Hotels are steadily recovering from the recession, but that doesn’t mean it’s back to business as usual.
The rapid rise of online booking and reviews in the past several years has sharpened competition, as travelers consider service, price and location on websites visited by hundreds of thousands of potential guests.
The web has given small hotels a better chance of competing with their larger counterparts for out-of-town travelers, but all owners need to be constantly vigilant about protecting their online reputations.
Amber House Bed and Breakfast, a 10-room inn tucked into a residential street in Sacramento, Calif., has seen its business transformed by online exposure.
When Judith Bommer bought Amber House in 2004, she quickly realized she wasn’t reaching many customers by spending the majority of her advertising budget on Yellow Pages ads. So she began scaling back her print ads, and instead started advertising on Google and TripAdvisor while working with online booking sites.
Nine years later, 50 percent of her business comes from the internet, Bommer said. The hotel now sits at the top of the TripAdvisor results page for Sacramento bed and breakfasts, and has an online ad allowing customers to easily find its phone number and website.
Business at Amber House dipped during the recession but has recovered to pre-recession levels, she said, adding that positive reviews of her hotel’s service have helped draw people.
“All the marketing we do is online,” Bommer said. “We don’t do any print advertising.”
Angela Welch, who manages the 16-room Sterling Hotel in downtown Sacramento, also advertises with Google and TripAdvisor, and does about 25 percent of her booking online.
Advertising with Google is inexpensive, because the company charges a fee only when visitors click on the link to the Sterling Hotel’s website, Welch said. The search engine ads, combined with increased use of online booking, has changed the mix of guests at the Sterling. Welch said the hotel once depended heavily on business travelers and weddings but now pulls in more tourists, who tend to book online.
Welch said revenue rose about 20 percent from 2011 to 2012. This year so far, it’s up another 10 percent. Today, about 70 percent of the rooms at the Sterling are occupied each night, compared with about 55 percent in 2011.
Welch attributes the improvement to increased online advertising and the end of the recession.
She reaches out to customers and builds the hotel’s reputation by monitoring online customer reviews and responding to them in a timely fashion.
“Whether it’s good or bad, it is good to respond to (show) that you’re paying attention,” Welch said.
By getting good reviews, smaller, independent hotels like Amber House and the Sterling can vault to the top of search pages on such popular sites as Google, Expedia and TripAdvisor. They can also take out paid advertisements on TripAdvisor that will showcase their hotels’ contact information alongside customer reviews. Google’s AdWords service allows hotels to target specific keywords that potential guests use when searching for hotels.
Larger hotels are also highly conscious of their online presence, and are fighting to stay at the tops of those pages, too. But because internet ads are relatively inexpensive, it is harder for them to dominate.
“With AdWords, the quality and relevance of an ad are just as important as the amount an advertiser is willing to spend,” Google spokeswoman Winnie King said in an emailed statement.
In this changed market, consumers themselves possess unprecedented power. The savviest aren’t just looking at online hotel reviews; they’re scrutinizing and comparing prices using multiple online booking sites, said Anthony Dimond, a hotel adviser and asset manager at Horwath HTL, a hospitality consulting firm.
The recession made both leisure and business travelers extremely conscious of room rates, and forced hotels to be increasingly competitive with one another, Dimond said. Travelers are getting better at shopping around, and hotels have taken to hiring revenue managers that monitor room rates to make sure they’re competitive with other hotels in the region.
The rise of online reviews also has forced managers at large and small hotels to be ever-vigilant and in constant communication with their guests, said David Jones, the director of hospitality management at the University of San Francisco.
“Ten years ago, if you had a bad experience, you would tell nine people about it,” Jones said. “Today, though, you have a bad experience and you post a review, you’re telling hundreds of thousands of people about it.”