César López11 minutes read

The deals are more efficient confidential: So we tried

Do confidential deals attract new clients? Do they fill empty rooms which, otherwise, people would not use? How? Must the price be lowered? By cooperating with a Madrid hotel, Mirai has experimented, leading to interesting results. In addition to gathering facts worth analysing, in thirty days we have explored and made comparisons, discovering how exactly to get this confidential rates to possible clients.

We are talking here about tariffs that are invisible to a general audience, though methods exist which enable them to reach prospective clients. We have explored two options: e-mails and Adwords.

We deal with cheaper tariffs (which make them more attractive and lead to more bookings). Any possible negative effect is compensated by less distribution costs, for they are launched on the hotel’s Website, marginally cheaper than the usual commissions charged by agents.

We sent two messages for comparison, one with and one without a confidential offer:

The hotel has 1500 subscribers: these are clients who have already stayed at the hotel, and who wish to receive offers and news, and have provided their e-mail address for future contact. And we divided them at random into two groups with the same language proportion. We sent a different message to each group.

E-mail Group I (containing a general message)

Subject: “Come back again to Hotel X in 2011”

When the user clicks on this message, the usual public offer page appears.

E-mail Group 2 (with a confidential offer)

Subject: “An offer in confidence from Hotel X”

When the user clicks on this message, he/she is passed to a specific page (not public) where more information about the offer is to be found.

In order to make conditions fair and equal, we sent the message at the same time, and to the same number of different persons: the first message on 18 January, and the next a reminder one week later in which urgency is emphasised in Group 2, to encourage the making of reservations before the closure date of the offer. This second message reads, “Last chance: special confidential offer from the Hotel X”

Both types of e-mail returned radically different results:

*(the cost in this case is the e-mail marketing service: Costs of reservation via the hotel website must be added)

These figures prove the surprising efficiency of a confidential offer. The conversion rate in Group 2 is abysmal compared with Group I.

  • The average price is affected, dealing with a tariff 16% less than usual, but this should be seen with caution; The average price is hardly representative as it is based on a single reservation.
  • Even so, the final net result for the hotel is situated above more expensive intermediary channels. The same price of €92 costs little, as it appears on the hotel website. In Booking o Expedia it easily converts into a net price of €70.

And the cost? Expense in the preparation and sending of the initiative is very low. At Mirai we offer an e-mail marketing service for just €30 (which means that each one of those euros generates €210, or, which is the same, a cost of 0.47% on what is generated.

If it is so effective, why do not the hotels launch a general distribution of confidential offers by e-mail?

  • Because of a lack of knowledge in this field. Among experts, e-mail marketing is considered one of the most effective methods of distribution. The big chains and their intermediaries know this well, and make good use of it (in the case of the intermediaries, assisted by the hotel’s paying commissions), whereas on the independent hotel websites almost nobody has stopped to think of the convenience of this method. It would be worthwhile for the hotel managements to subscribe to newsletters such as the Booking.com newsletter where they may find a promotion – for their own hotel.
  • For lack of subscribers. To make a list of those to whom news and offers should be sent is a slow and continuous task which the hotel must do with foresight. The majority of smaller hotels are unaware of the importance of this, and when they finally are convinced, they enter the medium of e-mail marketing without a database.
  • Because of resistance to investing in their website. Many managements think that the main attraction of their web is its cheapness as a medium, with costs inferior to those of the usual intermediaries. As a result, they are averse to invest in it, in the hope of maintaining this saving, though they seem to have no aversion to spending fortunes with Booking & Expedia, much to the latter’s financial advantage. In the case of e-mail marketing the contrast is clearer, given the low cost of investment, and high returns.

Adwords Advertising compared: with and without confidential offers.

We wished to go further in our experiment. Why not distribute the confidential offer in Google ads., and test the effect?

As with the e-mails, we prepared two kinds of advertisement, launched them under the same conditions and waited thirty days for comparable results.

Group I: advertisments without confidential offers. Example;

Hotel X Madrid

Official website, Madrid, Hotel X, 4*

No intermediaries, no booking fee

www.xxxxxx.xxx/Madrid

Group 2: Advertisements with confidential offers: example;

Name of hotel. Discount -25%

Book with this promo code: L24444

Official hotel website

www.xxxxx.xxx/Promotion

Publishing a confidential tariff breaks with rate parity? Possibly yes. It means crossing the frontier, take a daring step forward in the exploration of possibilities . . .though for once it is the hotel which makes the move. Previously it was the intermediaries who innovated in order to break with current parity pricing practices, in their favour: hidden prices in packages, discounts and free nights in their loyalty programmes etc.

In our case, the use of Adwords in the distribution of confidential offers has been a precise exercise to obtain data research. The decision to extend the initiative is the hotel’s.

Just as in the case of e-mail marketing adverts. with confidential offers (Group 2 above) obtained better results:

offers for hotels

*(the cost refers to investment in Adwords, and does not include the cost of any system of reservation in the Web)

The conversion rate in Group2 again demonstrates best capacity for transformation into reserving via adverts with confidential offers.

Curiously, the value per reservation is bigger as well, that is to say, either it deals with reservations for more rooms, or for a longer time.

The average price hardly varies – a little more than 1% difference. The explanation may be that an advert containing confidential offers does not always end up changing into a reservation fitting that tariff (the user can finish choosing another less restrictive tariff, for instance). To put it another way, these adverts are more efficient in generating reservations, including those with tariffs that are not advertised.

Adwords is especially sensitive to cost. Maintaining them low is the chief necessity in this battle, as the online professional knows. It is paid according to the number of hits. Very well, adverts with confidential offers bring lower cost, almost half in terms of what they produce. This is what makes them attractive for use in advertising campaigns.

Affordable for any hotel

To make this experiment we have needed:

  • A hotel website with a booking system which permits confidential offers protected by a promotional code.
  • To design a landing page within the hotel website, created specially for the occasion, where the user lands after clicking on the ads or e-mails. (This page is not accessed through any other part of the site. Only those who provide these ads or e-mails are thus enabled: fear of unlicensed entry by the unwanted is excluded).
  • Adwords: One account and one investment. These days many hotels already distribute via their advertisements. For those who do not, this could be the best time to start.
  • One tool for the distribution of e-mails. In these simpler versions the cost is much less. A free free trial is often provided. In our case we used Constant Contact
  • A list of subscribers. Clients interested in the hotel and wanting to get offers. The majority of smaller hotels are still not conscious that this list should be as large as possible. It is a shame that our chosen hotel only has 1500 subscribers. In just one test, half of these generated €5,600. This figure could have multiplied according to the number of subscribers.
  • Some time is needed for preparing the offer, ads., landing page and e-mails. In our case it was Mirai’s time as it was ourselves who offered the service to hotel marketing.
  • Care and the wish to try new methods (including direct sale) are essential, inspiring reservations from the intermediary position.

An experiment like this does not need a big superstructure or great investment. It means taking an interest in the possibilities of the hotel official website as a means of sale, a method which needs to be activated and encouraged, and which requires action in order to compete with intermediaries under equal conditions. These intermediaries are acting now, are moving now, are growing. They feed off the commissions you pay. In the official site who is responsible for doing so?

Email grupo 2: (con una oferta confidencial)

Título: “Oferta confidencial hotel Xxxxx”.

Al hacer click en el mensaje, se lleva al usuario a una página específica (no-pública) con más información sobre la oferta confidencial.

Para comparar en igualdad de condiciones, los enviamos en el mismo momento y al mismo número de personas: Un primer envío a fecha 18 de enero 2011 y otro de recordatorio una semana despúes en el que se reforzaba la idea de urgencia en el grupo 2 para animar a reservar antes de que se cerrara la oferta. Ese segundo envío llevó el título “Últimos días: Oferta confidencial en hotel Xxxxx”

Uno y otro email devolvieron resultados radicalmente diferentes:

*(el coste en este caso es el servicio de email marketing: Habría que añadir los gastos por reserva en la web del hotel)

Estos números evidencian la eficacia abrumadora de una oferta confidencial. El ratio de conversión del grupo 2 es abismal comparado con el grupo 1.

El precio medio se resiente, al tratarse de una tarifa 16% inferior a la habitual, pero hay que tomar el dato con precaución:

  • Ese precio medio resulta poco representativo al estar basado en una sola reserva
  • Aun así, el precio final neto resultante para el hotel se sitúa por encima de canales de intermediación más caros. Este mismo pvp de 92€, soporta costes bajos, al realizarse en la web del hotel. En Booking o Expedia fácilmente se transformaría en un precio neto de 70 €.

¿Y el coste? El gasto en preparación y envío de la iniciativa es ínfimo. En Mirai prestamos el servicio de email marketing por tan sólo 30 € (es decir que cada uno de esos euros ha generado 212 €, o lo que es lo mismo un coste del 0,47% sobre lo generado)

¿Si es tan efectivo, por qué los hoteles no se lanzan a distribuir ofertas confidenciales por email?

  • Por falta de conocimiento del tema. Entre los expertos, el email marketing se considera uno de los medios de distribución más efectivo. Las grandes cadenas y los intermediarios lo saben bien y lo tienen muy desarrollado (en el caso de los intermediarios, sufragado por los hoteles al pagarles la comisión), en cambio en las webs de los hoteles probablemente nadie se ha parado pensar la conveniencia de hacerlo. Una buena práctica para el hotelero es susbcribirse él mismo a los newsletters como el de Booking donde se puede encontrar promocionado… su propio hotel.
  • Por falta de subscriptores. Construir una lista de destinatarios a los que enviar noticias y ofertas es una tarea lenta y constante que el hotel debe realizar previamente. La mayoría de hoteles pequeños no son suficientemente constantes de su importancia, y cuando por fin se animan a realizar acciones de email marketing se encuentran que no tienen a quien enviar.
  • Por la resistencia a invertir en su web: Muchos hoteleros consideran que el mayor atractivo de su web es lo barato que resulta como canal, con costes inferiores a la intermediación, y, por tanto, son reacios ha invertir en él, con la esperanza de que mantener ese ahorro, a pesar de que no tienen inconveniente en invertir enormes comisiones en Booking, Expedia, etc para que ellos sí realicen esas acciones tan lucrativas. En el caso del email marketing el contraste resulta más evidente, dado el bajo coste de la inversión y su alto rendimiento.

Anuncios Adwords comparados: Con y sin oferta confidencial

Quisimos ir más allá en nuestro experimento: ¿Por qué no distribuir la oferta confidencial en anuncios de Google y comprobar su efectividad?

Al igual que con los emails, preparamos dos tipos de anuncios, los publicamos aleatoriamente en igualdad de condiciones y esperamos un mes para compararlos.

GRUPO 1. Anuncios SIN oferta confidencial. Ejemplo:

Hotel Xxxxx Madrid

Web oficial Xxxxx 4* en Madrid

Reserve ahora sin intermediarios

www.xxxxx.xxx/Madrid

GRUPO 2. Anuncios CON oferta confidencial: Ejemplo

Nombre de hotel. Descuento -25%

Reserva con este código promocional L24444

Web oficial del hotel

www.xxxxx.xxx/Promocion

¿Publicar una tarifa confidencial es romper la paridad de precios? Probabablemente sí. Supone cruzar la frontera, dar un paso atrevido en la exploración de posibilidades… aunque por una vez es el hotel quien da ese paso. En otras épocas fueron los intermediarios los que innovaron ideas para romper ellos la paridad a su favor. Precios escondidos dentro de paquetes, descuentos o noches gratis en sus programas de fidelización, etc.

En nuestro caso, el uso de Adwords para distribuir tarifas confidenciales ha sido una actuación puntual y limitada a obtener los datos de nuestro estudio. La decisión de extender su uso más allá pertenece a cada hotel.

Al igual que en el caso del email marketing, también los anuncios con ofertas confidenciales (Grupo 2 de la tabla) obtienen mejores resultados.

ofertas confidenciales

*(el coste se refiere a la inversión en Adwords y no incluye los gastos del sistema de reservas de la web)

El ratio de conversión del grupo 2 vuelve a demostrar la mayor capacidad para transformarse en reservas de los anuncios con una oferta confidencial.

Como dato curioso, el valor por reserva es mayor también, es decir que, o bien se trata de reservas de más habitaciones, o con estancia más larga.

El precio medio apenas sufre variación, poco más de un 1% de diferencia. La explicación podría deberse a que no siempre un anuncio con oferta confidencial acaba transformándose en una reserva a esa tarifa (el usuario puede acabar eligiendo otra tarifa menos restrictiva, por ejemplo). Dicho de otro modo, estos anuncios resultan más eficaces para generar reservas incluso reservas a tarifas que no son las que anuncian.

Adwords es especialmente sensible al coste. Mantenerlo bajo es la eterna batalla de toda estrategia, como bien saben los profesionales del marketing online. Se paga en función a la cantidad de clicks. Pues bien, los anuncios con oferta confidencial soportan un coste muy inferior, casi la mitad en relación a lo que producen. Eso los hace muy atractivos como tema de anuncios para las campañas.

Al alcance de cualquier hotel

Para realizar el experimento hemos necesitado:

  • Una web del hotel con un sistema de reservas que permita ofertas confidenciales protegidas con un código promocional.
  • Diseñar una página de llegada, una landing page dentro de la web del hotel, creada de forma específica para la ocasión, a la que llegan los usuarios al hacer click en los anuncios o en los emails. (Esa página no es accesible desde el resto de la web del hotel. Sólo llegan a ella quienes provienen de esos emails o anuncios: No hay que temer que acceda tráfico no deseado).
  • Adwords: Una cuenta y una inversión. Hoy en día muchos hoteles ya distribuyen a través de anuncios. Para los que no, ésta podría ser una oportunidad para iniciarse.
  • Una herramienta de distribución de emails. En sus versiones más sencillas tienen un coste muy bajo. Suelen permitir un período de prueba gratuito. En nuestro caso usamos Constant Contact.
  • Una lista de subscriptores. Clientes interesados en el hotel y que quieren recibir ofertas. La mayoría de hoteles pequeños todavía no son conscientes de la importancia de que esa lista sea lo mayor posible. Lástima que el hotel de nuestra prueba sólo cuente con 1.500 subscriptores. En solo una prueba, la mitad de ellos generaron 5.600 €. Esa cifra se hubiese multiplicado proporcionalmente a la cantidad de subscriptores.
  • Algo de tiempo para preparar la oferta, los anuncios, la landing page y los emails. En nuestro caso fue tiempo de Mirai ya que somos nosotros los que prestamos el servicio de marketing al hotel.
  • Cariño y ganas por hacer cosas nuevas y por impulsar la venta directa, moviendo reservas desde la intermediación.

Un experimento como el que hemos realizado no requiere de una gran infraestructura ni de una alta inversión. Se trata más bien de tomarse el interés por explorar las posibilidades de la web oficial como canal de ventas, un canal que necesita ser impulsado y que requiere acciones que le permita competir con los intermediarios en igualdad de condiciones. Esos intermediarios ya actúan, ya se mueven, ya crecen. Lo hacen alimentados por la comisión que les pagas ¿En tu web oficial quién se responsabiliza de hacerlo?

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6 thoughts

  1. Great posting, thanks for sharing. Highlights that Hoteliers have much more power than they think they have, using and improving the tools they can directly control to make a difference.

  2. Thanks for sharing such an amazing example for everybody interested on electronic hotel distribution.

    It´s pretty clear that the industry have to move forward quickly in order to better reach the new customer in the online tourism domain, broadly speaking.

    Since you don´t specify nothing in the article it is supposed that the landing pages and the mails where made in the differents languages used by the hotel´s suscribers or you sent the same information in english, for instance?

    Certainly you have stressed the point that the groups where randomly divided with the same languague proportion but would be nice to know it.

    Greetings from the Canary Islands

  3. Thank you PJ McIntyre and Javier.

    Both groups (with and without promo code) shared the same language percentage of users: 30% English and 70% Spanish.
    We created 4 email versions: English with promocode, English without promocode. Spanish with promocode and Spanish without it.
    Landing pages were also specific for each language.

  4. Nice article and thank you for sharing.

    Thought you might want to rephrase the above text.

    From:

    The conversion rate in Group 2 is abysmal compared with Group I.

    To:

    The conversion rate in Group 1 is abysmal compared with Group 2.

  5. Nos ha parecido muy interesante, el resultado del estudio que habeis hecho.
    También nos parece genial la forma en la que os explicais, y la sencillez de la trasmisión de conocimientos. Se hace muy facil de leer y entender.
    Es una web que a partir de hoy seguiremos atentamente 😉

  6. Interesting.
    But do you think that since the first add (email and Adwords) don’t have stated that there is a 25% discount, that it must have influenced the users to click more on the second option ?…
    Thanks,