you'd call loyal. Even when they avail of loyalty schemes, they are often openly, enthusiastically unfaithful. And with the right game plan, you can easily be the object of that infidelity.
Half of the people—50%—who visit OTA websites search and visit the websites of the hotels they have shortlisted. Take my word, and I'm not overselling here—this is the biggest opportunity OTAs present to us.
Here's the typical journey of half of the OTA users out there. The prospect—let's call him Frenchie—is on an OTA site, let's say Booking, and is looking for a room for him and his wife in California. He knows his dates and destination, enters them in, and gets a whole list of available establishments. He looks at the results and makes a shortlist of what he prefers. At this point in time, he is in window-shopping mode.
All right then, Frenchie searches the names of the establishments he's found on Booking.com on Google. He copies and pastes the names into Google exactly as he sees them on Booking. If he finds the establishment's website in Google, he clicks on it and visits it. This is where we need to shine. As a hotelier, you've paid nothing for this customer to get there. The financial effort necessary for Frenchie to
find your establishment has been made by Booking.com. Fair play to them. Not only that, but Booking.com throws him in your net—you just have to bend down and pick him up.
But if this is the case, how come we've got such a high percentage of our reservations coming from OTAs? Well, not to put too fine a point on it, that's your fault. The OTA sends you traffic, often without you realizing it, but in the majority of cases, when Frenchie arrives on your site, it's poorly designed, not user-friendly, and he'll lose patience and go elsewhere. And that's just if he can find your site easily, which is certainly not the case with all establishments.
So, best-case scenario: Frenchie goes back and books on the OTA. You can curse poor Frenchie's wretched name all you want, but you made him do it at the end of the day. So go curse the mirror if you want to be accurate. 50% of customers leave the OTAs to look for the site of the place they like the look of, and then a good chunk of them, Frenchie included, just return and book where they started.
And you might ask, why, Frenchie, why? It's a pretty good question, actually. Why do half the potential customers visit your website only to return and book on the OTA sites? Because you haven't optimized your website to get them over the finish line.
OTAs offer you a cost-effective method of customer acquisition, with 100% guaranteed and controllable return on investment. They also offer you unprecedented international visibility at zero upfront cost. And the icing on the cake? 50% of OTA traffic comes to visit your websites after being on the OTA.
OTAs are definitely not our enemies. There, now you know why your assumptions were wrong. We can cross this point off the list, which brings us to the last point of this video: How can you take advantage of OTAs?
That's the million-dollar question. Since we know that half of all OTA customers visit hotel websites, how can we capture this traffic and transform these visitors to your websites into direct bookings? And following on, how do we convince a guest who booked the first time via an OTA to book direct next time?
Well, firstly, we need to head to the Home Depot and buy you some new tools. As we just saw, OTAs are finely oiled selling machines, and as we saw before that, a lot of hoteliers are just using showcase websites, which, it turns out, don't sell or don't sell well.
There are some common problems on sites in our industry that we can zoom in on and provide some sort of explanation as to why visitors just don't book on them. First of all, there are some that haven't been updated in a decade or two. Never mind not having up-to-date maneuverability in terms of the latest computers, these kinds of sites have never even heard of smartphones. Here's one I just found on Google while preparing this. It didn't even translate into English, which should be a feature, by the way. The name is blurred out because we're not here to blame but to learn. All I can say is that if this is your site, well, it's a good thing you're taking this course, and you're going to need to study hard because this is a joke. You need this course.
Do you think you could win a race with a Formula One car from the 1990s or 2000s against a current Formula One car? I mean, even Ayrton Senna or Michael Schumacher wouldn't manage that. It's an impossible challenge. Forget about it.
So now let's look at what makes your site an old car, most likely. I've seen a lot of sites that are not adapted to smartphones, as I've already mentioned. That's where the vast majority of reservations are made—more than 80% of last-minute reservations. That's huge. Remember, the world has not been getting more patient since the internet Big Bang. We want things now or two-thirds of a second later, and if it's two-thirds of a second later, well, you better have a good excuse or it better change my life when it gets here. I don't even wait for my meditation app to load, and the only reason I have that is I like the idea of being more patient. Amazon's "one-click" is dangerous for your bank balance, but for your life as a consumer, wow.
You know what? I know what, and you can be damn sure the OTAs know it, because that's exactly the model they try to emulate when it comes to people seeking rooms for the night. If loading takes too long—zap—I'm gone. If it's difficult to see on my phone—zap—next. If the website is not very visual—zap. Today's consumers don't want to read; they rely on photos and videos to get a feel for things. You have to adapt your website to this new reality. Don't worry—there are detailed training sessions on visuals coming your way later on in the accelerator.
If your website is too slow—zap. I'm a potential customer, and I don't have the time. That's the assumption you need to make. The world is moving quickly, and me with it. One, two, three—zap—back to Booking.com.
No verifiable customer reviews—zap. Consumers need social proof, word of mouth 2.0. You've got to bask in the approval of previously satisfied customers, and the customers need to be verifiable as real. Because these days, everyone using the internet knows how easy it is to falsely advertise. In that regard, if the booking engine opens in a new tab or on a new page, if I'm forced to leave the ambiance of the site I started to book with, there's a very, very good chance—zap—I'm gone.
If the website is not secure—no SSL—zap. I don't want to risk my credit card information.
And then there's the cherry on top of the cake, the thing that kills me when I see it on one of your websites, and God knows I see it a lot. Frenchie visits your website and realizes that the price is cheaper on Booking.com. You guys are killing me when you do that. There's one rule for you to follow with the utmost strictness—though I'd rather you follow all of them, it's this one: best available price must be on your site.
Before you finish this video, remember one last thing. In the end, you are the place where customers come. So if a customer comes back to your place and books again through an OTA, you're the only one to blame. There are ways to avoid that truth. Booking.com is not physically present in your establishment. Your house, your rules. When the customer is finally at your place, you have to educate them—educate them with love and kindness. That's the only way to educate customers. If you're annoyed because of how they booked, and if you let them sense your annoyance by giving them a worse room and bad service, you've only got yourself to blame if they don't come back. Or if, when they do, they once again book through that OTA.
With these strategies just discussed, you've got what you need to turn the tide on your relationship with online travel agencies. For the moment, you might just be a participant in the online marketplace, but play your moves correctly, and you can be a leader. See you next time.
Module 3: Metrics that matter
Imagine the following. You have a terrific property that, for some reason, does not get the business it so richly deserves. Why not? That situation? Followed by that question just happens to be the perfect starting point for today's discussion on sales strategy. Let's get into it.
We are going to look at what the agent KPIs is and how they, they could prove useful for you. Then we're going to look at what the most important KPIs are and see how to interpret them. There are dozens, maybe more, but there's only a small few that you really need to pay attention to, and we'll cover which ones. And to finish, I'm going to tell you a few things. It's super important to remember all the time, forever. Okay, so no biggie.
So let's begin. KPI is an acronym for Key Performance Indicator guys. There it is at it. It's no more complicated than that. It is a set of data, usually statistics of some sort, that allow you to measure your performance based on a range of criteria. Your KPIs, like a dashboard. You fly a plane. You got to keep your eye on the altitude, wind resistance, altitude, fuel, whatever else I don't know. Wow. Being a pilot sounds easy actually, when you think about it. Anyway. When you pilot your hotel, it's the same thing. It's just different names and less chance of imminent death.
One of the most important KPIs. And how should you interpret them? It's a good question. I'll answer it.
The first is the Ohau, which stands for occupancy rate. This KPI is used to evaluate your performance in filling your rooms over a defined period of time. So when you get it, it tends to be categorised by daily, monthly, annually or whatever. An annual or for example. One good way to use it is to compare similar periods like this year's Easter with last year's. It is as clear means as there is to see whether you're growing or not. Additionally, it's important to analyse it based on macro and micro economic circumstances like global pandemics or local music festivals.
For instance, the Or is calculated as follows. Number of rooms sold over the period over a number of rooms available over the period multiplied by 100 to get the percent. An example. You've five rooms available and none are under construction or closed. The duration of the month of September there are 30 days. Your number of rooms available over the period is therefore 30 by five. Equals 150. Let's say the, during the month of September, you sold 86 rooms. Okay. So then you divide 86 by 150, which gets you, 0.573. And we only need to, put it into a percentage, which, some basic maths for you guys. Multiply something by 100. Move the decimal point. We're at 57.3%. Your or for the month of September is 57.3 or was depending where we are in the year.
Next is turnover or revenues. This one. And normally everybody knows it is very simple to calculate is the sum of all the money earned by selling rooms over a given period of time. In itself, the turnover alone is insufficient to measure performance. That is why it is supplemented by the other KPIs, such as the rate of power and the revenue per available room. This is a super important KPI, guys. It allows you to know how much you earn on average for each available room over a given period of time. What is meant by available? These are the rooms that you can sell over the period during which you calculate the red power. So we exclude from the rooms closed for renovation rooms. Your visiting family members might be staying in basically any room. That's not available to make money from. We don't count.
Here's the calculation. Power equals turnover for the period over number of rooms available during the period. Again, simple enough. So for example, let's say in September, September, again, we made a turnover of 10,750. Not a bad month. And let's take the same figures as earlier. That is five available rooms multiplied by 30 days. So 150 available rooms over the period. Then the red power is 10,750 over 150, which is 7166 over the month of September. Your rooms brought you an average of 7166 per room available.
There you go. There's an alternative to repair called rev pack, revenue per available client. It lets you know how much you earn on average per customer over a given period of time. It is particularly interesting for hotels that charge by number of people, not by room. Okay, so per person staying that kind of thing. In this case, knowing the revenue per person makes more sense than knowing the rev per the calculation is similar. Rev pack equals turnover for the period over a number of customers for the period.
So again for example back in September keeping the same turnover of 10,750, let's say there were 114 customers over the period. Then the rev pack is a 9430. So 10,750 over 114. It's 9430 over this period. Your rev pack was that too. Depending on the nature of your business and your billing method, obviously you will and probably end up picking one or the other. It's, you know, rare enough somebody would find the use in both, to be honest.
The next indicator is the A or average rate. Relatively simple to understand. This is the average amount your guests paid for a room over a given period of time. By the way, if the duration is one day, you will often see this acronym AD or for average daily rate. The average price is very simple to calculate a or equals turnover over number of rooms sold.
So example. Still in September we see the turnover of 10,750. It's over the number of rooms sold to 86 of the A or for the month of September is $125. Your average rate, i.e. what your customers have paid on average for one of your rooms, is that 125?
Now let's compare the A or and the Rev per okay. The A or is 125 and your rev part is 7166. Now why this difference. Well to calculate the rev part we divide the turnover by the number of rooms available over the period i.e. rooms sold and unsold. These two are very interesting to look at alongside one another. You will see that the higher your or the smaller the gap between these two is. So the idea is to have a rev per equal to your average rate, which which would mean that you have sold all your rooms over the period in question. So hooray!
The average rate is interesting because it allows you to evaluate the price your customers are willing to pay on a psychological level, right? So by increasing it regularly and by monitoring your own or very closely, all the while comparing it with a reference period, you will be able to get closer to the maximum price your clients are willing to pay for one of your rooms. Which by the way, guys, I hope I'm not telling any tales out of school is what you want to be charging. Many hospitality businesses do not dare increase their prices, even though they often have a lot of leeway to do so, which is a damn shame, if I may say so myself.
The next KPI is allawi's average length of stay. Okay, I lost some people, call it I don't. This is a very valuable indicator if you're trying to decide whether or not to do a promotion. Encouraging longer stays. Thanks to this KPI, you will know on average how long your customers stay with you. If you find out that on an average stay, they stay four nights, then you will want to make offers for eight days of four nights and more to encourage them to stay a little longer. Alternatively, if you see that the average day is one night, then you will have to come up with a promotion or incentive to make your customers want to stay more than that.
Okay? And and the beat goes on. The average length of stay is very similar. Calculate. They're all simple to calculate number of nights sold over the period. Over number of reservations for the period may maybe simple. On paper the example gets more complicated though I'll be honest. So here we have four bookings over a period of one week. So Frenchy stayed two nights. Johnny English did one night, Yankee Doodle Dandy stayed three nights, York or Japanese stayed five nights. The total number of nights sold during this week is therefore two plus one plus three plus five equals 11. The average length of stay is then 11 over 42.75 on average. Your customer stayed 2.7 nights in your hotels during this period.
Another very useful KPI to define your promotions is the book to stay average length. So this is the average duration between the date of reservation and the date of arrival. Why is this indicator useful to know? Well, let's suppose that your book to stay is one month. This means that on average, your customers book one month in advance. If this is the case, travel. If your guests typically reserve one month in advance, then you can fairly well see that it is useless to make a promotion implicit to bookings made more than three weeks in advance, you would be shooting yourself in the foot, quite frankly, because your customers would already be doing what you're promoting. If you promote in this manner, the the only thing you'll be doing is offering a lower price to customers who are already coming and you'll just hit yourself right in the margins. Ouch. That's where it hurts.
On the other hand, if you see a book to stay average of two days, it would be a good idea to work on some kind of promo that will encourage people to book further in advance
. Your objective is to see your or fill up far in advance so you have more time to plan. And so the more your customers book in advance, the better it is for you. In this case, I would set up a promotion for customers who book more than a week in advance, and everyone who books two days or less before their arrival pays full rate.
So the formula for book to stay is calculated like this. The sum of the durations between reservations and arrival is divided by the number of reservations over the same period. Okay, now the sum of durations, all bookings and all arrivals. Okay, so you're taking a lot into account here. Here's an example. So we still have our clients over a period of one week. Frenchy booked 20 days in advance Johnny English nine. Yankee Doodle 42. Yoko Japanese five. The sum of the duration between the reservations and arrivals for this week's reservations is therefore 76. Right. So book to stay average is 76 divided by four equals 19 or average. That customers book in advance is 19 days, which ain't bad to be honest.
The next KPI is that no show rate. So a no show is when it's it's exactly what it says in attendance. When a customer has booked and does not come boo without first warning you so his room or her room has been blocked for him or her, but he or she is not going to occupy it. It is strongly advised that in your terms and conditions, you specify that in such cases the first night will be charged. In most countries you legally have the right to do this though again, it's dependent on legislation. So if you if you don't know, it's certainly worth your while having a check. No shows are most common at hotels next to large transport hubs like airport hotels, for example. Calculation is very simple. Again, no show rate equals total, no shows over the period. Total bookings of that period.
We'll we'll see in more detail in the yield management training how we can use this no show KPI to adjust our pricing strategy. Simply put, the no show rate is an indicator that will help you to decide whether or not to overbook. Overbooking is the practice of selling more rooms than you have to, to compensate for no shows in advance. I'll give you a quick example. A 40 room hotel near an airport. Studies. It's is over the previous two years and finds that on average they had 2.40 shows per day during that period. In this case, it is logical for them not to put on sale 40 rooms, but 42 rooms during that period of December to compensate for the no shows. It's a practice that requires dexterity and a lot of control, and we'll talk about this later.
Now, a big, percentage of direct bookings. A quick reminder for you guys in the cheap seats. A direct booking is one made directly via your website or a phone call, or an email or a fax for which you receive full payment, whereas an indirect booking typically goes through an OTA, who in turn reap a commission for doing so, for obvious reasons, you'd like more of the former kind.
Okay, finally, we've got an indicator directly related to your direct bookings percentage your website conversion ratio. So what is this? Remember we talked about showcase websites. Well, even if you have a booking engine, if all people are doing is perusing the in a showcase website is all yours essentially is the conversion ratio measures the percentage of visitors to your site who actually booked there. Here's the calculation. Total number of visits to your site over a given period. Over the total number of reservations via your website over this period. You obviously want a high conversion ratio. Not only because it means more money, but also it's the best quality indicator you could hope for for your website.
There's a KPI sheet you can download beneath this video that summarises all this information. And the good news is any PMS worth its salt will calculate these for you automatically, which is just the kind of time saver you should be looking for in order to spend more time looking after your guests. Okay, that's what you want to be doing.
So we know what they are and we know which ones are most important. We can give this a take and get it off the list. Now let's wind down with a few key things to remember. Okay? Life and death stuff goes back to the pilot analogy. Point number one pilot your plane. If you are not at the controls and you do not monitor your key performance indicators, you're going to crash. I meet too many people who don't take the time to do all of the relatively simple work I've just outlined, and they don't know where they stand. Ultimately, the plane is flying, but they don't know what altitude, at what speed. Not looking at your KPIs is flying blind. It's a novelty at first, but you can be guaranteed that that plane will have no passengers to speak of for one, because, you know, people will look at it and go, wow, he's going to meet a mountain head on some day. Looking at your KPIs every morning should become a routine. It takes ten minutes max. Do it with a cross on and a coffee. Then periodically you need to take the time to do a more thorough analysis. Compare with previous years. Take a step back. Measure your performance and if necessary, adapt your action plan.
Point number two takes time to bring the plane back up. You won't get all the lights green overnight. It's just not realistic. Be patient. Good things come to those who wait, especially to those who wait tables after reading their KPIs every morning. Stay the course your efforts are paying off. You may not see it right away, but you're on the verge of making a big change. You need to keep at it as well and regularly.
Which brings me to our last point. Regularity pays off, and this is true of everything. It's regular training that makes great athletes, and it's regular preparation and shoe shopping that makes for victorious armies. And it's the same for you. It's your constant and regular efforts that will help you generate more direct bookings. That means you don't just put in a big effort during this accelerator and forget it afterwards. Follow it, learn from it, and then keep up the work so consistently. All someone wanting to improve might need to do is watch you at work while listening to me break it all down.
Okay? That's it for our deep dive on sales strategy. I hope that with the help of today's lesson, you find your niche and your fonts and your colours and all of that. Your story, what sets you apart if you don't know that, who else will? That's all for me today, folks. See you next time.
Module 4: Building your sales strategy
What's your online presence like? How about your digital marketing? Do you take care of it or do you have a member of your team doing it? These are the questions you'll need to answer before sizing up and making the most of your relationship with OTAs. Let's get into it. First, we'll define what a sales strategy is. Then we'll define your niches. Then we'll look at branding and what is required of you if you want to protect your brand. After that, we'll talk about colours and fonts and their importance when it comes to communicating via your website.
So first what is a sales strategy? It's the implementation of market research with the aim of achieving financial goals. It's everything you do on a daily basis directed towards generating revenue. It's whatever you do besides actually having rooms available to fill them at the best possible price. So let's look at the foundations of your strategies, your niches, and let's talk for a minute about the overarching structure around which every trade is built. Right. On the left we've got the client's current situation. On the right is where they want to be their goal.
Okay. So let's say your potential client works in Paris in a skyscraper of some description. He's a commuter, leaves early every morning and comes home tired. His life is like this: commute, work, commute, sleep. But when he dreams, he dreams of skiing. He dreams of flying down milk. Quite slopes. As you can see, there is a major gap between where he is and where he wants to be. So insert your offer in the gap there. Your offer is a ski lift that will take him to the top of the proverbial dream mountain. So in this case, a luxury ski lodge with a spa and a nice bar and a place to keep his car. It's the law that governs all trades. You have something and they want it. Let the games begin.
It's the same for all your purchases. All right. Imagine you're at home and you realise you're missing salted butter for breakfast. Catastrophe. You need some now. A no is not an option. Your situation A is no salted butter. And it's breakfast time. Your deepest desire is salted butter and there's none. How could this situation be worse? Your local shop is the bridge that will get you from A to B. You hop in and drive over and before you know it, you've some tasty Kerrygold melting on your toast. Thanks, shop. It's the same with anything. Same pattern all the time. You want to be the guy with the butter? Not literally. Mind. What I mean to say is you need to know what your clients want, and it should be interchangeable with what you've got on offer. Nice rooms, smile, amazing breakfast, endless salted butter. Everything that will let your potential clients live out their dreams.
That's why you need to know your niches. They're the foundations of your business. And also, yeah, you do want to be the guy with the butter. Just have the butter in your fridge. It's a bad situation to end up in, man. So here's the equation, right? You've your niches and you want to have as few as possible to focus on actually between 2 and 10. No more. And mash up your niches with your offer and you've got it. Result. You can learn more about your niches as you go, and refine your offer to better suit them and improve your results concurrently.
When I say a result, by the way, I mean margin. That's what you're aiming for. Priority. You remember the virtuous circle we talked about in mindset training? I've often told you that feedback is key when it comes to creating a virtuous circle. Well, virtuous circles are particularly applicable when it comes to adopting a state, a sales strategy. All right. Adapt your offer according to the expectations of your various niches. When your guests arrive, treat them well, give them the time of their lives, and ensure, insofar as you can, that they leave feedback. Use that feedback in your new and improved offer. The circle continues. Take everything they offer into account. There's no criticism that isn't constructive when you're trying to improve your offer. If you get some off a customer who's the type you'd rather not attract, for instance, and your niche is responding well to whatever it is the target of the ratty fella's ire. Well, you might be doing something you want to double down on.
This way you're constantly improving your offer in the direction of your niches. All right. You'll increase your customer satisfaction and feed your virtuous circle. The customer experience should improve with every new customer. Okay, okay, I hear you. What? The H is a niche. Your niche is your core target. They're a very precise type of clientele whose specificities, you know, beyond doubt. Your niche is the answer to the question, who are you talking to? To know what message to send, you need to know to whom you're sending it. You might have the potential for a whole bucket full of niches, but don't spread yourself too thin. Focus on a few.
The question that immediately follows, of course, is why do you need to define your niche? And here are three major reasons. The first is it's impossible to please everyone. A wealthy Indian customer, for example, does not have the same expectations as a middle-class American customer. The second is that targeting everyone is far too expensive. You simply do not have the budget to allow you to communicate on a global scale, to target everyone, as well as have an offer that meets everyone's needs. It's just not possible. The third reason is that if you don't target anyone in particular, you won't talk to anyone in particular. And if you don't talk to anyone, well, there'll be no one listening to you, will there?
I had a big family growing up, three boys, two girls and two parents, and everyone had to do their share. I have memories of my mother showing up before dinner for someone to set the table. She would invariably do it 3 or 4 times before slapping one of our names on the end of the request, and she'd at last get the desired result. Nothing had happened beforehand because she was talking into the void to no one, and the message simply faded into the void. The same thing happens with hotels when they don't pick a niche. As Confucius himself said, the man who chases two rabbits catches neither.
Let's burrow in a little on that niche. The first thing you want to do is a little bit of introspection. All right? As with a lot of things, the first place to look is inward. Don't put out an offer that is out of step with who you are. As a hotelier, the way to flourish in a lasting manner is to find customers that match up with who you are, whether you're from the country or the city, or own A, B and B, or a hotel, your crowd is out there. So you need to ask yourself, what are your values? Comfort, serenity? Dynamism, sensation?
So afterwards, do the same for your hotel. Does your establishment make you think of words like luxury, personalisation? Very quiet location, close to the ski slopes? Urban, modern, historical, charming, cosy? Define the offer of your hotel based on these values. If your personal values are comfort, serenity, dynamism and sensations and the values of your hotel are luxury, personalisation, and acquire a location close to the ski slopes. Your offer could be a luxurious and comfortable hotel with the most comfortable bedding available. Quiet with quick and easy access to adventure.
It's up to you to define one or more niches in relation to these values and this offer. In our example, it would be wealthy families, European couples without children who love skiing, who are attached to their tranquillity and luxury. In this diagram, you can see that your niches can be found at the overlapping point of your personal values, the values of your hotel, and your offer. This is the first step in defining your niches. Then comes step two: analysing your existing customer base.
For those of you who are starting a business, it's much simpler. You can skip this step and focus on your niches as you define them in step one, and as you will design them in step three. For others, those of you who are already in the business, this step is very important indeed. Often your niches already exist among your customers. They're simply waiting to be discovered so that you can cultivate them, adapt your offer to their expectations and needs, and understand what kind of messages will resonate with them.
To do this, you'll have to answer the following questions: Who are your best customers? Take some time to think about that now. Of all the people you've welcomed, who were the most satisfied, those who gave you the most praise for your hotel and your service? Which ones brought you the most pleasure in working to satisfy them? List them. There are many. Don't try to find links between them. When you make this list, simply immerse yourself in your memories and write down all those customers that come to mind. Then take the time to analyse the list and see what they have in common. Is it a nationality, a standard of living, a specific interest that matches one of yours? A diet, a religion, political ideas, a lifestyle, a common passion?
Then look to see if these characteristics are in alignment with your offer. In the majority of cases, this should be the case because naturally, the clients who are most satisfied with their stay with you liked your offer. By looking at it closely, you learn a lot about what people like best in what you have to offer.
I got a concrete example in this case, like of a guest house, where the alignment between the customers that the owner had defined at his as his best customers and his offer, it just didn't fit up at all. There was a big mismatch, or at least it wasn't easy to identify. So
the owner and this old man, about 65, he owned a charming little manor house. Right. And he was a former airline pilot who, for his retirement alone, since he was unmarried, bachelor decided to open his house to guests to have a little socialisation and supplementary income in one move.
While doing this exercise, that is to say, trying to figure out who his clients were, he realised that his favourite clients were young couples from Paris. They were by far the ones that left in the best reviews and the ones that came back regularly. He did not see at all how these clients were aligned with his offer. He defined his offer as follow: Pretty Manor, a charming old house in the quiet countryside with some animals not far from the highway.
What he had neglected to include was that he spent a lot of time socialising with his clients. It had been half his reason for opening to was to socialise, you know, and the stories he would tell, and he himself should have actually been front and centre when it came to his offer. Right. We dug a little and discovered that among the Parisian youth, this guy was a bona fide word-of-mouth sensation. Known for his storytelling abilities, these urban youngsters seem to be tailor-designed for what he had to offer. The only issue was he wasn't exactly offering it.
Which brings us to the next point. How can you attract more of this type of a customer, your best customer? What was the trade of what he had to offer that would be best to zero in on and magnify? In the case of our retired pilot friend, it was his stories and his location. So we came to the conclusion that simply asking his guests to tell their stories about the place would attract more of the same type of customer.
You've got to ask yourself, who do they trust? Who do they listen to? Where do they go on holidays? What are their needs and are you capable of meeting them? How did they find you?
The third step in defining your niche is to create an avatar for each of them. Each of your niches must be defined in the most specific way possible. You have to be able to visualise an avatar to represent each of your niches, by which I don't mean a nine-foot blue alien, I mean a fake person that brings together all the character traits of your regulars.
Here are some questions you could ask yourself in order to create the avatars. If you've got more than one of significance, it's a good idea to do them all one after the other, in order to be sure that you don't mix up traits between the avatars. First, give them a name and a job. A hometown and an age, write down their level of education, their social background. What does a typical day look like for them? What do they watch on TV when the day is done? And what did they do in their spare time? How much do they earn? Do they like their job? What do they care about most? Is there a trait of personality that impacts the way you sell your hotel to them? What does your hotel already offer that meets their needs? Does your offer meet the needs in any way? How can you make their life better, easier?
What is the thought that should go through their mind at the moment they decide to fork out for a room at your hotel? What might make them choose your hotel over another? Earlier, we defined an offer with a hotel at the foot of the ski slopes in the French mountains. Very luxurious and quiet. Here is what that avatar for that might look like:
Okay, Paul Stewart, 35 years old, financial trader in London, high level of education with an MBA. He is a banker in London. He works 60 hours a week. His sports coach keeps him in shape, he gets all his dishes delivered by a chef. He mainly watches news related to finance and international events. He earns 500K a year and loves his job, but would like to have more free time. He likes to drive on racetracks and skiing in his free time. He likes nice things and being away from the media hustle and bustle. Discretion is a fundamental value for Paul. He comes from a wealthy English family and studied at Eton, Harvard. He considers himself a gentleman. He is very proud of his success and loves to travel. He's married without children by choice. His wife is a lawyer. They have the same tastes and expectations. Hotel Her Daughter meets all their expectations: Private and secure garage for his Bentley. A spa to relax in. Absolute calm to recharge a luxurious and personalised level of service. But in terms of equipment and service, the hotel's offer will allow him to ski without stressing about his car, to be in a calm environment, to keep up with his business and stay connected, to enjoy his free time with his wife. As he was making the reservation, he thought, this hotel is perfectly located, luxurious and looks like a family home. On top of everything, there is a private and secure garage. Perfect.
The last step is to make sure it all matches up: your offer and the needs, desires, expectations, and inclinations of your would-be niche. If yes, brilliant. Happy days. Sit and wait and it's likely to work. If not, what's gone wrong? Where is it not working out like you'd like it to host? Time to pause and do a worksheet we've prepared for you. It's called defining your Niches. It's available to download beneath this video. This one is plenty time consuming, so don't worry if it takes you longer than a day. Take your time.
Okay, so we've seen what a sales strategy is. And we've laid the foundations with the definition of your niches. Now we can cross that off our list. And now we're going to talk about branding. So what is branding? Branding is the activity of managing your brand image. All right. Your brand image is the unique identity of your company. You will see that in your sales strategy. Your brand image plays a super important role. The first thing we want is for your brand image to be in line with your values, the values of your hotel and your offer. If you want a super trendy, luxurious hotel in a Western European capital city and you name it "the Dunkin," for example, there might end up being some kind of discrepancy between what you have to offer and what you appear to be offering.
All right. We shouldn't say there's anything wrong with an inn called donkey, and I would go straight to that if I was googling, you know, but maybe I'm not in your niche. Take the time. Once you've done the niche definition worksheet to analyse it, take the time after that to analyse your image. Know that you can always alter your brand. Some very well-known companies have changed their brand name to adapt to the evolution of the market, or even simply to better position themselves in it. Do you know what Google's first name was? BackRub. It wasn't until two years after the company's inception that the creators changed its name to Google, a play on the number googol, which is ten times ten to the power of 100, I think, which they meant to signify the vast quantities of data they'd be working through.
BackRub was named so in reference to a technical aspect of the search engine, which searched the backlinks of sites and used how many times they'd been clicked in order to rank the site. For whatever reason, they changed from one odd name to another. But I don't think there's one among you who could decry decisions from Google to rebrand when they did it. If you consider how successful they became, another one is called PayPal, when you probably know PayPal actually, but you didn't know it when it was called Finity, a contraction of the words confidence and infinity. Now, not only was it an awful name for a company, but it said nothing about what the company did, hence the change to PayPal, which essentially just means paid, pay friend, pay buddy.
So take the time to analyse your brand name. Obviously, it should be the name of your hotel. If you realise that your name differs too much from your niches, your values and your offer, don't hesitate to change it. It might be a lot of work, but it will pay off in the long term. The second thing is that your brand has to be unique in your market. What do I mean by that? No. You remember the customer journey I showed you in the video? OTAs are not your enemies. Your potential customers will find you in OTAs and then Google you. Well, if your brand is similar to other brands in the market, it's going to become much more difficult and expensive to be well-referenced in SEO on Google and therefore to be found.
If you have a hotel called Hotel Paradise, chances are you won't be the only hotel with that name. That means that to rank well in Google, you will have competition with all the other hotels with that name. And also with OTAs. As far as booking, if you have a hotel called Hotel Paradise, chances are you won't be the only hotel with that name. This means that to rank well in Google, you will have competition with all the other hotels with this name and also with OTAs such as booking that invest money in paid referencing on the names of the hotels. In this case, the first thing you could do is to add the name of your city in the name of your hotel. If you become like Hotel Paradise Ostrava, for example, you will certainly be more unique than just Hotel Paradise in general.
I advise you to search for your hotel name in Google as it appears in the OTAs. Here, I'll show you how to do it. So here you see, you just pop in a place name. And an inn and an out. And we go. All right. Queen's Hotel. So let's have a look. Just copy paste that into Google. And wow
. One in London, one in the city. See what I'm talking about, guys? See, the goal is that when a potential customer copy and pastes your brand in the hotel, they should find it right away. If there is confusion with competitors, think seriously about changing your brand to differentiate yourself and become unique. It will be easier to be found with a name that doesn't exist anywhere else. The trick of integrating your location into your brand name is also excellent.
Indeed. Your offer is fixed in space. You cannot move it. Your potential customers will therefore be very sensitive to the location. If a potential customer finds a hotel called Whatever Hotel Berlin in booking, he will search in Google. Whatever Hotel Berlin will have a better chance of finding it than it was if it was just Whatever Hotel.
The third point is to protect your brand jealously and completely. Be like a crazy girlfriend or boyfriend who doesn't like their significant other looking sideways at anybody else, or being looked at themselves. Your branding needs to be recognisably a symbol, guiding your potential customers towards the promised land you're providing. It needs to be strong and charismatic and unamused. Some people do abuse theirs OTAs, for instance. I mean, what exactly do they do? They invest money in Google ads on your brand name. So the OTA page about your hotel shows before your website in the search results. That's abuse. So when a potential customer goes to Google to search for your brand name, they will first come across links to Booking.com and other OTAs.
That's why you need to protect your brand. If you haven't done it yet, it must be registered and filed with the proper authorities in your country. Just do a Google search. How to protect a brand in whatever company country you're operating out of, and you'll be able to find it. You have to register your name and your logo if you have one in black and white, not in colour, even if it is a coloured logo. Why, you might ask? Because a logo in black and white is considered to be multicoloured. Every colour on the rainbow. Whereas if you register a single colour, only the logo of that specific colour will be protected. Somebody can just copy your logo and change the colours. It's a little trick to know and well worth knowing. The advantage of registering your trademark is that OTAs will no longer be able to use it in their advertising campaigns without your permission, in particular via Google Ads. Maybe in the future this will change, but for now. So it works.
Another thing it will protect you from a possible competitor showing up on your market with a similar name before registering your trademark, you must check that it is actually possible that it doesn't already exist. The process may vary from country to country, but do not forget to do it. Once you have received your trademark application proving that you are the owner of said brand, you will then have to notify Google. Because if you don't, and even if you are the brand owner, Google will continue to allow OTAs to advertise on your brand until you notify them that you are the owner of that trademark. You'll see the link on screen. So I want you to pause this video, copy this link into your browser, or bookmark the page. But it's very important that when you have the proof that you own the brand, you go to this link to tell Google all about it.
All right. Later, once you've registered your trademark, you can invest a little bit on Google Ads yourself with a limited budget to give yourself the maximum chance. When someone searches for the name of your hotel to find it directly, the space is there from the second you establish your brand, and we can have an empty nature abhors a vacuum after all.
So much for branding. It's quite simple. Well, but it's very important. All right. You want to go a little further? Branding in five and a half steps is a good one. It is an excellent little book. And with Amazon, it will be in your mailbox in a few days if you don't want it. Don't worry. I just gave you the main things you need to know. There you go. With that, we can scratch branding off the list.
Now we're going to do something very fun. We're going to choose the colours and fonts of your website. Let's start with the colours. For your website, you need a minimum of four colours, including white or a similarly light colour. So you need three main colours. And among these three colours, you need one that stands out sharply from the others. It's going to be that one that we use to draw the eye of your website's visitors to the bottom. We call CTAs or calls to action, and these are buttons that say things like book or book now that invite visitors to take action. And taking action for us means booking.
It is very important that these CTAs stand out visually from the rest of your website. And seeing as we've already gotten a little introspective from our personal values, it could perhaps be a good idea to align your site with those. So, how you might ask? Well, to make your choices, there are two excellent websites. The first is called Colour code. All right. Well, the first thing to take a choice about is called colour code. The website is colour meanings. It's great to immerse yourself in the world of colours. All right. Colours play a role in our choices and our perceptions of reality. If you don't believe me, invite you to Google what I just said. There are loads of scientific studies on the subject.
With this website, you're going to be able to better understand what the colours you choose mean and convey as a message. If you find one you like, take note of the colour and number. There will be a number on the colour. It's the code that will allow you to use that one. Find exactly the same one when you're building your website. The second website is this one all right. Colour adobe.com okay. And the advantage of this site is that in the explore tab which we're on, it offers colour combinations that go well together. So you can choose one that you like. You can even choose a basic one and then change one of the colours in the palette if you'd prefer.
I'd recommend pausing this video anyway, go explore some colours. Makes you make your choice. Make a few choices, you know, give yourself some options. Think carefully before you do, and then take the time to analyse the colour choices you make. In the previous website I showed you and and see what they'll convey as a message. For example, for the hotel club logo, I chose orange. Why? Well several reasons. First is I like the colour. It might sound silly to you, but it's going to be associated with the company. I'd like to like the colour. It's not. Although I also enjoyed what it seems to represent. Cycle psychology, good humour, action. Which I've been encouraging you to take throughout this training and optimism. I thought it was perfect for the hotel club.
Once you've made your choice, write down the codes because you're going to need them in next week's training. And we're putting together the website. Okay. So now the fonts, I'm going to state the obvious, but it has to be done. If your fonts are difficult to read on a computer screen, imagine on a smartphone screen. I often see websites with cursive font that are certainly very pretty but are difficult to decipher. Texts are necessary on your website for SEO and to inform your potential customers. However, you must not forget that people more and more these days are right. Humanity has become lazy, for want of a better word. So if a text is difficult to read, we're going to skip it, and therefore your message will not be transmitted to the ideal recipient.
And in general avoid text, but italics, cursive, and serif texts in sans serif are always preferable. Serifs are small stylistic effects below and above the letters. They can give a nice visual effect, but unfortunately they overload the text, which is the opposite of what we're trying to do on a website. Here's an example of sans serif text with the font I'm using and I've been using throughout. And here are several examples of the same text with the serif for you to compare them to. I'm sure you can see the first one is easier to read, and it takes up less space.
The easiest way to choose fonts for your website is Google Font. So this is a font library created by Google. There's several advantages to using this library. First of all, there are hundreds of fonts and you can download them all for free first. Good point. Second, and not the least is that these are fonts that Google knows. Okay. So you can be sure that they will be taken into account in the Google search engine when they appear on your website. All right. Basically Google second and not the least important by any means is that these fonts are ones that Google knows. So you can be sure that, you know, Google won't ignore them or vilify them when they're rolling around doing their SEO work on the search engine rankings.
Okay, so here you can filter fonts to see only those that are sans serif. All right. And I have it done already for your website. You can choose one or two fonts. Personally, I would just say one. It's simpler and visually less tiring. You can choose one font for the titles, one for the paragraphs if you want. It's up to you. Then once we've gone sans serif, we can go ahead and type something. Hello? I like the look of this Roboto fella. And yeah, then I like that. So it's easy. Easy as pie to download. Here we see it in italics and bold in bold, italics, etc. I like the look of all of those so I can just click there and it's easy as pie and that's it. Downloaded guys.
So that's where you want to be going to get your fonts. Okay. It's all going well in this course. You should have audited your online presence, learned about digital marketing and organised your team around whatever you discovered and decided on. Coexisting with OTAs is one thing, but in order to really make hay out of that arrangement, you need to have a realistic picture of where you stand beforehand. And with any luck, that's what you're finishing this course with today.
See you soon guys.
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