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The direct debate: RLH on expanding your reach (Part 2)

Whether direct booking programs are the best and cheapest route to capture business and drive loyalty depends on where you look. The cost of a direct online booking could actually end up being more than the typical 20% charged by the OTA, but loyal guests going the direct route can lower booking costs exponentially.

Yesterday, HOTELS talked with top dog Marriott International about how its direct booking strategy is working. Today, RLH Corporation: Hoteliers willing to go against the grain on customer acquisition approaches could net rewarding results. Bill Linehan, executive vice president and chief marketing officer of the Denver-based company, writes about RLH’s approach to distribution, including a partnership with Expedia.

 


Consider the OTAs, which use different channels to target various buyer personas across  every segment and demographic. This means hoteliers need to focus even more on leveraging marketplace opportunities to connect with consumers.

Channels market and price themselves differently, and that has varying effects on parity. Hoteliers should capitalize on expanded channels for expanded reach.

For example, RLH Corp. launched a partnership with Expedia last summer, offering Red Lion Hello Rewards members exclusive rates on Expedia.com and Hotels.com (U.S.), and it provided direct member sign-up for Hello Rewards from these sites. Expedia shoppers are required to join Hello Rewards to receive the rate, and RLH Corp. receives guest information such as email address.

Who has a greater ubiquity of inventory than the OTAs, so why not market within that marketplace? RLH Corp. took this unconventional approach because it realized that it was not going to outspend the OTAs on marketing.

RLH Executive Vice President Bill Linehan
RLH Executive Vice President Bill Linehan

Over the first year of the partnership, the wins helped Red Lion grow market share. Around the four-month mark, it started monitoring the consumer-facing displays more diligently as the test and learn culture at Expedia was abuzz with activity given the new product. Since then, Red Lion continually monitors to ensure common ground on defining tests and sharing results.

If it weren’t for online travel agent sites like Expedia, Red Lion wouldn’t be getting the customer volume. Essentially, these are mass marketplaces, and as a marketer it wants to ensure it is optimizing brand exposure when needed the most and at the precise time consumers are researching to book. So Red Lion plans to continue to work with the OTAs and “fish where the fish are” to capture, convert and retain consumers.

Another strategy affecting distribution is demand management. If hotel departments aren’t working together to generate demand and customer engagement, they are facing an uphill battle. Ideally, divisions need to be aligned under the same umbrella to become nimble and more proactively react to the market in front of them.

A few years ago, RLH Corp. faced such a problem and was able to break down the silos that existed with RevPak, a suite of marketing, operations and business intelligence tools configured to each brand. It’s a guest capture and management ecosystem – a technology platform that brings together third-party technologies to handle reservations, distribution, customer relations, CRM, marketing, revenue management and other marketplace related disciplines.

Instead of building the platform from the ground up, Red Lion bridged strategic alliances with a virtual team of industry leaders who customized their technologies, allowing Red Lion to capture untapped distribution opportunities, enable more efficiency and produce RevPAR growth.

The first of RevPak’s three product caches is customer acquisition as it helps the brands connect with, capture and convert guests. Examples:

• The CRS systems enable it to distribute real-time offers and inventory across all distribution channels.

• The hotel marketing (CRM) platform drives direct and repeat bookings through automated and personalized messaging.

• The “always on” approach to digital marketing promotes direct-channel business, and Red Lion makes it easy for intermediaries to further market its brands by sharing its creative with intermediaries for their own self-funded campaigns.

The other two caches focus on guest management and business intelligence.

Red Lion considers its partners as much a part of its team as its associates, and the vendors have adopted this mindset as well. The payoff is when Red Lion gets two, three or sometimes four vendors working on a single initiative. An example: Its recently launched website with the digital agency working with the loyalty vendor and both working with two central reservations systems, all to enable RLH Corp. to have a single website that allows customers to book any hotel.

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