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Where is Your Business Coming From?

There is a lot of discussion of late about online attribution models. This usually refers to the credit given to the different media or websites that are visited along the consumer’s buying path in the run-up to the booking. Many hotels are still assuming “last click attribution” which means they credit the last place a consumer stopped before clicking the “buy” button with providing the impetus for the business. Many clickstream studies have been conducted that examine the number of touchpoints made by consumers before they decide to buy. Some claim there are 7-10 stops along the sales path; others as many as 20. Documented in the Distribution Channel Analysis study, there were 7-8 websites visited by members of the comScore data panel that was used to investigate Expedia’s role in hotel bookings, but the data to evaluate other media such as email, banner ads or offline venues such as magazines, radio or TV were not available.

Why should we care who or what to credit with the booking? If a hotel marketer knows which touchpoints trigger the booking, he or she will presumably have more intelligence on hand to decide where to put limited marketing funds. Everyone wants to put their money where it will buy the most influence with consumers. If there are 10 touchpoints and the marketer puts all the funds into only one, such as the “last click” or an online travel agency claiming to dominate consumer hotel booking behavior, then they are assuming that all other touchpoints do not wield enough influence to justify an investment.

This is a contentious issue. Most hospitality marketers have limited funds so the decision as to which media vendor gets the budget from each hotel and/or hotel company is a big one. Media vendors would like hotel marketers to choose them as their dominant marketing partner so they go to great lengths to show that their venue is the decisive stop along the sales path for hotel buyers. Google has done some delving into it and it seems that it is coming into focus for many industries, but most marketers have not yet figured it out.

What is the answer to this question? Many of the large hotel chains are developing statistical models to figure out which shopping patterns lead to the most bookings. What does one individual hotel do? Lacking sophisticated analytics tools, the most practical method may be well thought out trial and error. Some savvy hotel marketers buy media from a vendor such as a search engine or an online travel agency or a consumer review site for a month or two testing just one new vendor at a time and carefully checking traffic and conversion volumes. Does it bring the type of clientele you want? Is it at the rate and spending levels you want? If so, try adding more budget to the plan and see if it yields more business. Test and repeat.

The first point of entry and last click before buying are worth testing, but should not be presumed to be worthy of investing all of a hotel’s budget so beware if those media vendors want to push you to put all of your eggs in their basket. As more channels are opening such as new travel-specific search engines, mobile vendors and social sites, there will be more opportunity, along with more confusion as to which channel(s) trigger the booking. Testing investment levels with corresponding results is the only way available now without a statistical model. This topic will be revisited many times in the future as techniques are developed to help hotels allocate their limited resources.