Online Marketing and the Hotel Industry

The Internet/Ecommerce and the Hotel Industry

The rapid spread in the usage of the internet and the increase in access to ecommerce and online bookings has definitely been a boon to the hospitality industry. The increasing incidence of guests booking their hotel rooms online has not only improved the booking rate of hotels but has also let them pass on hefty discounts to the customers which would otherwise had to be shared with the travel agents and other intermediaries. In other words, the advent of online booking has been a win-win situation for the hotels and the customers. Next, with so many guests from around the world flocking to the internet to book their rooms and plan their itineraries, hotels are turning to online marketing of their products. This has the effect of reaching out to a wider guest base as the hotels need not constrain their marketing efforts to nearby places and geography is no longer a limiting factor for hotels. The death of distance happened with globalization where the service providers and the customers were brought together by the internet irrespective of where they are and where they wanted to transact business. Similarly, online marketing by hotels has the benefit of the hotels reaching out to customers all over the world and in turn, the tourists and business travelers from anywhere can book their hotel rooms everywhere without any restraint.

Online Marketing by Hotels and its Advantages

Online marketing by hotels has the added advantage of improving the brand image of the hotel by ensuring that customer reviews of the hotels and the glitzy marketing of the hotels have the intended effect of enhancing the reputation of the hotels. As most of us go by word of mouth recommendations that influence our consumer behavior, favorable customer reviews of hotels on sites like Make my Trip, Travel Advisor, and other content aggregators has the effect of more customers booking rooms in the hotels that attract positive reviews from satisfied customers. Conversely, those hotels that are ranked below and have disgruntled customers writing bad reviews find themselves out of favor with new customers. This “electronic word of mouth” that happens because of travel websites and websites devoted to customers around the world who might be planning their trips to various destinations has greatly contributed to loyal customers and returning customers for the hotels that actualize customer delight and customer satisfaction. Not only that, as marketing theory states that returning customers are very valuable because the marketing effort can then focus on new customers and the returning customers lead to cost efficiencies is a strong point in favor of hotels undertaking extensive online marketing.

Doing away with Intermediaries

As discussed briefly earlier in the article, the hospitality industry is now moving towards a paradigm and a business model where the service providers and the customers interact directly leading to the removal of the intermediary layer. The airline industry was the first to phase out the intermediaries with airlines first reaching out to flyers online and the travel agents facilitating the process. This gradually phased out the travel agent intermediary layer with most bookings now being done online. The hotels are following suit, which means that the costs entailed because of the intermediaries can now be saved leading to value addition to the customers who can avail of the discounts. Indeed, many leading hotels now accept bookings directly on their websites.

Concluding Remarks: The World is Not Enough

As the internet is supposed to add value to all stakeholders in the value chain, the experience of the hospitality industry is a case in point about how the online transactions can result in a win-win situation for all. Further, the concomitant processes of globalization and the increased use of the internet and social media have ensured greater efficiencies in the processes and induced synergies between different players in the value chain. Finally, the world is not enough in this paradigm as the potential opportunities for expansion of the hotels’ customer base and the customer experience are unlimited.