HOTELIER'S 2013 FORECAST: Golden opportunities

Capitalising on the digital movement will be key for hoteliers in 2013

Reports, 2013 forecast
Marriott Healthcare City in Dubai is due to open in 2013.
Marriott Healthcare City in Dubai is due to open in 2013.
Minor is looking to embrace mobile technology in 2013.
Minor is looking to embrace mobile technology in 2013.
Jumeirah regional VP sales and marketing Christian Pertl.
Jumeirah regional VP sales and marketing Christian Pertl.

Capitalising on the digital movement will be key for hoteliers in 2013, while there is also abundant growth potential in a variety of different locations, segments and guest profiles

Of all the trends hoteliers will be grappling to get ahead of in 2013, there is one that stands out above the rest — the shift away from third-party booking engines to online direct bookings.

Having gained momentum in 2012, hotel groups are now set to actively pursue this reservations channel, thus also focusing on the development of all manner of associated digital medium, from mobile apps and tablet technology to sophisticated SEO and social media integration.

This trend was highlighted by all the senior executives Hotelier Middle East spoke with as 2012 drew to a close, no doubt because of the golden opportunities this ever-evolving arena of electronic distribution presents, but also, the speed at which hotel groups have to capitalise on them.

At Bangkok-based Minor Hotel Group — behind the expansion of Anantara in the Middle East — chief executive officer Dillip Rajakarier observes the gaps the company intends to plug.

“Reflecting on 2012, the consolidation of technologies and distribution networks affected the traditional electronic distribution. We believe that in the next year hotel groups such as ours must embrace the integration of ‘mobile’, and especially iPad, as these channels are already becoming one of our main sources of visit and it is growing month on month,” says Rajakarier.

“In addition we are currently working on responsive or adaptive design for 2013, as we believe that mobile will be one of the big conversion factors for 2013 and especially for markets such as the Middle East where mobile penetration is so high.
Furthermore, Anantara’s focus in 2013 will be to increase channels to bring qualified traffic to the brand website. We are working closely with Google Hotel Finder, TripAdvisor and many of the new review and affiliate networks.

In addition we believe that growth will likely come from the centralisation and development of our PPC strategy to be able to increase qualified bookers and take control of our own destiny,” says Rajakarier.

So, a lot to be done, but it’s the type of investment that brings tangible results, as Pascal Gauvin, COO, India, Middle East and Africa at InterContinental Hotels Group testifies: “In 2011, we released mobile booking apps for each of our seven brands; InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza, Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood Suites, providing guests with the functionality to find and book hotel rooms, check rates and view their reservations.

“Also, corporate partners now have their own customised IHG-branded app with their corporate ID embedded, so they can view and book hotels at their negotiated rates,” he adds, touching on another trend — the need to make relationships easier for clients as well as guests.

“In just over a year, IHG saw a nearly 1000% increase in room night bookings from mobile devices. In the first five months of 2011, the total number of room bookings surpassed all of those made in 2010. This year we’ve enabled guests to book through the Facebook pages and expect much more to come in 2013,” predicts Gauvin.

Marriott International too has reported significant successes, as Jeff Strachan, VP sales & marketing for the Middle East and Africa explains, also noting, like Rajakarier, the opportunity for yet more growth.

“The recent PhocusWright report which assessed the online travel opportunity provided interesting reading. Readers of the report will see that supplier direct websites only account for 4% of total lodging revenues across the Middle East.

Fortunately, our own site accounts for significantly more (130% more than the average) and in perhaps the region’s most mature online market, the UAE, our own website is delivering 150% more than the industry average.”

Boosted by the progress made in room bookings online, he reveals Marriott is also set to “trial a few tools for online restaurant reservations particularly in the mobile and tablet space over the next few months”.

Search and Find
Mövenpick and Fairmont have also significantly invested in digital reservations, with both now prioritising higher levels of SEO.

Toufic Tamim, vice president sales and marketing — Middle East, Mövenpick Hotels & Resorts says: “We have recently launched a new fully-optimised website featuring full Arabic capabilities and a dedicated booking engine.

One of our main goals during 2013 will be to improve our digital channel distribution and increase production of our website in terms of room nights versus 2012. Investments are now in process for SEO and search-engine marketing strategies in order to maximise revenue from digital distribution”.

At Fairmont Hotels, Kent Cooper, vice president, regional hotel sales, Middle East and Africa, says the opportunity to grow lies in sophisticated SEO.

“Our strategy is to expand beyond basic SEO strategies and continue to develop a holistic digital marketing plan that encompasses social media engagement, reputation management, paid search and display advertising. In addition, the Fairmont website is optimised for mobile devices to ensure guests can access the web content from all devices,” reveals Cooper.

“Specifically with regard to SEO, the mix of English, Arabic and local languages continues to shift in the Middle East and Africa. Sensitivity to language and local linguistics is a key strategy for SEO in the region.

Additionally, online purchase behaviour from SEO varies within the region. For example, the UAE population tends to use online methods for research and purchasing their travel arrangements compared to the Egyptian population,” Cooper continues.

“Although online conversion rates are lower in the Middle East, users are still looking for relevant information while researching their travel plans. Local language content is critical to success in the region.

Fairmont currently operates sites in seven languages and we are in the process of rebuilding the websites to provide our properties with enhanced capabilities in these languages,” he says.

Rezidor’s Mark Willis, area VP Middle East and Sub-Saharan Africa, agrees that offering language specific sites is essential.

“We will encourage our hotels to participate in more SEO programmes eventually in additional languages more than just English, Arabic, Chinese etc.,” says Willis.
The opportunity is there for the Middle East’s home-grown chains too, with Jumeirah and Hospitality Management Holdings (HMH) making great in-roads. HMH president and CEO Michel Noblet says “SEO strategy is the key to driving e-commerce”.

“With 65% of bookings coming from online channels be it brand website, online travel agencies or other travel portals, SEO acts as the major driver of sales.”

And at Jumeirah, Christian Pertl, vice president sales & marketing, Dubai & MEASA observes: “Our guest mix will not necessarily change a lot in 2013, however, we will have a stronger focus to drive more bookings directly to the hotels and this initiative will be supported by our newly-launched Jumeirah.com site.”

Virtual Relationship
Now hotels are making it easier for guests to book online, they also need to enable continuous communication online – think of it as a virtual guest relationship.
As Guido de Wilde, senior VP, regional director Middle East, Starwood Hotels & Resorts explains: “Technology is reinventing the travel business in terms of how people search, select and book hotels.

Consumers can find the best value proposition with technology at their fingertips which has led to an increase in mobile bookings. In fact, 25% of travel-related searches today are done via mobile, and mobile is fast becoming a booking method of choice among our travellers in emerging markets.

We have also noticed, of travellers who book via mobile devices, 50% of those bookings are for same-day or next-day arrivals.

“We live in a data-driven world today and it is only natural that travellers expect a dialogue with their favourite brands,” continues de Wilde. “Travellers today know what they want and when they want it and expect personalised attention and experiences. This is the reason we launched Ratings and Reviews, which gives our guests the opportunity to review their experiences directly on our websites.

Since we launched this, we’ve learned that guests who interact with Ratings and Reviews have a 50% higher conversion rate than those who don’t.

“We will continue to launch new technological innovations to provide our guests more access to our hotels, a smooth process when booking and also, to learn more about their preferences,” de Wilde asserts.

Fairmont’s Cooper shares de Wilde’s philosophy, warning that hotel groups not developing this loop of the chain risk falling behind. “Guests accessing our sites via a mobile browser are generally very task oriented,” Cooper says.

“They are looking to book a room, retrieve an existing reservation, login to their account or find specific information. Although conversion rates are lower on mobile devices than tablets or PCs consumers have an expectation that the brands they work with should make it easy for them to do business together.

“If consumers are not able to complete their tasks using their preferred browser they will look to other competitors that can fill that need,” he concludes.

FACTS AT A GLANCE

How many hotels are you opening in the Middle East and Africa in 2013?
HMH: 10 hotels totalling 1400 rooms that make up 35% of existing supply.
Mövenpick: Three hotels totalling 1100 rooms.
Starwood: Seven new hotels, five in the UAE and two in Saudi Arabia, and two hotel extensions at Le Meridien Dubai and Four Points by Sheraton Kuwait.
Fairmont: Two including Fairmont Ajman and Fairmont Residences Mina Al Fajer, Fujairah.
Minor Hotel Group: Two, each comprising 30 villas on Sir Bani Yas Island.
Jumeirah: One, in Kuwait.
Marriott: Nine hotels in Bahrain, Egypt, Saudi Arabia and Dubai totalling 2977 rooms.
Rezidor: Two, in Kuwait and Oman.
IHG: Six, in Kuwait, Lebanon, Oman and KSA.

How many staff are you recruiting in the Middle East in 2013?
HMH: 1000
Mövenpick: 1000 employees for three upcoming hotels in Dubai and Riyadh, plus a general 5-10% increase in manning to meet demands of higher occupancies
Fairmont: 2750 in 2013-2015
Minor: Minimal numbers
Marriott: 1500
Rezidor: 500

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