Commerce on the line: E-Commerce roundtable
Hotelier gathered the Middle East's best minds in e-commerce and revenue management to talk about leveraging loyalty and beating OTAs
In the first of our two-part roundtable, regional ecommerce and distribution managers discuss the role of ecommerce in the hotel industry and how it has evolved in line with technological advancements. Online reputation management, leveraging loyalty and keeping up with the OTAs are some of the key topics up for debate
Meet the experts
Ayse Abbas, digital marketing manager, Carlson Rezidor
A Turkish national, Abbas has been with Carslon Rezidor since May 2014 and was previously with Starwood Hotels & resorts for 10 years, five of which were spent working in the revenue and digital field.
Thomas Spinner, corporate director of ecommerce, Rotana Hotels
Spinner has been in the Middle East and with Rotana Hotels for four years and has been working in the hospitality industry for 11 years in total. In his current role, he oversees the ecommerce strategy for all of the hotels in Rotana’s portfolio.
FJ Esanboev, regional web and ecommerce manager, Kempinski Hotels & Resorts
Esanboev began his career in the hospitality industry in 2001 during his student years, while he did freelance web development on the side. He moved to Dubai in 2008 and currently oversees Kempinski Palm Jumeirah as well as the rest of the group’s Middle East/ Africa portfolio.
Sahaj Agarwal, ecommerce manager EMEA, Ritz-Carlton Hotels & Resorts
Agarwal looks after ecommerce for Ritz-Carlton’s Europe, Middle East & Africa properties. Prior to his current role, which he has held for a year and a half, Agarwal worked with Accor’s Sofitel in Cairo where he was in charge of EMEA, and then he moved to Dubai three years ago with the company.
Sebastian Schwetje, area manager ecommerce UAE, Anantara Hotels, Resorts & Spas
Responsible for ecommerce and distribution for the five Anantara properties in the Abu Dhabi area, Schwetje has held his current role for five years. He began his career in 1999 in his native Germany and has worked with IHG, Starwood Hotels & Resorts and Kempinksi Hotels & Resorts.
MickaËl Guckert, ecommerce manager, Emaar Hospitality
Guckert is responsible for ecommerce at Emaar’s Vida Hotels & Resorts and currently oversees Vida Downtown Dubai and Manzil Downtown Dubai. He has held his current role for a year and previously worked in France in the digital marketing field.
Ben van Nieuwstadt, senior regional distribution manager, Accor Middle East
Nieuwstadt arrived in the UAE at the start of March and previously was based in his native Amsterdam. Having worked with Accor for seven and a half years, Nieuwstadt is responsible for distribution through direct channels and through third-parties.
Hotelier: The ecommerce role in the hospitality industry is relatively new and constantly evolving, and as a result it is relatively misunderstood. Could you please explain what responsibilities fall under your remit?
Ayse Abbas: My main role involves driving traffic and creating incremental revenue to direct channels, which is the main focus at the moment especially with the OTAs being very dominant and with the high commissions being paid from the hotels.
That goes through creating different tactical campaigns, SEO and pay-per-click, so there are a lot of activities we do on a daily basis. Another thing I do and it’s due to the nature of our job, is training and explaining to our stakeholders what I’m doing and what the benefits are.
Sahaj Agarwal: It is also about identifying opportunities. So we know our biggest strength in the GCC is GCC business, but there are also growing markets. Since we have all that data to analyse, we have to make recommendations to revenue or to marketing to identify growing markets.
So besides OTAs and direct channels, this is another thing we should look at—and digital marketing as well of course. It’s difficult to keep up with all the technology and changes. Ecommerce I think is what’s left over from different departments.
If revenue doesn’t know what to do —ecommerce; if marketing doesn’t know what to do — ecommerce. Training the hotels about ecommerce is one thing, but training your office colleagues about what you do is also important — I’m not the guy to fix your printer!
Ayse: It’s getting better, it’s all about education on a daily basis. Everything needs to be questioned by people, especially if they’re spending money.
Ben van Nieuwstadt: It’s not as technical as people think. It’s not IT. It’s using the data we have and optimising our distribution. Do people share more information than 10 years ago? I don’t think so, not on purpose.
The only difference is you don’t have a choice anymore about what you share, because 10 years ago you didn’t buy an iPad and you didn’t have to accept the terms and conditions, so people don’t even know what they are sharing. We do know what we can get out of this data and how we can optimise it.
Hotelier: How has ecommerce in hotels evolved?
FJ Esanboev: We are taking ecommerce from corporate office to every hotel so that in every hotel there’s one ecommerce manager. We see web and ecommerce more as a revenue tool rather than marketing.
Sahaj: Ecommerce is what revenue management was 10 years ago. Now each hotel has to have a revenue manager or director.
Ben: I think ecommerce is driven by business. When people enter your hotel with a smart phone — is it distribution, is it ecommerce — and I think everyone is struggling to define which department it is. I think everything that drives business in the end, either through our own websites or third parties, that’s defined as distribution. That’s what I’m responsible for and that’s how I look at data.
Ayse: I think it’s important that whatever we do in the hotels, we work hand-in-hand with revenue management, digital marketing, ecommerce, OTAs, and distribution because you have one main objective, so if you don’t have this communication between the teams it will never work.
Thomas Spinner: Another part is the online marketing; it’s the ecommerce itself — the selling and the online reputation management. All the reviews are out there and that’s definitely one area ecommerce should take control of.
I don’t mean answering — that’s very operational — but having the tools in place to know how it works and then support the GM to answer those reviews. It’s getting more important to be on target and know what guests are saying about us.
Hotelier: Have online review sites increased the importance of reputation management?
Sahaj: Now everyone carries a smart phone and in the Middle East I think there are 1.2 smartphones per person. So we all have to be at the top of our games all of the time in operations.
If you do one thing they’ll capture it on their phones and it’s on Instagram or YouTube immediately, so ecommerce is, let’s say, the police of the internet, and then they escalate it to different departments, and then they do the resolution.
Thomas: There are always mishaps and errors; people share them with their family and friends and now it goes viral, but it’s our opportunity because we can see those negatives and turn them into positives. It’s only that it has to be very quick. You can’t wait for two weeks and then remember to respond.
Hotelier: Is it your responsibility to handle complaints on Twitter?
MickaËl Guckert: For us it goes under ecommerce, but I believe for other hotel companies it’s different. Smartphones bring instant feedback, so it’s twenty-four-seven — you have to work on how the hotel is structured and how you will answer within four to eight hours based on what you’ve decided internally.
You work on pre-written answers or processes on how you have to handle certain types of complaints. If, for example, you have someone at the bar and they tweet and say the Cosmopolitan they’ve ordered isn’t good, we’ll take care of it on the spot; the restaurant manager will find the customer in the outlet and meet them. The feedback we have from this has been very positive.
FJ: We basically set up the channels and we flag up what’s happening. We can open tickets to PR departments to say that something needs to be replied to within 12 or 24 hours. There’s so much data, so you need to prioritise it. Now in hotels all of the departments are connected at some point of the ecommerce role. So we get involved in social media set up, even though we distribute the tasks.
Ayse: Some people have crisis management for when things turn really, really bad. In Carlson Rezidor we have a team sitting in the corporate office where they monitor by keywords. If the customer was talking about something really controversial, that goes to the attention of the hotel immediately, which needs to handle it directly with the guests. Online reviews can turn things upside down for the reputation of the company.
Sahaj: In this region there is some political instability so you need such teams. With the recent struggle between Saudi and Yemen, what’s been happening in Russia, we’ve really had to be careful about what we’re talking about and where we target our messages. We’re opening a hotel in Cairo, another volatile market, so you need crisis management to take care of things immediately.
Sebastian Schwetje: Online reputation management is not only marketing, it’s not only PR, it’s not only operations, and it’s not only ecommerce. Everyone is involved because it can be such a threat to the hotel, but also an opportunity as Thomas mentioned.
At Anantara I set up all the channels for social media and the online reputation management tools, I pull all the reports, I look at the statistics, the sentiments, whereas marketing and PR actively manage the channels operationally.
On the other hand, reviews have to be replied to by the GM and the operational team gets these reports distributed from the tool directly on a daily, weekly and monthly basis to have a look at what is happening and see where they can improve.
Hotelier: Do the GMs actually write the reports?
Thomas: The majority, yes definitely — they are involved. The GM should know what’s going on in his hotel anyway so it’s an opportunity. By answering them the guest feels appreciated, but also the next 100 people who read the reviews will see that this GM cares, so it’s definitely a marketing tool as well.
Ben: I really like the idea of approaching a guest in person because it’s so easy to hide behind a screen and just put it on the web. That’s in one way transparent, but transparency should at some stage turn around and be transparent towards the customer as well.
A lot of hotels approach me saying someone threatened to write a nasty comment online if they don’t get this or that. It happens, so it’s about getting more and more transparent. Imagine if our reviews became part of an algorithm for defining the rates of certain hotels — then you would really be moving into a more transparent world.
Thomas: TripAdvisor also allows you to rate when guests are trying to threaten you, so you just have to tell them. TripAdvisor is just trying to get the most transparency.
Ben: It’s like Uber; with Uber the driver can rate you as a customer as well, so the next one seeing that you are looking for a pickup can decide, ‘do I really want to pick up this guest because last time he caused some issues?’ that’s a really transparent situation.
Hotelier: Is part of your role maximising profits through online travel agents (OTAs)?
Ayse: It’s a bit of a cliché but you need someone to look after OTAs and understand how they work. You need a healthy balance between all the channels because you can’t say: ‘I’m only going to get my business from my direct channels from now onward’. You need OTAs, you need GDS, and you need brand web.
Ben: Yes, growing total web share. The OTAs are important and they have their fair share, but we do see them more as a partner and not as a danger. I’d rather optimise my total web share than try to stop them. I will never try to stop the OTAs in driving business to our hotels.
We do want to work with them as partners to learn how they use the business and how we can do that on our direct websites, so that’s what we try to do on a daily basis.
Sebastian: What we do with the OTAs is basically account management; we need to be friends with them. Yes they all have natural growth, but still we need to work them in certain areas. They give you all the tools but you need to know how to use them and not to undercut your own website, so that’s why I think it’s very important not to see them as a threat. They have the marketing power and the opportunity.
Sahaj: We are hoteliers and these OTAs are technology companies so we cannot have their marketing budget. We need to work with them on growing markets. Expedia and Booking.com spend a billion dollars on Google alone so we really have to work with them strategically.
Now there are essentially two left — Expedia and Priceline. They’ve acquired all of the smaller players so it’s interesting to see how this will evolve. I think they have more power now, so we may see a change in commission levels in the future.
Hotelier: What are the key challenges in terms of keeping up with OTAs?
Ben: They are technology-driven, we are hospitality. If you look at reviews, in the end we have the guest in our hotel so we need to give them hospitality, we can’t change the kind of company we are. The thing we do need to do is look at their data and technology and define where we want to use them.
For example, if you look at Expedia, they are strong in the US and we’re in the Middle East. Booking.com is very strong in Middle East as well, so there’s a difference in how you’d like to pay them for what they do.
Sebastian: I think for us as ecommerce leaders we really should be somewhat alarmed. We really need to start using our own data to drive our own channels because otherwise we will lose track. In the OTA world now they’re starting to offer activities like a travel agent — offering the full journey. We, as hoteliers, should be the experts of choosing our channels and then packaging them up to deliver the product to the guest.
Ayse: That’s our advantage, we can see the guests and we can talk to them, the OTAs don’t have this. So when you come to the hotel you have your concierge, your front office manager where you can talk to a human being. Yes we are all digitally driven but the human element will always stay.
I think OTAs are a great learning curve for me and I look up to them, but I think we have a long way to go. If you consider why OTAs are so successful, it’s because they’ve been making so much money from us. They’ve spent every commission they’ve got on Google search, for example Booking.com, so if we had started it 15 years ago, we could have been in the game. But we’re starting now, and I don’t see why we can’t reach to their level in maybe five to 10 years — hopefully.
Sebastian: The core element is they use the data, they use it and they’re so strong, the same as the airline industry.
Ben: What the customer doesn’t understand is that we pay commission to these players. The second thing is, a lot of customers think they get the best deal on an OTA, not on our brand website so that’s one thing we need to stress.
Hotelier: Are hotels offering competitive prices on their websites?
Ben: Definitely, you have to have rate parity. If you look around for a deal you can still find some difference. For Google maybe we’ve anticipated a bit too late or we didn’t get the right budget at the right moment and the OTAs had budget.
For metasearch it makes sense — people don’t want to go from one website to Google to another hotel website to compare my chain with another. You do your price comparison, you define which hotel you want to stay at and then you check the business. Metasearch is very important for OTAs and it’s really important for us at Accor as well; being there and making sure our own channels are listed there.
Sahaj: I think TripAdvisor realised that recently, so they’re moving from review site to a metasearch, and TripAdvisor in the US is starting a campaign. They say whenever you’re performing a search for a destination just put ‘TripAdvisor’ next to it so that they get all the traffic and then they can negotiate with the hotels.
They’ll say ok ‘pay us this much so that we can place your hotel rates on our website’. They’re getting more and more revenue-driven.
Thomas: They rolled out an OTA in the US, so they’re trying everything. It’s a real technology company just trying data and seeing if it works, if not, they roll it back, they try something else.
Hotelier: How do you choose which OTAs to work with?
Ayse: I think we still have the main players in the market, which give us 95% of the business, and then you get 5% which is a mixture of different OTAs that are coming in new to the market — so still the main players.
Sebastian: A company was created recently in Saudi Arabia, but their concept is just getting net rates and distributing them — that’s an easy thing to do, but that’s what we’re trying to undercut. That’s when travel metasearch becomes really important. It’s essential to monitor it and get your contracts and wholesale right, try to find out the affiliate networks they have, how they distribute the rates. It’s getting complicated.
FJ: OTAs come to revenue managers every day; maybe five or 10 of them. They say: ‘let’s make a contract’ but you see your hotel is bookable on their site already. Imagine how many websites your hotel is listed on, and then you have to dig so deep to find out where they’re getting your rate.
It’s either coming through Booking.com or other affiliates, or the worst case scenario is tour operators are going behind your back distributing your rates. We use OTA management, rate distribution tools like RateTiger.
We also ask new OTAs if they are on RateTiger and if they say yes we can look into them and see how their business is growing. Because of that, they’re also getting smarter. Most of the OTAs are not trying to hop onto RateTiger so that hotels sign contracts with them. Nobody is willing to handle 50 websites a day manually, that’s why hotels don’t sign up with smaller OTAs.
Sebastian: Back to travel metasearch; when we talk about the B2B rates sold on a B2C level, I think this is where our opportunity comes as hoteliers. If we use the data and we build a proper CRM, we can build trust with the customer.
If my sales colleagues say ‘oh no, they have seen a rate on there, and now I have problems with my corporate and leisure contracts and it’s all so much higher and I can’t sell anymore’, I say ‘ok let them try to book’.
It’s all non-refundable, and here the market is driven by cash, so once the customer has to pay directly and leave the money on the table, they don’t feel secure anymore, they don’t do it. So you use the strength of the sales team and your cancellation policies.
Hotelier: Other than your cancellation policies, what advantages can you leverage over OTAs?
Ayse: One thing we all have is our own loyalty programmes for guests. It’s all about using that database and how frequently you reach those customers and how efficient you are. Sometimes we are weak in that, we don’t communicate with customers that regularly.
That is something that goes in the CRM system: putting together the loyalty marketing. There are a lot of things to do and this is how we can actually turn those customers around and get them to book through our channels.
Sahaj: And what happens when you book through an OTA and you want to modify or cancel your reservation — those OTAs come to the hotel in the end. But if you come to the hotel directly, you’ll find better deals on hotel websites.
Thomas: The rate parity is gone. For the last two years, there were so many trials in law, especially in Europe, so the real rate parity that was dictated by the OTAs doesn’t exist anymore. It takes time until it actually gets through and it’s there, but I think we all give benefits when booking on our own websites.
FJ: The difference between Hotels.com or Booking.com telling you that and us telling you that, are those millions of dollars Booking.com has. What we say is visible to 10 people, and what they say is visible to thousands.
What they bring to you are the customers who, out of 100, 50 were not looking for your hotel, just a hotel in your location. Whereas on our websites, they’re looking for our hotels. The biggest challenge going forward is to bring the incremental — those who are not looking for our hotel — to capture them before an OTA captures them.
Ecommerce Roundtable - Part Two
In part two of our ecommerce roundtable, our experts will discuss the importance of storytelling through great content, share tips on transforming OTA customers into loyal brand.com bookers, and assert the need for bigger ecommerce budgets to achieve their marketing and revenue goals. Look out for the second part of the debate in the June 2015 edition of Hotelier Middle East. For any comments, get in touch with us through Facebook or Twitter (@HotelierME)