Cost of customer acquisition risen dramatically in groups and meetings market

The total costs can reach upwards of 35% of room revenue on many pieces of group business when all third-party commissions and other booking costs are considered, according to a new report by Kalibri Labs.

Kalibri Labs just announced the release of their latest hotel industry study that encompasses the groups and meetings market segment. This in-depth look at a critical component of the industry’s business mix is the first of its kind and filled with detailed insights and key metrics which reveal increased intermediation in the groups and meetings segment.

The report highlights that groups and meetings business in the U.S. represents approximately $300B, with about $140B spent in hotels. Of this $140B in hotel spend, about $30B represents room revenue, with F&B, ground transportation, AV and other ancillary requirements making up the balance.

The report shows that groups and meetings business is about 15% of total U.S. room nights across the full spectrum of hotel segments. Full service hotels at the higher end of the rate range (those over $220 published rates) have 30-35% of their room nights generated by groups and meetings business. Small meetings, defined as requiring under 100 rooms on the peak night, make up almost three-fourths of the meetings in the U.S., however this represents just over one-fourth of the meetings revenue (28%). The balance of revenue is split between meetings requiring between 100-499 rooms (33%) and those over 500 rooms (39%).

The complexity of the groups & meetings ecosystem is put on display in the report and details the process from the point at which the concept of the event is conceived through to its execution. There are many intermediaries involved at various points in the value chain which adds to the process’ fragmentation and ultimately to its costs. Cost of customer acquisition has risen dramatically over the last 5 years as the proportion of intermediated events has increased, equating to over $4B in 2017 and is expected to reach close to $8-10B by 2022. The total costs can reach upwards of 35% of room revenue on many pieces of group business when all third-party commissions and other booking costs are considered.

The report also reveals that automation has entered many aspects of the groups & meetings sourcing, booking and execution process over the last five years and is accelerating but it hasn’t always made the process more efficient for those involved. Cindy Estis Green, CEO and Co-founder of Kalibri Labs, says that, “with this renewed attention, the next 2 to 3 years appear to be an inflection point in the way the groups & meetings process will evolve. Operators with hotels of all sizes should pay heed to the costs and processes in place as they are likely to affect all events from the smallest social events to the largest corporate and association meetings. An open and robust dialogue on how to improve the efficiency of this ecosystem would benefit all involved to improve the overall guest experience and reduce costs for all parties.”


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Kalibri Labs Report Reveals Increased Intermediation in the Groups and Meetings Segment

A new Kalibri Labs report reveals increased intermediation in the groups and meetings segment of the hotel industry, the associated costs, and future projections. The analysis sheds light on the challenges imposed by a fragmented ecosystem with a focus on costs and the impact on relationships between hotels and their customers.

Groups and meetings business in the United States totaled approximately $300 billion in spending last, with about $140 billion spent in hotels. Of this hotel spend, about $30 billion represents room revenue, with F&B, ground transportation, AV, and other ancillary requirements making up the balance.

The report shows that groups and meetings business is about 15 percent of total U.S. room nights across the full spectrum of hotel segments. Full service hotels at the higher end of the rate range—those over a published rate of $220—have 30 to 35 percent of their room nights generated by groups and meetings business. Small meetings—those under 100 rooms on the peak night—make up almost three-fourths of the meetings in the U.S., however this represents just over one-fourth of the meetings revenue (28 percent). The balance of revenue is split between meetings requiring between 100 and 499 rooms (33 percent) and those over 500 rooms (39 percent).

Rising Customer Acquisition Costs

The report also details the meetings and events process—from when the event is conceived through its execution. The many intermediaries involved at various points adds to the process’ fragmentation and, ultimately, to its costs. Cost of customer acquisition has risen dramatically over the last five years as the proportion of intermediated events has increased, equating to over $4 billion in 2017. Customer acquisition costs are expected to reach close to $8 to 10 billion by 2022. The total costs can reach upwards of 35 percent of room revenue on many pieces of group business when all third-party commissions and other booking costs are considered.

Automation in Groups and Meetings

Automation has entered the sourcing, booking, and execution processes for groups and meetings over the last five years. However, it hasn’t always made the process more efficient for those involved. “With this renewed attention, the next two to three years appear to be an inflection point in the way the groups and meetings process will evolve,” Cindy Estis Green, CEO and co-founder of Kalibri Labs, says. “Operators with hotels of all sizes should pay heed to the costs and processes in place as they are likely to affect all events from the smallest social events to the largest corporate and association meetings. An open and robust dialogue on how to improve the efficiency of this ecosystem would benefit all involved to improve the overall guest experience and reduce costs for all parties.”

Read the full article on Lodging Magazine

Report: Intermediaries Contribute to Meetings Costs & It Will Only Get Worse

By: Julie Sickel

The cost to hotels for groups and meetings has been on the rise in the U.S. in recent years. According to a report from hotel benchmarking company Kalibri Labs, the cost, if left unchecked, likely will double by 2022.

The report, titled U.S. Groups & Meetings: The Economics and Complexity of Intermediation, estimates that groups and meetings cost the U.S. hotel industry $3.4 billion to $4 billion in 2017. Commissions paid to intermediaries accounted for $1.3 billion of that, based on a 10 percent commission rate. By 2022, the cost could reach $8 billion or $10 billion, according to projections from Kalibri Labs, PwC and Oliver Wyman.

Kalibri serendipitously released some early findings from its research in January, just before Marriott International announced its intention to cut groups and meetings commissions in the U.S and Canada from 10 percent to 7 percent by March 31. But even with the largest hotel company in the world pledging to lower the money it pays out to intermediaries, Kalibri co-founder and CEO Cindy Estis Green said that, at the rate intermediation is growing, Marriott's move isn't enough to alter future projections.

The Solutions & Tech Problem

The ways in which organizations book groups and meetings with hotels is largely unchanged from where it was 40 years ago, according to the report. What has changed is the number of vendors who provide services and solve for pain points in a stagnant process. Typically, they exist in the first four stages of the meetings process: discovery, sourcing and booking, planning, and execution.

Of the approximately 100,000 meeting planners in the U.S., according to PwC's estimates, 20 percent are external planners who aren't directly employed by the organizations they assist. One-third of those external planners are employed by one of six major firms: HelmsBriscoe, ConferenceDirect, American Express Meetings & Events, Experient, Maritz Travel and BCD Meetings & Events.

Tech companies also have emerged to assist with discovery, sourcing, planning, and execution, including Cvent, Etouches, Groupize, Groups360 and Cendyn. While certain steps of the process are now being supported, Estis Green said, the solutions provided by third parties are still contributing to a broken system. For example, while automation can solve for the RFP process on the meeting host side, it increases the labor costs for hotels, which get inundated with high volumes of queries. "The groups and meetings market is very diverse," Estis Green said. "There are a lot of tech companies that are interested in aggregating it, the way transient business has aggregated over the last 15 years, and it's more complicated than the transient business. There's more to it. The process is more complex."

Approximately 43% of group rooms revenue is being intermediated. By 2022, Kalibri estimates, that portion will grow to 60 percent.

The Threat of Commoditization

Beyond the dollars and cents impact of increased intermediation, Estis Green warned, "If hotels become a commodity for the groups and meeting experience, the quality of the experience will deteriorate." It becomes less about finding a unique and engaging space and more about finding "a box."

"For hotels to be sharp and tuned in to what their customers want, they need to know their customers really well," Estis Green said, which is harder the more intermediaries step in between the two sides.

She hopes the report will help the industry recognize the need to change the meetings ecosystem. "In order to make it more efficient," she said, "all of the players in the food chain may have to give a little to make it work better."

Read the full article on Business Travel News

Expedia turns to HomeAway as direct-booking campaigns dent earnings

Expedia’s Q4 earnings missed projections as its stranglehold on the online hotel bookings landscape may be in jeopardy over the effectiveness of hotel direct-booking campaigns, though Expedia CEO Mark Okerstrom is reluctant to admit as much. 

Expedia reported $10.05 billion in revenue for the 2017 fiscal year, missing analyst projections of $10.11 billion. Expedia’s bookings increased 14 percent, or $2.4 billion, reaching $19.8 billion, but the company missed its forecasted revenue goal of $2.36 billion, recording $2.32 billion.

 Expedia missed its quarterly projections once again, but this time it may have more to do with spending than the weather. 

Expedia missed its quarterly projections once again, but this time it may have more to do with spending than the weather. 

Directly Limiting

Hotel companies' push for direct bookings may have had its initial detractors, but a 2017 report from Kalibri Labs, which analyzed the early days of the campaign, showed room night growth from May through Dec. 2016 was up 7.8 percent across 12,000 surveyed hotels, while net revenue for these properties also rose 9.3 percent. 

This data are not the only relevant facts to consider when looking at the impact of direct bookings. During Expedia's Q4 call, Okerstrom said the company's sort order for online searches is pushing bookings toward independent hotels. This could be attributed to Expedia's customers preferring to book by price. If independent hotels are appearing higher on Expedia’s searches, then it stands to reason that the better rates for branded hotels will be found through branded booking channels.

Read the full article on Hotel Management

The Numbers—What Are We Dealing With & Where Are We Headed?

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By Gregg Wallis

LOS ANGELES—This year’s ALIS Conference included a session entitled “The Numbers—What Are We Dealing With & Where Are We Headed?” Leading economic researchers took a look at the industry and presented their findings. Here is a look at what they said.

Carter Wilson, VP of consulting and analytics, STR

According to Carter Wilson, VP of consulting and analytics at STR, 2017 was a great year for the hotel economy. “The hotel economy is very dependent on the overall economy,” he said. “Right now, all of the indicators are very solid. We are looking at low unemployment, strong corporate earnings and moderate inflation levels, so it all played a key in 2017’s performance in the industry. Demand did outpace our estimate in 2017; a lot of that was due to the third and fourth quarters with the impact of the hurricanes and the wildfires. The industry continues to perform at all-time record levels according to every single metric.”

Cindy Estis Green, CEO and co-founder, Kalibri Labs LLC

Cindy Estis Green, CEO/co-founder of Kalibri Labs, took a look at hotel performance in the digital marketplace.

In 2017, the U.S. hotel industry had nearly twice as much business through its brand.com websites at 22.6%, compared to 13.6% booked through online travel agencies (OTAs). In spite of this difference, hotels are still challenged in managing costs of sales, with OTA commissions rising at three times the rate of guest paid revenue and twice the growth of loyalty costs, according to Estis Green.

Read the full article on Hotel Business

Marriott Will Reduce Group & Meetings Commissions

What led us to the decision was trying to balance [intermediaries, customers and owners] and make sure that we make a decision that made good sense for all. … And frankly, it also had to make good economic sense for the business overall.
— Brian King from Marriott International

Marriott International is reducing the commissions it pays to group intermediaries from 10 percent to 7 percent beginning March 31, 2018. The policy change will be a brand standard that will take effect at all managed and franchised properties in the U.S. and Canada.

Marriott global officer of digital, distribution, revenue management and global sales Brian King said the change is a "reset and rethink" moment for the company. "We've been looking at the demand that we're receiving from our customers and the amount of innovation that needs to take place in the group space from an end-user perspective, and then we've also been watching the pace of revenue growth and the pace of commissions, and they're just not commensurate with each other."

The policy may not come as a surprise to many in the meetings and events space, as fears that commissions would change have been growing the past three to four years, particularly in light of industry megamergers. One consultant speaking on background earlier this month, prior to any Marriott news, suggested the company had the power to do away with group and meetings commissions entirely. King, however, said that was never a consideration. "We're very, very committed to intermediaries and our partners, we're committed to our customers and we're committed to our hotel owners," he said. "It's a three legged-stool, and we are trying to strike the right balance that we can appropriately take care of each of those audiences, invest in the hotels appropriately so those customers can have experiences that they desire which will drive demand to our partners." But that consideration also had to make good economic sense for Marriott, he added.

Read the full article on Business Travel News

ALIS Day One: What is the new normal?

Editors recap the opening day of the Americas Lodging Investment Summit with takeaways, quotables and more highlights from the event.

LOS ANGELES—“You’ve got to know when to hold ’em, and know when to sell ’em,” according to a hotel-centric adaptation of the Kenny Rogers classic performed at the opening plenary session of the Americas Lodging Investment Summit.

 ALIS speakers dove into the numbers Monday, talking fundamentals, transaction volume and what to expect in 2018. From left: moderator Rob Kline, Chartres Lodging Group; Carter Wilson, STR; Cindy Estis Green, Kalibri Labs; Mark Wynne Smith, JLL Hotels; and Mark Woodworth, CBRE Hotels. (Photo: Stephanie Ricca)

ALIS speakers dove into the numbers Monday, talking fundamentals, transaction volume and what to expect in 2018. From left: moderator Rob Kline, Chartres Lodging Group; Carter Wilson, STR; Cindy Estis Green, Kalibri Labs; Mark Wynne Smith, JLL Hotels; and Mark Woodworth, CBRE Hotels. (Photo: Stephanie Ricca)

The theme of this year’s ALIS is “Dealing with the new normal,” and opening day speakers started that conversation with a look at the big questions facing U.S. hoteliers in this period of unprecedented continued growth.

“The question is, what is the new normal as we head into 2018?” asked Jim Burba, ALIS chairman and co-founder of Burba Hotel Network, during the conference’s opening plenary session on Monday. “More deals or less? Is it time to sell? Time to build? Time to hold?”

Read the full article on Hotel News Now

Roundtable: Women in hospitality discuss a male-dominated industry

 Pictured from left to right: Allison Reid, CDO, Kimpton Hotels & Restaurants; Cindy Estis Green, CEO and co-founder, Kalibri Labs; Marina MacDonald, CMO, Red Roof Inn; Amy Jakubowski, managing director and design director, Los Angeles, Wilson Associates; Michelle Russo, CEO, hotelAVE; Kate Henriksen, SVP of investment and portfolio analysis, RLJ Lodging Trust; Rosanna Maietta, SVP of communications, AH&LA; Peggy Berg, Director, The Castell Project; Andrea Foster, SVP of Development, ‎Marcus Hotels & Resorts; Anne Smith, VP of brand management and design, Choice Hotels International; Mary Beth Cutshall, SVP and chief business development officer, HVMG; Kay Lang, president and CEO, Kay Lang + Associates.

Pictured from left to right: Allison Reid, CDO, Kimpton Hotels & Restaurants; Cindy Estis Green, CEO and co-founder, Kalibri Labs; Marina MacDonald, CMO, Red Roof Inn; Amy Jakubowski, managing director and design director, Los Angeles, Wilson Associates; Michelle Russo, CEO, hotelAVE; Kate Henriksen, SVP of investment and portfolio analysis, RLJ Lodging Trust; Rosanna Maietta, SVP of communications, AH&LA; Peggy Berg, Director, The Castell Project; Andrea Foster, SVP of Development, ‎Marcus Hotels & Resorts; Anne Smith, VP of brand management and design, Choice Hotels International; Mary Beth Cutshall, SVP and chief business development officer, HVMG; Kay Lang, president and CEO, Kay Lang + Associates.

Amid the #MeToo movement and an overall dearth of women in upper-echelon hospitality industry jobs, a bright bunch who currently are leaders participated in Hotel Management’s inaugural Women in Hospitality Roundtable, held at the Renaissance Times Square at the tail end of 2017. Participants discussed many of the myriad issues that women face in a business landscape still dominated by men.

Andrea Foster, SVP of development at Marcus Hotels & Resorts, pointed out that her company has two female members on their board and while that is something to celebrate, it’s hardly an ideal scenario. “When we show up [at conferences] we have two representatives, typically, and it’s a male and a female,” Foster said. “But other companies aren’t necessarily sending as many women, or maybe they don’t have that balance.”

Foster was quick to name her mentors—both men—as positive figures who helped elevate her career in the industry. She called on more men to provide advocacy for female employees, and she also said women should be seeking out these opportunities whenever possible.

"The mentoring concept is one that is crucial,” said Cindy Estis Green, CEO and co-founder of Kalibri Labs. “Whether your mentor is a male or a female, it really is what helps you move up. I was fortunate early in my career and had male mentors who really put me out there and let me do things that otherwise wouldn’t have happened, and accelerated my career tremendously.”

New Faces

An industry can’t have new leaders if it doesn’t have new applicants. Allison Reid, chief development officer at Kimpton Hotels & Restaurants, said more women are coming into the hospitality industry with an eye on the business side of hotels, something that is reflected in the crowds attending trade shows.

“With the younger generation you see more women coming out, and… it just takes time to get women into more senior roles,” Reid said. “Most of our junior analysts… are women rather than men at this point.”

Once they get in the door, however, several of the women at the table said it is an uphill battle to be considered for promotion. Peggy Berg, director of The Castell Project, said it isn’t enough to change jobs and work hard. Traditionally, she said, women are not taught as they are growing up to have a skillset that is valued by the business community. Instead, they either rely on mentors to teach them, or they learn these skills autonomously.

“We have this funny thing where business is gender neutral, business has no gender, but every human being in business has a gender and we don’t have a way to talk about it,” Berg said. “We don’t have a way to admit it, and we don’t have a way to teach the skills that our gender needs if they want to succeed in development, or on the equity side or on the ownership side.”

True Equality

  Anne Smith, VP of brand management and design, Choice Hotels International; Cindy Estis Green, CEO and co-founder, Kalibri Labs; and Amy Jakubowski, Managing director & design director, Los Angeles, Wilson Associates discuss the culture in which we are raising children, and how it affects the business environment.

Anne Smith, VP of brand management and design, Choice Hotels International; Cindy Estis Green, CEO and co-founder, Kalibri Labs; and Amy Jakubowski, Managing director & design director, Los Angeles, Wilson Associates discuss the culture in which we are raising children, and how it affects the business environment.

Since today’s companies are led by boards of directors that are entirely male, can we look forward to a future where a hotel company’s board of directors will be entirely female? The consensus at the table was that voting based on gender is a flawed concept – entirely the reason why quality female candidates have been passed over before.

Rosanna Maietta, SVP of communications for the American Hotel & Lodging Association, said it’s up to women in business to put themselves out there and apply for positions where they feel they might be a fit.

“I read a study that said on a given job application, if a man has three of 10 qualifications he applies,” Maietta said. “Women want eight or nine of them before they’ll even consider it. So part of the challenge is we have to put ourselves out there and challenge ourselves to do something that maybe we have an 80 percent chance of getting. We should do it anyway.”

Michelle Russo, CEO of hotel AVE, said women face other challenges in the applications process. For instance, a young woman with children might doubt her ability to work within the confines of a schedule set by someone else, and may benefit from the ability to dictate their own schedule or be flexible in other ways.

“Part of our job is helping [these women] succeed by saying ‘You can manage your schedule, and if you get your work done, you’re successful,’” Russo said.

As the concept of working remote came up, Marina MacDonald, chief marketing officer at Red Roof Inn, said flexibility in working conditions is growing more common in all corners of business as millennial permeate the workforce. However, understanding the mentality of millennial workers requires more than knowing their birthdate, as gender and marital status also have a role to play. Single women in business, MacDonald said, value their free time, and they also value experiences.

“This is a great industry for millennials… if my marketing team isn’t going on a trip every six weeks, it’s not good,” MacDonald said. “I’m like, ‘Send them to New York,’ because they love that experience, and they’re more loyal for it.”

Read the full article on Hotel Management

5 things to know about direct-booking campaigns

By  Sean McCracken

smccracken@hotelnewsnow.com

@HNN_Sean

In the not-too-distant past, major hotel companies were all-in on various campaigns to let the public know direct channels were the best way to book rooms. Here are some insights into how those now stand.

There was a period not that long ago when entire earnings seasons were dominated by various companies, headlined by heavyweights like Hilton and Marriott International, going to new lengths to secure more direct bookings.

In those companies’ quests to win share back from online travel agencies and other third parties, many engaged in discounted loyalty bookings and other new programs to lure more direct business.

Chatter around those programs has cooled considerably, so Hotel News Now decided to look to some expert sources to take a pulse on where they stand.

Read the full article on Hotel News Now

2017's top hospitality trends

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The year has come and gone, and it will remembered as one of uncertain optimsim. Things may be looking up for 2018 as pro-business reforms, such as changes to the tax code, begin to effect change on the industry, but looking back on 2017 we see an industry already in action. Hotels took time this year to adapt to the changing business landscape through partnerships, changes in strategy and a renewed focus on technology. 

Here are the five biggest storylines that took place in 2017...

1. OTA Partnerships and Home-Sharing Legitimization

2. Women in Hospitality

3. Rising Costs and Hidden Fees

4. Design Disruption

5. Safety Under Duress

Read the full article on Hotel Management

Kalibri: Discounting Isn’t The Best Way to Drive Loyalty

by Ed Watkins

While recent brand company campaigns to promote direct bookings through special loyalty club pricing has been mostly successful, it’s not the long-term solution for hoteliers looking to build repeat business. That’s a conclusion from research conducted by Kalibri Labs and discussed during a recent webinar.

“Discounting is not sustainable and should not be the incentive used in the future to stimulate new loyalty members or to retain loyalty members,” said Cindy Estis Green, CEO and co-founder of Kalibri Labs. “Instead, benefits (to loyalty club members) should be better digital experiences, conveniences and creature comforts. Hoteliers are more likely to get guests, and especially millennial travelers, to stick with one brand over another if you fulfill their expectations of a frictionless travel experience.”

Estis Green noted amenities such as mobile check-in, keyless entry and choose-your-own-room as ways to attain guest loyalty.

During the webinar, Estis Green and Mark Mazzocco, Kalibri’s VP of revenue strategy and account management, shared results of a landmark study to gauge the effects of loyalty pricing programs announced last year by several major brand companies, including Marriott International, Hyatt Hotels, Hilton and others.

The study, which reviewed 52 million hotel transactions at 12,000 properties between May and December 2016, reached three major conclusions about the ongoing effects of the book-direct campaigns:

A meaningful channel shift to brand.com. Unlike the recent past, brand.com bookings had a higher rate of growth than did OTA bookings. While roomnights generated by OTAs increased 11.1% during the study period, brand.com bookings increased 13.4%. Similarly, guest paid revenue minus booking costs increased 12.1% through OTA platforms and 13.2% through direct channels. More than 80% of the hotels in the sample had net positive outcomes due to the direct-booking campaigns.

The findings varied by chain scales. At upper upscale properties, for example, total room nights from loyalty members grew from 51.1% in 2015 to 55.5%.

A higher net premium ADR for loyalty bookings than those booked through OTAs. After accounting for all costs of customer acquisition including channel costs, commissions, paid search and other costs, the net loyalty member ADR was 8.6% higher than the net OTA ADR. Put another way, despite discounts that range from 2% to 10%, direct bookings by loyalty club members produce returns on investment three times the value of OTA bookings.

A growing number of loyalty club members. Loyalty members represent 40% to 60% of room nights booked, and that trend is expanding. Estis Green called it “transformative,” especially in light of the billion-dollar marketing budgets commanded by major OTA companies.

The researchers performed a stress test to determine how various distribution channels would have performed if the direct-booking campaigns didn’t exist. Using internal modeling, they found OTA demand share grew at a slower pace than it would have without increased focus on direct bookings. Likewise, brand.com share increased at a higher rate than forecast.

Another question loyalty rates raise — especially for hotel owners — is whether they encourage guests, especially those who would have booked rooms anyway at prevailing rates, to trade down to the loyalty program rates.

According to Mazzocco, despite the emphasis on direct bookings, between 14% and 17.6% of hotels in the sample produced ADRs below expectations in the Kalibri model. On the other hand, between 82% and 86% of properties performed equal to or above ADR expectations, given historical trends.

“The data suggests there was very little trade down into the loyalty rates by customers,” he said.

Mazzocco challenged owners and operators to take advantage of the traction the direct-booking campaigns have provided to them.

“Over the course of the campaign, there was a notable uptick in loyalty contribution to hotels, so now more than ever the interaction hotels have with their loyalty customers gives them the opportunity to curate programs and experiences to keep these valuable customers,” he said.

Read the full article on Duetto

https://www.duettocloud.com/library/kalibri-discounting-isnt-best-way-drive-loyalty

Six excellent hotel websites (and how they encourage direct booking)

Online travel agencies (OTAs) have enjoyed huge growth over the past few years, with the majority of consumers now booking hotels and accommodation via third-party sites. 

However, new research from Kalibri Labs suggests that consumer favour could in fact be be shifting, reverting back to brand hotel sites rather than OTAs.

In the analysis of the period of May to December 2016, when the hotels in question ran ‘book direct’ campaigns, Kalibri found a faster rate of growth in hotel site bookings compared to the OTA channel. This was also the case in terms of both revenue and room nights when compared to year before, (and prior to the direct booking campaigns being launched).

So, what makes consumers want to book direct rather than via a third party? Here are some examples of hotel websites I think are getting it right.

The Ritz

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As one of the most well-known hotels in London, the Ritz largely relies on its prestigious reputation to drive bookings. This means that people might be more inclined to visit its website as a first port of call anyway (as opposed to a third party site). However, the Ritz still encourages direct bookings as often as possible, immediately capturing the user’s attention with a list of benefits (including lowest rates and free calls and internet).

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Elsewhere, it sets out types of rooms and suites clearly, showcasing the opulence and luxury of the hotel with large and prominent imagery.

The search and booking process itself is quick and easy, with prominent reviews also being used to spur on consumers and encourage bookings.

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This is perhaps surprising for a luxury hotel like the Ritz, whereby a high level of service is presumed to be standard. However, its inclusion shows how important the advocacy and influence of past customers can be - regardless of hotel heritage.

Hotel Direct-Booking Pushes Really Worked and Owners Were Big Winners

The bigger question, however, is whether these campaigns will still work in 2017 and beyond; offering discounted rates can only last for so long. Hotels need to start thinking about how they can ensure this momentum continues in the long run without having to use discounted rates.
—  Deanna Ting
 Did Hilton succeed in convincing consumers to  “Stop Clicking Around? ” Did Marriott prove “ It pays to book direct “?

Did Hilton succeed in convincing consumers to “Stop Clicking Around?” Did Marriott prove “It pays to book direct“?

According to a new report from Kalibri Labs, they and their peers which launched direct- booking campaigns in 2016 certainly did.

Compiling data from its database of more than 25,000 hotels in the U.S., including validated costs and daily transactions directly sourced from the hotels’ systems, Kalibri Labs found that there was indeed a shift in consumer behavior toward brand.com sites versus online travel agencies such as Booking.com or Expedia. More consumers than ever before chose to book direct versus booking on a third-party site.

Read the full article on Skift

Hotel direct booking campaigns really work

Over the past 18 months industry experts and analysts have weighed in on the effectiveness of direct booking campaigns, but a new report from Kalibri Labs shows consumer behavior has taken a shift to favor Brand.com, meaning the effort is paying off.

A new study from Kalibri Labs shows that the collective effort of hotel companies to sway people to book direct is working. The study, “Book Direct Campaigns: The Cost & Benefits of Loyalty,” was conducted between May and December 2016, and authored by Cindy Estis Green, CEO and co-founder of Kalibri Labs, alongside Mark Mazzocco, VP of revenue strategy at Kalibri Labs.

Read the full article on Hotel Marketing

Report: Book Direct Campaigns Have Shifted Consumers to Brand Websites

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ROCKVILLE, MD—Kalibri Labs has revealed the results of a new study regarding hotel brands’ book-direct campaigns: according to the research, there’s been a consumer shift in favor of brand.com versus online travel agencies (OTAs), compared to historic growth trends, during the recent promotional campaigns. The study also revealed increased revenue for hotels during the campaign period examined in the study.

“This shift in consumer behavior is positive news for hotel brands across the country, supporting the efforts to increase use of the hotel industry’s direct channels over the past couple of years,” said Cindy Estis Green, CEO/Co-founder of Kalibri Labs. “The results demonstrate that customer affinity to brand.com is increasing, and there is an accelerated growth in loyalty membership and revenue.”

Read the full article on Hotel Business

Research: Book Direct Campaigns Drive Consumers To Hotel Websites vs. OTAs

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Rockville, Md.—Kalibri Labs released results from a new study that reveal a consumer shift in favor of hotel brand websites versus online travel agencies (OTAs) compared to historic growth trends. The change in consumer preference took place during recent promotional campaigns to attract new loyalty members with incentives to book direct. The study also revealed increased revenue for hotels during the campaign period examined in the study.

“This shift in consumer behavior is positive news for hotel brands across the country, supporting the efforts to increase use of the hotel industry’s direct channels over the past couple of years,” said Cindy Estis Green, CEO and co-founder of Kalibri Labs who conducted the analysis. “The results demonstrate that customer affinity to Brand.com is increasing, and there is an accelerated growth in loyalty membership and revenue.”

Read the full article on Lodging Magazine

Research reveals consumer shift in favor of hotel brands websites vs. OTAs

Loyalty with hotel website found to be powerful driver of demand and growth. The Kalibri Labs study sample of 12,000 hotels and 52 million transactions confirmed that channel shift occurred with more rapid growth in Brand.com and slowed growth in the OTA channel during the period the campaigns were running.

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ROCKVILLE, MD - Kalibri Labs announced that the results of a new study reveal a consumer shift in favor of Brand.com versus online travel agencies (OTAs) compared to historic growth trends, during the recent promotional campaigns to attract new loyalty members with incentives to book direct. The study also revealed increased revenue for hotels during the campaign period examined in the study.

“This shift in consumer behavior is positive news for hotel brands across the country, supporting the efforts to increase use of the hotel industry’s direct channels over the past couple of years,” said Cindy Estis Green, CEO & co-founder of Kalibri Labs who conducted the analysis. “The results demonstrate that customer affinity to Brand.com is increasing, and there is an accelerated growth in loyalty membership and revenue.”

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New study from Kalibri Labs shows direct bookings push is working

 Hotels have been trying to guide guests to Brand.com... and it's working.

Hotels have been trying to guide guests to Brand.com... and it's working.

They say if you want something done right, you have to do it yourself. In 2016, 10 of the hospitality industry’s largest hotel brands began a concentrated effort to win back direct bookings from online travel agencies as part of the “Book Direct” campaign. The effort was designed to educate consumers on the benefits to booking direct, while offering bonuses or reduced rates for loyalty members, but until now no one in the industry was sure if it worked or not.

Over the past 18 months industry experts and analysts have weighed in on the effectiveness of the campaign, but a new report from Kalibri Labs shows consumer behavior has taken a shift to favor Brand.com, meaning the effort is paying off.  The report, titled “Book Direct Campaigns: The Cost & Benefits of Loyalty,” was conducted between May and December 2016, and authored by Cindy Estis Green, CEO & co-founder of Kalibri Labs, alongside Mark Mazzocco, VP of revenue strategy at Kalibri Labs. This is the first study of its kind to look at the Book Direct campaign that looked beyond the transactional aspect of bookings, and also included an analysis of the “lifetime value” of incremental loyalty members as they relate to hotels.

  Loyalty contribution is 40-60 percent for most hotel segments, and has risen 7 percent on average the last three years, with a jump in 2016 in growth of 2-4 times prior year’s growth rate.

Loyalty contribution is 40-60 percent for most hotel segments, and has risen 7 percent on average the last three years, with a jump in 2016 in growth of 2-4 times prior year’s growth rate.

The full report, "Book Direct Campaigns: The Cost & Benefits of Loyalty," can be viewed here.

Consumer acquisition costs too high and growing, says Kalibri Labs CEO

By Elliott Mest

NEW YORK — Customer acquisition costs in hospitality can vary depending on the property, but when guests book through third parties, hotel revenue takes a serious hit. Cindy Estis Green, CEO & co-founder of Kalibri Labs, held a workshop on the second day of the Direct Booking Summit in New York City titled “The New Dynamics of the Digital Landscape,” which delved into the numbers behind customer acquisition costs and how small shifts in direct bookings can add up over time.

According to Green, the cost of customer acquisition in hospitality is an average of 15 percent to 25 percent of guest-paid revenue, but she said there are many hotels that are spending as much as 35 percent of guest-paid revenue to put new heads in beds. Green said revenue that contributes to operating profit and expenses (such as sales and marketing) consists of whatever is left after operators pay out for loyalty investments, retail commissions and wholesale commissions, leaving a tiny slice of the pie for overall net revenue. 

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30 Influential Women In Hospitality

Cindy Estis Green, CEO and Co-Founder, Kalibri Labs

Cindy Estis Green launched Kalibri Labs—a data analytics company geared toward the hospitality industry—in 2012 after spending years in the field. As the CEO, she influences the company by staying connected to the team’s activities, promoting personal development for team members in their areas of discipline and acting as a spokesperson for the industry. “I have experience and a skill set in an area that I realized can help mitigate some challenges facing hospitality today,” she said. “I wake up every day and can’t wait to get to work and move a little closer to meeting the objectives of making a difference. I am very self-motivated and when I set my sights on a target, I have a lot of persistence and a lot of energy that I train on that objective. I try not to focus on the hurdles which are inevitably on the path; I just try to work through them quickly and keep my eye constantly on the finish line.” Green suggests that up-and-coming leaders focus more on where they go than on where they studied. “Keep in mind that what you end up doing for most of your career may not exist when you graduate from university, so don’t worry if the work you do in your first five years isn’t something you want to do for the next 20,” she said. “Find a path that makes you want to jump out of bed so you can get to it. When you learn what you love to spend time on, the career opportunities will be clearer and easier to achieve.”

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