Belonging to strong background in hospitality and online travel technology, hotel online distribution and digital marketing; Max Starkov provides consultancy services for hotels and resorts to reach their customers on a whole new level. We got the opportunity to interview the hospitality veteran about his journey in hospitality industry and to know his profitable tips for hotel online distribution strategy in COVID-19 recovery phase.
1). What inspired you to be a Hospitality technology consultant?
I have been fascinated by the lack of technology knowledge, the reluctance to adopt the latest technology innovations in our industry ever since my internships at hotels so many years ago. Now it is the lack of understanding of the digitally-savvy customer we are dealing with today and what their needs and wants are. If you as a GM understand today’s customer, then you would hire the right people with the right expertise and convince ownership to invest in the right technology applications: CRS, RMS, CRM, CMS, IoT and mobile, and invest in adequate digital marketing (DMS).
2). How do COVID, and other disruptions, impact the future of hotel distribution?
COVID and the government travel restrictions crushed travel demand. In hospitality this necessitated a complete overhaul of any hotelier’s distribution strategy from the usual market segmentation channel strategy to a Feeder Market Channel Strategy. Hoteliers are now focusing on their short-haul feeder-markets and especially on their drive-in feeder markets and citizens in their immediate location in the firm of staycations and work-from-hotel offerings. People are already traveling and will continue to do so in the post-crisis period, especially on short-haul and drive-in trips.
3). How have direct bookings grown as part of the channel mix?
Hoteliers have one tremendous advantage over the OTAs, wholesalers, bed banks and other distribution players: they know their destination and their customers better than anybody else. If they apply this knowledge to their distribution strategy, they would be able to increase direct bookings as part of the overall distribution mix.
Do you have weekend specials, coronavirus de-stressing packages, spa packages, family packages, activity packages, special occasion and F&B packages and promotions, staycation and work-from-hotel packages, etc. that you can use to target your local, short-haul and drive-in feeder markets?
4). What are your tips to increase control in a blended hotel distribution world?
Systemic underinvestment in technology, knowledge and digital marketing in our industry is the main reason for the rise of the OTAs and Bedbanks. These players did not come from some other planet, we allowed them to emerge and grow at the expense of our own incompetence and underinvestment in everything digital.
How do you exert control of your distribution mix? Start by enforcing strict rate parity. Review your property website – is it mobile-first? Do you have Schema markup and Google AMP in place? How is the site SEO: on-page and technical SEO, inbound linking? Have you updated your Google My Business local listing? Have you retained a relationship with your digital marketing partner agency throughout the crisis? These are all fundamentals that would allow your property not only to survive, but prosper in the post-pandemic era.
Focusing on your past guests and repeat business should become a top priority versus chasing new customers. Past guests and loyalty members are already familiar with the property, its location and product, the only thing now is to convince them that the property is safe to stay at. Past guests and repeat business will rule the next 24 months!
The big question is what else can hoteliers do in this environment of weak travel demand and severe budget cuts? I believe selling on value versus selling on price alone can compensate to a great extent the budget limitations and online dominance by the OTAs. Hoteliers must remember and relearn how to sell on value versus price alone! Be creative: it is not difficult to figure out what customers that have been locked at home for 6 plus months – we have all been there – would love to experience at your property and its surroundings.
5). How can hoteliers deal with wholesale distribution dilemma?
Intermediaries have always played a role in hotel distribution. Even in the pre-Internet era, intermediaries contributed to 25% of hotel room nights. But ignoring the direct channel and allowing the intermediaries to usurp your distribution strategy is a major failing of our industry. Did you know that independent hoteliers in Europe have allowed the OTAs and bedbanks to have an 80% market share of online bookings vs 20% via the hotel website? The situation is not much better for many hoteliers in North America, Latin America and APAC.
Smart hoteliers utilize their knowledge of the digitally-savvy travel consumers, technology investments and digital marketing expertise to maintain a healthy distribution mix of directs and intermediary channels.
In the post-pandemic world any hotelier should “own” their short-haul and drive-from feeder markets and “delegate” to the intermediaries only the long-haul and foreign feeder markets. You do that by employing solid revenue management practices and RMS technology; enforcing strict rate parity, implementing CRM program and technology to engage and retain your repeat customers, investing in digital marketing initiatives in your short-haul and drive-from feeder markets.
6). What are your tips for a profitable hotel distribution strategy?
In these difficult times with low occupancies, catastrophic ADRs and RevPARs and staff operating on a skeleton-crew fashion, launching elaborate and expensive performance marketing campaigns to acquire new guests are out of the question.
Therefore, with your post-crisis marketing strategy, the goal is to achieve maximum returns with minimum budget. Here are some of these initiatives that will help you achieve that:
- Content marketing, when done well, is much cheaper than performance marketing. It engages and entices the travel consumer in the Dreaming and Planning Phases and creates ready-to-book customers for the Booking Phase of the digital customer journey.
- Google My Business Listing: Monitor and respond to reviews. Google has more hotel customer reviews than all of the review and OTA websites combined! GMB directly influences travelers in the Planning Phase and creates powerful word-of-mouth effect in the Sharing Phase.
- Google Ads: Launch a small-budget, hotel-branded keyword terms campaign via Google Ads (GA) to target past guests in the short-haul and drive-in feeder markets. These past guests already know your hotel brand name, they know your hotel product, all you need to do now is to convince them that your property is safe to stay at and that you have packages and promotions that address their current needs.
- Launch a small-budget Google Display Network (GDN) Retargeting campaign. This will help communicate your property’s value proposition to users who have visited your website and are already familiar with your product, offerings and location.
- Use marketing creative with “It Pays to Book Direct” messaging. Offer perks or value ads to close the deal, such as “Book Direct and Get Free Wi-Fi” (or free breakfast, free parking, and et cetera).
- Make Google Hotel Ads (GHA) (metasearch) part of your must-have Google marketing initiatives by joining the pay-per-stay GHA program. instead. Google launched this program understanding well that a) hoteliers do not have much advertising dollars and b) travel consumers often cancel their hotel reservations due to the volatile COVID-19 situation.
7). How does technology help optimizing the distribution mix for hotel?
As I mentioned, underinvestment in technology is one of the main reasons for the existing over dependency on the OTAs in hospitality.
In addition to revamping the property website, its merchandising and SEO, and introducing contactless check-in, I believe CRM technology is the most urgent technology hoteliers need today. Why? In the post-pandemic period repeat business will save the day. Acquiring a new customer is 10-15 times more expensive than retaining your existing customers. How do you retain your customers? By utilizing a CRM technology and having a robust CRM marketing program: customer data platform (CDP) with cleansed guest data from all silos; RFM value customer segmentation based on how valuable are these guests to the property; pre-, in-stay and post-stay marketing initiatives, marketing automation and drip campaigns, etc. The CRM technology allows any hotelier to create a Reward Program or a Guest Appreciation Program and reward repeat customers for their loyalty. A cloud CRM technology costs several dollars per room per months and is worth every penny!
About Max Starkov
Max Starkov is a hospitality digital strategy, technology and marketing executive, consultant and expert with 30 years of industry experience.
Max has spent his entire professional career in hospitality and online travel, focusing on hotel digital strategy, technology and marketing. Max has consulted hundreds of major hotel chains, boutique and luxury hotel brands, independent hotels, resorts and casinos on their digital technology and marketing strategies.
As an online travel expert consultant with the major expert knowledge networks, Max has consulted hundreds of Wall Street analysts and investment bankers on the online travel marketplace, hospitality industry technology and marketing, online distribution strategies, OTAs, TripAdvisor; travel initiatives by Google, Facebook, Amazon, etc.
Max is a published author of hundreds of articles, opinion articles, white papers and best practices guides and is recognized “thought leader” in digital technology and marketing strategies in hospitality and travel.
Max received the most prestigious industry award, the HSMAI “Top 25 Most Extraordinary Minds in Sales and Marketing” and served on the HSMAI Digital Marketing Council.
For 20 semesters Max has been an adjunct professor, graduate courses, on hospitality technology, online distribution, digital marketing and CRM at New York University’s Tisch Center for Hospitality Studies.
Max has an MS in Economics of International Tourism & Hospitality, Sofia University and an MBA in E-Commerce degree, Beta Gamma Sigma Honors, from Fordham University in New York.