BookingSuite: A Lesson in Direct Revenue StrategyBy Vikram Singh - Global Hospitality & Travel Strategist
BookingSuite: A Lesson in Direct Revenue Strategy | By Vikram Singh
Throughout my career in revenue optimization for the hospitality and travel industry, I have always stressed the importance of owning your digital assets. This means having control of your domain, your marketing campaign's analytics and history, and especially your website. As a strong supporter of open source technology, I have stepped in every time a marketing vendor ("expert") started trashing new and innovative options for hotels. Of course, vendors will always favor their outdated proprietary systems over new technology. They have made a huge investment and have to keep selling. But being tied to old technology is never going to give your hotel an edge in the online marketplace.
WordPress is a perfect example. As a flexible, secure, and user-friendly website platform, it has been displacing proprietary content management systems worldwide. Threatened, some hotel marketing agencies starting publishing propaganda about WordPress; they said it was "unsafe" and did not include essential "marketing features." In response, I have steadfastly encouraged hotels to embrace open source and steer clear of fear-mongering by agencies trying to push their agendas. Of course the agencies want you hooked on their website platforms. It provides them with the security of you not leaving them. Know that when you do leave, you will be left with nothing but a zip file containing the remains of your most profitable channel and a "we are sad to see you leave" email. Good luck!
Case in Point: BookingSuite
In 2014, I wrote detailed article on Priceline's Acquisition of Buuteeq, in which I again outlined the importance of owning your digital assets. Buuteeq was run by smart people who tapped into the reluctance of hotels to invest in their own direct revenue strategy. They offered to relieve hotels of the headache of owning and maintaining their digital assets, starting at just $99/month! They did a great job of marketing themselves and were able to successfully scale their own business by offering websites and marketing packages to hotels for a low monthly fee. At a crucial time when direct marketing investment was already a massive challenge for hotels, this approach was not doing the hotel industry any favors.
After the Priceline acquisition, I tried to make the strongest possible case for not renting your website and your marketing strategy from the largest online travel agency in the world. Priceline Inc. has its own agenda for growth. If you were to look at their stock performance and revenue breakdown, you would see that they do not make money building websites or running your marketing campaigns. They make money when people use their suite of OTA websites to book a room. Surprise! They prioritize their own direct revenue channel over yours.
Unfortunately, the illusory free lunch is too tempting for a lot of industry folks. BookingSuite (Buuteeq's new identity under Booking.com) did more than just retain Buuteeq's hundreds of hotel and B&B clients. They heavily leveraged the reluctance of hotels to spend time and money on marketing and signed up more hotels than ever. This seems to be a fatal flaw for hotels. They have made a habit of outsourcing 100% of their marketing to the vendor with the lowest bid. Then they get to check the box labeled "direct revenue strategy." Death by checklist? Check.
Folks, We Have a Hard Stop
Earlier this week, BookingSuite announced that it will no longer be offering Search Engine Marketing services to hotels using their website platform. Below is the official email that was sent out to hotels using their system:
They could not have summarized it better:
"SEM is an important component of your digital marketing strategy."
You know what else is an important component of your digital marketing strategy? Your website. The thing that so many hotels are currently renting from BookingSuite. If they can drop SEM …how much sleep they would lose over the few dollars you pay them every month to rent a website? That $99 to $999/month website does not sound like such a hot deal now, does it?
Here is some Shakespeare for added effect:
"As flies to wanton boys are we to the gods. They kill us for their sport."
Your website, booking engine, digital marketing efforts, and revenue management strategy are the pillars of your direct revenue. Viewing them as cost centers instead of investments in your future is the root problem underlying disadvantageous marketing decisions for hotels of all sizes. This cost vs investment approach (looking at departmental budgets instead of overall growth and revenue) is causing hotels to act against their own self-interest; it makes you pick the wrong vendors for wrong reasons.
Not to get all Nostradamus on you, but I would like to quote myself from all the way back in 2014:
"Ownership of your digital assets is more important than ever before in the history of the lodging business. Who provides your technology and in what format really matters. In this case, if your hotel is using a website made by Buuteeq, your site is now essentially a subsidiary of one of the biggest OTAs in the world."
This Is the Checklist You Need
The fact remains that the majority of hotels and inns worldwide are renting their digital assets; and this is hurting their long-term direct revenue potential. When you make all your marketing decisions on the basis of lowest possible cost, your long-term profitability will suffer.
If you're ready to take control, here's a five-step checklist to get you back on track.
- Website. Pick any designer/website vendor in the world… but build and power your website using WordPress as your CMS. It is always the right time to start running and managing your most profitable digital channel using open source technology.
- Search Engine Optimization. Google is all about website speed, health, usability, and useful content. There are no secret algorithms that any agency has in place to tackle this. You can read in detail here how search engine optimization has changed for the hotel and travel industry over the years. Staying with a vendor because they are good at SEO and "keyword rankings" is like investing in the stock market using a psychic as your portfolio advisor.
- Pay Per Click. Here is some detail on why PPC is one of your most powerful marketing tools. Pick any vendor you like as long as you use your own credit card to pay Google directly and own your AdWords account. Yes, you should own your AdWords campaign so that you maintain control of your history and retain the quality score built over years of spending and testing. That way, when your vendor wants to peace out on you (example: what BookingSuite is doing now), it won't be a big deal. You will have to find a new vendor; but you will not have to start from scratch again.
- Social Media. Make sure the ownership of all of your social media accounts stays with you. Use your email address, and not a vendor's. This includes Facebook and all other social media marketing campaigns that you are currently running.
- Analytics. Stick with Google Analytics. Here is a detailed article on staying away from expensive solutions designed with agencies in mind. When working with Google Analytics, always set it up with a Gmail address that you own. You might have several vendors working on your account with access to the same data. But they shouldn't control the account. Avoid the headache hotels experience every day when the vendor who owns their analytics account decides to walk away, taking years of website data with them.
Here is a detailed guide on managing all your digital assets. Successful hotel and travel marketing departments own and continually build on their marketing and digital assets. Just like you would not build a hotel on land that you do not own (or lease for a long time), your online assets should not be built in someone else's proprietary digital environment. Of course, you will always need someone to help you maintain your hotel/home. But you don't have to give someone the deed to the house in exchange for making sure the plumbing is working. *mic drop*
People I have worked with over the years know that I do not believe in declaring "wars"; I believe in making revenue. The hyperbole in the marketplace around the "war on OTAs" is impractical and annoying. Using this article to launch a tirade against BookingSuite is a complete waste of time. You cannot blame others for your poor decisions. Also, please remember that Priceline Inc. and Expedia Inc. are not going anywhere anytime soon. So, buck up, Champ.
My goal here is to highlight that now is (still) the perfect time to invest in owning and maintaining your digital assets and marketing campaigns. Marketing agencies and vendors will eventually get acquired or lose interest. Nobody can control or predict when that will happen to your marketing agency. I could not have predicted the exact date when Buuteeq (the helpful agency who wanted to take all your work and worries away at a super low price) would sell out to the world's largest OTA…. or the date when they would later shut down the SEM services that were not making them enough money. What I can do and always will do is to recommend that you own and invest in your own digital assets and marketing. Remember: your profitability needs to outlast your current marketing agency. Stay woke.
Vikram is a global thought leader in the hospitality and travel business. Vikram heads up the Revenue Optimization Services division at Rainmaker. During his 20-year career in hospitality and tech, Vikram has delivered portfolio- wide audits, asset turnaround strategies, and other high-level consulting services to real estate investment funds and property management groups across the globe. His strategies have helped power some of the biggest and most successful hotel equity turnaround deals in the last decade. As one of the leading experts in the hospitality and travel realm, Vikram is a frequently requested speaker at industry conferences worldwide. Former hosts include the US Department of Commerce, Travel Distribution World Asia, Arabian Travel Market, and Airbnb. He has been featured in the American Express/American Hotel & Lodging Association Educational Series for several years. He is a perennial favorite of audience members everywhere because he emphasizes action-oriented strategies – and he is never boring. Vikram writes the popular hospitality and travel marketing strategy blog: www.wordsofvikram.comRevenue ManagementOnline Travel Agencies (OTA)Email marketingDigital MarketingGlobal