Hotels & Travel Digital
Marketing Trends
Schieber Research, January 2017

Introduction
• Technological advancements continue to change the hotel industry, causing
the traveler’s path to purchase to rely heavily on digital means throughout the
exploration, research, booking, traveling and departing process.
• The most relevant technology trend is the rise in smartphone penetration,
which enables competitors to offer a seamless, omni-channel experience for
the traveler’s journey and create significant service innovation. Another trend
is that of “big data” which – when analyzed properly – can offer personalized
experiences to the consumers.
• The penetration of artificial intelligence and bots in self service, is also
beginning to increase.

Introduction
• The purpose of this presentation is to present the major industry and consumer
trends affecting the hotel industry, specifically with respect to the digital evolution
and online booking.
• Main subjects covered on this presentation:
1. Competitive landscape
2. Consumer and industry trends
3. Competitor strategies and innovations

The Travel Booking Landscape
• The traveler’s journey has
become a digital journey,
across countries and
generations.
• Accommodation booking via
mobile apps is also on the rise.

The Travel Booking Landscape
• The online booking trend is
relevant to all generations; but
apparently, mobile apps are more
relevant to Millennials than to
Generation X consumers and to
boomers.
• Mobile constituted 11% of digital
accommodation booking among
Millennials, compared to 7%
among Gen-X consumers and
4.5% of Boomers.

The Travel Booking Landscape
• OTAs - Online Travel Agencies such as
Expedia and Priceline, and hybrid / aggregator
sites such as TripAdvisor, have been
competing hotels to drive accommodation
booking. Increasingly, they are also offering
other elements of the trip, such as flights, car
rentals and restaurant reservations. Search
engines, led by Google, pose an additional
challenge to the industry’s traditional players. Source: IHG Commercial Strategy presentation, September
2016
• Price plays an important factor in consumers’ decisions whether to make a reservation via
an OTA or directly through the hotel website. Rates are not the only determinant of value,
though: perks, loyalty benefits and extras all play a part in the consumers’ reservation
decision.

The Travel Booking Landscape
• Apartment rentals, led by Airbnb, are based on the promise of “traveling like a local”,
competing with hotels not only in terms of channels / commissions – but also in
terms of experience / business model.
• A vacation rental is an alternative lodging option to hotels accommodation that
involves the short-term rental of myriad properties, such as apartments, farm stays,
private homes, cabins, beach houses, villas, cottages, or chalets, to travelers and
tourists. These units are offered on a nightly, weekly, or a monthly basis.
• According to the Global Vacation Rental Market 2015-2019 report conducted by
Research and Markets, the Vacation Rental market is believed to be worth $100
billion, with the U.S. accounting for 25% of that.
• The report further expects the global vacation rental market to be worth $170 billion
by 2019.

The Travel Booking Landscape
• Airbnb is the leading player in the market and has seen
a significant surge in its valuation.
• According to Airbnb, since its founding in 2008, 140
million guests have arrived at Airbnb listings, including
nearly 80 million in 2016, up from 40 million in 2015.
• Millennials account for about 60% of all guests who
have ever booked on Airbnb, and has grown more than
120% in the past year. Seniors are the fastest-growing
host demographic, and senior women consistently are
the best-rated hosts on Airbnb.
• Airbnb does not disclose its financial performance, but
revenues were estimated at $250 million in 2013, and
reports suggest that the company ended 2015 with
nearly $900 million in revenues.
• Airbnb is yet to make profits. It is estimated to
have ended 2015 with $150 million in operating losses.

The Travel Booking Landscape
• Some of the biggest players in the travel industry have entered the apartment rental market.
• Choice Hotels launched a vacation rental business working strictly with vacation rental
management companies rather than with individual property owners.
• Priceline Group said that vacation rentals will be an important source of growth. The
category already accounts for almost half of Priceline’s property roster thanks largely to
Villas.com, which Priceline’s Booking.com business launched in 2014.
• In 2015, Expedia acquired HomeAway for $3.9 billion
• Onefinestay, founded in 2009, was acquired in April 2016 by AccorHotels for $170 million.
Hospitality service Onefinestay provides temporary travel accommodation using high-end,
luxury apartments. It targets high class client segment.
HomeAway’s
proposition

The Traveler’s Journey
• Source: Schieber Research
Understanding the Path to Purchase and the triggers affecting each stage
Reviews,
Social
Media
Content,
Ads,
Search and
Social
Reviews
Content
Reviews,
Cross
Services,
Concierge Aps
and Social
Reviews
Staying
Websites
OTAs
Reviews
TRAVELER‘S
JOURNEY

The Traveler’s Journey | Pre-Travel
• The pre-travel stage can be triggered by an ad, social media content or the consumer’s
own search. It tends to be a stressful stage, during which the consumer searches
information and reviews on destinations and service providers. Online reviews, and
aggregation of content / comparisons, are crucial at this stage. Today, reviews and
comparisons are offered by hotels as well as by third party websites, as hotels identify
that the consumer will research the various options any way.
• Note that, the entire travel might stem from content (including through social media) or
loyalty offering rather than the traveler’s initial decision to go on a trip; as this creates
opportunities for travel companies, it is important to remember to establish a long-lasting
connection throughout the consumer journey.
• Sometimes, these activities take place on several devices, starting on one device and
proceeding on another – and so, transparent shift between channels should be taken
into consideration, usually through log-in (with your email, social media identity or
membership card).

The Traveler’s Journey | Pre-Travel
• At this stage, the leading resource for the consumers’ research is the OTA website. This provides
OTAs with an opportunity to offer value to consumers and drive reservations. This also means
that, in order to become the first stop for consumers, hotels should provide content, information
and reviews that influence the decision process.
Leading Resources for Destination Selection
Source: ComScore 2016

The Traveler’s Journey | Pre-Travel
• Travel costs are the top influencing parameter of the trip destination choice.
Factors Influencing Travelers’ Destination Decisions
Source: ComScore 2016

The Traveler’s Journey | Pre-Travel
• TripAdvisor offers a Best of 2016 section with information regarding attractions and locations which
were given the highest grades by travelers, to encourage and inspire travel.

The Traveler’s Journey | Pre-Travel
Booking.com search results include a meter
on top which tells travelers if the destination is
a top choice with fellow travelers on their
selected dates.
• Expedia operates a blog for travel-related issues under
the name “view finder”.
• The blogs offers “stories” which can be sorted by different
categories.
• Expedia’s YouTube channel offers travel-related videos.
• The videos are sorted according to different categories:
One Day in an Amazing City, Popular Destinations, Expedia
Travel Destinations divided to different regions and Travel
Blog | Expedia Viewfinder.

The Traveler’s Journey | The Trip
• During the trip: the trip itself drives new needs, such as check-in, room service and check-
out, but also cross-services and products such as event tickets, entertainment and dining.
Competitors are responding to such demands by launching / acquiring services such as
online restaurant reservations, attraction reservation etc.
• Other trends – such as self service, mobile service, content sharing on social media,
research and personalization – are also relevant to this stage.
W Hotels chain joined forces with Snapchat to
reach Millennials and encourage social media
sharing.
In October 2015 the chain launched a sponsored
geofilter campaign that allowed users to overlay
phrases like “Wish you were here” and “Current
Situation” on top of images taken at W properties.

The Traveler’s Journey | Post-Travel
• Post-Travel – consumers are encouraged to leave a feedback and reviews, post pictures
and recommend services to their friends. Competitors are turning to CRM in order to drive
repeating purchases, via email marketing, referral programs and loyalty programs.
• Companies use the data received by the consumers to offer personalized solutions, and
encourage trips. Shared content is also used to inspire friends’ travels.
• Agoda has created an
online “community” of like-
minded land divers to share
their superior tourism
experiences via
social/video channels like
WeChat, Youku and Weibo.

Competitor Strategies
Pricing &
Loyalty
Whole Trip
Planning
Reviews
and content
Professional
services

Competitor Strategies
Pricing &
Loyalty
Pricing pays a major part in deciding on where to book, and competitors use
several price-related tactics, including: Best price guarantee; bid / reverse
bid; last minute deals; and price alerts.
Source: IHG Commercial Strategy presentation, September 2016
• IHG promotes “Your
Rate” pricing

Competitor Strategies
Pricing &
Loyalty
KAYAK offers
travelers to
receive flight &
hotel prices alerts
by email
Priceline focuses on a “Best Price”
proposition

Competitor Strategies
Pricing &
Loyalty
Hotels are using different strategies and tactics in order to win the battle
against the OTAs, including loyalty, pricing, perks and service.
A TV ad by Hilton under
the name “Stop Clicking
Around”, encourages
viewers to book directly
through Hilton,
promising the lowest
prices available.
• Some hotels offer additional ancillary services and
rewards for direct bookers, such as a welcome foot
massage, or a free scuba lesson for guests who
book direct.

Competitor Strategies
Pricing &
Loyalty
Hilton offers a loyalty program under the name
Hilton HHonors. Members of the program can also
earn HHonors Points for staying, traveling,
shopping, and/or dining at the Hilton.
The chain offers 4 different levels of membership:
Blue, Silver, Gold and Diamond, determined
according to the number of stays / nights in Hilton
properties and providing different benefits.
According to Hilton’s CEO ,Christopher Nassetta,
since the launch of Hilton HHonors rates,
membership enrollments have increased
significantly.
In the second quarter for 2016, Hilton added 2.4
million new members and its share of occupancy
by members was nearly 56 percent in the second
quarter, up more than 400 basis points year-over
year.
The Hilton HHonors app accounts for 23 percent of
Hilton’s direct web traffic and app downloads are up
66 percent year over year.
Source: Hilton Worldwide, Q2 2016 Earnings
Conference Call

Competitor Strategies
Pricing &
Loyalty
• Best Western launched in 2016 a
new digital platform,
BestWestern.com, which enables
the chain to offer a discount rate to
the Best Western loyalty members,
typically reflecting a 10% discount.
IHG offers IHG® Rewards Club Select Credit
Card which benefits its owners with bonus
points for spending during their stays. The
bonus points can then be redeemed for free
nights and discounts.

Competitor Strategies
Pricing &
Loyalty
• IHG Rewards Club has almost 94 million members, making it the largest hotel loyalty
program.
• IHG®
Rewards Club Credit Card offers: “Annual Free Night Worldwide, Earn 5 points per
$1 spent when you stay at our hotels, Earn 2 points per $1 spent on purchases at gas
stations, grocery stores, and restaurants, Earn 1 point for every $1 spent on all other
purchases, Automatic 10% point rebate, Platinum Elite Status”