Meeting and Convention Management

By Max Starkov, Jason Price, Mariana Mechoso and Evan Rosenblum

In the tough year that 2009 is turning out to be for hoteliers, it is crucial to know where every marketing dollar is being spent. When reevaluating marketing plans - as most of you have had to do this year - hoteliers also need to consider whether or not they should shift marketing dollars from offline to the more measurable online initiatives, what their peers are doing, and how they can evolve with the industry without wasting valuable dollars on unproven tactics.

How are hoteliers budgeting for their Internet marketing this year? Are they focusing on Web 2.0/Social Media initiatives in this recession? What percentage of business should be coming from your website?

In the 3rd Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices in Hospitality, HeBS set out to answer these questions and identify trends in online marketing in hospitality. The purpose of the survey was to assess hoteliers' 2009 Internet marketing priorities and strategies in order to compare with the responses received last year, and to provide the industry with insights on how internet marketing strategies for the hospitality industry are developing.

Who Participated in this Survey?

The survey experienced global participation, with almost half of respondents from the US and Western Europe. Hospitality executives included general managers (20.6%), sales and marketing directors (49.6%), e-commerce managers (13%), and revenue managers (29.8%).

The full spectrum of hospitality and travel verticals are represented in this survey, including boutique hotels, upscale hotels, budget, mid-scale and luxury franchised properties, major brands, real estate groups, resorts, hotel management companies, casinos, and more. Most participants were hoteliers from independent properties; however there was a heavy influence this year of franchise/hotel brand hoteliers.

Main Findings from the 3rd Benchmark Survey

• Hoteliers strongly believe that Internet marketing produces the best results. We asked hoteliers whether they thought Internet marketing, traditional marketing, or a mix of both produces better results and 55.7% said Internet marketing (up from 49.2% in the 08 survey and 37.7% in the 07 survey). Hoteliers are right on target as the online channel will be the only growth channel in hospitality in 2009-2010.

• Even in this current economic environment, 63% plan to increase their Internet marketing budget in 09 - and a majority of hoteliers are planning on raising their online budget more than 15%. A larger percentage of respondents this year (33%) will be keeping their 09 budget at 08 levels. Where is the money coming from for hoteliers that are increasing their Internet marketing budget? Fifty-three percent of respondents are shifting money from offline marketing budgets.

• In the 2009 survey, we introduced ‘the economic environment' as one of the multiple choice options when we asked hoteliers what factors they will consider in planning their 2009 budget. Not surprisingly, 81.6% of respondents said that the economy will affect their budget planning for 09. We also saw that ‘what my peers are doing' and ‘industry averages' had less of an influence on hotel budget planning this year.

• The types of Web 2.0 marketing initiatives planned for 09 vary greatly from 07 and 08. In previous years, hoteliers selected Surveys and Comment cards as the Web 2.0 initiatives they were planning. This year, hoteliers selected advertising on Social Media sites (i.e. TripAdvisor), creating profiles on social networks and a blog on the hotel website.

• Almost half of all respondents believe their property does NOT conform to industry's best practices in terms of Internet marketing. While hoteliers are getting more educated about the direct online channel, many of them do not have the internal resources, bandwidth or knowledge to deal effectively with this highly dynamic field.

• This year, hoteliers overwhelmingly responded that they thought website optimization produced the best results and the highest ROIs (81.6%).  Search optimization - organic search was next at 60.9%. Indeed, both website and search optimizations are the most-cost effective initiatives for hoteliers in this economy.

• This year, 85.6% of franchise/major brand hoteliers respondents said they did not find there to be major restrictions in online marketing due to brand restrictions. This percentage is increasing over the years (81.8% in 2008 and 76.2% in 2006) as more and more franchisees embrace best practices and launch local Internet marketing initiatives that complement their brand efforts.

• The percentage of hoteliers who are participating in Paid Search increased from 50% in 2008 to 59.8% in 2009.  The use of Meta search and local search is also increasing year after year. Also, Web 2.0 Paid Search (e.g. TripAdvisor) was big this year as 32% of respondents are spending marketing dollars on this initiative. These responses are in par with industry practices and show that hoteliers are aware that as much as 60%-80% of traffic and bookings on hotel websites originate from the search engines.
  
  

Where is Hotel Business coming from?

For the past three years, Benchmark Survey respondents have said that most of their business comes from the direct online channel, which is supported by industry data. In 2009, more than 55% of all travel bookings and up to 40% of all hotel bookings in North America will be generated from the Internet (eMarketer, HeBS), which represents a double-digit growth over 2008. At least another third of hotel bookings will be directly influenced by online research, but booked offline. Over 65% of online hotel bookings will come from the direct online channel (76% for the major hotel brands).

However, 2009 survey results also show that bookings made via Online Travel Agencies (OTAs) have increased for hoteliers - from 19% in 08 to 21% in 09. This is in large part due to the dire economic situation many hoteliers are going through. Hoteliers seem to be worried about lower occupancy rates and are providing more and more inventory to the OTAs. What hoteliers are not realizing however is that the OTAs are also affected by the overall decline in travel demand (Expedia reported 7% decline in revenue in Q4 2008) and can help only so much. Therefore the only real growth channel in 2009-2010 is the direct online channel which allows savvy hoteliers to outsmart the competition and gain market share.

Budgeting for Hotel Internet Marketing in a Recession

Compared to last year's survey, we noticed an increase in hoteliers saying that they have overall budget constraints. Hoteliers are less concerned with what peers are doing now then they were last year (24% in 2006 up to 27% in 2007, and back down to 18% in 2008), and much more concerned with the economy. We saw the same decrease with concerns over industry averages for budget planning (from approx. 40% over the last two years, to 30%). However, despite the economy, most hoteliers are increasing their Internet marketing budgets in 09:

Table A

Do you plan to INCREASE or DECREASE your 2009 Internet marketing budget?
I plan to increase my budget	63.2%
I plan to decrease my budget	3.4%
I plan to keep my budget at 2008 levels	33%

So where is this increase coming from? As expected, over half of the respondents (53%) said they were shifting money from the offline marketing budget.

When asked approximately what percentage of your overall marketing budget was devoted to Internet marketing activities in the past year, most respondents were in the 11-20% and 21-49% range. More people are devoting a larger portion of their overall budget to Internet than they had been in 06 and 07. Year after year we are seeing a shift from lower categories of percentages to higher percentages of money spent on the Internet, although hoteliers are still using traditional media. In this year's survey results, people that were throwing their entire budget towards the Internet (76-100%), have scaled back as hoteliers discover a better balance between traditional and Internet marketing budgeting.

Once the budget is set, what are hoteliers spending their Internet marketing dollars on? From the table below, you can see that they are indeed spending their money on those formats they believe achieve the highest ROIs. Website design, website optimization, paid search and email marketing consume fairly high percentages of the budget (Table C), and this correlates with those activities hoteliers see as producing the highest returns (Table D).

Table B

Of your Internet Marketing Budget where did you spend your money in:	2006	2007	2008	2009 (projected)
Website re-design/design	18%	22%	19.6%	20.6%
Website Optimization	9%	11.3%	12.8%	13.3%
Strategic linking/partnerships	6%	9.6%	7.5%	7.6%
PPC/paid inclusion (SEM)	14%	8.6%	17%	15.7%
Local Search	3%	3.6%	4.2%	5.2%
Meta Search	2%	2.6%	2.6%	3.2%
Search Engine Optimization	10%	11.5%	8.7%	9.3%
Display Advertising (banners)	6%	6.6%	7%	7.8%
Email Marketing	10%	11.5%	10.4%	11.2%
Consulting Fees	6%	7.0%	5.1%	5.5%
Web 2.0 Formats	1%	3.1%	3%	4%

What Marketing Formats do Hoteliers Believe Produce the Best Results?

What are the Internet marketing formats hoteliers believe generate the highest ROIs?

In the 2007 and 2008 results, website design, website optimization and search engine optimization ranked as the highest revenue generators. For 2009 we saw a decrease in the percentage of people who ranked website design as one of the highest revenue generators.

This thinking is in line with current budget restraints due to the recession. Website optimizations are much more affordable than website redesigns, and often pay for themselves within 3-4 months (as do website redesigns).  Unless the website is over 2-3 years old, hotel optimizations can help hoteliers take advantage of the much cheaper organic search related visitors to the hotel website.

Table C

What Internet marketing formats do you believe produce the best results and the highest ROI?	2007	2008	2009
Website design/redesign	62.9%	70.19%	56.3%
Website Optimization	71.9%	68.27%	81.6%
Strategic links to property website from online	52.7%	41.35%	48.3%
Paid Search Engine Marketing: Pay-per-click (PPC)	40.7%	39.42%	56.3%
Search optimization - Organic Search	68.3%	56.73%	60.9%
Display Advertising (banners)	16.2%	12.5%	28.7%
Email Marketing	58.7%	60.6%	51.7%
Email Sponsorships	6.6%	4.8%	4.6%
Web 2.0 Media Formats	16.8%	26%	37.9%
Other	4.2%	2.9%	2.3%

Even though hoteliers are going back to the basics this year, there are a high percentage of hoteliers who believe Web 2.0 initiatives produce results. This is interesting considering that according to Table E below, 15% of respondents are not even planning Web 2.0 initiatives for 2009.

The results make a lot of sense however, in the case of the increase of hoteliers who thought Paid Search Marketing produces the highest ROI. We saw the use of paid search decrease from 07-08, and then saw over a 40% increase in the 09 survey results. This is most likely because more and more hoteliers realize that Paid Search works.  According to eMarketer, these survey results are on track for search engine marketing across all industries (not just hospitality), as U.S. spending on search engine marketing will nearly double from $12.2 billion in 2008 to $23.4 billion in 2013.

Brand Standards & Regulations on Hoteliers are Easing Up

For the past two years in the HeBS Benchmark Survey, franchised hotels have responded that they feel there are some major restrictions on their online marketing efforts. However, this percentage has been decreasing year over year:

Table D

If you are franchised or managed by an outside major chain or brand, do you find there to be any major restrictions in online marketing conduct due to brand standards and regulations	2007	2008	2009
No	76.2%	81.8%	85.6%
Yes	23.8%	18.2%	14.4%

Here are some of this year's responses:

• "Email marketing is a challenge when past guest lists are under brand control."
• "You can't be as flexible as you need, you don't spend a lot of money in online marketing because you can't analyze it as you would [normally] do."
• "Hotel website is stand-alone however we have to use the Franchise Booking Engine."
• "Limitations of who you can contract with."
• "Restriction for hotel pictures loading...restriction for hotel package design and loading."
  
  

So what does this tell us? HeBS believes that there are many online revenue opportunities which fall outside the scope and ‘bandwidth' of the major hotel brands' Internet marketing efforts. Even though most of the leading hotel brands have become proficient national and international eMarketers over the past 5-6 years, they cannot possibly cover all the local online revenue opportunities available to the property. As hoteliers are becoming more Internet marketing savvy, they are realizing they can complement the hotel brand's Internet marketing efforts with their own "Local Internet Marketing Strategy for Franchised Hotels" - read HeBS' article on the subject.

What's Ahead for Hoteliers and Social Media?

Social media continues to be a hot topic in the industry, and more hoteliers are looking for the next big thing they can do (without spending a lot of marketing dollars). We asked hoteliers what type of web 2.0 initiatives they were planning for 2009 and compared it to 2008 results:

Table E

What type of Web 2.0 marketing initiatives are you planning for next year?	2008	2009
A blog on the hotel website	14.5%	14%
Photo sharing functionality on the hotel website	12.7%	4.7%
Sweepstakes and contests on the hotel website	9%	3.5%
Survey and comment card on the hotel website	18.4%	14%
Subscribe to a reputation monitoring service	8.4%	2.3%
Create profiles for my hotels on social networks (Facebook, MySpace, etc.)	13.3%	14%
Actively participate in blogs that concern my hotel	12.7%	5.8%
Advertise on social media sites	8.1%	24.4%
I am not planning on Web 2.0 initatives for 2009	NA	15.1%

According to the survey, this year the most important Web 2.0 initiatives were: advertising on social media sites (25%), a blog on the hotel website (14%), creating profiles on social networks (14%) and survey and comment cards on the hotel website (14% - although this is significantly down from last year). Last year, hoteliers selected Surveys and Comments Cards as the most popular option. Another big drop was in the use of reputation monitoring tools, as hoteliers become savvier and realize they can monitor the most popular sites that offer reviews themselves - and for free - read HeBS' article on the subject.

Conclusions

The survey results show that hoteliers really are "Getting Back to the Basics" in this tough economy - read HeBS' article on the subject. While there were some interesting results, such as an increase in hoteliers planning on advertising on social media sites, hoteliers are shifting budgets from offline to online, focusing on Internet marketing initiatives that have been proven, are becoming savvier at monitoring their hotel reviews on their own, and in general are embracing the Internet as their most cost-effective, revenue generating tool.

All industry forecasts indicate that in 2009-2010 the travel industry in North America will experience a major decline. GDS contribution is also projected to decrease by several percentage points.  And yet, online travel bookings in 2009 are expected to grow by 10.5% and reach $116.1 billion due to channel shift, and an additional 11% in 2010 to reach $128.9 billion (eMarketer).

In other words, this year the Online Travel Channel will be the only growth channel in hospitality and, as the survey shows, many hoteliers clearly understand that.  Here at HeBS, we firmly believe that a comprehensive, ROI-centric Internet marketing strategy is one of the perfect "survival tools" for hoteliers in the current economic environment. The direct online channel can help smart hoteliers generate incremental revenues, improve marketing ROIs, attract more affluent travelers and out-smart the competition. For the past 14 years, our experience shows that Internet-savvy hoteliers with robust Direct Online Channel strategies are the winners in economic downturns like this one.

About the Authors:

The HeBS team for this project consisted of Max Starkov, Jason Price, Mariana Mechoso and Evan Rosenblum.

Source: ehotelier.com

 

Blog Information Profile for imerpsoap

It takes for months that I could not find any interesting topic to put in this space.

However, I got this one written by eMaketer which is quite good to read and to be ready for the change.

Enjoy reading !

 

Compared with today's virtual worlds, e-mail is solidly Web 1.0-an almost archaic communication channel.

Yet e-mail works, and marketers and advertisers keep putting it to new uses. Moreover, consumers-whose opinions are the ones that matter-genuinely like e-mail. Nearly three-quarters of adult e-mail users in North America said they used it every day, according to an April survey conducted by Ipsos for Habeas.

Two-thirds of adult respondents said they preferred e-mail for communicating with businesses. Just as many-and this is the important part-said they expected to still prefer e-mail five years from now.



"Far from being eclipsed by Web 2.0 and other emerging communications methods, consumer expectations suggest that e-mail will be the workhorse channel around which future online communications will revolve," said Des Cahill, CEO of Habeas, in a statement. 

 

 

That is not to say that consumers are ready for random, untargeted e-mail. Opt-in is still key. Consumers are even willing to help marketers custom-tailor their messages. More than 88% of respondents said they would like more choices in e-mail content and frequency, including options on advertisements and special offers.

So if e-mail is set to remain a consumer favorite for the next several years, that must mean e-mail ad spending will grow during that time, right?

Yes and no.

 

eMarketer predicts that e-mail ad spending in the US will hit $492 million this year, then increase by 55% to $765 million by 2012.



And while e-mail accounts for only about 2% of all online ad spending, eMarketer predicts that percentage will actually drop to only 1.5% of online ad spending in 2012, despite the growth in dollars spent. The amount spent on other formats will dwarf what is spent on e-mail, thanks to its low cost.



E-mail is cheap marketing. The pricing scales well, too: The cost of sending a million e-mails is little more than the cost of sending a thousand. However, this can also cause problems.

"E-mail is so inexpensive that it lulls many marketers into underestimating its influence on entire campaigns and a company's brand," said David Hallerman, senior analyst at eMarketer.

 

 

 

 Are search engines becoming obsolete? Are Web 2.0 sites going to replace the search engines as an advertising media? Will online travel consumers abandon Google as a travel planning and research tool and shift their attention to Web 2.0 sites such as TripAdvisor.com and social networks like YouTube.com? Must a hotel engage in such strategies?

Web 2.0 is the second-generation of web-based communities and hosted services (Wikipedia). Web 2.0 reflects a utilization of the Web in a new way, by both developers and Internet users. Especially of interest to hoteliers is the Internet user aspect of Web 2.0-also known as Consumer-Generated Media (CGM) or User-Generated Media or Social Media. CGM is online content created by Internet users and made available to other Internet users via Web 2.0 interactive technology applications.

This new dynamic has caused a degree of confusion and many hoteliers are unsure about the implications of Web 2.0 on more "traditional" Internet marketing formats such as search marketing, email marketing, and display advertising. This article details the roles of Web 2.0 and search engines and their significance, as well as supporting data and case studies on how search engines remain of strategic importance long-term in online marketing and distribution.

Examining the Roles of Web 2.0 and Search Engines

Web 2.0 and CGM represent a new dynamic in communication by allowing consumers to drive the content. No one can question the important role, relevancy, and impact of such social network sites as YouTube, MySpace, and in the travel space sites like TripAdvisor, Yahoo Travel Planner, Igoyougo, HotelChatter, and many more.

So what about Web 2.0 and the search engines? Are these new and old Internet media formats in synergy, or are they at war with each other? A recent article raised a very important question, asking if search engines are slowly becoming obsolete, especially as consumer-generated media appears to increasingly dominate online behavior.

Here is how hoteliers replied to our question regarding search engines and Web 2.0:

HeBS Poll Results:
Are Search Engines Threatened by Web 2.0 Sites and Initiatives?
39% - Yes
61% - No

The majority of hoteliers are correct. Web 2.0 is not a threat to established search engines like Google, Yahoo, and MSN. Consider the following:


• Specialized blog engines like technorati.com, blogpulse.com, and others could not and have not gained the critical mass required to replace or even threaten established search engines like Google and Yahoo.

• Only 3% of traffic from MySpace, Facebook, and others go to travel sites, according to HitWise 2007.

• HeBS uses state-of-the-art website analytical and campaign tracking tools for its clients, and can closely monitor where websites visitors and online bookers come from, their behavior and pathing patterns:

• Consistently over 50% of visitors to a hotel website originate from the search engines.

• We have not noticed any decline in search engine contributions to traffic and bookings over the past several years.

We know search engines thrive on new content. Web 2.0 is a huge generator of new content and search engines index Web 2.0 sites with great fervor. Google, Yahoo, Windows Live all include Web 2.0 content (text, video, consumer reviews, blog entries, etc.) in their search results. In other words, Web 2.0 and the search engines are in a symbiotic relationship.

The online travel consumer research and purchasing habits clearly show the need for both media:

• Online travel consumers prefer to shop around and on average visit 3 to 4 travel related sites before making a booking. Indeed, Web 2.0 sites have increased their share in the travel planning process, but travel planning is still done predominantly on traditional travel sites--both supplier and intermediary sites, and in many cases using search engines to find the most relevant results.

• As noted in a previous HeBS article, there exists an "ideological clash" between official and unofficial (consumer-generated) content. Online travel consumers need two reference points:

• How does the travel supplier describe its own products/services, i.e. deemed official content

• What is the experience of users who are willing to share about a particular hotel, resort, i.e. deemed unofficial content

• The emergence of travel meta search engines over the past several years (kayak.com) farechase.com, sidestep.com) is a confirmation of the viability of search engines in travel. To a great extent the third-party online intermediaries fulfill the role of meta search engines. For example, Expedia claims that over 40% of its visitors research travel on the site, and then end up booking on travel suppliers' sites.

Industry Research Regarding the Importance of Search in Travel and Hospitality

Search engines are an essential component of the hotel direct online distribution strategy:
? According to Forrester research, 80% of website visits begin in a search engine or a directory service. Many other surveys also show that up to 85% of Internet users rely on search engines to locate relevant information on the Web (e.g. Google, Yahoo, MSN, etc).
? PhoCusWright surveys found that three-fifths of online travel shoppers cite search engines as resources to research their vacations.
? According to a recent study by the comScore Networks, some 73% of online travel buyers conducted relevant keyword searches in the weeks prior to an online travel purchase

According to Forrester Research, iCrossing, and other leading online behavioral research groups, the most popular online activity after checking and sending emails is the use of a search engine. They report that as much as 70% of all internet activity begins with a search engine. This is consistent for men and women and across demographics and socio-economics. Travel is no different. According to PhoCusWright, 64% of online users start with a search engine for travel related searches.

Shopping for personal travel, the following services were used in deciding what to purchase:

• Search Engines: 64%

• User-Generated Reviews: 47%

• Special Deal or Promotional Web Site: 34%

• Travel Search Engines: 25%
(The PhoCusWright Consumer Travel Trends Survey, Ninth Edition, 2007)


HeBS Proprietary Research: Evaluating the Impact of Search Engines on Hotel Website Traffic & Revenues

According to a recent HeBS analysis, revenues directly attributable to search-generated leads (natural and paid search) were the highest source of website traffic and revenues for the hotel - more than email, strategic linking, online banner ads, third party intermediaries, and Web 2.0 sites and other forms of advertising combined.

HeBS researchers tested whether search engines still have relevancy going into 2008 amidst increased dominance of the direct online channel and the rise of Web 2.0 applications. While our researchers anticipated that search engines would still have relevancy, it was never anticipated that it would be on such a grand level.

To measure website conversions, including those generated through search, HeBS employed state-of-the-art website analytics and campaign tracking technology.

Here are some of the findings:

• Search engines contribute in average over 50% of the hotel website traffic. In reality, this percentage varies greatly (48%-75%), based on website optimization strategies, Internet marketing proficiency, property type, customer segmentation, location, budget allocations, etc.

• Revenues generated from search engines-both organic and paid search-were identified as the single greatest source of website revenues.

• Search constituted the highest source of traffic and natural search far outweighed paid search traffic that led to conversions.

• Google and Yahoo dominate with the largest share of search engine contributions to the hotel website.

• Web 2.0 and CGM sites and initiatives have no significant contribution to website revenues at this time. In many cases such sites are not among the top 100 referrers to the hotel website.

• These findings suggest that website optimization to make the website search-friendly remains the single most important activity for the hotel to influence growth of online revenues.


Case Study:
Search engine contribution to hotel website traffic and revenues



What Do Hoteliers Think About Search Engines?

What are the Internet marketing formats hoteliers believe generate the highest ROIs? The 2007 Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices in Hospitality, conducted by HeBS in conjunction with NYU's Tisch Center for Hospitality, Tourism, and Sports Management, clearly shows that hoteliers understand that long-term, strategic objectives and Internet marketing formats such as website re-designs and organic search optimizations, search marketing, email marketing and strategic linking produce higher ROIs than new media formats such as CGM, blogs, etc.

The following chart shows hoteliers believe that long-term solutions such as search and website optimization produce higher ROIs vs. CGM, blogs, etc:



Web 2.0 and Search Marketing Strategies Are All Part of a Bigger Picture

In 2007, one-third of all reservations in hospitality in North America will be generated from the Internet (30% in 2006). Over 65% of these Internet reservations will be via hotel-branded websites, though some major hotel brands already enjoy a very healthy 85:15 direct vs. indirect online distribution ratio. By 2010 over 45% of all travel reservations in the U.S. will be done via the Internet (Merrill Lynch, HeBS). As discussed above, a significant percentage of these reservations will be directly influenced by search marketing, as well as other direct Internet marketing formats.

Web 2.0:

In our view hoteliers should consider Web 2.0 and CGM initiatives only as part of a comprehensive Direct Internet Marketing Strategy, together with other fundamental Internet marketing formats such as search marketing, website re-design and optimization, email marketing, strategic linking and link popularity, online sponsorships and display ads. CGM initiatives like blogs should become a line item in the overall hotel marketing budget.

There are three approaches to building the hotel Web 2.0 / CGM strategy. Which approach to use depends on your situation and needs. If the goal is to protect and monitor the 'chatter' on the web about your hotel for whatever reason, then a Brand Defensive Strategy should be entertained first. If the goal is to leverage the expert knowledge that currently exists at your property out there on the web, then consider a corporate sponsored CGM initiative, like a hotel blog. Lastly, if the goal is to simply communicate to readers on high traffic Web 2.0/CGM sites, then you can advertise on them (run of site banner on MySpace.com goes for as little as $2-$3 CPM).

Search Engines:

As discussed above, there is no doubt that search influences the hotel's bottom line. As research shows, search engines influence travel planning and purchasing on a grand scale.

Search engine marketing is a comprehensive undertaking that includes both organic and paid search, and has four unique formats:

• Organic Search: involves a comprehensive website re-design and optimization strategy and turning the hotel site into a search engine-friendly site.

• Paid Search: the perfect direct-response marketing tool, paid search has proven its importance. Includes pay-per-click marketing, paid inclusion services, media sponsored listings, creation of special landing pages of 'high quality,' etc.

• Local Search: with market share of up to 30% of searches on the Web, local search is particularly important in hospitality where searches are location-driven. Includes local search directories and mapping services of Google, Yahoo, MSN, Yellow Page online directories, etc.

• Meta Search: these travel-only search engines have become established niche players and are popular with certain customer segments. Includes paid listings and PPC types of advertising services.

Each of these search marketing formats requires the development of a differentiated approach and marketing strategy, and naturally deserves a line item in the hotelier's Internet marketing budget.

Web 2.0 and Search Engine Guidance on 2008 Internet Marketing Budget Planning

In 2008, as much as 37%-38% of all hotel bookings will be transacted over the web, which represents 15%-16% growth over 2007. Use this as a benchmark to increase your overall Internet marketing budget. Now more than ever, billboards along the highway, hotel print brochures, and other traditional means of advertising should be shifted towards the web.

The top areas to devote your 2008 marketing budget include:

• Website Optimization and Redesigns

• Search Engine Marketing (organic, paid search, local search, meta search)

• Email Marketing

• Strategic Linking

• Display/Banner Advertising

• Online Sponsorships

• Website Analytics and Marketing Campaign Tracking

• Web 2.0/CGM Initiatives

Conclusion:

Search marketing continues to play a major role in driving revenues and success, and should be a chief component of any comprehensive Internet marketing strategy. Despite all the interesting and novel Web 2.0 and CGM approaches to information sharing and communicating over the web (and more are sure to come in the future), it all starts with the fundamentals that generate the bulk of the hotel website revenues-search marketing, website re-design and optimization, email marketing, strategic linking and link popularity, online sponsorships and display ads.

Hoteliers should keep a close look at Web 2.0 and develop a strategy as discussed above. In addition, Web 2.0 and CGM initiatives like customer reviews and experience sharing should become a line item in the overall hotel marketing budget albeit a small percentage.

Consider seeking advice from an experienced Internet marketing hospitality consultancy to evaluate your current website assets and Internet marketing presence, and to help you build a robust Internet marketing strategy as per best industry practices, including the most appropriate and effective Web 2.0 / CGM strategy.

Note: Mariana Mechoso, Manager eMarketing Services at HeBS, also contributed to this article.

About the Authors:
Max Starkov is Chief eBusiness Strategist and Jason Price is EVP at Hospitality eBusiness Strategies (HeBS), the industry's leading Internet marketing strategy consulting firm for the hospitality vertical, based in New York City (www.hospitalityebusiness.com). HeBS has pioneered many of the "best practices" in hotel Internet marketing and direct online distribution. The firm specializes in helping hoteliers build their direct Internet marketing and distribution strategy, boost the hotel Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ADRs. A diverse client portfolio of over 350 top tier major hotel brands, multinational hospitality corporations, hotel management and representation companies, franchisees and independents, resorts, casinos and CVBs and has sought and successfully taken advantage of the firm hospitality Internet marketing expertise. Contact HeBS consultants at (212)752-8186 or info@hospitalityebusiness.com.