Here Be Dragons: Dangers and Opportunities in the Digital Marketplace
The digital marketplace is ever changing with constant disruption. Newspapers, digital photography, retailers and financial services have undergone massive changes as a result of consumer behavior. The hotel industry is no exception. Hotel selection happens much deeper in the sales process because consumers are gathering travel information on aggregator sites like online travel agencies, Google and TripAdvisor well before narrowing down to a shortlist. By the time the consumer decides to make a hotel purchase, he or she may have touched seven to 10 sitesand been directed or diverted by the search or information site based on which hotel(s) have a more prominent listing or a higher ranking for the destination.
Managing Acquisition Costs – the Marketplace
The bifurcation of brands in hospitality into booking brands and stay brands has been a driving force behind the escalation of customer acquisition costs. Hotel operators along with corporate and regional teams, have to navigate the digital marketplace with a new imperative to modify revenue performance evaluation. Supplementing the traditional methods of tracking operating margins and market share, managing gross margins (revenue – cost of sales) may prove to be a key to success in a dynamic and turbulent online arena