Thursday, March 24, 2011

Facebook leads to hotel room revenue

Facebook is fast becoming more than a customer relationship tool for many independent properties and chains. Many hotels now offer room-booking technology on their Facebook pages, which is leading to incremental sales.

“There is real commerce that is starting to grow on Facebook. Companies like Delta (Airlines) are putting booking engines on Facebook, and Sony just started a deal where consumers can rent movies,” said Michael Hraba, owner of Hraba Hospitality Consulting in San Mateo, California.

Michael Hraba
Hraba Hospitality Consulting
For the independent properties that Hraba Hospitality advises, Facebook booking engines do not yet produce a lot of revenue, but Hraba believes it is necessary to offer the option. “If you are there, you (won’t) miss the ones who do want to book. You are available in every possible way your guests need you,” Hraba said.

Facebook conversions growing
“Over the course of 2009, we saw the volume of direct referrals from Facebook to hotel websites grow. The conversion rate was higher for Facebook than it was for TripAdvisor and other travel review sites,” said Douglas Quinby, senior director of research for PhoCusWright, a travel research firm in Sherman, Connecticut. The conversion rate on direct referrals from traveler review sites to hotel supplier websites ranged from 4% to 6% in 2009, while conversion from Facebook to hotel websites was 8%.

Starwood Hotels and Resorts Worldwide has provided a booking function within a tab on Facebook for all of its brands and properties since it has been on Facebook.

“Conversion on Facebook is smaller but close to conversion on our brand websites. (Starwood’s Facebook fans) start to see other people’s experiences at the properties,” said David Godsman, VP of global Web for Starwood.

While Starwood primarily uses Facebook to “engage” with its guests, the company’s executives realize the valuable e-commerce potential on the global social-networking site. To that end, Westin Hotels & Resorts in January introduced a “Shop” tab on its properties’ Facebook pages. The shopping widget serves as a fully-contained shopping transaction, instead of working as a link from Westin’s website.

“What we are seeing now is an emergence of technology that that we didn’t see six months ago. There is an opportunity for ourselves and other hotel brands to enable these type of transactions within Facebook,” Godsman said.

Facebook booking engines
While most hotel companies have a booking link within Facebook that takes users to their websites to make transactions, Bolongo Bay Beach Resort in St. Thomas, U.S. Virgin Islands, sports a unique, free-standing booking engine on the social-networking site.

Katarina Doumeng
director of sales,
marketing and Internet
Bolongo Bay
“We had a hotel-and-air booking engine on our website for years, so we asked our Web developer to put that on Facebook. They can click on the Reservations tab on Facebook and book rooms,” said Katarina Doumeng, director of sales, marketing and Internet for Bolongo Bay.

The hotel-and-air engine has proven successful for Bolongo Bay.

“In the last four weeks, for example, we had 207 people on Facebook who either booked or checked rates. That is big, since we are a 62-room property,” Doumeng said. Because the property has made a concerted effort to interact with its guests on Facebook, it has grown its fans from 300 in 2009 to 9,000 this year.

Shopping on social networks
The booking success that hoteliers are experiencing on Facebook makes sense because consumers are using social-media sites much more for travel research and purchases than in the past, according to PhoCusWright. Nearly 13% of social-network users use social networks to shop for travel, according to the firm’s “Traveler Technology Survey 2010.”

In addition, 35% of U.S. online travelers interacted with a travel company on an online social network in the past year. Not only are guests talking with their friends and family about travel on Facebook, but they are also being served travel-related ads, Quinby said.

Given such engagement, other hotels are quickly jumping on the Facebook booking bandwagon. The Hyatt Regency Irvine in Irvine, California, for example, recently became the second Hyatt hotel globally to offer room booking capability on its Facebook page.

“We believe social media is part of the future of how guests will interface with hotels prior to checking in,” said Colleen Kareti, manager of Hyatt Regency Irvine.

  Bolongo Bay
While Fairmont Hotels & Resorts does not yet have a booking function on its Facebook pages, executives plan to add the capability soon. “Part of the audience does want and expect to find out about offers. They may feel excluded if they don’t hear about offers,” said David Doucette, executive director of internet marketing for Fairmont.

Fairmont's social-media policy is to have 80% of its information about travel, hotel and its hotel's food and beverages options. Only 20% of Facebook posts have anything to do with travel offers.

Meanwhile, Fairmont’s Swissotel brand in Zurich, Switzerland, is realizing limited success with a booking link on its Facebook page. “We have seen a slight increase in conversions, but it is not dramatic. Their activity on Facebook is not as evolved as Fairmont’s is yet, so we don’t want to use that as a case study for analyzing potential,” Doucette said.

Despite the current and future success with hotels’ e-commerce activities on Facebook, hoteliers still say their primary purpose on social-networking sites is to develop relationships with their guests.

“We didn’t enter this space with a commercialization concept—we entered it to really re-define the relationships we could have with our guests,” Starwood’s Godsman said. “We haven’t tried to get as many fans as possible. Instead, we have a really engaged group of people.”  

Source : HNN
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