Hotels Com Marketing

     

Video Transcript

Steven Quach: Our industry is changing, my industry is changing in terms of travel. We are walking through airports, we are getting out of our house, walking through airports, getting to the hotel, everything seems little bit easier now, right and lot of it is because of the phone. And so mobile is not going anywhere. I have got an obligatory mobile, gross slide there, you have heard it before, it's huge, it's blowing up, and it's only growing more and more. In terms of smartphone penetration, latest number is 61% mobile users have a smartphone. Couple of months ago I was giving a presentations and I said one in two, I can't even say that anymore because I have to say more than one in two users have smartphones now because it's 60%. From a global standpoint, it's definitely getting there as well. You think about a lot of third world countries and stuff like that don't have great cellular infrastructure, well, those guys are starting to come along as well. Every single one of those people I stay on phones, most of them are smartphones. So I think recently smartphone sales have actually exceeded feature phone sales for the first time ever on a global basis, and so you can see the global penetration actually come up too pretty soon.

And then when you talk about tablets and that sort of explosion, I mean there is human penetrations, that took smartphone 7-8 years to do, now you have got 40% of online users have tablets, so that's going to continue to sort of hockey-stick left and upwards. So I am sure you guys believe me at this point that mobile is here to stay and it's going to be pervasive, it's ubiquitous and it's going to take over our world even more it has already, we just have to be kind of okay with it.

And so from a traveler’s standpoint just sort of tying it back to what I do, traveler’s heart mobile. They love their mobile devices. Approximately 70% of leisure travelers and business travelers either research or book on a mobile device, so that's pretty high. 98% of us bring our smartphones or tablets with us when we are on vacation. That seems pretty obvious. What's not obvious is why that's not 100%, I don't know who they spoke to, I got a smartphone but I leave it at home, in a blog, yes, weird. And so not only do we bring it with us but we also use it a lot, it's not like we leave it in our luggage or in our suitcase and we never see it again until the end of the trip. So travelers heart mobile.

So it's really no wonder that travel leads the category–all categories in terms of researching and booking on mobile. And so it's a little bit of surprise though, I knew it would be high but it beats like entertainment, it beats retail. I mean I am on guilt all the time and I am on Roux La La all the time and I am buying stuff in bed, there is very little serve incentive for me to get out there and deal with a mall anymore, and so I am a little bit surprised there but travel actually beats it, retail is third. I don't know what entertainment is to be honest because you got music and stuff down the list but travel is number one in sort of leading the charge there. Travel apps are going faster than others as well. I mean that makes a lot of sense too, given everything that we have been talking about. If you are in the app store, just do a quick sort of survey, when you are in the app stores, you see many more travel apps in there than any of the other categories, except for photography and I mean you guys can attest how many photography apps you guys probably have with Instagram and all that stuff and all the filter ones. So that's leading the charge but travel is not too far behind.

And so for bookings, just from a revenue standpoint for the industry, it's going to exceed $8 billion this year, so little less than three times growth, 300% growth within less than three years. That's huge. And, in terms of Hotels.com, we are not only sort of following this growth and sort of along for the ride, but we are actually driving it as well, because we have seen 700-800% growth in mobile orders in the last three years. So its big business and we are invested in mobile because we know that's kind of where the future is, it's the present and the future really because more and more of our customers are accessing our content, with their mobile devices, either tablet or phone. Right now, see our official numbers like 1 and 5 for orders are something like that, it's actually a mobile order. It's actually more than that but that's the official line and our strategy is pretty straightforward, it's we want to be your travel ally, wherever and whenever you need us, and so we have mobile web experience that looks great on all devices, we have apps out there that work on all devices, and the apps are different depending on the device. We have tried to really take into consideration into sort of the native features of each device and kind of what it does well and we incorporate them to design.

So it's unique and sort of enhanced experience no matter if you are Android user or Windows user or iPhone user. So after 35 plus languages globally, 200,000 plus hotels at the touch of your fingertips, hotels near me which really answers the call in terms of like last minute bookings so you can find things near you GPS location, and the robust filtering and search capabilities, and fast and easy payment options. I want to talk about payment and sort of the whole revolution that we are experiencing right now because it's a big one, it's definitely affecting our category but you know for retailer, brick and mortar retailers out there, probably even more so with some of the NFC technology, that's on the horizon but payments is a big one for us. We implemented PayPal not too long ago, many sites lets you sort of store your payment information, that's huge. Something so basic as that is going to promote your loyalty and retention because it's that much easier to book. So why not go back there and give all my information one or two clicks and you are done, right, on a mobile device it's even more exaggerated. You do those extra steps and you concise that purchase process that flow and you are going to see lift, leaps and bounds. We were voted best travel app not too long ago by our DotCom readers and those Readers Choice Awards all voted by all of you guys and so that means a lot.

So this is essentially the traveler journey, so we are talking about the inspiration, planning stage, you don't know exactly where you are going, you want to go on a vacation, you may have sort of inkling in terms of timeframe, and then obviously it's shopping and booking and then it's travel day, trains, planes, and automobiles, and then you get to your hotel and then you are on your destination and before you know it's your home, and you are exhausted., and you wish you had a vacation after your vacation, that's typically how it goes. And so from a planning stage, more people are doing it on mobile. The stats really speak for themselves, 62% of people survey say, they research travel on mobile and so the older way to do it, like, hey, travel guides, magazines, friends and families, where did they go, how did they like it and that kind of graduated into user generated content, sort of same concept, sort of tips from trusted sources but now it's like the wisdom of crowds, now with Trip Advisor and Yelp and the blogs, so you know exactly what you are getting yourself into and obviously people still use Google and online but people are doing this on a mobile device now, on a tablet.

Facebook and Social is blowing up, we are going to talk about that in sort of a dedicated way in a book. We can't talk about Facebook unless you talk about–or you can't talk about social unless you talk about local, unless you talk about mobile and that's why these ridiculous terms come up like mobocial and somolo, I hate them all. I shouldn’t have put them here, because I just perpetuated like that, what I hate but how to talk about it, and then deal driven demand is something new that we are seeing as well with mobile, because people aren’t deciding where they want to go first and looking for the best price, increasingly people are sort of being open minded and saying, what has the best price and maybe I will go there.

So social is the new word of mouth. Like I said, it's kind of like that wisdom of crowns but it's just curated just to your social network and so more and more people are taking to Facebook to Twitter to seek out travel deals, right, 30%. 52% people say they change travel plans based on the things that they hear on their social network, and then 50% travel companies like H.Com have taken advantage of this and actually directly drive bookings from our social pages. It wasn’t too long ago where sort of our industry as marketers didn’t know how to treat Facebook, it's like hey, they obviously have the traffic, but how can we monetize it. It didn’t seem like these people were in the mood to sort of transact and interact and click off and purchase. I think that's changing. You guys saw Facebook’s stock is finally up over IPO because they demonstrated the ability to monetize their audience, a lot of it's mobile, it was all mobile driven. So just to tie back to mobile. Social is the new word of mouth and guess what, most of use social on mobile, 78% of Facebook, 65% of Twitter, and if you guys are anything like me you use social, you access these social sites exclusively on your mobile phone. I have logged into Facebook on PC maybe three times in my life but every day on my phone several times a day.

So from the social standpoint, H.Com is all in, we understand that shared images inspire travel. Social tools capture intent and so we have done–one of the cool things we are doing with Twitter is we routinely host these Twitter hacks and essentially it has got our customers, our followers, anybody who wants to join in but then also like travel professionals and travel bloggers as well, and we all sort of get together on Twitter and we talk about travel hacks like tips. Tips to make the best out of your experience, to get the best deal, and then lot of it is like mobile travel hacks, you should want this long, that sort of thing and there are sort of couple of examples of Tweets in travel hacks and we hashtag the travel hacks, so you can kind of reference all the tips on the fly.

From a viral standpoint we really take an advantage of the mobile explosion because we actually–we are doing a web viral series that we have done since probably 2011 something like when we started and really it's a simple concept. I mean it's just–it's every day situations that we are in where you may need a mobile booking. One of the examples was like, you are hurling yourself off a plane and you are free falling to earth, and you forgot, hey you forgot to book a hotel room, that happens to all of us, and so he actually tries to book, and he is successful, he doesn’t die, and so we did it again with somebody, Enniebel [ph] foam Jack Ass, he signed on to Run through the streets of Pamplona with the bulls and then he forgot to his hotel room, so he has got to do it while not being impaled. And then we did again recently in our APAC, Asia-Pacific team actually did it this time, so they got sort of the Jack Ass equivalents, they are called the Tokyo Boys. I don't know if you guys have heard of them, they are online menu and stuff like that before but they did it again and I just wanted to sort of premiere here. There you go. Again, mundane situations that we are all in. So next time just remember your–when you are river rafting without the raft just bring your cell phone, that's how you–Forget about the raft you just need your cell phone, this is what we are trying to say.

So from a shopping and booking standpoint so researching, we know from the other slide that most people research and then book on PC or book on tablet, that gap is closing, more people are actually booking as they become more comfortable but it's pretty big amounts, so 42% of travelers actually book on mobile and again we are seeing that last minute demand that I was talking about. So with hotels, and we will actually talk about it in the next slide and then I want to talk to you guy about the mobile wallet and the digital wallet using your phone and sort of cloud services but there is a payment revolution that's on top of us and I think we should to understand that, hey, this is the generation, we are seeing this kind of next turning point for payments and it's going to change things for years to come.

So, Last-Minute Booking … Extreme edition. You guys saw our extreme booking series, right, and so that's what we are seeing from last minute booking standpoint as well. Over 2 and 3 bookings are actually for the same night on a mobile device, so over 60%, right, so you know it's an urgency situation, it's a last minute situation. For the most part it's one night stays on mobile. 81% of those are within the hotel, a lot of which are in the parking lots, some of which are in the lobbies, right, but obviously you are in need and you are checking to see if you have a great deal. If you have it great and if not, it's okay, you will probably end up booking anyways if you are in their lobby but we also see a lot of impulsive demand where let’s say it's a weekend because Friday and Saturday are the busiest booking days, well, maybe you and the wife can get a baby sitter and go to a hotel and go to dinner and have a nice night. If it's a good deal, let’s do it and if not, we won't. So sort of fickle and impulsive but that also means that it's incremental. Otherwise, it's just the shift, they would have booked anyways and now you are just giving them a deal. So there is some incrementality there as well we have seen in numbers but the extreme addition. We have always observed this last minute booking with hotel, so if you observed like your own behavior, you booked like first and then you wait two months out or two weeks out then you book hotel. Now we are seeing those bookings are even more condensed and getting more exaggerated because of mobile.

So from the payment standpoint there are some competing technologies, and if you go online you will see the debates, but its cloud versus NFC. Cloud is basically PayPal. It’s like a universal web based store payout, that’s exactly what it is. Google Wallet is coming into the picture and Google has a tendency to when they get into something to disrupt and to blow it up and make it mainstream, so its going to happen, its going to be huge. So, you know, really with Cloud technologies such as those it’s really convenient to make a purchase online, but it’s really clumsy at brick and mortar. There are some stores who have tried to integrate it and make it work. Its just–its not–you should just pull out your credit card and swipe it, so that much quicker, if it’s a new development or new technology it has be to be like 10 times better than the other one, it has to be much better and much more convenient. And so Cloud payment at the grocery store just doesn’t make sense.

Now you have NFC which lot of people are calling tomorrow’s technology, its just device to device connecting. Its kind of like blue tooth sort of but essentially its really convenient at brick and mortar as long as the point of sales systems are integrated and there is readers there but essentially what you do is you just take your phone out and get work done. And then you know with NFC you could actually store all of your sort of coupons and loyalty things all there and so if applicable once you pay for it, it takes into account all those coupons that you have in store as well, it instantly sort of processes.

Now, there is a cost issue with that, again from like retrofitting all of your existing point of sales system to make this happen. So right now the demand doesn’t really warrant the cost. And so when you think about these two technologies it’s very different. And so I don’t think one can replace the other. I think they will converge. I don’t think they will compete. I can see banking institutions actually coming up with their own getting to the game. Visa and all the credit card companies are already getting behind NFC. So what your banking institution will do is they will have–they are tier checking account to their own sort of PayPal, their own Cloud service and then integrate with the credit card companies that are already applicable or workable with NFC. So, I do think that there is indeed convergence and on top there is just sort of the timeline, last 100,000 years of payment and you can see credit cards is really when it started turning the corner, I think that’s the last sort of more recent huge event for payments, and I do think we are inside the next revolution and you guys will think back like 10 years from now or 5 years from now. But this is the moment when it all started to change.

We are seeing from a shopping and booking standpoint deals make a big difference, so interestingly you will think that you are in a buy and you need a last minute hotel and so you are going to go for the cheapest hotel. That’s not really the case. What we tend to see with deals and coupons is that users like to trade off. And so you know they want to stay–they will stay at a 4 star versus a 3 star because they got a good deal even though the total price is still more expensive than some of these other selections. So that’s easier on the margins, because when you do these offers you take it out of the margin, while the property mix is higher and it’s a higher margin property that they book is traded up and sort of the net effect of the margin isn’t so bad. So from the business sense standpoint it actually makes a lot of sense for us to do this. So we have a lot of products that sort of speak to kind of these behaviors, we have Flash Sales, we have Tonight’s Local Deals that are specific to mobile and that of course kind of answers that same or next night booking behavior that we see. We have mobile exclusive deals so we work with the hoteliers to actually give us a better deal on mobile than our desktop. We have Deal-of-the-Days. And then value adds really play a big part as well. So didn’t have to be 30% off, it could just be free breakfast or free Wi-Fi or something like that and we that sometimes that’s enough to sort of move the need and have you book one property versus another.

And so now you are at your airport, right, and there is notion of this invisible traveler and that’s what mobile is facilitating and so in this example I will just do a walk. I haven’t let the house shift but there is a Gate Change, so now I am not going to drive to the wrong gate park, so now I am actually getting into the right gate on time. I have already checked in at this point using my AA app, I have got my boarding pass already setup. And if you are anything like me and you are afraid that your app won’t open or crash and you are in a buy-in at the gate, just take picture of it or you could add it to Passbook. And then once you arrive at your destination you are about to get into a taxi cab you have added your hotel card to Passbook, and so now you have all the information, the name, the ID number, address, phone number, all that stuff that you can give to the cab driver.

So its been very, very easy up to this point, we probably haven’t really talked to anybody at this point I mean other than like the security guys. When you get to the hotel its kind of the same concept, right. We get into a place, we are going to skip the front desk all together, go straight from the taxi straight to your room, open the door. That’s going to require some of the NFC sort of retrofitting. So if you think about all the doors that will have to be retrofitted with NFC reader. For now though there is interim sort of Band-Air process that chains like Marriott is doing, so I am sure you guys have read this, Marriott has been testing this sort of kiosk approach, so the guest checks in via mobile prior to arrival. They send you a barcode ID to your phone and then you go to the kiosk and then you scan your barcode and you go straight to your room. That’s kind of the Band-Aid approach, right. But eventually you are going to get to the place where you just walk straight to your hotel room. And then once you are there, once you are in your hotel room its really bring your own device, whatever device you have you download their hotel guest app and at point it will give room notifications or issues, you know you can access all your concierge information through there as well, interim controls to use your phone to actually close the blinds or to make the room cooler or hotter. Anything–pretty much anything you want, even from entertainment standpoint, instead of sifting through the TV to see what movies they have they may give you a good deal to just download the movie straight into your tablet and you can watch it there. And the room service anywhere is kind of nice. You know before you kind of change into your room when you needed something and you have to wait for them to get there, now they know where you are at, because they’ve GPS located you, so whatever you are asking for they will spring it to you, you could be at the pool, you could be at the gym whatever, right, that’s when they will bring you what you need whatever you requested. So that’s phenomenal. This is coming soon. So Marriott has done 30 properties to date with this kind of kiosk model and they just announced that they are going to retrofit that to all 325 properties worldwide, so it’s happening.

Now you are on your destination and everything is on demand and realtime. So remember the days when you had the maps, not too long ago, right, I mean think about it, maybe like 5 years ago, you bought a map and like you are walking down the street and you are like do I turn on this corner or that corner, you know there was no blue dot that will sort of pulse in and tell you if you are walking in the wrong direction either. 68% of the people use Google Maps or mapping service on their phone in order to get directions and to find where they are going. You can do walking directions too which is great obviously. Also, you know there is really no excuse for you to eat the soggy calamari at the tourist trap restaurant anymore, right, because before you walk in the door, you know unless and you are ignoring all the red flags obviously but before you walk in the door you just look at the Yelp review, they are terrible or it is really good, or if you go to place called Philly Bistro, it’s a great restaurant and you should get the burger. So you get in there and check-in, right, because you are starving and starving, lets check-in, 46% of the people do that while they are on trip. ________[00:22:38] you got to take a picture of that greater burger. But then beyond that you know like you are on the trip and you are taking videos and you are taking pictures and you are posting them in real time, so not too long ago, you would go on a trip and then you would go back and then you would print out your pictures and then show your friends and family, you had a great time is awesome. They are experiencing this with you in realtime because you are posting along the entire trip, right, so there is no need for that. It’s phenomenal. So 72% of the people are actually doing this, okay. Huge numbers.

So as a marketer when the user is on destination that’s a great time to reach out, it’s kind of that all sort of tired you know goal of the right place, right time, right message right. But you know with the phone you are able to just sort of do that with unparalleled precision. So this is an example. There are two examples, so this Jason Hart guy is at the Luxor, you know what I mean, he probably Tweeted something about being at the Luxor or maybe he checked in. Luxor reached back out to him right away and said ‘hey man, try the pigs in a blanket at the CatHouse. They are a fan favorite. I’m also partial to the mac & cheese balls’. So they’re having–that brand that hotel is having a direct conversation with him while there while he is on their property. I mean talking about cross selling and merchandizing and all that stuff, that is powerful, powerful stuff. And I don’t think Jason Hart minds it. Now the stalker or a friend thing is an interesting thing because Jason would probably be like why are you stalking me. Now if Luxor said ‘hey you get 40% off in those pigs in a blanket’, he would be like thanks friend! You know what I mean? That’s the distinction, are you are a stalker or fan, are you valuable to me. Like you are reaching out to me but are you saying something valuable or you just stalking me and irritating me and then I am going to turn you off and I am going to turn off my push mail or something like that.

McDonald’s did an interesting thing last year. This was in New York. And somebody is walking down Times Square. So, yeah, somebody is walking down Times Square, you get within like 10-15 feet of McDonald’s, its cold obviously, its 9:50 in the morning, and they are saying ‘hey its 36 degrees outside, and you are nearby, why don’t you stop in and get a hot coffee’. And they geotargeted that–they geo and location targeted that person up to 10 or 15 feet away. That’s pretty powerful. And again no offer. I mean what’s the that’s stalker, all right. So make it valuable, even if it is 5-10% you know something that’s valuable or give away a free biscuit with the coffee or something like that, I don’t know, but there needs to be some value for the user otherwise they will sort of quickly sort of turn against you.

And then from a post destination standpoint now it’s all about feeding this beast that we have been talking about you know sort of starting all over again. So now you are leaving hotel reviews, 46% of people review hotel reviews, 40% people attraction reviews, that same amount of people leave restaurant reviews, post photos to social networks. So now your friends and family who have been really tracking your vacation, sort of experiencing it with you all along, now they can actually see your hotel reviews and say, hey may be I will do it because so and so really liked it, and so it starts all over again for another person.

So that’s I mean its pretty obvious and I think you don’t realize you are doing a lot of these things but you absolutely are because I think we are all pretty savvy but it has definitely changed the way we travel and they are done in a really short period of time. And so for a marketer like Hotels.com you know we understand that hey this is providing the growth for us. You know there are a lot of our marketing channels that are still delivering massive scales like SEM Google, we are never going to stop doing that, but the growth has kind of decelerated, right, because its very mature, its mature channel, its mature industry and now we see mobile is coming up and its nice, so one is coming down and one is coming up which is always good. Another kind of unique sort of counter play with that is typically with our business the bookings and activities are concentrated during the week and then people did book Monday through Friday and then they are doing things on Saturday and Sunday so they don’t really get on your site. With mobile what we see is we see the opposite, we see the trough during the week, spike during the weekend. So I mean that’s huge right because you have got these complementary plays where one drops off the other picks up.

So, it’s huge for us. We are not only following the growth, we want to feed it, we want to feed the beast and so we are constantly sort of in the lab trying to iterate and innovate on our app. There are lots of good things coming on the horizon. We have been really good I think at the presale side like hey you need a hotel room, you are in a bind, lets give it to you, we will try to get a good deal as well, but now we are working on the on trip stuff. So for our business most of our users actually drive to their destinations. That was surprising to me when I first started, but it completely makes sense because we only do hotels, so you don’t need flights or anything like that, so lot of people are just like drivers arriving at your hotel. So in an order to sort of speak to that US centric crowd you know we are going to we are going to start incorporating like road trip planning features within our app as well. We want to be pervasive and your ally even after you have booked with us and so you know you could sort of plot your destination right in and look things along the way the gas stations and attraction and all that stuff. So we are working on that and it should be good. But yeah, we think mobile is here to day, I mean I think its pretty obvious, its going to continue to sort of eat into the rest of our business but we do think that its incremental in its lift and its not just a shift, so that’s all I have got.