Tag Archives: Booking Engines

A Greek Lesson

I think that one of the overwhelmingly consequential stories of 2011, was that of the Greek financial and social issues. The topic has been covered very thoroughly by the world media, so I am guessing that just like me, you will have mixed emotions about my fellow countrymen as a whole.

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

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Filed under eCommerce, Hotels, International, Marketing, Multilingual, Return On Investment, Sales Strategies

Letting Google choose the best web booking engine? Let the results speak up.

Experience has taught me (and I presume most of us) that Google comes up with lovely, useful and free solutions. Despite the massive influence they have on how you and I are designing and running our electronic business (I can think of many worse companies to do this) I constantly find myself admiring them as they seem to have a knack for identifying real solutions to real needs, before you and I even know we need them.

So, are you looking for a free way to collaborate with colleagues on a word or excel document (well, close enough to word or excel anyway)? Google docs will give you the answer.

Some results - like the efficiency of a booking engine over another - are easier to quantify than you may think

Do you want to use an interactive map for showing your hotel’s locations, maybe against local attractions, whilst allowing your on-line visitors to examine distances, directions etc.? Google maps is there for you and – again – it is free.

Do you want to evaluate the credit-worthiness of a website you are visiting? The Google toolbar will offer as much as any one company can, and it will throw in the deal (the free deal that is) a few useful extras like the really rewarding and empowering voting buttons. (So if Europcar upsets you with their dodgy last minute charges, you can always vent a little by clicking on the appropriate button). It is worth mentioning here that the best solution for quick site evaluation that I have come across this far is a toolbar in Firefox that apart from the Google ranking and backward link options, also offers data and options from Alexa and Compete.)

Of course, from all the great tools Google have, the Google Analytics are closest to my heart as they are very nearly the best solution out there, and they are (once again) totally free. It is one of these Analytics tools that I was thinking about today, as I was reminded that not everyone knows what they can do.

The topic was approached as I was having a conversation with a gentleman from Canada. Good properties with a rather imperfect website – which should nevertheless do enough of the job it is supposed to do. The company seems to be using two different types of booking tools between all their properties, one that comes out of the PMS – which is really, really badly done, but comes free – and one from SynXis – which is really, really well done, but you have to pay for it. Unsurprisingly, he noted that the properties using the free version of the booking tool are performing less well on-line than the ones that are using the paid-for SynXis’ tool.

He didn’t have to say much from there on, as the scenario is the same around the world. I could tell that he is fairly sure that the PMS’s questionable booking tool is damaging conversions to bookers, but it is difficult to argue against something that is free.

We all know that when it comes to the guys that pay the bills, taking a stance requires certainty and – if at all possible – facts.

In scenarios similar to ours, one needs to be able to argue that making a change will generate sufficient ROI. ROI which should more than cover the costs of the % commission to a paid-for booking tool provider. The ROI would also have to be demonstrably higher than the original solutions as one has to consider the opportunity costs of the % commission and the time/effort investment that one is inevitably going to undertake with such a change. Usually the problem is not so much the lack of conviction, but the lack of hard data.

There are a couple of solutions that I have seen to this problem, including the running of the two bookings tools on the same page (think two buttons, practically next to each other). This is obviously not all that brilliant for a number of reasons. Effectively, two “book here” options equate to introducing a factor that will confuse not only your results, but also your visitors. You are going to be using prime real estate on your home page for this, and by changing your web-page you are messing with the actual subject of your study. There will also be visitors that will choose by clicking on both, and there will be visitors that will visit one of the two (the one they would like least) and decide they don’t like it enough to use it. There are many more reasons that you will be able to think, but the underlying fact is that this is not the best way to go about it.

A better solution would be a process of concurrent website monitoring and analysis (hello Google Analytics). This is much more simple than it sounds, and it will give you (at least theoretically) a clear and clean image of visitor behaviour. It is a technique that allowed eHotelworks’s partners to develop the internationally culturally optimised templates we are selling through our HelloWorld packages (it effectively allowed us to see what types of look-and-feel in international versions of websites converts best on a per country basis).

The same technology (without the complexity and costs associated with significantly changing your website) will allow you to take your existing pages and copy them next to the original ones. You then change the link of the “book now” button (or the code of the search behind your mini booking tool) to that of the new booking tool. You then promote your website normally, but each time someone clicks to see your webpage they are given one of the two versions. Assuming that all other parameters are unchanged, you could theoretically sit back and wait for the enlightening and comparable results.

The theory is that if your new booking tool is performing better than the old one, you can look at the incremental revenue that the new conversion % across all bookings and you can see how much better off you would be if you were using the new tool for everything.

This is also going to give you interesting data for your negotiations with your CRS supplier. I can think of no more solid an argument from a hotelier asking for a discounted % fee from its CRS provider, than the one that is backed with hard data of this type. “This is how much money I make above what I get from the PMS’s tool, so I can only go ahead with using you if you make your tool available at this reduced percentage”. Solid, truthful and backed by data. To be honest, as a systems sales person I would do my utmost to give this intelligent hotelier the reduced percentage, just to keep them as a friend! (The grumpy old man inside me is already muttering under his breath that there just aren’t enough good negotiators out there any more).

So this is all good and easy, in theory. Alas, practice is always a little different, so please beware:

In practice, using a better CRS, one that will allow you to do more things than the old one, and one that looks better than the old one (thus giving the all important signals to your visitors that you care), should always generate more conversions. It really always should. And running the experiment as described above – sticking to visual comparability – is not giving the better tool a full chance to shine. In other words, changing only the link may not give it enough of a chance to generate more bookings. And if you do more of the stuff you should be doing (promoting your product through the additional features) you are not running a straight comparison any more.

Not to mention that having a good account manager from a CRS specialist firm looking after you, over time, it is always going to be more productive for you than having a PMS account manager who is invariably treating connectivity and the booking tool as an “add on” rather than a lifeline.

Additionally, very rarely have I come across a hotel that is doing all it could to maximise visitors to their website. With less than the potential numbers of visitors arriving, the value of the increased conversion ratios is also lower than the potential. In other words, 5% increased conversions is nothing to write home about if you take ten bookings a month from your website, whilst it is a lovely increase in profitability if you take a thousand.

It is interesting to mention here that increased numbers of visitors (usually driven through aggressive campaigns and because no campaign is perfect) tend to be more demanding than your usual lot. If for example you are running a PPC campaign for the first time, you will get visitors that would otherwise not find you. And you will find that they are less determined to stay with you than the usual clientele – that found your website organically after doggedly looking for it. So suddenly you are talking to visitors that may be much more easily put off. Hence, looking good throughout may suddenly be much more important than it used to be when you weren’t pushing for visitors.

For all these reasons and depending on your property and market, the better booking tool may be one good step in the direction of more bookings, but as a standalone step it may appear not to be worth it. An orchestrated web business generation effort is usually worth much more than the sum of its parts, because your website booking process (from search engine optimisation to repeat guest hunting) has each step optimising the results of the previous one, reducing drop-outs. This is a fine yet important point as introduction of the improvement elements one by one may never individually look good on paper. In the website optimisation business, more is much more!

In conclusion, I recommend caution but definitely action. Run the test (it is cheap, and it is easy), have a look at the results and use them to your advantage. Use the new booking tool’s bells and whistles through a gradual introduction to the concurrent website to evaluate the impact of each step. Use this data to estimate the benefits of additional facilities that you won’t be able to use in a test environment. Get the results and interpret them. Run a campaign and use links directly to the features of the booking tool. Compare results to older campaigns.

There will still be a lot you won’t know as most of the advance facilities of a booking tool come into their own with time as people don’t adjust to new technology overnight.

In any case, there will be hard data in your hands. Data that will most likely show you how you are better of with a good booking tool. Even if you don’t take into consideration the other long term benefits of empowering technology, you are going to be better off for having tried to stop your accountant and floor manager (PMS) to run your sales.

Yannis Anastasakis

eHotelworks

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Filed under Conversions, eCommerce, Hotels, Marketing, Return On Investment