On the one hand, the irregularities (ranging anywhere from innocent mistakes all the way to blatant stealing – from both Europe, but also from the poor to give to the rich) have happened within the country itself. Unquestionably it has been the Greeks making their own bed (albeit messing up everyone else’s as a result) and that apportions blame squarely and wholly somewhere within the country.

On the other hand, under several very misguided and very unfair governments for almost 30 years now, it is typically the “non-thieving” hard-working type of Greek (majority) that is paying a very disproportionate price for all the irregularities that went on. Which is also hard to forget…

To use some culinary parallels to explain my views: whatever your position on the matter, I believe that the whole mess can be boiled down to a few key ingredients that have been cooked by certain people (from what in Greece is now called “the elite”) for almost three decades; unfortunately these were the same people that also happened to be in control of the books which were also thoroughly cooked.

From these few ingredients, the one that is very easily underestimated is complacency. And in my experience complacency is a very contagious disease.

“The Greek physics law of Inertia” – AKA the Greek version of “mañana”

The one thing for which I will dare to “throw a stone” to my countrymen is that us Greeks are pretty much governed by some cultural imperative, similar to the physics law describing inertia. When we aren’t doing anything, we are very likely to maintain our state and continue not doing much. (Incidentally, although much more rarely, the opposite also applies: when we somehow find ourselves in motion, we can find it difficult to stop). All this can make us relaxed company and great party friends, but in business it can be a disadvantage…

During the autumn of 2007, when our BABEL Multilingual product was still in its infancy, I was starting talking to hotels about multilingual versions of their websites, and international marketing packages. Knowing that Greece attracts people speaking foreign languages in their millions every year, I did some research in new hotels in the country that were more likely to use and benefit from our services.

Amongst many potentials, I remember finding a wonderful candidate. It was a five star property with some 450 rooms, in a prime location in Crete, near an airport (but far enough) and by a superb sandy beach. The hotel was independently owned, and only on the second year of its operation – which to me it meant that there would normally be a lot of room for growth of business. To cut a long story short, this property’s vital statistics made them an excellent candidate. According to my guestimations at the time, they could find themselves generating some pretty impressive profits within the first season of using us. I couldn’t wait to talk to them..

Unfortunately, my initial enthusiasm quickly evaporated by the hotel’s lack of a booking engine on their website. In fact, there was no way to make a reservation at that hotel, other than calling them, or emailing them and hoping for the best. Obviously there is very little point in pursuing, finding and getting visitors to your website from abroad if you don’t have a way to convert them to customers!

For those of you that aren’t familiar with the issue of booking engines, I should briefly highlight here that for such a property having a booking engine is an absolute necessity. I don’t want to send anyone to sleep talking about a the different pricing models of agencies and the comparative costs; so let’s just say that in a country like Greece, a decent-sized independent hotel of this type on its second year of operation, would easily pay the equivalent of 30% for a reservation in commissions to all manner of agencies. Forgetting about the numerous benefits that further enhance the argument and necessity for a booking engine, I will just mention that when someone books a hotel on the hotel’s own website, the commission costs for that hotel would drop to anywhere between one and five per cent. It is relevant to mention here that agencies already squeeze hotels as much as they can, and as hotels have costs associated with servicing a room, bookings over the hotel’s own website represent a staggering benefit in  profit levels – a 25% reduction in commission payments could be very nearly the entire profit on a room sold!

So why on earth would anyone not have a booking engine – I hear you ask. I didn’t know either and I was too curious to let this go, so I decided to find out. I picked up the phone, got through to the General Manager, and basically asked the question.

“Well, someone would have to manage it..” – came the answer.

[What? As opposed to bookings from agencies that are OK to be left unmanaged?!!]

I was shocked. That was a prime example of (these days already hard to find) old-style Greek public-sector complacency having permeated the private sector. Of all the people to show such lack of interest in the hotel’s well being, to hear such a blatant statement of laziness from a General Manager… To me, that was just wrong.

A year after this conversation took place, the financial world imploded. Today travel agents control the business for that hotel (and so many other hotels like it) and have forced the General Manager to drop her prices and increase the commission she pays to them. The owners were probably far too removed from the day-to-day decisions to identify the missed opportunity, and have now fully blamed the Greek corrupt elite for their misfortunes. Complacency and lack of understanding are a poisonous mixture for a business.

Following that incident (and a few more like it), and seeing the  suffering of Greek hotels in these trying times for Greece, I have quickly developed a strong aversion to complacency. It is therefore with considerable worry that I share with you my suspicion that this affinity to a “mañana” approach to life is not entirely alien to Britons either…

Having worked with hotels from all over the world [and aware that I have no other evidence than our own contacts with the markets (hardly a statistically acceptable sample)] I would suggest that British hoteliers are on average less keen to move forward with international marketing than their international counterparts.

Despite us being a firmly UK based company, today only 23% of our clients are located in the UK – the rest are based pretty much everywhere else around the world. The hoteliers around the world to whom we sell our services seem to be much more aware that hoteliers sell to travellers and that these days travellers don’t come from the hotel’s neighbourhood, and they don’t always speak the neighbourhood’s language.

Looking at the flickering lights of the world economy today, I am strongly advising hoteliers to go after international business even if they do well domestically. Every incremental demand point is of benefit not only to the hotel’s pricing and yielding flexibility. It is also another point of safety in an unsafe world.

If the pessimists of this world are correct, there is a lot of pressure for everyone in the not too distant future, and it will be only those who are prepared that will stand a chance to thrive.

Thank you for reading,

Yannis Anastasakis

Given our rather unusual performance-related payment model, I have been doing some digging around, to find out more on the potential of growth from that particular market. A few days of research, and a visit to the excellent 1st International Digital Forum, I am delighted to report that it is mostly impressive news.

I was prompted to write about the Chinese market when the BBC reported yesterday that the Chinese smartphone market finally caught up, and even overtook (by some 1 million devices sold) the USA market last quarter. This is obviously a significant milestone, and one to which we should be paying attention. The smartphone market is both extremely young, extremely fast growing and extremely significant in every measurable way. For many, it represents the future of not only computing, but the internet as well. And that means the Western world is left in an “interesting” place…

When Neil Mawston, Executive Director of Strategy Analytics, was asked to comment on the news that the smartphone market of China is now bigger than that of the US, he said:

“China has become a large and growing market that no hardware vendor, component maker or content developer can afford to ignore”.

Source: BBC.co.uk

If hoteliers are to compete for internet business from China, they have to roll up their sleeves and get to work!

The internet for the Chinese people is dominated by a company called Baidu – pretty much as Google and Facebook dominate the markets here. Given the size of the internet market over there, and the pace of growth of Baidu (in multiple markets), one cannot conceive to look at the Chinese audiences without looking at what Baidu does.

The company has been on the news a lot lately. It launched back in September Baidu Yi – its own version of mobile operating system (like Google has Android over here), which will do everything that Android does, with some nice iPhone iOS-like add-ons. Also, Baidu has also just announced its partnership with Dell, for Dell to run Baidu Yi on their mobile devices sold in China.

Looking a little further, we see Alibaba (one of the world’s biggest internet conglomerates) launching its own mobile OS in Chinese, found on their own K-Touch mobile smartphone, whilst every other mobile phone provider is making up their minds on how to enter the market.

In fact, only two days ago the US Agriculture secretary visited China to boost trade agreements between the two countries, and Japan announced the merger of its Osaka and Tokyo exchanges in a bid to compete with China.

It seems to me that everyone knows where growth is set to take place. The importance of the Chinese market is now more prevalent than ever, and the trend will not be changing any time soon. Whilst most of the western international markets are at a plateau – or even spectacularly declining (like the economy of my home-country), the words “boom”,”growth” and “development” seem to be permanently associated with the extraordinary economy of China.

The “leap” from a growing economy of billions of inhabitants to a source market that potentially generates additional travellers to our hotels does not require a particularly strong imagination. Where there is boom, there is money; and where there is money, there is a potential source market.

With travel restrictions having been greatly lifted, the Chinese are now allowed to book their flights and accommodation pretty much as the rest of us do. Hence, there is a growing potential in this vast, exploding source market. Although traditions and habits will probably need some time before they start tentatively changing, a tentative change in the Chinese travel patterns, is a tsunami of change for the rest of us.

Every additional 1% of the Chinese people that book their holidays or business trips over here, will represent 14 million additional travellers. That is very nearly one Chinese person for every international tourist that has visited London in 2010!

This is the time for hoteliers to look East and see an opportunity for growth. It is for that reason that I currently strongly suggest to all my clients to consider not only building a new website in Chinese; I also prompt them to ensure they are working with a booking engine that has embraced the mobile internet space – preferably through an app-like booking environment.

With thanks for reading,

Yannis Anastasakis
CEO
BABEL Multilingual

——

If you are interested in seeing some examples of our work in Chinese website re-building, please just visit us here.

If you are a hotelier, think of your PPC and SEO efforts… do you think you are selling to the Japanese in the same way that you are selling to the Brits? I am afraid that unless you KNOW the answer to be “yes”… you aren’t.

Although this changes dramatically from market to market, the rule of thumb for the top city destinations around the world seems to be that a disproportionally low number of hotels chase international business.

For such markets (think London, New York, Chicago, Miami, Paris, Munich etc.) this imbalance is presenting us with an interesting dynamic of supply and demand. On the one hand we have some finite and proportionately small – and (in most western countries) fairly accurately measured – demand for local accommodation from international markets. On the other hand, we have a very low number of hotels that appear to be interested in, and actively trying to reach, international markets. There also seems to be a very clear divide between large international chains and independent hotels – irrespectively of the standing or reputation of the properties in question.

It would be somewhat impolite for me to point to any specific properties here. But, to get an idea of the point that I am trying to make without naming any names, think of the 5  independent quality hotels in London that spring to your mind. Find them in Google and see if you can find any languages there… Now, I know they have their reasons for this – maybe they really don’t need any more business directly to their website – at least not at an additional cost. However, the conclusion (which will be visited again further down in this entry) is clear. If you want to stay in one of those hotels, and you happen to come from Japan, you pretty much have to find and book this hotel via an agency.

Now, it is personally important to me to mention here that the more I study, the more suspicious I grow of statistics and evidence. However, I have to agree that the figures available to us suggest a staggering opportunity for independent hoteliers, in the international/multilingual markets as a whole. In the case of certain cities with strong international demand, only those hotels that can speak the customer’s language (literally) have the chance to attract international traffic directly to their own website. The rest, don’t.

You Are Not Alone

Figures for international inbound travel to the UK are readily available for anyone with an interest in accessing them. One of my favourite sources is www.visitbritain.org who frequently update their figures and implicitly remind us of the magnitude of the opportunity in the international traveller. A good summary of the latest update on international tourism facts can be found straight on their website here (http://www.visitbritain.org/insightsandstatistics/inboundtourismfacts/index.aspx).

Some of the quoted figures are truly staggering. Almost 30 million visitors in 2010 have generated almost 16.9 billion pounds in revenue to the country, and certain key performance indicators have pretty much stayed the same over the last four years – despite the rare turmoil in the international and domestic markets since 2008. More than half of those visitors (52%) were visiting London.

The Language Mosaic

There is no escaping that we live in a multicultural, multilingual world. The consequential complexities and inconsistent (and even incompatible) patterns of consumer behaviour between the various international markets make marketing to such an international audience a seriously complex affair. The very simple fact that a hotel is ideally trying to sell the same room to anyone in the world who potentially wants to come to the area, makes it all more tricky than we would ideally like it to be.

However, and as it often happens with similar populations, there are some demand patterns that can make our lives a little easier…

The – almost – 80/20 rule

It turns out that almost 70% of all international visits in 2010 happened from the top 10 source countries (only 10% of the countries that have direct flights to Britain). The top ten in terms of market volume and spent can be seen in the table below:

Source: VisitBritain.org 2011

We also know that not all visitors behave the same way. The reasons behind travelling (e.g. VFR vs. Business Travel), the age of the visitor, as well as the source country itself can make a great difference in the suitability of a traveller for any particular hotel.
Furthermore, from a linguistic point of view (and despite that with the exception of two English-speaking countries (USA and Australia) all other top 10 source countries (by volume) are within Europe) the complexity that we are faced with isn’t too scary…

The Big Four

Looking at the table above, and making the assumption that all the Dutch visitors speak English (I have yet to come across a Dutch person that doesn’t speak English better than I do) leaves us with four major foreign language “powered” contributors to inbound international travel in the UK. France, Germany, Spain and Italy. These four countries alone represent exactly one third of all the international visitors that came to the UK in 2010!

Lost in Translation?

According to eye4travel (2008) some 70% of all internet users don’t speak English at all, or are uncomfortable using it for transactions… this is obviously a figure that refers to everyone with a computer and an internet connection, and we would be dishonest with ourselves if we didn’t assume that international travellers are more likely to speak English than the average user. Yet, the significance of language barriers is pretty evident from that figure – 70% is a high number in any language, and so is 60% or even 50%.

In any case, I believe that there are only two significant questions to be asked by any hotelier trying to increase its direct traffic.

1. “Do I think that international travellers understand my site when they visit it?“

Before anyone raises their hand to talk about Google Translations and risk giving me an aneurysm (however brilliant and useful their translations tools are) I would like to ask you the even more pertinent and logically preceding question:

2. “Do you think that travellers from abroad are actually able to find you online, in order to have the opportunity to try and understand what you are selling to them?”

…..

Even if it were only a minority of international inbound travellers that didn’t speak English (and it isn’t), them being unable to find your website in the first place is – I am sure you would agree – a major issue!

If you are a hotelier and you’re are reading this, the chances are that you are already doing some SEO and PPC for your website. Also, the chances are that you are NOT doing SEO or PPC for your German, French, Japanese etc. potential customers. Hilton is, Marriot is, and crucially Expedia, LastMinute and Bookings do (have a look at the Google screen captures below).

At eHotelworks, when we were thinking of offering the BABEL Multilingual product, we run multiple search tests from several countries for multiple types of hotels, using a variety of languages and IP locations (in other words we were pretending we were searching for UK hotels from abroad).

The results were really fascinating. From certain countries (most clearly show in Holland than anywhere else) the evident problem of being found appeared to be little. In Dutch searches, hotels without international languages on their sites produced mixed results (and much better than we expected).

It seems that the Dutch’s ability to speak perfect English has permeated Google’s results. A lot of hotels – especially in what we call “narrow” searches (e.g. “hotel name” and “location” were used as search terms) – did come up in the first pages, no problem.

On the other extreme, in countries and languages where English is not a prominent language or the language has a significantly different alphabet (Japanese, Arabic, etc.) no searches gave us any independent hotel results at all. Even when we were looking for hotels by their exact name and location, only agencies came back with results. Fascinatingly, Bookings.com – presumably through their very popular xml feed based service – seemed to power the staggering majority of results in the more obscure source markets (such as Greece in the example below).

Have a look at the example of two searches (used the keywords “hotel in London”) here:

First, from England, in English

Even for the traditionally expensive keywords "hotel in London" there is a multitude of hotels having their direct links seen. Especially in the Local Results section.

Then from Greece, in Greek

You don't have to speak Greek to notice that there are NO results, either organic or paid for, which belong to a hotel. The OTAs have the opportunity to rule the first pages of Google. Even the mighty Marriott and Hilton of this world have to give those bookings away to OTAs.

The inability of hotelier to market to the many – and obscure – international languages is arguably – and at least in part – justified. As those that do engage in the “get the international traveller” game would testify, the law of diminishing returns applies with unforgiving realism.  After the first few “top-tier” languages have been put together and offered to consumers, adding more languages is not necessarily a good idea. Going after certain countries that represent only a very small proportion of the overall inbound UK market is simply too expensive for the returns this market will generate, and therefore a good commercial decision to leave them out.

It is most likely for that reason that you don’t get to see Expedia, Hotels.com, LastMinute etc. featuring in the Greek search results of Google above… It is too expensive to build Expedia in Greek and their commercial model is nowhere near as attractive to local wannabe OTAs as that of Bookings who seem to thrive over there not only through XML feeds to smaller operators, but also directly, on their own two feet.

So what is one to do?

Some markets are – I would argue – no-brainers! With a third of all international travel to London coming from France, Germany, Spain and Italy, and (statistically speaking) with only a fraction of the hotels in your competitive set offering rooms to these countries through their own websites, there is a huge internationalisation opportunity that should generate some real results.

Whatever your country, do talk to us. BABEL Multilingual is of the risk-free variety and I certainly believe in it. The nature of building and maintaining international presence against the OTAs doesn’t have to be alienating or difficult. We think it is completely worth it.

Thank you for reading – as always we are completely open, interested and grateful for any feedback you may have.

Yannis Anastasakis
Director

The Royal Park in London now speaks fluent German (and is learning French)

Massimilano Naspi, Head of Distribution for the Royal Park Hotel said:

“We were attracted by BABEL Multilingual because it was an obvious – and risk free – way for us to increase our international exposure. We were impressed with both the quality of the work that was delivered, but also the ease with which both our website and our booking engine were translated and marketed from within Europe…

The end result is that we now truly have a fighting chance to get international reservations straight on our website, and away from the competition – however big or established they may be. I am very happy with this product.“

Yannis Anastasakis, Director and owner of Electronic Hotelworks expressed his delight for the first BABEL Multilingual site becoming reality.

“This is not an ordinary translation by any stretch of the imagination. As far as I am aware, our services are a world-first in multilingual website re-construction and international optimisation, as we bring together a unique blend of quality of work and an agency-like pricing model. This is a risk free product for hotels and I can’t imagine why anyone wouldn’t want to sell roomnights everywhere in the world through BABEL. It just makes sense.”

…”we are particularly proud that we seem to have achieved our aim to ensure that this is easy for the hotelier. Everything, from accessing the .com website files and re-building the website content, to picking up and translating rate-plans, room-types and hotel descriptions (as well as everything else that can be found on the booking engine) was done with great ease for them…
… for the hotelier, building an international BABEL site is proving to be a process that is much, much easier and simpler than building an original .com site – despite the very detailed work we have to do behind the scenes. And all this whilst creating excellent levels of incremental international exposure for the hotels. All this couldn’t have been done without some great partnerships with OBAN Multilingual and CookieBite.net so my sincere thanks to them too.”

“I am told that the team at the Royal Park were so happy with the delivery and execution of their German site, that they have now signed up for French to be developed for them as well.“

For more information on BABEL Multilingual, please visit us at www.babelmultilingual.com, or have a look around at www.ehotelworks.com.

The BABEL Multilingual team.

Almost a decade ago, when I first met with the guys from OBAN in a presentation they did at the Sussex Innovation Centre, I had one of these light-bulb moments. Whilst the rest of us were battling to convince hotels that spending some money with Google for some track-able advertising was a good idea (again, this was a decade ago and the market was very, very different) OBAN were talking to their blue chip clients about the end game. Proper internationalisation projects where everything is done on a per country basis, with thorough and creative local research techniques that would help identify what the search engine AND cultural requirements of each country were, and use all this information for home-grown websites, talking to each customer in his or her language, from within his or her country… why hadn’t I thought of that??!

OBAN and I hit it off right away. These guys were wondering why they had such success with global giants around the world (think BMW, governments and tourism departments of Holland, Spain, Abu Dhabi etc.), yet when it came to hotels, there seemed to be some barriers… We looked at it back then, and we pretty quickly figured it out. The level of sophistication required for boldly investing some serious money to gain a well-worth it international presence, seemed to be firmly in the court of the large chains – those with international presence in the first place. Any single hotel or small chain, which would typically invest under 10K a year on their entire website effort for their .com and .co.uk versions were very unlikely to invest with such commitment…

I immediately knew there was a gap in the market there… hotels are natural targets for foreign customers. And searches from other countries, in other languages will always yield… well… “other” results. An international version of a hotel’s website, living and growing within the target (source) country HAS to be a good thing to have. And having it sooner rather than later, HAS to be a good thing, as age is generally a factor that helps you with your organic listings extremely significantly. I know that if a hotel places a .de version of their website properly in Germany, they will have what is called “early entrant benefits” for many years to come.

There was definitely an opportunity there… Fast forward to today, and I am delighted to say that I genuinely believe we have come up with the answer.

How does it all work?

• BABEL is a product where we take the hotel’s website and we re-construct it – using OBAN‘s awesome services – in foreign languages and for a foreign audience.
• First we look at each hotel individually in terms of price, style and location. We then make a call on where we think there is an opportunity for them internationally (given existing AND projected international tourism trends).
• Then we send the guys at OBAN‘s various international offices the hotel’s existing URL, and we ask them to evaluate if the website will work in that market.
• Each of the international offices will then re-construct the website from within that country to match both the online behaviour of the guests (e.g. the terms they are using to find a hotel) but also their cultural requirements (I always have fun explaining to hoteliers why their website is going to be having slightly different colours for a Chinese version..).
• The hotels typically approve any suggested changes right away and we crack on with buying the correct URLs, hosting a site locally (or simulating local hosting – depending on the market) and then fine-tuning the text.
• We then get the booking engine sorted. Pre, post and confirmation e-mails – as well as modification and cancellation confirmations are translated alongside with room and hotel descriptions. The entire experience has to be strictly seamless.
• We finally launch and we generate traffic and reservations from these countries.. and there is the kick. A hotel typically won’t have paid anything until that point. They are only asked to pay a commission on the value of the reservation, once the reservations start going through, and only for a period of time. When we have been paid for our work, the then established and well producing sites are returned to the hotels and the reservations from abroad become free!

The real excitement for me is that this has never been done before. Hotels paying on a CPA basis for an established, thorough and otherwise very expensive multilingual expansion and localisation service is a completely new thing – and seeing it move from a glint in my eye a few years ago to a real, working concept that generated revenues for the hotels – where they didn’t have anything before – is just extremely rewarding!

With thanks for reading – and don’t be shy to give us your feedback and thoughts.

Yannis Anastasakis
www.ehotelworks.com

The Arch Hotel now speaks very fluent German, and can be found in Germany

The Arch is no ordinary hotel. 88 wonderful rooms, excellent public spaces and meeting rooms, and a genuinely impressive record of looking after guests. With the property being open for just over a year now, the Trip Advisor reviews are placing it firmly on the top of London’s elite hotels.

Earlier this year, the Arch joined eHotelworks in being part of BABEL Multilingual, a revolutionary opportunity for a select list of hotels to compete with online travel agencies for reservations from abroad coming directly to their own website.

Yannis Anastasakis, eHotelworks’ CEO, commenting on this opportunity said:

“Unlike every other translation that you see hotels undertake, this property had the chance to get its first international language created through our BABEL Multilingual solution. That definitely means no ordinary translations! Using Oban Multilingual‘s extensive experience in cross-country on-line traffic and in creating content and designs that are both search engine and culturally optimised, TheArchLondon.de is enjoying a locally-focused presence in Germany, and is already well on its way in getting significant international exposure for the hotel.

Through the Babel Multilingual product, the Arch had its current official website re-built – rather than translated. Respecting the look and feel of the original pages, the content of the English pages was re-created from scratch to match the terms that German people use when searching online.

The end result is that the new website was made to be search engine friendly – which brings more visitors – but also consistent with the online habits of German visitors. With the right kind of promotion in Google.de, the Arch will have a great opportunity to compete directly with the likes of Hotels.de, and LastMinute.de – who so far had very little online competition from independent hotels for cross-country traffic.”

Possibly the most exciting element of the Babel Multilingual product, is that hotels receive the service of their international page re-construction without any up-front costs.

Uniquely, eHotelworks offers the entire range of content and url research, website hosting, website re-construction, cultural optimisation and localisation on a Cost Per Acquisition (CPA) basis. Hotels are charged a commission on incremental reservations only when the international websites have generated reservations for the hotels.

To find out more about potentially getting your hotel’s website re-constructed without up-front costs, you can contact us here.

The iPhone OS3 doesnt' look so different.. but the hidden tricks, and most of all the open communications protocol it offers, will change the way customers interact with you.

The iPhone is a peculiarly ignored medium for reservations and guest interaction; and almost never seen as a different segment in internet business segmentation – even from the most aggressive and methodic specialists. Possibly a slightly uncomfortable subject for CRS firms (who usually educate on what they can deliver and forget to talk about the stuff they can’t do) even the most obvious features of the trend-setting platform (because that is exactly what it is) are frequently ignored. Look around (on the net) and see the signs.

There are many examples of full Flash websites without an html alternative… which will not work on an iPhone, making the expensive choice of full Flash design less high-end than what it might have looked on paper… (and don’t expect any great improvement with Microsoft’s Silverlight technology either)

With the new iPhone and iPod Touch related developments around the corner, there is a lot more that is coming our way that should worry us. A lot more than just presentation and usability of our website on such a great demographic (who do you think can afford an iPhone?).

Alarm bells starter ringing about a month ago when Apple invited developers (people that write applications for its Apple Store) to talk to them about the tools that it is now giving them for the next operating system (3.0) for the iPhones and Touch iPods. In their presentation (tailored to the less technically minded person – so don’t be shy if you don’t know your class from your object, and do watch it here) they didn’t fail to point out that their market is just superb. And growing really, really fast.

A few facts of interest:

In less than two years, a completely new and different – and in most places rather very expensive – phone is being sold to over 80 countries around the world.

Just in the 12 months of 2008, Apple sold 13.7 million (yes, million) iPhones and another 16.5 million iPod Touch units. That is a combined 30 million units (did I mention these things don’t come cheap?).

If you are not already getting interested in the size of this market, maybe I should mention that there is over 50 thousand individuals and companies working to produce independent applications for these two machines.

And today, there are well over 25 thousand applications for it.

And over a billion (yes, billion) downloads that have taken place by iPhone and iPod touch owners by the end of last month (in about 8 months since the shop where you can buy them went live).

Given that the iPhone is invariably one of the most expensive phones to buy (yes, I know I mentioned this before, but it is important enough) there is probably a lot of mileage in the demographics behind it. I don’t think there is data for it, but I suspect that in their majority, people that have an iPhone also have money to buy a hotel roomnight somewhere. And that makes them oh, so very interesting to us…

So we know that this technology is here to stay, and we know which way it is going to go (from the presentation Apple did, telling us all about it). And in my personal view, there are a few interesting factors that will make this market an arena for differentiation and profit of those of us that find the means to tackle it early.

The main changes are:

• iPhone will now allow in-application purchase.
• It will allow for push technology to be taken advantage of, and
• peer to peer over Bluetooth is going to be supported.
• Stereo Bluetooth is going to be supported, and
• maps can be widely used by everyone who is writing an application for the iPhone.

All in all, if successfully implemented, the way that we interact and relate to our customers has just been opened up to endless possibilities for dramatic, and really cool changes.

In-application purchase means that if you are making a booking over your iPhone through an “App” dedicated to the job, you don’t need to browse a hotel’s website in order to buy add-ons. And third parties with their technology and budget requirements fulfilled, (companies like Expedia and Travelocity, but also hotel chains and representation companies) will be able to offer add-ons dynamically, at any stage of the booking (before or after) and without giving their app customers any extra work to do in the process. In fact, it should be easier for the consumer to be offered and to buy add-ons over the phone, rather than on his or her computer. Naturally, these add-ons can also be free, allowing for post booking customisation of the stay (something not dissimilar to what BA does with their offering to their customers the ability to choose their seats and set meal preferences. Not dissimilar at all in fact – just much, much, much cheaper to develop).

Push technology means that a firm with an app handling the booking on the customer’s phone, can now send messages to its customer without needing to know their mobile number (although consumer permissions will be needed at some stage – so I suspect a new process of licensing will be introduced in the app purchase process). So, in our example of a hotel chain, if the reservation happens through an app, it is easy for the hotel to send all sorts of interesting stuff (calendar notes, location pins, important news etc.) to the consumer – without the need for anyone to be reading e-mails, or agreeing to being sent texts (that are both expensive for the sender, and apparently massively annoying for the consumer). No resistance in “pushing” messages to consumers is in itself a huge subject, but it should suffice to say here that we expect it to provide a new channel to consumers’ mobile phones. Consumers that would otherwise decline receiving that message (at least through text) are now going to seek them..!

Bluetooth peer to peer – using Apple’s brilliant Bonjour – could mean that when a customer is in range, the iPhone can register them with reception, and even receive a key to open the Bluetooth enabled or docking port equipped door of their room.

When in the room, the customer won’t even have to take the earphones off to listen to the TV (thanks to Bluetooth Stereo). The customer could in fact use the iPhone to control every electronic item in the room, from a specially adapted interface for the lights, to radio clocks, to channels on the TV, to ordering room service or booking a table without talking to anyone. Even feedback can be given on the spot – giving you a greater chance to fix the problem before you read about it on TripAdvisor!

Sounds like science fiction? It shouldn’t. Because the hardware is here, and the platform on which the required software (Apps) can be developed is here. The only thing that is needed at this stage is time for the development and the market forces to kick in. And yes, initially these services will be offered separately – one imagines that it will all have to progress from one App per service; customers will have to dock their phones rather than working with them wirelessly. But things will move on and improve as hotel chains will start standardising their software.

So the future looks bright… bright, apple shaped, on a back-lit touch screen hand-held with automatic dimming and a platform that – barring minor annoyances – is better than all of the rest of them.

Yannis Anastasakis

eHotelworks

One day, maybe, simple - and not so simple - mathematics could be driving your business

be. Trust me on this, I am an expert

Although the term super crunching sounds like yet another feeble attempt by a bunch of statisticians to make their jobs sound more exciting, this is definitely not the case here. Super crunching is a (relatively) new way of using large volumes of data.

You see, the norm for any type of research and development today, is to have a hypothesis, collect data and test it.

The super crunching way of doing things is reversing this traditional hypo

thesis-data order and starting from the end. You take the data (the more the merrier) and you ask it to tell you what is going on. If there is a causality within it, you can now know about it.

Letting a database tell you if there is a (not necessarily visible) relationship between data that concerns your business, is effectively telling you how the various parts of your business are effecting each other. The proper term for this: modelling of causal relationships, sounds a bit like science fiction and far fetched for a modest hotelier, but in reality it is a fascinating fact of life and rather feasible to consider for your business. Most importantly, it will make you really more efficient, and it will make you money in ways you just couldn’t guess by yourself. I fully recommend the book on the subject by Ian Ayres, Super Crunchers: How Anything Can Be Predicted.

Super crunching is used by many companies today. Do you have an iPod in your pocket? If yes, the chances are that you have noticed a little feature on it, called Genius. Genius is Apple’s super crunching software that looks at what you have bought, what you have in your music library, and your own rating of your songs. It then figures out (based on other people that appear to have the same tastes) what you are most likely to want to also buy. Amazon, Wall-Mart and Continental Airlines are just a few names you will recognise, which are becoming increasingly efficient at handling larg

e volumes of data. And they make very, very good money from it.

The real-life applications of today, and the execution of this kind of crunching, can be enormously interesting for the forward thinking hotelier. In fact, the chances are you are using a form of forward looking software already when setting prices for the future. IDEAS, or one of their competitors, are looking at your PMS’ data and are telling you how to price your empty rooms. Hoteliers that are using such software consider properties without it to be less sophisticated, and in a competitive environment the non-equipped property is seen as the most likely one to miss out. Although what IDEAS does shouldn’t quite qualify as super crunching, it is an example of how important it can be to look at data seriously.

What makes me think twice on this is that despite super crunching (effectively a collection of statistical and mining techniques) being perfectly suitable for the electronic transaction world, I am not aware of any hotel company that is using it today – at least not effectively.

Hotel companies use e-mail software to manage their e-mail campaigns. Quest

ionnaire software to collect data from actual and potential guests, and they have an on-line booking engine that will allow them to take bookings on-line. Some also use CRM software to monitor their sales efforts and a variety of software and techniques to monitor the progress and change the content of their website. On occasion, if they are luc

ky, they will be working with one of the better companies out there (I personally like Avvio from Ireland) which will give them the opportunity to combine some of these processes – even with external sources (so hotels can monitor and control their promotional activities with third party websites). But – given the cost and limitations that larger companies with “enterprise” solutions – the only way to truly use all this data to find out how you can be more efficient, is to look at it all together. Everything, dumped in a database, and then super crunched.

We are delighted to announce that eHotelworks will soon begin its first super crunching calculations within March. The project is extremely hush-hush at this stage, but we expect that we will be able to formally let you know what we will use it for, and the goal should impress. Even though we are not particularly seeking change, we expect that it will be enough to not only convince us to alter the way we do business. We think that it will be enough to also affect the way you do business too

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SUPER CRUNCHING – FALLING IN LOVE.

When I was first introduced to Super Crunching, I knew I was falling in love. Super crunching is fun not only because it serves useful reminders of our inability to be as cool as we would like (which is otherwise very easy to forget); it also delivers shattering blows to two annoying constants of professional life:

First, come “the followers”.

For a number of reasons (in my mind these are ranging from the need to keep the boss happy to well documented flaws in the human thinking process) people – and consequently businesses – are very likely to become followers. Following is the easy option, and it is therefore sometimes confused with “bad” – which in itself, it is not. Following the example of the others, provides us with a safety net, and by comparing ourselves with the leaders it helps us assess what the results of our efforts will be (in a very crude way it helps us predict the future). All in all, there are good reasons why it is OK to follow. Nonetheless, there is such a thing as “early entrant benefits”, and becoming a permanent follower (almost a certainty amongst those that like the safety of having seen it done somewhere else first) eventually translates to long term, and opportunity costs. That is what is annoying about it.

In the internet world, these costs can be of monumental proportions. The example

of having a website in a particular country (localisation) comes to mind. Allowing your competitors – who also want French visitors in their hotels – to enter the French market by introducing a French website with a French domain and locally hosted, means that you will never, ever be the first entrant (from your competitive set) in that market. Your SEO professionals will be able to do a lot of things to improve your rankings, but they can never, ever make your website older (which is an advantage) than that of your competitors who have already done all that. If you don’t act early, the opportunity is lost for ever.

Ian Ayres, in his supreme book Super Crunchers, summarises the issue with poetic

beauty. Talking about the medical world (scary stuff actually) he says:

“…once a consensus has developed about how to treat a particular disease, there is a huge urge in medicine to follow the herd. Yet blindly playing follow the leader can doom us to going to wrong way if the leaders are poorly informed.”

Ian Ayres in Super Crunchers: How Anything Can Be Predicted. 2008

To make things worse, we – as a species – love to hold on to our errors. As new evidence arrives, evidence which contradicts our beliefs, we tend to discount it; we are focusing instead in evidence that supports our views.

Just the other day I was talking to a Director of Sales in a small group of hotels in Manhattan. She discounted all the evidence I provided that multilingual websites can be useful for converting higher levels of lookers to bookers. She also wiped away all suggestions about strong evidence that early entrants will have longer benefits from multilingual search engine optimisation and PPC, all with a single statement that the h

otels were doing just fine without them. Knowing the basic principle of higher demand = higher RevPAR (OK, I agree that some yielding has to happen somewhere in the process, but we are talking yielding 101 here), it practically hurt my ears listening to her. (Nevertheless, one absolutely has to respect the “we are fine as we are” argument… At the end of the day, maybe it was my manners…)

The second annoying constant, “the statistical lie”.

I used to have a boss at Hilton International (a long, long time ago, in a galaxy far, far away) that was just precious. During one of our arguments about salaries and payroll (no, I didn’t last long) he put his case forward by explaining that I was being given the same % of pay increase as all my other colleagues who were doing the same job. Correct though he was, he was conveniently forgetting that my salary was significantly

lower than the salaries of everyone else at my level. I was immediately pointing out that 100% of nothing is still nothing, and if you take the actual base salary figure into consideration, the amount of money that I was getting in the end was negligible.

To this day I am not sure if it was all a tactic, and he just wanted to pretend that he was tired with me by the time I had explained the flaw in his logic, or if he genuinely didn’t get it. He was generally an intelligent man, so I would normally opt for the former, but on the other hand it is quite amazing what people will completely fail to understand if not understanding helps them with their interests…

In any case, the use of statistics to prove erroneous (and occasionally barking mad) points is an international phenomenon, with implications that can be very severe. The problem is that acquiring the data is frequently full of problems. Sometimes the collection of data happens at the wrong place. Sometimes the actual collection process is flawed (maybe field researchers that are trying to get questionnaires in, even if it means bending the rules) or the actual questions asked lack the necessary insight to assure quality of data. In any case, it is no secret that “in this world there are lies, there are damned lies, and then there are statistics”.

So, it is little wonder that the idea of super crunching the truth, with its reminders that

a) experts don’t know as much as we would like them to and therefore shouldn’t be blindly followed, and

b) its promise that flawed statistical analysis will have more difficulty in supporting flawed logic,

immediately found an avid supporter in me.

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NOTE 1.

Ted Ruger, a law professor at the University of Pennsylvania challenged political scientists Andrew Martin and Kevin Quinn (super crunchers) in predicting the outcome of the US Supreme Court’s decisions in 2002, and comparing their results to the predictions of a panel of experts.

Ruger used some 83 crème de la crème legal experts (top of the ladder, hand-picked and ultra

experienced professionals), each casting predictions on their field of expertise. Martin and Quinn used no more than six factors in predicting the results. Experts achieved 59.1% accuracy in their predictions, whilst the algorithms of Martin and Quinn produced a 75% of correct predictions.

Yannis Anastasakis

e

Hotelworks

“What determines where travel companies advertise online? And what rates are paid for various types of advertising?

I am currently looking into the costs of and reasons for online marketing campaigns and wanted to ask the group what determines whether a site is worthy of advertising budget. I’m less interested in SEO or the PPC campaigns on the likes of Google, MSN and other generic search engines, but rather the budgets people allocate to advertise on travel specific sites such as deals publishers, meta-search engines and online travel communities / social media sites. Specific information I’m looking for includes:

What kind of volumes of traffic do advertisers look for? What kind of click through rates do they look for? What are the going rates? What revenue models work the best (PPC, PPA, commission based)? Banner advertising – do companies still pay for impressions/page views, or would it always be a PPC model these days? What do advertisers look for in a site other than traffic levels?

Does anyone have/know of any documents/research with this kind of information that you are able to share with me? Or do you know how I’d go about find this out for myself?

Any advice you can give is much appreciated. Will be happy to share my findings with anyone who is able to contribute.”

Simon Carkeek, Exec. Director, eye4travel

Mr. Carkeek’s question is indicative of the complexity and variety of answers he is expecting to receive. Different companies obviously have very different ways of thinking, and there will hopefully be many different, specific figures that will go his way. If this is the preliminary groundwork for another excellent report from eyefortravel, I can only wish them the best of luck in quantifying some of this stuff.

The answer to "where do I spend my money best for marketing" is one you should be answering every day.

Having worked in multiple environments, I know that less accountable factors such as “gut feeling” or habit are still in use, but I have also come across a couple of examples of “doing it properly”, and that is what I think you might find useful here.

The client was a luxury collection with properties mainly in USA and the Caribbean. Upper 4 star hotels in their majority – with a couple of really famous properties in the mix and an unusually structured management team. (Hopefully further down it will become clear that this is relevant because it allowed for efficient flow of critical information amongst executives).

• Can we measure the results?

Investment in electronic advertising was always subject to one paramount criterion: Measurable ROI. Irrespectively of the method of calculating charges (PPC, % commission or “exposures”) if a channel or the company’s internal processes and systems could provide reasonable measurement of results, the campaign had a good chance of taking off.

• How much additional work would it cost us?

It is relevant to mention here that the costs of the campaign were also evaluated against the processes and work-load that would be generated by the campaign. The specific collection was rather “lean on the ground” without large teams of people delivering at property level so if a campaign had certain complexities to it (e.g. delivering of a promotional item or value-add-on for a booking) we would always take these into consideration.

• What were the opportunity costs?

Opportunity costs were also looked at in every case, and from two slightly different points of view.

Traditionally, we would examine the potential return in terms of volume (we were looking primarily at volume of roomnights here, not just the % of ROI as the right roomnight levels always justify a little more aggressive payments). If a certain opportunity A was looking like generating more than another opportunity B, then opportunity A would get the green light first. This staggered processing of opportunities was very useful – amongst other reasons – because of man-hour considerations; so only the number of opportunities that could realistically be handled would be eventually allowed to take off, and the decision didn’t have to be conscious (you often run out of time before processing opportunity F, but you didn’t run out of time in the midst of working on opportunity B or C just because you allowed the processing of opportunity F take up vital time).

The second, and rather non-traditional view of opportunity costs, is associated with the cross evaluation of ROI against all other revenue generating channels and segments.

To understand this approach and the logic behind it, it is relevant to mention here that the collection run almost completely (they were in the forefront of trying to do so with wholesale business as well) on BAR.

With occupancy levels being low during large sections of the year (this was a very new company with a lot of properties coming out of massive long-term renovations, so the starting point was lower than one would expect) the importance of filling up the hotels was at the top of the to do list. (Every revenue manager will tell you that you fill up your hotel first; then you may start any serious efforts to yield through improving your ADR).

Working with such a pricing structure, and with empty rooms to fill, the company would look at each campaign and could compare the opportunity costs and potential ROI across segments. As long as the ROI could be measured, a comparison was very easy. Would we spend 5 thousand dollars in aiming at incremental business in Expedia for additional % commission in each booking, or would we give this money up as a promotional add-on for an e-mail campaign to loyal members? Would we invest it in GDS cpm based advertising or would we go for brochure contributions with yet another wholesaler (which would produce results in a year and a half from the point of investment)?

The primary decision making tool was a universal % target for commission/payment levels. All BAR model channels would be analysed for a % cost of roomnight. The most expensive would be the “walk” point in negotiations for pricing of advertising, the cheapest would be the “wish” point and anything in between would be acceptable.

Another important criterion came from relationships. Larger organisations, companies that were important to the collection had more bread-and-butter business for the hotels, would always get priority. Without breaking parity, and working with a narrow range of commissions even for the best partners, giving them advertising dollars was the single method of showing preference to them on a day to day basis – and it worked well too.

The principle of this universal % payment/ROI approach rings true. For me, comparing costs and monetary/relationship benefits across all relevant channels (which is only really realistic if your pricing model is BAR and parity) has to be the correct way to run a business. It allows for nimble, justifiable and accountable investment.

In final point? There may be varying levels of money you have in the marketing pot, and as a company most likely there will be varying attitudes towards different media, accounting and payment practices and personal views. Choice for investment should come following consideration of alternative opportunities, their real costs (obvious and hidden) and always, always based on measurable results. Even if the non provable media with which you are presented has more to offer in your opinion, think of the way and cost you will have identifying bookings from it. In my experience you will always be better off with the measurable; if for no other reason, because you will be able to show your boss an unsinkable ROI figure

Yannis Anastasakis

eHotelworks