Insights Type: Articles

Stephanie Smith, CHDM, CEO and Digital Matriarch, Cogwheel Marketing, HSMAI Marketing Advisory Board Member 

Recently Expedia Group released their 2023 Q1 Traveler Insights Report. I brought this interesting piece of research to the great minds at the HSMAI Marketing Advisory Board to discuss the trends and explore if they align with what we are seeing in the industry.  

Booking Window Patterns 

While short-term bookings were common during the pandemic, many in the group have noticed a shift towards longer-term bookings. Some noted that leisure travelers are booking closer to 60 days out for some of their properties. One interesting point was that hotel bookings are being made further in advance compared to flights, indicating a flip-flop in booking patterns, especially in vacation destinations. 

Marketing to Blended Business and Vacation Travelers 

The trend of travelers adding extra days to their business trips for leisure is here to stay, with travelers adding an average of three to six days onto business trips. Parents in our group mentioned a pressure to make up for lost travel memories by combining work and leisure. 

Three ideas to effectively market to this segment:  

1. Highlight amenities that would appeal to people staying on property for a longer time, like pools and other on-property facilities.  
2. Leverage data to identify business travelers. 
3. Focus on the destination rather than specific properties can also help in tailoring marketing campaigns. Partnerships with Destination Marketing Organizations (DMOs) can be valuable in promoting the destination, beyond just the hotel offerings. 

On Loyalty 

Member rates for loyalty programs remain successful for brands, and the research bears out that is what guests want. Another interesting take on loyalty programs was introducing Food & Beverage (F&B) options to both use and gain points, tapping into the local market. 

Experiences are Everything, Except for Airbnb 

The report indicated that experiences are still paramount. On the call, several board members mentioned having success increasing their offerings for experience. However, we discussed why Airbnb has been pulling back on experiences? Is it the lack of control operators have over quality and consistency or profitability concerns? Hotels, on the other hand, have more brand control, which may contribute to the difference in approach between hotels and Airbnb in terms of offering experiences to guests. 

Agility and strategic marketing approaches are crucial to navigate changing trends in booking patterns, flexcations, and loyalty platforms. Staying updated with the latest trends and consumer preferences is essential for hotel marketers to stay ahead in the competitive landscape. 

Further Reading:  

Understanding the Gap: Examining the differences between evolving traveler expectations and industry perceptions | HSMAI Americas 

Robert Torres, Senior Vice President Media & Affiliate Solution, Expedia Group; Haley White, Senior Director Global Strategic Accounts, Expedia Group, HSMAI America’s Board Member 

This is the second installment in a series of articles sharing insights from our partners who presented at an HSMAI Chief Marketing Officer Roundtable 

Brief overview of research

The pandemic created more discerning consumers with higher expectations for their travel experience, from booking a place to stay to the taxi ride home. The Traveler Value Index 2023 examines what people value in their travel experience compared to priorities and considerations shaping decisions and investments across industry professionals. Expedia Group partnered with Wakefield Research to conduct the Traveler Value Index: 2022 Gap Analysis research.  The survey included 11,000 consumers and 1,100 industry professionals from 11 markets: Australia, Brazil, Canada, France, Germany, Japan, Mexico, South Africa, South Korea, the United Kingdom, and the United States. Ultimately, consumers weigh a variety of factors when making booking decisions. Today, flexibility and price are top of mind, but other considerations are also at play. 

Biggest takeaways/highlights 

The pandemic caused several shifts in traveler behavior and influenced industry norms. Our research shows that several permanent preferences that will continue to have a prolonged impact on our industry.  One major take away:  the absence made the appetite for travel stronger. Traveler searches for car and vacation rentals on our travel websites were above 2019 search volumes in the first three quarters of 2022. As of the end of September 2022, searches for cruises and activities saw the highest percent growth year-over-year compared to accommodation and other methods of transportation. In addition to the increase in demand, there are other signals that people feel more comfortable booking travel. Consumers are comfortable booking five months in advance on average, up from four months in advance based on Expedia Group research from April 2022. 

Despite increased confidence and less tumultuous travel, consumers continue to demand flexible options. For domestic travel, nearly half of consumers (47%) say they would never book non-refundable lodging, and more than half (51%) would not book transportation they could not change. This need for flexibility intensifies internationally, increasing to 57% and 59% for lodging and transportation respectively.  

Another trend that is expected to remain is that Travelers prefer to book with providers that align with their personal values. Travelers will vote with their values. The 2023 Traveler Value Index found that people are seeking out businesses that are welcoming and accessible to all travelers: 70% of people say they are more likely to choose travel options that are more inclusive, even if that comes at a higher cost.  Industry professionals acknowledge this preference, with 64% indicating that they believe their customers will choose travel options that are more inclusive, even if they are more expensive. 

Conversely there are a few temporary responses to the pandemic that are expected to dissipate throughout the remainder of 2023. For example, travelers’ heightened concern over health and cleanliness is waning. This waning importance is also reflected in our traveler review data. Prior to the pandemic in late 2019, the percentage of reviews that included mentions related to cleanliness was between 5-12%. Review mentions rapidly increased in early 2020, peaking in September 2020 (42%) and then again early 2021 (41%). At the end of 2021, that average dropped to 25% — higher than pre-pandemic but continuing to decrease from peak times.  

Business and international travel is expected to rebound as restrictive policies ease. More than three-fourths (76%) of business travelers plan to extend a work trip for leisure purposes in the next 12 months; and almost a third (28%) plan to take a “flexcation” in the next 12 months to take advantage of remote work combined with leisure travel. Similarly, about half of consumers are likely to book or have already booked an international trip in the next 12 months, up from 12% in mid-2021. and Gen Zers and millennials are even more likely to do so.   

Why is this timely? 

Understanding the conditions impacting travel in the months ahead is critical for travel marketers. Our platform brings together millions of properties, billions of bookable airline seats, and thousands of car rentals, cruises, and activities across 200 booking sites in 70 countries. Every second, thousands of signals – transactions, rate fluctuations, searches, visits, and itinerary changes – flow across our platform and through the interconnected lanes of the global travel ecosystem.  Our extensive 70+ Petabytes of first-party data are backed by this qualitative research to help hoteliers better understand evolving traveler expectations.   

For example, we learned that consumers say inflation is impacting their travel plans more than ongoing pandemic concerns and travel restrictions, particularly those in North and South America and Europe.  In our current economic climate, consumers have expressed price sensitive amid rising inflation. Price sensitivity doesn’t mean consumers are always hunting for the cheapest rate– our research suggests that they want to get their money’s worth. Respondents say feeling that “the experience was worth the cost” was the most important factor for a positive trip experience.  

How will this help marketing professionals? 

Understanding the gap between industry expectations and what people value in their travel experience could uncover accelerated growth for savvy industry professionals. Taking action to stand out and deeply understanding traveler wants and needs can help drive business success:  

• Maintain your refundable rates and flexible policies. Flexibility continues to be one of the top considerations for travelers, particularly those traveling internationally.  
• Set realistic expectations with travelers — and have realistic expectations for your staff. Only 15% of industry professionals said their business was currently providing full hours and services. Ensure the information you communicate to travelers pre- and post-booking and during their time with you accurately reflects what their experience will be like. 
• Be thoughtful about discounts and perks. Your customers may be more price sensitive now than they were a year ago – so consider what types of incentives will be most effective. If you offer a loyalty program, keep in mind that discounts, points, and complementary add-ons are most important to members. Access to specific amenities may be more of a draw for business travelers.  

• Lean into and showcase your brand values. A third of industry professionals say they are promoting specific company values or priorities, like sustainability efforts, to encourage bookings from their key traveler audiences. Consumers will continue to book based on their personal values and will be loyal to the destinations and travel providers that walk the walk in these key areas.  
• Keep a pulse on customer feedback to understand how they perceive their experience. Whether through reviews, social media, or your own feedback channels, collecting and acting on feedback is key to optimizing the travel experience you provide. Just over half of the organizations in our research relied on customer reviews to measure the guest experience, and the same amount make changes often due to feedback – meaning there is a big opportunity for more businesses in the travel space to be taking advantage of feedback loops. A positive travel experience attracts loyal customers.  

Links to Research 

Link to Traveler Value Index    

Noreen Henry, Chief Revenue Officer, Sojern, HSMAI Foundation Board Member,  and Kurt Weinsheimer, Chief Solutions Officer, Sojern

This is the first in a series of articles sharing insights from our partners who presented at an HSMAI Chief Marketing Officer Roundtable.

Hotel marketers face a number of challenges. Consumers want a more personalized experience, with 71% saying they expect it from companies. And the benefits are there for marketers that follow through: Companies that use personalization grow 40% faster than those that don’t. However, consumers are wary of giving up too much information, with 68% concerned about the amount of data collected. In addition to satisfying customers’ need for both personalization and privacy they must also efficiently drive direct demand, quantify the value that corporate marketing provides to individual properties, and enact a first-party data strategy to find success in a cookieless world.  

How can hotel marketers overcome these challenges to drive volume and revenue across channels at a low cost while giving potential travelers and current guests the relevant experience they want? 

It all starts with permission-based personalization.  

What Do Travelers Want and Need Now? 

To stay ahead of privacy regulations and give customers what they want, hotel marketers must evolve the way they identify, target, and convert key travelers. Consumers want relevant, personalized advertising but also want consent and control. Marketing that relies on third-party cookies, which is 80% of all digital advertising, provides personalization but often lacks permission and control. Now, as consumers demand more control over their information, third-party cookies are losing value for marketers: Safari and Firefox block them today and Chrome is set to disable them in late 2024. To continue to reach potential travelers with relevant, personalized messaging, hotel marketers will need to shift to newer, more relevant, and privacy-first strategies that reach and engage consumers. 

How Do Brands Build Trust? 

Permission-based personalization allows hotel marketers to deliver individualized messaging and experiences based on information, or first-party data, that the traveler has willingly shared. First-party permission keeps advertising open so marketers can make personal connections, even after third-party cookies go away. First-party data includes loyalty program information, booking details, and observational data about guest interactions. These insights allow hotels to combine online data from social, CRM, and the hotel website with offline data, such as front desk interactions, to engage with potential travelers on a deeper, more personalized level. Use first-party data on the guest-servicing side to deliver a memorable stay or even marketing new experiences to your past guests to build loyalty and repeat bookings.  

Hoteliers can use first-party data to enable cross-device targeting to deliver personalized experiences and create deeper connections. Think about it this way: Third-party cookies don’t allow for cross-device targeting, which means a traveler may book a hotel room in Rome on their laptop and still receive hotel ads on their mobile phone for days or weeks. Now, with first-party data and cross-device targeting, the traveler experience is no longer disjointed. Once that traveler books their room in Rome, marketers can begin to serve up much more relevant ads for activities or attractions. 

By using customer data wisely and delivering the experiences they want, hotels can build relationships based on transparency and trust, which ultimately builds brand loyalty and increases the chance of repeat bookings. A recent report found that 81% of hoteliers have seen a lift in revenue since they’ve implemented a first-party data strategy. What’s more, 57% saw an increase in guest satisfaction.  

How Do You Build a Permission-Based Program? 

Hotel marketers can build a successful permission-based program by taking a transparency, consent, control approach. Transparency means hoteliers clearly communicate the value the customer receives for the data exchange and how their data is used. To do so, you must have a framework for collecting and organizing customer data in a CRM or customer data platform. Consent means that customers can opt in to the hotel’s data collection strategy with a clear idea of how their data will be used and establish a baseline that ensures all customer data is being used in a consistent and uniform manner. For example, you can ask travelers who visit your website for permission to market to them via email. Control gives customers the power to choose what they do–and don’t–share. By creating a framework for what data is collected, how that data is used, and the value exchange for customers, hotel marketers can make the data ask and obtain consent.  

How Do You Turn Permission-Based Marketing into Value? 

Once hotel marketers build a permission-based marketing strategy, they can use the discover, plan, book framework to transform that strategy into bookings–and long-term value. 

Hoteliers can discover more about their customer base by collecting first-party data. It was found that 68% of respondents say first-party data has been effective in helping them build stronger relationships. Not only can you use first-party data to remarket to loyal customers and entice them to take a return trip, you can use your customer data to create lookalike audiences, which allows you to reach new potential travelers who might be interested in your hotel because they share similar characteristics with your existing customers.  

While collecting first-party data is a great start, you must still enrich that information with partner insights such as travel intent data, supply and inventory, and more. The same report also found that hotels who said first-party data has helped them compete with OTAs and other hotel brands were twice as likely to have worked with technology companies in planning their first-party data strategy. This highlights both the importance that first-party data–and the right partnerships–play in successful marketing campaigns.  

By combining internal information with partner data, hoteliers around the world can gain a complete view of the customer journey and segment and score potential travelers based on likelihood to book. From there, they can use those scores and enriched data to create offers to entice users to come back and book. The discover, plan, book approach allows marketers to tie their efforts to revenue, which also helps them demonstrate value at a property level. Recently, Marriott partnered with Sojern to engage with potential travelers using traveler intent data. By marketing to travelers with the right message for where they were at in their journey, Marriott’s conversion rate increased by 40% and booking activity went up by 6%.  

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 At Sojern, we provide the tools and data hotel marketers need to create a personalized customer experience that captures bookings again and again. Reach out to our team of travel experts to learn how to create a permission-based strategy to build relationships with travelers in a cookieless world.  

Bianca Sewake, Social Media Manager, Aqua-Aston Hospitality, LLC, HSMAI Rising Marketing Leader Council Member 

ChatGPT is an AI chatbot that has gone viral for its ability to have a humanlike conversation and advanced capabilities. It can write essays, craft resumes, explain quantum physics, or even recommend a recipe based off what’s in your fridge. However, users are finding creative ways to harness the power of this AI chatbot, including sorting through vacation lodging with best prices, putting together travel itineraries, and more. I brought the topic to a recent HSMAI Rising Marketing Leader Council meeting. 

9 Ways We Are Applying and Experimenting with AI  

1. Sparking creativity and brainstorming for marketing campaigns. 
2. Generating ideas for projects to get over the initial writer’s block. 
3. Copywriting for marketing needs. For example, “Write a wedding flyer for X hotel.” 
4. Reaching niche demographics in a targeted way, such as pet messaging for those who travel with pets. 
5. Personalized text message responses to in-house guests. 
6. Planning travel with personalized itineraries. 
7. Creating automated emails after guests check out. 
8. Crafting personalized review responses. 
9. Organizing data to assist with data analysis. 

Yes, But… 

While some are anxious about what this means for the future of marketers, we all agreed that the human touch is needed to utilize AI effectively. Whether that is in content creation or brainstorming – we use AI generated content as a jumping off point and then use our own strategy and creativity to take it to the next level. One thing is for sure: We are excited about the future of AI. 

Read More 

• Headlines to Watch: TikTok, ChatGPT, and “Junk Fee” Legislation | HSMAI Americas 
• HSMAI Perspective: Generative AI in Hospitality | HSMAI Americas 
• How ChatGPT and Generative AI Could Change the Way We Travel – The New York Times 
• What Does ChatGPT Mean for the Future of Business? | Entrepreneur