It’s no secret that relationships between hotels and their OTA partners have always been a little strained to put it delicately. While there is no denying the major influence that these online marketing giants have had on the visibility of hotel groups, OTA regulations can sometimes be stifling and restrictive. Sophia Soltani talks to Geraldine Calpin, chief marketing officer, Hilton Worldwide to hear why the hotel group is taking control of its market through the launch of its biggest campaign: Stop Clicking Around.
The relationship between hotels and online travel agencies (OTAs) has always been a complicated one. There is no denying the impact that OTAs have had on global travel and hospitality, connecting millions of travellers to rooms every year. In addition, these distribution platforms gave independent hoteliers the opportunity to boost their visibility and accept reservations from around the world. Companies like Booking.com and Expedia spend millions of dollars annually on marketing, doing a large part of the work for the accommodation providers. The catch is obviously the commission and with guest trends and spending patterns changing, hoteliers are becoming increasingly wary about commissions charged. As the number of online bookings grew and OTAs became increasingly dominant, hotel chains began to gradually alter their business model and there is no better example in the industry right now than Hilton Worldwide’s ‘Stop Clicking Around’ campaign.
Geraldine Calpin, chief marketing officer, Hilton Worldwide explains: “On 15 February 2016, Hilton launched the largest marketing initiative in our 97-year history, which encourages travellers to “Stop Clicking Around,” as Hilton now offers an exclusive discounted rate on its rooms everywhere, every day, in addition to industry-leading benefits for members of the Hilton HHonors programme.”
“In 2015, 57 billion Hilton HHonors points – or more than 1.6 million free nights went unearned because guests did not book direct. We saw this as an opportunity to challenge consumer perceptions of how to get the best prices and perks on our hotel rooms”
Leaving no stone unturned, the campaign is designed to reach travellers on every platform says Calpin: “Stop Clicking Around has a global reach spanning TV, billboards, at-home and digital buys, as well as on-property placements in our hotels. Our advert spot includes 60, 30, 15 and six second clips.”
With the campaign not limited to the Middle East, Hilton Worldwide took to the streets of London to convince British travellers and tourists alike that booking direct could prove more beneficial then venturing to third party sites for bookings as Calpin adds: “To enhance the launch in the UK, we implemented an eye-catching stunt at Kings Cross station in London, allowing us to reach high volumes of consumers and actively drive consumer awareness of the HHonors guaranteed discount as well as encourage social engagement and HHonors sign ups. Passers-by were invited to Stop Clicking Around and Start Winning by clicking once on a giant mouse to try and match three Hilton brands to win a prize.”
The two largest OTAs in existence today are Expedia and Priceline, and they respectively dominate the markets in the United States and Europe with Expedia controlling approximately 70% of the US market while Priceline accounts for 62% of Europe. This is because both companies have been taking active measures to strengthen their position in the industry – Priceline’s acquisition of Booking.com and Expedia’s purchase of Orbitz and Travelocity are just a few examples. With the danger of this duopoly growing rapidly, it could be argued that hoteliers have reason to become increasingly concerned about the receding negotiation room in terms of commissions payable. Revealing the decision behind why the campaign was launched, Calpin insists that the initiative isn’t to push out OTAs, but because, “in 2015, 57 billion Hilton HHonors points – or more than 1.6 million free nights went unearned because guests did not book direct. We saw this as an opportunity to challenge consumer perceptions of how to get the best prices and perks on our hotel rooms.”
As OTAs are now also beginning to follow in the footsteps of hotels by offering loyalty programmes, rewarding guests who make repeat bookings regardless of the hotel or the number of rooms reserved, directly competing with the lure of an attractive loyalty programme from the hotel itself. “Hilton HHonors members who book directly with Hilton save time and money, and gain instant access to the benefits they care about most. In addition to a guaranteed discount that can’t be found anywhere else, we offer free Wi-Fi, the ability to earn and redeem points for free nights, as well as popular and useful tools like digital check-in with room selection and digital key. Booking through Hilton.com also gives Hilton HHonors members access to exclusive events, like Live Nation concerts and private dining experiences to name a few perks,” explains Calpin.
If the lure of room selection and free stays isn’t enough to engage a HHonors member, Hilton Worldwide’s loyalty scheme pioneers innovate ways to encourage members to sign up or use points, Calpin says: “Through our extensive network of partners, we are curating once-in-a-lifetime experiences for our members – many of which can be bid on using points on our Hilton HHonors auction site.
“For example, with our newest partner, Live Nation, we are hosting private concerts in our hotels, providing VIP tickets to sold-out concerts, and creating incredible one-on-one experiences with artists. Through our longstanding partnership with McLaren-Honda we are offering unprecedented access to the legendary F1 team, as well as unrivalled access to professional golf as the official Hotel Supplier of the European Tour.”
As hoteliers have been forced into a relentless battle where the onus is to streamline operations and innovate guest experiences in order to retain business, Calpin insists Hilton’s Stop Clicking Around campaign is different: “Our mission with Stop Clicking Around is to educate travellers that when they stop clicking around and book direct, they will save money, receive instant benefits and have the best stay possible.
“The campaign is already changing consumer booking behaviours. Early results are very positive, with HHonors enrollments increasing nearly 90% since launch, helping drive HHonors occupancy to a record 55% in the quarter, an increase of more than four points versus last year. The business we receive through web direct is higher than it’s ever been and is growing faster than ever thanks to increasing share shifts. The share of web direct channels in our distribution mix is growing five times that of the OTA share of growth in the quarter, and business generated from our mobile app is up nearly 150% year over year, with downloads exceeding 70,000 a week, an increase of 200% over last year.”
Arguing that Hilton Worlwide is not on a mission to isolate itself from its OTA partners, Calpin says: “The OTAs and other intermediaries are an important part of the hotel booking landscape and Hilton is committed to selling where our customers want to shop. We want to build meaningful relationships with our guests to serve them better with each stay, and booking direct helps us to maintain and build upon our relationships with guests.”
Tapping into digital
With a number of dominant forces driving its involuntary evolution, from distribution tactics of third-party OTAs to the growing influence of accommodation-sharing services like Airbnb, marketing and digital strategies driven by e-commerce teams have never been more important. “E-commerce has given us the ability to reach our guests where they are, with the information they need and on the channels they use most. Travel is innately an industry focused on mobility. Through digital tools and channels, we’re able to make our guests’ lives easier throughout their entire journey, taking some of the friction out of travel.”
Seismic shifts in guest sentiment have driven a strategy overhaul in an age where travellers demand personalisation, essentially leading to a new breed of hotel loyalty programmes where the focus is customisation, flexibility and simplicity, facilitated by technology. “With Hilton’s digital technology specifically, we have one-click booking on the app, mobile check-in, and choose-your-room capability based on the floor plan. And in many hotels you can use your phone as your key and order room service from your phone. So for guests, they really have the heart of Hilton in their pocket.”