Deconstructing Distribution - It’s All About the Customer

Presentation by Robert Cole of RockCheetah at Leading Hotels of the World Global Sales, Marketing & Distribution Conference held May 15, 2011 at Kameha Grand Hotel, Bonn Germany.

1. Leading Hotels of the World Sales, Marketing & Distribution Conference Deconstructing Distribution It’s All About the Customer Robert Cole | RockCheetah Kameha Grand Bonn | May 15, 2011 Image: Brave Heart (Flickr)
2. Deconstructing Distribution • The Customer – Affluent Travelers – Personalization & Customization – Multiple Stages & Touchpoints • The Channels – The Splinternet – SoLoMo – Discounts • The Future – New User Experiences – One Size Does Not Fit All May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 2 Image Credit:
3. Pitfall: SOS (Shiny Object Syndrome) May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 3 Image Credit: • Every New Idea is Not a Good Idea
4. Pitfall: Egocentric Customer Relationship May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 4 Image: i-love-cartoons.com
5. Pitfall: Customer Engagement ≠ Marriage May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 5 Image: Defence Images (Flickr)
6. The Customer: Affluent Travelers • 6.44 million US Affluent Online Travelers – 89% Take At Least 1 Leisure Trip per Year – 62% Have Investible Assets of $1-$2.5 Million – 95%+ College Graduates | 45% Post-Grads – Average Age 58 | 14 Years Above US Avg. – 73% Manage Finances Online – 45% Make Own Investment Decisions – 30% Worse Off than One Year Ago May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 6 Image: Curtis Gregory Perry (Flickr) | Source: Forrester Research - Selling To US Online Affluent Travelers Poses A First-Class Challenge To Travel eBusiness (January 2011)
7. Affluent Travelers: Value is King May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 7 Source: Forrester Research - Selling To US Online Affluent Travelers Poses A First-Class Challenge To Travel eBusiness (January 2011)
8. Personalization & Customization • Guests Are Not Frequent Guest Numbers • Interactive Conversations Can Get Complicated • True Customer Engagement Doesn’t Scale Well May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 8 Image: kagey_b (Flickr)
9. Guests Have Multiple Personas May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 9
10. Multiple Travel Phases (Seven) May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 10 Inspiration Research Planning Validation Booking Travel Sharing
11. Multiple Hotel Touch Points (Six) May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 11 Pre-stay Arrival On- property In- destination Departure Post-stay
12. Channels: A Small Sampling May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 12 Image: Michael Coghlan (Flickr) | Source: VFM Leonardo
13. SoLoMo – Distribution Gets Tricky • Social – Personal Likes / Group Likes / Similar Likes – Cannot Fully Control Message in the Wild • Local – Proximity Based Offers – Context-Sensitive Offers • Mobile – Variations – Form Factor / OS / Carrier – Mobile Web (HTL5) v. Native Application (App) May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 13 Image: Jason Mcdermott (Flickr)
14. SoLoMo Travel Factoids • Leisure Travel Search – Average is 22 Sites Over 10 Sessions • Mobile – 19% Hotel Queries From Mobile Devices – IHG Europe – Adding Click to Call +91% Revenue • Local – 70% Mobile - 1 Person, 1 Night, Same Day • Social – 80% of Travelers Participate in Social Media – 49% Book Based on Others Experiences/Reviews May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 14 Sources: Forrester Research | Google | Ipsos/OTX 2010/2011
15. Social Media: Cynical Perspective May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 15
16. Social Media – It’s All About Trust May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 16 Source: The Nielsen Company – April 2009
17. Splinternet – Walled Gardens May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 17 Image: Stephen Bowler (Flickr) | Source: Forrester Research “The Splinternet” (January 2010)
18. Splinternet – Advertising Impact May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 18 Image: Stephen Bowler (Flickr) | Source: Forrester Research “The Splinternet” (January 2010)
19. Discounting Considerations • Do Discounts Translate to Consumer Value? – Does Channel Absorb Discount as Profit? • Group Buying – “Have never seen a profitable Groupon deal for a travel site” – H. Harteveldt, Forrester Research • Flash Sales – How Exclusive is the Club? Qualified User Base? • New Models - Micro Auctions – Off & Away – Is it a Game, a Con or New Model? • Packaging – Protects Retail Pricing; Requires Strong Rules Control May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 19 Image: Christopher Sessums (Flickr)
20. The Future – New User Experiences • Voice Commands – Google Android Voice Actions • Near Field Communications – Interaction / Authorization / Payment • Integrated Travel Experience – Apple iTravel • Traditional Channels – Travel Agencies / GDS / Telephone May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 20 Image: Iris Shreve Garrott (Flickr)
21. Future – Voice Commands May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 21
22. Future – Near Field Communications May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 22 – Openways (Example) – Pre-Arrival Contact – Engagement for Stay – Supports All Cell Phones – Uses Existing Locks – Cards Keys Still Work – More Secure than Cards – Code Change – 12 Secs – Future Support for NFC Unique Sound Pattern • Integrates Distribution / Engagement / Access Mobile Phone Key
23. Apple iTravel – End to End Control May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 23
24. Apple iTravel – Traveler Identity May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 24
25. Apple iTravel – Airport Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 25
26. Apple iTravel – Hotel Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 26
27. Apple iTravel – Cruise Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 27
28. Apple iTravel – Conference Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 28
29. Apple iTravel – Event Experience May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 29
30. Apple iTravel - Payment May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 30
31. Apple iTravel - Merchandising May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 31
32. Apple iTravel – Passive App Delivery May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 32
33. Future - Traditional Channels May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 33 • Traditional Travel Agents - Specialization – Origin (Local) v. Destination (Experience) – Type of Travel – Luxury / Destination Weddings • Online Travel Agencies – Rate Parity / Last Room Availability / Max. Discount – Order Takers or Order Makers? • Global Distribution Systems – Critical Role for Air Vertical & Corporate Segment – Air Model Change – Cost Shift to Intermediary • Telephone – High Touch / Customer Care – Mobile Click to Call
34. The New Customer • Seeks Value • Is More Sophisticated & Empowered • Desires Unique Experiences • Demands the Lowest Available Price • Has Questionable Brand Loyalty • Has Situational, Itinerary-centric Needs • Defines the Degree of Engagement • Demands Seamless Cross-Channel Access May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 34 Image: Sergey Galyonkin (Flickr)
35. New Distribution Challenges • Must Have Presence in Favored Channels • Consistent Cross-Channel Brand Message • Consistent Online & Offline Experience • Value is a Highly Personal Assessment – Time, Convenience, Simplicity, Quality, Cost • Efficiently Managing App & Channel Silos • Competition May Behave Irrationally • Distribution Costs May Shift to Subscribers May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 35 Image: Toni Blay (Flickr)
36. Navigating Distribution Obstacles • Three Core Distribution Goals – Easier – Faster – Cheaper • To Be Successful, Luxury Hoteliers Must Control – Retail Pricing Structure – Access to Visual & Descriptive Content – Distribution Rules – Access to Rates & Inventory • Only Point of Focus - The Guest – Why is Guest Using that Channel/Site/Tool? – Is Guest Able to Accomplish that Goal? – Why Not? May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 36 Image: The U.S. Army (Flickr)
37. It’s All About The Customer Questions? Copies of the Presentation? Comments? Robert Cole mail: robert@rockcheetah.com phone: +1.262.309.9560 skype: robertkcole twitter: @robertkcole web: rockcheetah.com/blog/ May 15, 2011 – Bonn, Germany Leading Hotels of the World • Distribution Robert Cole | RockCheetah - Page 37