How digitization is transforming the hospitality industry and impacting customer behavior, necessitating new marketing strategies for hoteliers.
In the aftermath of COVID-19, technology and customer behavior are changing rapidly. To ensure hotels and the hospitality industry continue to thrive, we must understand how to adapt marketing strategies to be successful hoteliers amidst a dynamic customer journey.
In this article, we’ll review how the digitization of hospitality has impacted customer behavior and strategies for keeping up with these changes.
The deck and webinar video are now available.
COVID-19 Has Accelerated the Digitization of Hospitality
Before discussing 2023 and the future of hospitality, we must first understand the bigger picture: the digitization of hospitality and the world at large.
McKinsey and Company conducted an extensive study on the pandemic and concluded that it accelerated digital transformation by an astonishingten years.
It should come as no surprise that hotel guests are significantly more tech-savvy than they were before the pandemic. As a hotelier, getting tech-savvy with them is just one critical strategy to protect and grow your business.
Travelers are Booking Even More Trips Online
It’s more important than ever for hoteliers to understand that online is where the customers are. This cannot be overstated. A few essential numbers offer some context:
- The earth’s population is now 8.01 billion people
- 68% of the population are mobile phone users (5.44 billion)
- 59.4% of the population are social media users (4.76 billion)
- 64.4% of the population is online every day (5.16 billion)
That means our current and future guests are online, including the astonishing 83% of US adults that want to book their trips online. Because companies need to advertise in channels where customers spend time, 73.3% of advertising has shifted from offline marketing to digital.
Yet, while all other industries heavily invest in digital marketing, hospitality is falling behind. There’s a ton of opportunity for the industry to make changes and adapt to this changing landscape.
7 Ways Traveler Behavior is Changing Across the Board
Before making massive shifts to your marketing approach, it’s critical to understand your customers’ behaviors, what motivates them to buy, and how the pandemic has altered expectations. As travelers become more flexible in their plans, consider these seven trends:
- Travel is no longer bound to the traditional ‘peak and off-peak’ seasons.
- Price remains a primary concern, but flexibility is increasingly important. We’re seeing shorter booking windows, plans that change on short notice, and a willingness to pay more for the ability to reschedule.
- Travelers are more willing to embrace leisure. In 2022, American Hotel & Lodging Association found that 89% of respondents wanted to add leisure time to their next business trip.
- 40% of Millennial travelers choose destinations based on how “Instagramable” they are, and 52% make travel choices based on recommendations by online influencers.
- Personalization has become more important, with customers expecting brands to use data to provide enhanced personalized experiences at all stages of their customer journey.
- Booking.com’s 2022 Sustainable Travel Report shows travelers want more responsible and authentic travel and are willing to pay more to ensure their hospitality dollars benefit local communities.
- Gen Z, the largest generation in the US, frequently decides whether or not to buy from a company online based on ease of website navigation, the checkout and payment experience, and ratings and reviews.
Not Everything Has Changed: Marketing and Messaging Still Matter
The customer journey includes multiple stops, with online search leading as the journey’s starting point. With that in mind, as you evaluate your marketing methods, consider how easily people can find you online, if your messaging is relevant and consistent, and whether your efforts inspire consumers to choose your product.
After all, while search is crucial, it’s far from the only thing the hospitality industry must prioritize. Research shows that brand messaging outperforms performance messaging 80% of the time, driving as much as 30% of paid search.
As a caveat, it’s important to note that as much as 30-60% is driven by non-marketing factors such as seasonality, loyalty, or category trends.
With that in mind, brand messaging is the best long-term strategy to win customer loyalty in an era of high inflation, job insecurity, and economic volatility. As a result, it’s more important than ever to align your marketing efforts across your brand, specifically focusing on:
- Ensuring departments are in alignment on overall marketing strategy to avoid mixed messages and wasted marketing dollars.
- Creating an omnichannel strategy to ensure a consistent and seamless experience and message across all touchpoints.
- Creating aligned KPIs to deliver a better customer journey and more profitability.
Ultimately, prioritizing your messaging allows you to optimize your customer journey across digital channels and the in-person experience.
Understanding the Changing Digital Customer Journey
So what does the digital customer journey look like? The typical hotel booking cycle takes over 36 days and involves over 45 touchpoints.
Suffice it to say the digital customer journey has become complex with five well-defined phases:
- Dreaming: when your customers think about the places they want to go.
- Planning: when they’ve narrowed down the options and begin to create their itinerary.
- Booking: when they make reservations.
- Experiencing: when they’re on-site at your property and exploring the area.
- Retention: when they’ve left your hotel, and you seek to turn them into return customers.
With that in mind, the digital customer journey is not a straight line. It’s a flywheel that has the potential to loop endlessly. This customer journey should dictate how we approach marketing and hospitality.
It’s your job to identify how you can approach marketing at each stage of the journey to engage, acquire, and retain customers.
Three Marketing Categories to Embrace
As we’ve been exploring, effective marketing meets your customers where they are in the buyer journey. To that end, each hotel should know and engage in three distinct—but interconnected and interdependent—marketing categories.
- Customer Engagement Marketing: Engaging customers and potential guests (dreaming and planning phases)
- Customer Acquisition Marketing: Converting the already engaged customer or potential guest into a guest at the hotel (booking phase).
- Customer Retention Marketing: Ensuring you deliver on the customer experience during their stay and after they leave (experiencing and retention phases).
Hotels must invest in all three digital marketing categories. Getting by with one or two is simply not an option. Too many hotels focus exclusively on the customer acquisition marketing space, ignoring the engagement and retention areas. Unsurprisingly, their marketing ROI is lower.
How To Adapt to the Digitization of Hospitality
While some forecasts are optimistic, there are concerns that accumulated consumer savings are running out. Government assistance from the pandemic has stopped, inflation is rising, and interest rates are making travel more expensive.
As a result, it’s projected that fewer people will travel in 2023, and those who do will choose lower-category hotels, take shorter trips, and travel closer to home. This doesn’t have to cause panic. Quite the opposite—it presents excellent opportunities.
Because every lead should be better, stronger, and more efficient, investing in digital marketing to engage, acquire, and retain customers is critical.
Hoteliers can use a variety of techniques to attract customers, including but not limited to:
- Brand messaging
- Performance marketing
- Content marketing
- Social media (paid and organic)
- Paid search
- Programmatic display
- Lookalike audiences
- Omnichannel marketing campaigns
- Customer retention strategies
Remember that your property doesn’t have to use all these techniques, especially if you’re new to most of them. However, in an ideal world, you’ll run omnichannel marketing campaigns at least five to six times yearly based on seasonal promotions and events. Even starting simple and adopting one or two can move the needle, and as you build a track record, you can increase the complexity of your marketing.
Since hospitality is a more competitive industry than ever, it’s vital to navigate the application of technology to hospitality with care and intention while prioritizing our core value of welcoming guests. In the end, hotel marketers that invest in digital marketing will be successful in 2023 and beyond.
Strategic Considerations in a Complex Customer Journey
Prioritizing marketing efforts can be challenging, particularly with many technologies at your fingertips. Hoteliers need to categorize the possible technologies available to prioritize their efforts. For example:
- Pre-visit (social media, email, offline leading to online marketing, engagement)
- On-property (digital check-ins, keyless entry, virtual concierge, guest apps)
- Post-visit (digital touchpoints after the guest checks out)
Because all the possibilities can be overwhelming, it’s best to choose specific areas to focus on and avoid the urge to digitize everything simultaneously – so consider starting with what happens pre-visit.
Often, first impressions in hospitality are digital, and those interactions are essential building blocks of the customer experience. Hotel marketers must consider this in their storytelling across all channels to create emotionally resonating, consistent, relevant content, and all departments must be ‘all hands on deck.’
The Importance of Search Quality and Relevance in 2023 and Beyond
As a hotelier, you should prioritize information that answers your guests’ questions and guides them along the emotional journey of choosing your hotel. In exploring how to upgrade your messaging, consider how you can speak to the desired experience.
Additionally, it’s important to deliver on these online promises when guests arrive on the property, ensuring they feel positive about their experience and that it contributes to beautiful memories of their vacation.
A Personalized Experience Matters
As digitization continues to grow in the hospitality industry, it’s going to impact the customer journey. Making your hotel discoverable to guests means going beyond the brand name to attract guests traveling to the area who may not be familiar with you.
You may have heard the EAT acronym—Expertise, Authoritativeness, and Trustworthiness. Now it’s truly EEAT, where experience is the new E. you can attract a new category of guests by doubling down on experiential content and including nearby attractions or events as well as the on-property experience.
Best practices boil down to personalizing your approach with custom offers and content designed to drive guests your way.
The Bottom Line: Prioritize a Better Experience
Even though the pandemic transformed how every business operates, it’s bringing incredible opportunities to the hospitality industry. Consumers have increasingly high digital expectations, and hoteliers must step up to the plate to meet—and exceed—them.
Connecting with your audience online is the first step. However, it’s also critical to use the opportunity to enhance the overall guest experience with your brand. By setting customer experience goals as your North Star, it becomes a lens for all of your marketing efforts. Moreover, it can help you determine which actions will likely drive the most success so that you can prioritize them.
As digitization grows within the hospitality industry, it will impact your customer journey. The key opportunities lie in making sure that your hotel is discoverable, not just for your brand name but for things to do near your hotel, for attractions, events, and other items in the market. Creating content and experiences around discoverability will help your hotel capture that customer that may not know you; they know you are going to your area for a reason.
Secondly, not all contents are created equal. Hospitality marketers think about helpful content and E-E-A-T factors which stands for experience, expertise, authoritativeness, and trustworthiness. Emotional experiential and content that really gives that consumer a pleasant experience delivered to optimize across an omnichannel perspective be it online, apps or offline by using platforms like Milestone CMS. Making sure to give that guest a wonderful experience no matter where they are on their journey. Meet that customer where they are and find ways to hopefully pull them to you. And a lot of that comes through by making sure that you are personalizing, localizing your information by doing research, looking at the data in your market, and creating customized offers to drive guests towards you.
Ultimately, you don’t have to take on every strategy suggested here. However, you can and should adapt your marketing efforts to an omnichannel customer journey. Just keep the customer experience in mind.
If you’re ready to explore how you can adapt your marketing strategy to include more digital and omnichannel efforts, we’d love to help. Contact our team at www.milestoneinternet.com, or email us at [email protected] to get started.
To learn more, download the full deck and webinar.
To experience more incredible insights like these, consider attending our in-person conference, Engage 2023, July 31-August 1 at Caesars Palace in Las Vegas.
How can a hotel better prepare for digitization?
What are the key considerations to better deliver a seamless hotels online experience?
Hotel guests are living in the digital world — spending more than 7 hours online per day! To meet them where they’re at, a survey from Google found that 83% of US adults would like to book their trips online. That’s why being focused on digital customer journey initiatives is imperative. Hotel marketers must “play” in all three digital marketing categories: Customer Engagement, Acquisition and Retention Marketing but not in one or two, but in all three categories. Different marketing formats and initiatives are used in each category. Hotels should also consider optimizing their marketing budgets and directly address challenges by
using hospitality digital marketing experts.
How should hotels prepare for the constantly evolving and complex customer journey?
As the customer journey becomes more complex, technology is acting as an enabler for services; how it has accelerated in the past few years as a positive, however, it is always not for all customers. In the luxury space hoteliers see this as a need for options – providing choice for the guest. At the end of the day, hoteliers are in hospitality which must have the consideration of welcoming guests. Moreover, as channels become more competitive than ever the customer, the travel professional, and the meeting planners are also becoming more technology led by adapting new channels and creating search optimized experiences and helpful content before, during and post stay.