Between 2009 and 2013, South American outbound travel grew by 50% in terms of the number of trips, twice as much as the overall global increase. Despite subsequent economic problems in the two largest economies in South America, Brazil, and Argentina, 43 percent of South American international travelers still want to travel this year as much as in 2015 and 27 percent might travel even more, according to IPK’s Latin American Travel Confidence Index for 2016.

Nevertheless, the outlook for South America in 2016 expects a moderate growth of just 1.9 percent for outbound travel from the region.

South American outbound travel has slowed in 2015 after several years of above-average high single-digit growth but still grew by 5% in the first eight months of the year partly due to the football World Cup in Brazil.

The estimated less than 2 percent growth in 2016 is due to continuing economic challenges in the region’s two main markets, Brazil and Argentina, which together accounted for about 50% of the South American outbound trips. In Brazil, the currency has devalued and that makes trips abroad more expensive while Argentina lost market share due to its economic problems.

The best economic performers at present are Columbia, Bolivia, and Uruguay.

Source: World Travel Monitor.

The Bundeskartellamt, Germany’s Federal Competition Authorities issued on December 23, a decision that requires Booking.com to remove all rate parity clauses from its contracts with accommodation partners in Germany, by the end of January 2016.

Following the decision, Booking.com can no longer apply “best price” clauses in its contracts with hotels, and German hoteliers will be allowed to offer lower prices and different conditions on their own direct online and offline channels.

Booking.com already made public is intention to appeal the decision.

It seems that Central European countries are becoming a more and more approachable region for tourism. What is the region’s potential for the hotel industry? How it differs from Western Europe? How can you attract tourists from other regions to your hotel if you operate in Central Europe?

Hidden from tourists for much of the 20th century, Central Europe has not been a well-established touristic region until recently. In the eyes of many globetrotters, the region, between the Carpathians and the Baltic Sea is closely associated with its tumultuous past, the Iron Curtain and its mix of the Slavic languages. Changing with every moment that goes by, the countries from this region are now full members of the European Union, and as they adapt to greater European culture and reflect the plunge into modern day capitalism, the region is becoming a touristic destination to remember.

Economic development has a real impact on the hotel industry. Given the standard of living of the inhabitants of Central Europe, wealthier citizens are more willing to book accommodation in hotels, even luxury ones. Twenty five years after the fall of the Soviet Union and the regimes of satellite states, Central European countries are trying to catch up with respect to Western Europe. Citizens are quite hungry for the same standards as their neighbours from the west enjoy. Nine years ago the Polish GDP per capita was 54% of the EU average, 3 years ago it was already 68%. Hungary reduced its gap from 61% to 67%, and record holders in the region are Czech Republic (80%) and Slovenia (83%).

Lonely Planet has recently published a list of 10 most important states and cities in 2015. One of the listed was Bulgarian Plovdiv as the biggest city right after Sofia in Bulgaria, boasting the state’s most beautiful sights, attractions and nightlife. The countries of the former communist bloc countries are increasingly present in Western guidebooks, which is good news for hoteliers!

Eurostat data shows that smaller markets are more dependent on the influx of foreign tourists, For Poland, foreigners accounted for 30% of the total guests in hotels. In the case of smaller countries such as the Czech Republic and Lithuania, this number rises to more than 60, and in Bulgaria, 70 per cent. Croatia also recorded a high score thanks to its tourist attractiveness.

What distinguishes the markets of Central Europe from the West? Undoubtedly, the price for the stay. So that’s why the Croatian, Bulgarian or Polish seaside are besieged by Germans, Austrians and even Italians! Cheap holidays at a high quality can become a key to the success of a hotel. Here are a few simple steps on how to attract more tourists from the West to your hotel:

Potential of OTAs

Take advantage of the potential of sales and marketing of OTA portals. Enjoy the benefits of the big global names, but also the locals covering a country or several countries from the region. Global OTAs have massive advertising budgets on Google and enormous databases used for email marketing. However, they don’t have the same access to the little local treasures offered by local, in-the-know OTAs.

Tailor your website to your clients

Is your website offered in multiple languages? Research into the most commonly-used tourist languages in a given region pays off. If the number of Dutch tourists booking stays in a Polish hotel is significant, then supporting a Dutch-language version of your website may bring serious results.

Adjust your hotel to Western standards

Take care to maintain the highest standards of housekeeping, reception and restaurants. Bet on delicious food, local menus and the best quality bed linens! Let wireless internet be available for free in every room, not just the lobby!

Take advantage of the potential of the hotel’s surroundings

Foreign tourists come to your hotel to know the area. Help them in this! Organize attractions in the form of guided tours, or allow your guests to hire a car and a bicycle right from the property.

Taking into account the past and prevailing sales trends, everything points to a continuation of the marked preference for most hotel reservations being made on the strength of information first found online in 2017. Since the Internet first became an international community and marketplace, information about a hotel with an online presence has been written not only by the hotel itself but also by clients.

According to research recently conducted by TripAdvisor, up to 96% of clients chose a hotel based on reviews they had read online; what’s more, 53% of clients deliberately avoided hotels which did not have any feedback or client reviews published online.

Reviews can often be frustrating – however, for the most part, they reflect the truth, and may indicate important areas of improvement in the areas of customer satisfaction and offered services. This is the field of reputation management.

Hospitality industry professionals, seeing the undeniable effect that negative client opinions have on hotel revenue, have added ‘client opinion’ to the list of variables that have a significant part to play in hotel pricing strategy, particularly as a part of the larger revenue management process.

2012 research from Cornell University and ReviewPro show that an increase of 1 point in GRI™ (Global Review Index – a ReviewPro parameter) causes a RevPar increase of 1,46% and an increase in reservations of 0,5%. A hotel’s reputation is composed of several key elements: location, personnel, gastronomy, and marketing, among others. With this in mind, what is the best way to manage your hotel’s online reputation?

Generate positive reviews

Our human nature means that it is easier to recall our bad experiences than our good ones. Therefore, in order to receive as many positive reviews as you can, it is wise to encourage satisfied guests to post leave a review on such websites as Booking.com, TripAdvisor, and HolidayCheck. This can be done during check-out while thanking them for their stay, or by sending an automated email afterward asking them for their opinion and including a link to the hotel’s online profile. Some online portals allow you to install an application on a Facebook page, or a widget on your hotel’s own website.

Do take note that it’s not only on the previously-mentioned websites that guests can leave reviews. Your Facebook page, for example, is a place where direct contact between your hotel and your clients is also possible and can be easily managed. Guests looking for the fastest response possible often post questions on a hotel’s Facebook page. Additionally, Facebook offers the possibility of creating a separate “Reviews” section of your main page, where guests can leave a number of stars and an opinion. Google is also a place where guests can leave their reviews, and also their own photos of your establishment.

Monitor and analyze

Always check for new online reviews on a regular basis. The majority of online portals offer the option to receive notifications of new client comments automatically, however, the best way to keep track is to take advantage of an internet-monitoring tool. Such tools allow you to create your own reports of all references concerning your hotel in community portals, on forums, blogs, in article comments, etc. You can respond to these references, the sum of which combined put at your disposal an advanced analysis of all comments, sentiments, and emerging influences.

Reply to comments

Whether or not you reply to comments counts towards your online reputation as a whole. Don’t be afraid to respond to negative comments – they often provide a valuable lesson or the motivation to make a much-needed change in your hotel. The answer to such a comment cannot, however, be aggressive – TripAdvisor’s recent research claims that as many as 70% of users consider a rude, aggressive answer to a negative review as a major disincentive to book a stay at the given hotel. Please also remember that your replies should not be identical, copy-pasted templates. Just as in real life, approach each commentator individually.

Apply guest observations to real life

Making an in-depth analysis of all guest comments can produce a ranking, which your potential clients eagerly look for. There were no bathrobes in the hotel rooms? Buying bathrobes will be not a mere expense, but a good investment in your reputation. As written above – the better your grade, the higher your RevPar and overall occupancy will be.

Take advantage of the newest technology

If you already have the previously-mentioned tools for monitoring the internet and social media, you can expand your online toolkit further with programs that measure your GRI™ index. They work either individually or in tandem with tools for managing sales or pricing – working to find the correlation between these variables and the price recommendations resulting in ADR value. The most popular tool of this kind is ReviewPro, whose Guest Intelligence experts created the GRI™ online reputation score. Its current use is estimated at more than 30,000 hotels worldwide. Certain of its elements have been incorporated into new functions now available in the YieldPlanet Channel Manager.

The Channel Manager’s new ReviewPro widget gives hoteliers swift access to statistics formed on the basis of reviews collected from such varied sources as TripAdvisor, Facebook, Booking.com, and Expedia. These statistics indicate the main source of your hotel’s reviews, and what’s more, breaks down these said reviews into negative, neutral, and positive categories. This allows you to quickly catch wind of negative or neutral reviews damaging the reputation of your hotel.

Segmentation has always been a very important part of a hotel’s revenue management strategy. This was true even before hoteliers called it “revenue management”. In other words, segmentation has been around for quite some time and has always played and important role in marketing and sales strategies.The question now is, “Do the traditional definitions and way of tracking segmentations still work for hoteliers?”

Traditional definition

The traditional definition of segmentation includes having a clear understanding of customer definition, segments that apply to the property and to the corporate level, and an understanding of the source of business.

At the most basic level, the industry differentiates between rooms sold as a group and those sold individually, also known as transient business. The next level of categorization usually separates rooms booked but the purpose of the guests travels such as business or leisure. Sub-segments are then further developed and customized to unique demand drivers in a market. These are commonly referred to as market segments.

Market segmentation

Initially defined as the purpose of the customers visit to a hotel such as someone travelling on business staying at a corporate negotiated rate. Prior to the inception of the internet and the of the internet as a channel through which to receive hotel reservations, it was relatively easy and sufficient to define market segments as each customer’s reason for travel. If the reservation was made via the telephone directly with the hotel, the reservation associate would simply ask the direct question, “What is the purpose of your visit to the hotel?” If the reservation was booked via a Global Distribution System (GDS), the confirmed rate or rate code would typically provide the reservation associate with the reason for travel. For example, someone traveling on corporate business but not with a preferred company would typically book the public corporate rate. This was obviously long before hotels offered more complicated rate structures. In other words, it was clear and typically very easy to understand the customer’s purpose of travel making it easy to track and measure. But today, we operate in a very different environment and the purpose of our current market segments has become less cut and dry.

Behavioral segmentation

It may be time to rethink segmentation. Perhaps it is time to create segmentation based on the booking conditions, behavior of customers and lifestyle of customers. For example, customers booking through an opaque channel may be traveling for either business or leisure, or both. But their willingness to accept the strict booking terms imposed by an opaque channel makes them a unique group of guests compared to others who do not want to prepay and who want a last minute change and/or cancellation option.
It is important that hotels understand the behaviors of their customers. This will lead to a better understanding of what choices the customers are willing to make. If the hotel knows the specific value proposition the guest is seeking they can price accordingly.
A large global hotel company is a good example of a company that is segmenting with a focus on behaviors. They have created brand targets based on the behaviors of the customers for each of their branded hotels. They actually incorporate profiling questions into their guest satisfaction program. Because each guest defines value differently, their goal is to identify whether or not the target segments are getting the intended experience.

New definition

One could argue that Internet-Merchant and Internet- Opaque could in fact be market segments defined as non-loyal guests traveling on business or leisure. Hotels that define these channels as market segments can easily adopt this definition.
For hotels that prefer to keep channels and market segments separated, it may work better for them to redefine their market segments by focusing on behavior and lifestyle segmentation. Behavior segmentation can be defined as guests traveling for business or for leisure who have specific booking preferences or varying levels of willingness to accept different booking conditions.

Lifestyle segmentation is based on those individuals who select hotels based on their own values and lifestyle choices.

Benefits

One of the benefits of redefining traditional market segmentation and how we use segmentation information is that it will allow hoteliers to ensure the definitions currently in use are reevaluated to reflect the needs of today’s market. Too many hotels use market segments that are outdated or serve little purpose.

Reevaluating segmentation will allow hoteliers to stay ahead of trends. There does need to be some continuity to be able to accurately compare data year-over-year but this should not prevent hoteliers from tweaking the segments in the same way amenities and soft goods in the rooms are refreshed every few years. Or perhaps hoteliers can add behavior and lifestyle segmentation to their existing market segmentation allowing for yet another way to slice and dice the data. Adding another dimension could provide more depth to the hotel’s performance information. It may complicate things in the short-term but technology can help to ease the burden.

Adding another dimension by which to collect and analyze hotel data may very well allow for more accurate and easier tracking and ultimately add value to the accuracy of hotel forecasting.

Another potential benefit to this is the opportunity to increase the accuracy of hotelier’s target marketing initiatives.

In the end by adding another dimension to understanding behavior segmentation, the biggest benefit is a clearer understanding of who and what is truly making up the mix in the hotel, and understanding a hotel’s mix of business is critical.

Lifestyle segmentation is a tremendous opportunity for hoteliers to understand their customers far better than ever before. Having a greater understanding of the lifestyle choices customers are making with regard to their hotel stays will lead hoteliers into the opportunity of practicing one-to-one revenue management which after all, is the future of revenue management.

Once a hotel makes the decision to incorporate behavioral segmentation, they will need the ability to track the data in their existing technology. It will require writing reports to allow them to gather the information. Training must also take place to ensure all of the appropriate team members such as reservations and front desk agents understand not only the new fields and definitions they see but also the reasons for the changes. Ensuring everyone understands the reasoning behind the changes and the benefits they will bring will increase the accuracy of the implementation, tracking and ultimately the results.

Key review questions:
What is the purpose of market segmentation?

• • What is behavioral segmentation and what are the benefits?
  • Which of your customers are price elastic and price inelastic?
  • What are some of the actions or items that a hotel may need to consider in order to effectively implement behavioral segmentation?

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