Online Marketing for the Hospitality Industry

This manual provides an introduction to e-Marketing in tourism. It also contains detailed analysis and action plans for various aspects of e-Marketing.

This manual is intended for starting to mid-level marketers and students who are looking to understand and apply measures to develop an effective e-marketing strategy and action plan for a tourism organisation.

Basics of e-Marketing

What is E-Marketing?

In today’s world, the internet has become an essential part of everyday life and business. And there are significant benefits to marketing online. Businesses have a wider reach, there is scope to access new customers, there is more inter-activity and it can also create an immediate impact. Considering this E-marketing  needs to be a critical component of every marketing plan

Situation Analysis

The first step to developing a marketing plan is to understand the current scenario. Answering the “where are we today” question forms the basis for developing a plan for the future. Understanding your online marketplace involves identifying and analysing the following: 
  • Customers and potential customers
  • Market
  • Competitors
  • Intermediaries
  • Micro and macroenvironment
  • Current capabilities
  • SWOT summary

Setting the Objective

A marketing plan should have clear objectives in order to succeed.An objective defines what one wants to achieve with relation to the current situation. Each objective has one single action that is clear, realistic, measurable, challenging, but attainable. An objective simply states the aim but does not articulate how that aim can be achieved.

For example: ‘To increase sales by 10% within 6 months’. This objective is a single actionable aim, without any description about how that aim can be achieved. 

Identifying Marketing Strategies

Strategies specify how the chosen objective can be achieved. It is important to identify strategies that best suit your current situation and objectives. Your choice of strategy may depend on your marketing mix, market segmentation, product differentiation and positioning. 

The Marketing Mix

In order for your business to sell its products and services successfully, you need to get the right type of marketing mix for your product or service.

Marketing mix include four main elements:

  • Product
  • Price
  • Place and
  • Promotion.

To achieve the right marketing mix, you need to examine your product / service in detail and ensure that:

  • They address a specific requirement of the market
  • Their pricing is not too cheap or too expensive
  • They are being distributed in the right marketplaces
  • Adequate interest around and awareness about them
  • They are targeted at the right people at the right time.

Product Differentiation

Product differentiation defines the way in which an organization’s services or products differ from those of competitors.Product differentiators could be positive attributes such as importance, distinctiveness, superiority, affordability, profitability, communication, etc.

Common product differentiation strategies include:

  • Physical attribute differentiation
  • Service differentiation
  • Personnel differentiation
  • Location differentiation
  • Image differentiation

Strategies Based on Market Segmentation

The following are some common strategies based on market segmentation:

  • Undifferentiated marketing strategy: Ignore market segmentation and go-to-market with one service offer across the board.
  • Differentiated marketing strategy: Target different several market segments with specially designed / customized offers for each segment.
  • Concentrated marketing strategy: Concentrate on one single segment with a specific service to get a large share of that market segment.

The choice of market segmentation strategy also depends on the following:

  • Company resources: The less the company’s resources, the better it is to opt for a concentrated strategy.
  • Product homogeneity: The greater the differences in services, the better it is to use either differentiated or concentrated strategy.
  • Market homogeneity: The greater the homogeneity in customers, the better it is to use undifferentiated strategy.
  • Competitors’ strategies: Depending on the market scenario, use the same or a completely different strategy from that of the competitor.

Market Segmentation

Market segmentation is the process of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes. Markets can typically be segmented based on the following:

  • Geographic segmentation (regions, countries, etc)
  • Demographic segmentation (age, gender, etc)
  • Psychographic segmentation (social class, life-style or personality characteristics)
  • Behavior segmentation (knowledge, attitude, use or responses to a service)

Choosing the Right Market Segment

The attractiveness of market segments can be evaluated based on the following:

  • Measurability: Degree to which a segment’s size and purchasing power can be measured
  • Accessibility: Degree to which a segment can be accessed and served
  • Substantiality: Degree to which a segment is large or profitable enough
  • Actionability: Degree to which programs can be designed to attract and serve the segment

Feasible market segments can then be chosen based on the following parameters:

  • Size and growth: Current segment sales, growth rates, and expected profitability
  • Structural attractiveness: Presence of strong competitors, relative power of buyers, presence of powerful suppliers
  • Organization’s objectives: How the segment fits in with the organization’s objectives or philosophies.

Strategies Based on Market Segmentation

The following are some common strategies based on market segmentation:

  • Undifferentiated marketing strategy: Ignore market segmentation and go-to-market with one service offer across the board.
  • Differentiated marketing strategy: Target different several market segments with specially designed / customized offers for each segment.
  • Concentrated marketing strategy: Concentrate on one single segment with a specific service to get a large share of that market segment.

The choice of market segmentation strategy also depends on the following:

  • Company resources: The less the company’s resources, the better it is to opt for a concentrated strategy.
  • Product homogeneity: The greater the differences in services, the better it is to use either differentiated or concentrated strategy.
  • Market homogeneity: The greater the homogeneity in customers, the better it is to use undifferentiated strategy.
  • Competitors’ strategies: Depending on the market scenario, use the same or a completely different strategy from that of the competitor.

Market Positioning

Market positioning refers to the way in which an organization’s services are defined by consumers; the place these services occupy in consumers’ minds relative to competitors’services.

Positioning Strategies can be based on:

  • Specific attributes of the services
  • The need the services fill or the benefits they offer
  • For certain groups or classes of customers
  • Against an existing competitor or competitors
  • Against another product class

Choosing and Implementing a Positioning Strategy

The following are the steps involved in implementing a market positioning strategy:

What are the factors that has to be analysed to understand online marketplace?

  • SWOT summary
  • Competitors
  • Micro and macroenvironment
  • New Brands in the market
  • Market Conditions

One of the first steps to an effective marketing plan is to set an objective. An objective:

  • is the plan that is required to reach a goal
  • statement that coveres the details about the goal
  • statement of the goal without any information about how the goal can be achieved
  • it can cover multiple action points as well

What factors are important about a product to achieve the correct marketing mix?

  • Their pricing is not too cheap or too expensive
  • They address a specific requirement of the market
  • Ensure that the prodct is targeted at every market possible
  • Adequate interest around and awareness about them

Match the following common strategies based on market segmentation

  • Undifferentiated marketing strategy
    Ignore market segmentation and go-to-market with one service offer across the board.
  • Differentiated marketing strategy
    Target different several market segments with specially designed / customized offers for each segment.
  • Concentrated marketing strategy
    Concentrate on one single segment with a specific service to get a large share of that market segment.

The steps involved in implementing a market positioning strategy are:

  • Identify a set of possible competitive advantages.
  • Select the right competitive advantages.
  • Develop a memorable statement to communicate for all market segments
  • Measure the effectiveness of the positioning with tools such as Perceptual Mapping or Multi Dimensional Scaling (MDS)

Market Segmentation

  • Geographic segmentation
    regions, countries, etc
  • Demographic segmentation
    age, gender, etc
  • Psychographic segmentation
    social class, life-style or personality characteristics
  • Behavior segmentation
    knowledge, attitude, use or responses to a service

The Online Buying Process

Introduction to The Online Buying Process

Consider a customer’s decision to take a leisure trip is made. The customer must make three simple decisions - where to go, how to get there and where to stay. Yet, the consumer travel planning process can be quite complex.

It can depend on the purpose or occasion of the trip(a vacation for fun and entertainment versus a visit to a home town or a family visit, etc.) as well as the travel components involved (i.e., air travel, a hotel stay, a rental car, etc.). Depending on these choices, further decisions include choosing a specific airline and accommodation, as well as choosing various trip activities.

With so many choices available at each point in the decision-making process, consumers seek authentic and reliable travel information from a variety of sources. Here is a graphical illustration that provides a high level outline of a generic leisure customer’s journey. The image specifically highlights the opportunities available to provide focused online services for the leisure travel segment. 

What were the stages that you went through when you booked a holiday last time? What made you choose the destination/hotel/airline that you booked?

Role of a Website

Role of a Website

An organisation’s marketing goals should form the foundation for your website goals and support it every step of the way.

Ask yourself

Why do you need a website? Is it to attract new local or international customers? Or is it to keep current customers informed about developments in your organization? Is your aim to boost sales during low season by presenting special package deals? Do you see your website as a way of encouraging visitors to book their stay and other activities in advance?

Whatever the reason, your marketing goals should form the foundation for your website goals. Studies reveal that visitors decide whether a website is worth exploring or not in the first 8 seconds! This underlines the need for your website is designed to retain the visitors interest during those crucial seconds.

The Content Goal Matrix

The content goal matrix helps you define the goal and target groups of your website. The content goal matrix is made up of three columns:

  • The target groups you wish your website to reach
  • The actions you want these target groups to undertake on the website, and
  • The information your website must provide to ensure that the expected actions are performed by the visitor. 


Profile of Key Customers
  • What are the actions that you want visitors to undertake on your website / after having visited your website?
  • What information (pictures, video etc.) should be presented to target group?
Spanish Families
  • Subscribe to e-newsletter
  • Send a friend
  • Print/Order a brochure
  • Add to favourite
  • Call me (back)
  • Use of Contact form
  • Send an e-mail
  • Chat
  • Book Online
  • Products/Services (inspiring, customised, call to action)
  • Testimonials
  • Customer reviews
  • Maps
  • Show experience: picture, video
  • Awards/ Certification / Labels
  • Safety
  • Security
Tour operator Portugal


  • Explore your B2B section
  • Print/Order a brochure
  • Call me (back)
  • Use of Contact form
  • Send an e-mail / contact you / contact your agent
  • Add to favourite

As Product Manager

  • See above. If a good first impression has not been made, the B2B section will probably not be visited.

B2B Section

  • Certifications / Awards / Labels
  • References and testimonials from (EU) partners
  • Customer reviews
  • Company information: history, facilities, experience, employees, tour guides, safety, security, other options-etc.
  • Quotes from media
  • Information on working with large groups: If you can, put it explicitly on your website (We can cater to large groups as well. Contact us to hear about the possibilities we offer for large groups)


Ask Yourself

Design a content matrix for your own organisation. What is it likely to look like?

Essential Elements of a Website

Home Page

An effective homepage is one that persuades visitors to explore the website and visit other pages of your website (within those crucial first 8 seconds!). You need to engage your visitor immediately and show how your offering can make a positive difference to their holiday experience. 


Using good quality and appealing pictures on your website is of the utmost importance to create a good first impression.To reinforce your message, the picture should show people experiencing and enjoying your accommodation/activity in its proper setting. Moreover, the people in these images should match your target group (for example, do not use images of middle-aged people if your target group is students.)

The following are some points to remember when using pictures on your website:

  • Obtain permission from your customers if you want to use their picture.
  • Use a size of about 400x300 pixels and a resolution of 72 PPI; however, ensure that the loading speed does not exceed 200 KB.
  • Use a maximum of 2 to 3 image sizes across the site.
  • Provide an appropriate ALT tag using specific keywords. The ALT tag helps search engines to understand the content of a picture while indexing the site. 


A good video is powerful, emotive, personal and persuasive. You can place videos on your own website and also on various social media channels to increase traffic to your website. Videos could be in the form of documentaries, panoramic view of the destination / activities, interviews of customers, real-time webcams shots, etc. 

Written Content

Well written content is important for three primary reasons:

  • Engages the reader
  • Increases search engine rankings and traffic
  • Promotes the likelihood of quality links from other sites 

Different Sections for Different Target Groups

In order to serve different target groups best,it might be advisable to have separate sections for your Business to Business (B2B) and Business to Consumer (B2C)offerings. 

The website of Tourism South Africa and of New Zealand are good examples.

Ask Yourself

Find out some more examples of organisations who have separate sections targeting separate target groups 

B2B Section Content

The B2B section of your website should emanate professionalism, reliability, experience and willingness to create partnerships. Consider adding certifications, testimonials from other tour operators and customer reviews. Furthermore, tour operators would want to be able to contact you directly. Put the direct contact number and email address of your company’s representative on your website.

The B2B section must contain all information that is relevant to tourists / customers. Consider enlisting all facilities along with other activities that your company provides. You could also consider putting pricing and availability information for easy reference and planning. 

About and Contact Information

The About Us section, giving information about the history of the company, experience, employees, interesting news items in newspapers or guide books, etc.,improves the credibility of your company.

Make sure to provide your contact details – address, phone number, helpline number, email address, etc. You can also consider providing a map that can help customers find your location easily. Online chat is very popular at the moment. You can also consider providing the following:

  • Downloadable brochure
  •  Call me (back) form/ Contact form
  • Button to subscribe to your e-newsletter


Besides stimulating your customers to write reviews on social media, you should also create a platform for testimonials from customers on your own website. This will reassure new visitors that your company is trustworthy and that the services you are offering are of a good quality.

Some tips for using testimonials:

  • Always use real testimonials
  • Longer testimonials - two or three sentences - come across as more credible than just one word
  • Specific, detailed testimonials are better than general or superlative testimonials
  • Use full acknowledgment and include the person’s name, city and country
  • Obtain permission from your customers!


Besides showing customer testimonials on your website, it is also advisable to show labels and/or certifications you have obtained from credible organizations. If your company has received any award, placing this information on your homepage will give you a very strong competitive advantage. Another way of increasing your trustworthiness is to mention memberships. For example, in the UK, being a member of the ABTA inspires confidence in the visitor.


Within the 27 member states in the EU, less than half of all people understand English. Knowledge of English tends to be good in Northern Europe, but less so in Southern Europe. Again, younger people have a better knowledge of English. If your primary goal is to, for example, get into contact with French tourists, it would be wise to develop a French version of the website. This will make it easier for them to read the content on your website and give a more personal touch to the experience. 

Online Reservations

When the content on your site is up-to-date and attractive, the next step will be to make online reservations possible from the website. You can give visitors the option to make an online enquiry by email or a contact form. However, as your organization grows, a full-fledged online booking system would be desirable. A good example of this is the “Visit Scotland” website.

Content Management Systems

Content Management Systems

Nowadays, it has become relatively easy to keep your website up-to-date, without the help of IT professionals, by using Content Management Systems (CMS). A CMS separates content and its presentation. The content – including text, images, audio, videos and document files - comes from databases and can be edited, deleted or added at any time. The presentation is carried out by templates which are stored separately from the content.

The following are the major benefits of a CMS:

  • It simplifies the creation and publishing of content and also maintenance of the website without the need for technical skills.
  •  Many authors throughout the organisation can edit content.
  •  Standard templates ensure consistency across the website.
  • It allows you to share content across different websites, including websites in different languages.
  • It enables you to insert meta-tags for search engine optimization.

Online Marketing Activities

Online Marketing Activities

Online marketing activities cover a wide spectrum and can include Search Engine Marketing, use of Social Media to Online advertising. The critical factor is that all actions are measurable and that they are targeted at the right audience.

Using Proper Meta Tags

Meta tags are descriptive words and phrases - keywords - that are attached to web pages and help you to control how your content is understood by search engines, how they appear in search results and how they are ranked among other results.In general, the more specific keywords you use, the better is the click-through rate (number of visitors) and the conversion rate (the number of buying or returning visitors).

Meta tags are language dependent. If you are targeting non-English speaking customers, make sure to translate the meta tags using tools like Yahoo Babel Fish ( Your web designer can add them to your web page in just a few minutes, once you have thought of the right meta tags.

The most important tags for SEM are the Title tag and the Meta Description tag.

  • Title Tag: One of the most important elements influencing your page rank, the Title tag should be no longer than 60 characters (including spaces). Include the name of your company and the most important keywords to reach your target customers. 
  • Meta Description Tag: 

    The Description tag gives a summary of the page which many search engines use to determine if the site is relevant to the search. In general, the Description tag should have a maximum size of 150 characters. However, it is best to include the most important message in the first 13 words, since some search engines cut the description tag after 13 words. 

Travel Directories

Travel directories and portals can be another useful tool in order to reach a larger audience. Travel directories want to be the starting point for consumers when they begin their search for travel information and hence compile a lot of information about travel companies. These directories are not always free-of-charge. While some list your company as long as you insert a link to the directory on your site, others charge a payment for a premium listing. It might be worth investing some money to get listed on carefully selected travel directories that can generate enough traffic from your target group. 

Website Category
  • For members of the Adventure Travel Trade Association
  • Directory about eco-tourism
  • General travel directory
  • UK travel directory focused on specialist and adventure holidays 
  • General travel directory
  • Yahoo’s guide for destinations and rate comparison  

  • Collects information on tours and activities.


Ask Yourself

What are other ten relevant travel directories for your business?

Travel Meta Search Sites

Travel meta search sites are actually travel search engines that search hundreds of travel sites from all over the world, give an overview of the information found and redirect the visitor to the source to make a purchase. 

Some of the examples are:

Fare Chase 
Hotels Combined
Travel Supermarket

You could also ask webmasters of other websites to include a link to your website. Linking to other good sites will also help to increase your own page ranking. When adding such a link, make sure that the text of the proposed link includes the keywords that your page is optimized for. For example, for the Bed & Breakfast Hotel in the old City of Quito, a link named ‘Bed & Breakfast Hotel in the old City of Quito’ will be much more effective than a link simply saying ‘Bed & Breakfast’. 

A helpful tool to find quality websites for a link exchange is the Google Toolbar ( 

Link Building

Getting listed in key directories is important to increase link popularity, and therefore, page ranking. These listings, often in alphabetical order, are seen by many people. Search engines are also more likely to find your site if you are included in their directories. This will result in an immediate increase in traffic to your website. DMOZ ( is a good example of a directory. You could increase your link popularity or page ranking by submitting your website to DMOZ.

Link popularity can be measured by the actual number of links to your website. However, search engines also take the relevance of the links to the subject matter on your site into account. For example, if you have a link to your site coming from a travel blog, the search engine will measure the link as valuable.

On the other hand, if your website has 200 links coming from sites that have nothing to do with tourism, the link popularity will be influenced negatively.

Learning from Your Competitors

You can also learn from your competitors. A useful tool to do so is the website where you can discover links (such as directories and portals) that your competitors have with other sites. You can also see the directories and websites that have included alink to the website of your direct competitor. There is a good chance that these websites may be willing to link to your website also!

Search Engine Marketing

Marketing a website through search engines, like Google, Bing, Alexa, etc., is called Search Engine Marketing (SEM). A search engine is a large database that searches many web pages on the World Wide Web. When people enter keywords into a search engine, the search engine finds pages based on meta tags, site contents and page ranking. 

Social Media

According to Forrester Research, 33% of leisure travellers changed their hotels based on what they read on blogs or other travel related community sites. As per the Australian Tourism Data Warehouse, over 80% consumers research online before they travel and agree that online word of mouth influences their decision.

User-generated content (UGC) is evolving to become the favourite source of information for consumers. Although SEM is still the most effective online medium for discovery, the effect of social networking is increasing rapidly, especially through blogging and online videos, especially since all UGC is indexed by search engines. Managing customer reviews is, therefore, imperative in order to improve and also boost your business reputation.

Some examples of portals where you can find UGC:

New media has created a new marketing environment where the old rules of marketing no longer apply. When you have a passionate fan base for your brand, the internet is especially vital for going viral. Communicating to a small but powerful group of fans first online to enlist their support is a smart way to ensure positive coverage in the mainstream press. But beware - the internet can be a double-edged sword. Listen constantly to what’s being said about you. Adverse comments and reviews about your company or services can severely damage your reputation online and drive away new customers.

Always be aware of what is being said about you on the internet. You can set up a Google Alert on your company to stay up-to-date with everything that is being said about you on the Internet.Each time new information including your keywords - like your company name - is put on the internet, you will receive an alert by e-mail.

UGC is not just about Trip Advisor. The new age Marketer needs to be aware of the other relevant websites which feature user feedback and reviews.

Getting Listed on Social Media


  • Tripadvisor is consulted by more than 1 million unique visitors per day and includes more than 20 million traveller reviews. Being listed on TripAdvisor gives you the opportunity to increase your reach, improve your exposure, respond to negative reviews, include pictures, description, rates and videos, and become visible on Google maps (provided your Google Business listing and TripAdvisor listing have the same name and address.) 


  • YouTube is the most important social video network today. Uploading your video to YouTube increases the possibility of more people finding your company and also saves you bandwidth on your website. Rather than place high quality videos that take up a lot of bandwidth. Make sure to add proper tags and description to make your video findable on YouTube. 


  • Flickr is a photo-sharing site that reaches a very large number of visitors and is, therefore, are a very good place for tourism providers to present some of their best pictures. To make the most of such sites, it is very important to use specific tagging, both keywords and description tags which link to related topics on your own site. Flickr also allows geo-tagging. 


  • A blog can be compared to an online diary. An increasing number of people want to share their thoughts with the rest of the world. Portals like Travel Blog are free and travellers across the world add their blogs and pictures on the site. Besides international travel blogs, almost every country has its own popular travel blogs.
  • There are also blogs written by people working in the travel industry or who have very strong ties with the travel industry. Two examples are Tourism Keys Blog and Travel Rants. 

Interactive Maps 

  • You can also increase your exposure to potential tourists by listing on interactive maps like Google Maps and Google Earth.
  • You can put your company on Google Maps, add pictures, videos and even customer reviews with your contact details for free. 


Ask Yourself

Ad-Based Marketing

Every major search engine with significant traffic accepts paid listings. This unique form of search engine advertising means that you are guaranteed to appear in the top results for the phrases you have an interest in. Considering the market share of Google in Europe, using Google Adwords is highly recommendable. The key to a successful Google AdWords campaign is specific keywords, good meta tags and a relevant landing page on your website with a clear call-to-action.

Apart from Google AdWords, you can also advertise on Yahoo! and Bing. These are especially attractive because their bid prices are lower, conversion rates are sometimes better, reaches out to older users and also provides better customer support for small accounts.

Before running a pay-per-click campaign, run split tests on different ads / versions to see which ads are the most effective. Through a split test, you can determine which ads have a higher score and hence identify which ads to continue.

Viral Campaigns

Unlike the old-rules, numbers-based marketing techniques, it is virtually impossible to create a web marketing program that is guaranteed to go viral;it requires a huge amount of luck and timing.

Consider a direct mail campaign: You could always count on a direct mail piece to generate a known number of responses, say 2 percent. So if you needed to have 100 people respond, you would send out 5,000 mailers.

Viral marketing is different and we cannot count on numbers in the same way. In the world of viral marketing, a site, or video, or e-book may remain unnoticed for several months. And suddenly, the same marketers might get lucky and get a million people to view their content, driving tens of thousands of people’s interest in their products and services.

Ask Yourself

When was the last time you shared a video or a picture with your friend? What was it in that which made you share it?

Email Marketing

Email continues to be a very popular means of advertisement. It is important to first decide what type of email you want to send – Editorial or Promotional email.

Editorial emails inform and educate your subscribers about your business and the industry in which you work. Promotional email is primarily concerned with promoting your products and services from a sales angle. If your overall target is to produce new leads for your sales team or convert more browsers into buyers, then you may consider focusing on promotional email. If your goal is to retain a greater number of customers and build your brand then you’re best to focus on editoriall. Most companies, however, run a mix of both promotional and editorial emails.

With the objective defines, the next thing you need to do is plan your email marketing toolkit. 

Data and Email Information:

You can develop your database of email addresses over time. Email ids can be obtained from:

  • Online sign-up forms to collect new contacts
  • Data capture sheets for exhibitions, meetings and networking events
  • Opt-in/permission policies.

You can build up information about individuals over time. Consider asking for the essential data only to start with and then building on this over time. People are often very protective of their personal information until you have built up their trust. You can use the thank you pages on your website to collect additional data.

Consider appointing a Data Manager to manage and maintain data by performing regular data cleansing tasks like bounce cleaning.

Template Design

Your designer can help you create a reusable HTML email template for your campaign. You need to test your designs to ensure that they are displayed correctly on all types of email clients such as Outlook, Lotus Notes, Yahoo, Gmail, etc. You also need to consider how your design will complement your website and other offline marketing materials.

Delivery Software

Most email marketing software will deliver your emails in addition to helping you design and track. Email delivery software providers simplify the process of emailing several people on the subscribers’ list. They also automate the unsubscribe process to protect you from accidentally sending to these people again.

Remember that you are legally required to provide an unsubscribe process. Failure to do so can cause many issues for your business, such as IP blacklisting or at worst a fine and imprisonment.

Forward to a Friend Tool

Your email delivery provider, like NewZapp, can add a forward tool to your email designs. This will help you improve your database through viral marketing. If you are designing your own forward tool, allow the friend to add a personal message to the email before you forward it. This helps personalise the message for the new recipient and explain why they have received the email. It is also possible to add the option to sign-up to your email database.


Pricing Strategies

Here are some online pricing strategies that have worked well for some hotels:

  • Rate Parity - Same ratesand conditions on all public channels
  • Rate Integrity - Pricing accoridngly to the market
  • Price Fencing–Small discounts for short stays; steeper discountsfor longer stays
  • Lead Time Pricing–Steep discounts prior to the egular pick-up curve
  • Opaque Pricing - Hidden discounts through non-branded offers. Useful to unload distressed inventory
  • Flexible Corporate and Consortia Pricing–Discounts for volumes
  • CRM Pricing–Greater discounts for direct bookings (since you eliminate agency fees of 10 to 25%)
  • Friend Rate–Special discount for referral customer
Add Value - Make a package at a slightly higher price than your room only rate and add additional services or features to the offering. 

Technology for Distribution

Distribution Channels

The number of reservations flowing to hotels through the electronic distribution channels – the global distribution systems and the internet websites – is growing steadily. Once a minor contributor of bookings, they are now primary business sources and grow more important with every passing month.

Electronic Distribution Channels

The productivity growth through the electronic distribution channels has heightened emphasis throughout the hotel industry on using them effectively and maximising their potential.

Distribution now goes hand-in-hand with marketing and includes terms like “social media” and “search engine optimization”. Distribution channels have become more complex and multi-dimensional as brands have developed powerful websites and online travel agencies have evolved from being strictly booking engines to also being media sites reaching tens of millions of consumers each month.

The Online Challenge

Hotels and tourism companies everywhere in the world face one common challenge – not being able to reach out to a large audience worldwide to ensure high occupancy consistently and achieve optimum rates. However, this can be addressed with better use of technology and business logic in an online environment and offline.

Tourism companies still lag behind in terms of online distribution as it is difficult to afford well integrated end-to-end technology solutions to manage their inventory online through all possible channels .Another challenge for independent hotels is having the IT & Distribution knowhow in-house to manage all these distribution channels on integrated platforms.

Using Technology for distribution

Booking Engine

A booking engine is a piece of software integrated with the central reservations system to allow customers to book directly from a hotel’s website in an interactive manner. The booking engine is comparable to a search engine for room availability and rates for a hotel. 

Central Reservation System

Hotel reservations systems, commonly known as a central reservation system(CRS),are computerized systems that store and distribute information of a hotel, resort, or other lodging facilities. A CRS contains information on room types, rate plans, room rates, conditions of stay, room inventories, generic hotel information, reservation information, etc. 

Channel Management

Channel management solutions allow hotels to update their online rates and availability with one click on online travel portals like Expedia. In the absence of a channel manager, hotels will have to log onto each OTA site and update rate and availability information manually.

Global Distribution System

A Global Distribution System (GDS) is a worldwide computerized reservationnetwork used as a single point of access for reserving airline seats, hotel rooms, rental cars and other travel related items by travel agents, online reservation sites and large corporations. Premier global distribution systems are Amadeus, Galileo, Sabre and Worldspan. A GDS hotel's inventory and rates can be accessed and booked by any travel agent that subscribes to the GDS.

GDSs offer two levels of participation. While the first level is free of charge, the second level offers a wide range of paid advertising options. All of these advertising options are now offered by a single a company, TravelCLICK, thus providing a convenient one-stop for evaluation and selection. 

Customer Relationship Management System

A recent Harvard study suggests that a 5% growth in customer retention can generate an increase in profitability of more than 25%. Customer relationship management (CRM) is an overall strategy to help you learn more about your customers and their behaviour so you can develop stronger, lasting relationships that will benefit both you and your customers.

A CRM solution:

  • reduces the time required for sales cycles while managing potential sales leads
  • facilitates growth by improving customer retention
  • boosts the marketing function by providing a clear idea of customers’ needs
  • helps integrating essential information about sales, marketing, market trends, employees, customer attitude and customer retention

Good CRM practices and an efficient CRM system like helps in gathering higher quality customer information. This in turn has a direct positive impact on conversion.

Rate Shopping

Rate shopping services provide hotel rate intelligence reports from different online sales channels including GDS, ODD, OTA, IDS and hotel websites. Individual hotels or hotel groups may easily analyze competitor's room rates, market trends and sales strategies. Rate shopper reports bring very detailed information about current and future market conditions and aid decision making

Electronic Distribution Options

Global Distribution Systems

GDS Distribution Cost to Hotel Audience Sign-up Procedure Maintenance Process





GDS fee of approximately $4.50 plus switch company fee of approx. $.45 plus hotel chain/ representation company processing fee (when applicable) plus 10% travel agency commission (usually applicable) Travel agents and corporate travel planners who gain access to these private data bases/networks on a subscription basis Hotels participate at the chain level or, if property is an independent, via their representation company (i.e. relationship is between the chain or rep. company and the GDS) Availability, rate and other information that the property maintains in the chain or representation company’s central reservation system is relayed onward to the GDS


Internet Sites – Maintained Directly by Property Staff

 Distribution Channel Sample Participants Distribution Cost to Hotel Affiliated Sites/Agencies
Property’s Own Web Site None unless hotel chooses to pay travel agent commission Possible hyperlinks to CVB site, local attraction sites and local news media sites
WorldRes Commission 1,000 sites
Commission American Hotel & Motel Association  
Distressed Inventory Sites – Discounted Rates Listing Fee  
Distressed Inventory Sites – Auctions

"Net" rate – site’s profit is difference between hotel rate and rate that buyer pays

Distressed Inventory Sites – Reverse Auctions’s Hotel Price Matcher    
"Net" rate – site’s profit is difference between hotel rate and rate that buyer pays  

Distressed Inventory Sites – Consolidator
HRN -     "Net" rate – site’s profit is difference between hotel rate and rate that buyer pays    
2,000 sites
Meeting Planner Sites – RFP and/or Registration    
Transaction fee for business that materializes     Meeting broker sites


Internet Sites – CRS Powered

Distribution Channel Sample Participants Distribution Cost to Hotel Affiliated Sites/Agencies
Representation Company Web Sites (VIP)


Reservation processing fee plus commission if travel agent is involved Often serve as the booking engine for their members’ own web sites


Internet Sites – Switch Powered

Distribution Channel      


Internet Sites – GDS Powered

Distribution Channel Sample Participants Distribution Cost to Hotel Affiliated Sites/ Agencies
(Worldspan; Pegasus for hotel data)
Earthlink, Washington Post, Worldnet., (net rate),

(Sabre &Worldspan; Pegasus for hotel data)
(Sabre), AOL Travel, Yahoo Travel
(Galileo)      Commission    Commission    


Questions to ask before participation

Some questions to ask before participation:

  • Does it target a market segment that is important to my hotel?
  • Who would maintain the data about my hotel on the site?
  • What are their initial membership fees and on-going costs?
  • Which other properties use the site?
  • Is it likely to actually deliver bookings? What is my return on investment?

Ask Yourself

What is the mix of distribution channels that a hotel should typically have?

Analysing & Measuring Marketing Data

Website Analysis

Effective marketing is all about measurement and analysis. Online marketing allows organisations to quickly measure the impact of their marketing actions and fine tune them as necessary.

The last part of your promotion policy is to evaluate your website promotional instruments. For example, if you had formulated a goal to ‘Increase online sales by 20% compared to 2007’, you can evaluate whether or not this goal has been realised. There are a number of tools you can use to evaluate the effect of your e-marketing and identify channels were instrumental in helping you achieve your target. The last part of your promotion policy is to evaluate your website promotional instruments. For example, if you had formulated a goal to ‘Increase online sales by 20% compared to 2007’, you can evaluate whether or not this goal has been realised. There are a number of tools you can use to evaluate the effect of your e-marketing and identify channels were instrumental in helping you achieve your target. 

Web Analytics Tools

Web analytics tools measure web traffic, gauge popularity trends and also help measure the results of ad campaigns. The tool can estimate how traffic to a website changed after the launch of a new advertising campaign. There are two categories of web analytics: off-site and on-site web analytics.

Off-site web analytics refers to web measurement and analysis regardless of whether you own or maintain a website. It includes the measurement of a website's potential audience (opportunity), share of voice (visibility) and buzz (comments) that is happening on the internet as a whole.

On-site web analytics measure a visitor's journey on your website and measures the performance of your website in a commercial context. This data is typically compared against key performance indicators for performance, and used to improve a web site or marketing campaign's audience response. 

Performance Trackers

Trackers provide visitor statistics, such as the URL that your visitor has come from, the average number of visitors per day and keywords that are used to find your site. They enable you to analyse the effectiveness of some promotional instruments. Google Analytics ( is a very good tracker.

Google Website Optimizer ( is an easy-to-use tool for testing site content. It can help you to increase websites conversion rates, decrease visitors bounce rates and improve visitor satisfaction. 

Page Ranking

A growing number of search engines use link popularity in their ranking algorithms. You can check your link popularity using tools such as Icon Interactive ( Google Webmaster ( is a free tool that helps you to improve your site's visibility in the Google search results. 

Google Insights

Google Insights ( shows you what the world is searching for. It helps you to compare different search terms and find the most effective one for yourself. You can also compare search volume patterns across specific regions, across categories and across time frames. 


To improve presentation on GDSs, your hotel has several options:

  • Provide a full spectrum of public rates – rack, corporate, senior citizen, government/ military, weekend and promotional
  • Participate in consortia and negotiated corporate rate programs
  • Ensure that room availability and descriptions provided by the CRS to the GDSs are accurate
  • Periodically review the GDS property description for your hotel

Travel Websites

Difficulties in first evaluating and later maintaining your hotel’s information in travel Web sites do not diminish their importance and a hotel’s need to participate in them. Once you have chosen to list your hotel on a site, that site should be reviewed on a regular basis to verify that the data for your property is accurate, complete and compelling.

Next comes a commitment to maintain the same rates and availability data in the websites as in all of your other sales vehicles – the front desk, the reservation office, GDSs, etc.

Like the GDSs, travel websites offer supplemental promotional opportunities. Preferred placement of your listing in sites or search engines, banner ads and additional on-screen graphics are just a few of the extra cost options.

Email Campaign Monitoring and Feedback

It is very important that you monitor your email campaigns and feedback thisinformation into your marketing strategy. You can track who opens your HTML emails and who clicks on thelinks. To do this, you will need software that can create the trackinglinks and report on who did what, when and how many times. You can monitor the following:

  • Database growth
  • Read rates
  • Click through rates
  • Opt-out rates
  • Bounce rates
  • Sales from email
  • Customer loyalty.

You should monitor each campaign on an individual basis. It is also important tolook back at your campaigns and try to identify:

  • How quickly is your database growing or shrinking?
  • Are your read rates increasing or decreasing?
  • Are your click through rates increasing or decreasing?
  • Are your opt-out rates increasing or decreasing?
  • Are your bounce rates increasing or decreasing?
  • What is the value of sales made as a result of your email marketing?
  • Has your customer retention rate improved as a result of email marketing?
  • Are some types of email performing better or worse than others?
  • Which variables have a positive effect on email performance? Time ofdelivery, type of email, database size, etc.

Case Studies

When 7 = 350,000,000

Cindy Gordonvice, President of new media and marketing partnerships, Universal Orlando Resort.

Recognizing that millions of fans around the world are passionate about all things Harry Potter, Gordon knew she could rely on word-of-mouse to spread her story. After all, Harry is a global phenomenon. The series of books by author J.K.Rowling has been translated into sixty-five languages and has sold more than 325 million copies in more than 200 territories around the world. The films, produced by Warner Bros. Pictures, have grossed $3.5 billion worldwide at the box office.

Gordon and her counterpart at Warner Bros. chose to launch The Wizarding World of Harry Potter by first telling the exciting news to a very small group of rabid fans. Seven people at the top Harry Potter fan sites, such as Mugglenet, were hand-selected by Gordon’s team, with Warner Bros. and Rowling herself providing input about the choices. These seven (affectionately referred to by Gordon’s team as “the AP of the HP world”) were invited to participate in a top-secret Webcast held at midnight on May 31, 2007.

The Webcast was hosted by Scott Trowbridge, vice president of Universal Creative, and featured Stuart Craig, the academy award-winning production designer for all the Harry Potter films. In the Webcast, live from the “Dumbledore’s Office” set at Leavesden Studios, Craig discussed how his team of twenty designers is bringing together The Wizarding World of Harry Potter theme park.

“If we hadn’t gone to fans first, there could have been a backlash,” Gordon says. She imagined the disappointment dedicated Harry Potter fans might feel if they learned about Universal Orlando’s plans in, say, The New York Times rather than an insider fan site Soon after the Webcast, the team sent an e-announcement to their in-house, opt-in email list of park guests so they could hear the news directly too. Team members also sent thee-announcement to friends and family. During the secret Webcast, a Web micro-site went live to provide a place for bloggers and the media to link to for information on the theme park, which is slated to open in late 2009 or early 2010. Visitors to the site learned that the park will feature immersive rides and interactive attractions, as well as experiential shops and restaurants that will enable guests to sample fare from the wizarding world’s best known establishments.

Because Gordon’s team launched The Wizarding World of Harry Potter through social media—putting fans first—they were able to run the entire promotion in-house, with a very small marketing budget (covering the Webcast infrastructure and the micro-site production) and a tiny development team. They did not hire an agency, and they did no widespread outbound media relations, no marketing stunts, no CEO conference call, and no expensive advertising.

Of course, not all companies have Harry Potter on their team. But Gordon still accomplished a remarkable feat with an approach that most large organizations would not have taken. She told just seven people, and the power of word-of-mouse led to 350 million people hearing the news.

Customer Engagement = Better Revenues

A small group of hotels in the US generated over US$1 million in extra revenue by simply up-selling their hotel suites through their reservation confirmation messages. After a customer made a reservation, the hotel sent a confirmation letter with the offer to upgrade from a standard room to a suite for a modest additional fee. Now you’ll be thinking, "Any hotel can do this (or they do already)”. Yet, most do not!

Here is a more complex example:

Gaming resorts and casinos have done some innovative things in terms of enhancing the customer experience. When guests check in at Harrah's Casinos, for example, they are given a casino card that acts like a credit card and can be used to gain access to gaming rooms and machines, the resort spa, restaurants and other places within the casino.

As a result, the casino gets a real-time history of where the customer is spending his time on the site, and they can offer rewards or discounts and other promotions based on those patterns. Because it's real-time, they can even offer the incentives during the current stay or as an inducement to gain repeat business.