Food for thought: How Airbnb markets to hosts, The rising costs of advertising and more

Online advertising is changing, costs are going up (just like hotel franchise costs it seems) and returns are becoming harder to get. Direct revenue is losing market share to OTAs and in the middle of all that, people are talking about AI as the solution-to-everything remedy. This week let's try and cover some of these points. Best, Martin PS: Did you see the new Tell. Trends website?

Food for thought. Is it an Evolution for Communication?

It seems that all one needs to do is mention the word chatbot for investors to start throwing money at startups. And yet, the chatbot trend really needs a lot of work. The added value it brings to a hotel website isn't orders of magnitude larger than putting a booking engine. Yet, all the big tech companies are falling over themselves trying to build chat platforms (Google, Apple, Facebook). But what if it isn't about making more reservations and is just simply the replacement of the phone? Today we're more likely to try and text/chat than call. What does that mean for room-service, arrival questions, reservations and all the upsells?

GOT WHATSAPP FOR BUSINESS?

Debating today's Hotel Tech scene

Three people with some knowledge of the market debate today's hotel tech scene and it's quite thought-provoking. Is meta-search incremental revenue or is it just chipping away at other revenue streams? If it was one should see the effect on increased direct revenue shares, but numbers are hard to find. How the battle against the OTAs is just a repeat of the old battle against the GDS and more great thoughts on where the hotel tech scene.

PUNDITS ON PHOCUSWIRE

Chinese Payment system disrupting US?

Alipay and Wechat pay systems have changed the payment landscape in China, but with banks being government controlled overcoming them was easier than in the west. Yet it is just a matter of perception. If enough people decide they'll fill up their alternative payment accounts rather than checking accounts the tide could change. It's cheaper for the merchants and more convenient for guests. But can that change happen in the west? Google have it a shot and shelved it, Apple is trying but it isn't a runaway success. Maybe it takes Alipay and Wechat to come over and show how it's done.

ALIPAY IN HOTELS MAGAZINE + BLOOMBERG EXPLAINS

The Rising costs of Advertising

The costs to advertise are going up, as the ad channels reduce (it's down to Google and Facebook essentially) the costs rise and hotels are feeling it. Google's shift from pay-per-click (AdWords) to Hotel Ads might be efficient, but it also raised the cost per click. Maybe the solution is on the buyer side. Hotels have mostly managed online ads like a website, that is; set-it-and-forget-it. Maybe this is where AI, machine learning, and automation can have a first major breakthrough in hospitality. Optimizing advertising and distribution costs to increase revenue with lower spend. Several players are working on it, but can they work on it together to make a holistic system?

WHO CAN BUILD A COST EFFICIENT SOLUTION?

Airbnb's marketing automation funnel

There's a lot to learn from Airbnb when it comes to marketing, that is :-) In hospitality we're so accustomed to procedures and processes that we lose sight of the fast-paced world that is online ads. Changing methods, switching tactics, improving conversions and always increasing efficiency is a "growth hackers" process. It goes against pretty much everything hotels are used to doing. Yet, that might just be exactly what hotel marketers need to be doing. It's not a cheap solution but considering how direct revenue is losing ground to OTAs and the rising costs to generate direct revenue, that might be the only way.

A TECHNICAL LOOK AT AIRBNB'S AD PROCESS

Property Technology Travel Technology Digital Marketing Innovation