The US$18 million website
Four Seasons recently announced the beta-launch of its new website, which cost a reported US$18 million to build. I?ll give that a moment to sink in.
The sheer size of the investment is sure to elicit a jaw-dropping, shock-and-awe response from most hotel marketers. At a time when the majority of hotels are spending less than US$30,000 for their websites, US$18 million seems way over the top. But dig deeper, and it looks like a case of the tail wagging the dog. Four Seasons may be teaching the industry an important lesson about priorities.
The Internet has become the dominant booking source for transient business and plays a vital support role in group and social business. While many hotels report they generate as much as 35% to 45% of their total room revenue online, we know that a large number of consumers are visiting hotel websites before making their reservation through offline sources. So let?s make some basic assumptions.
- The new Four Seasons website will live for at least five years.
- With 72 high-end hotels in world-class destinations and ADRs often above US$300 per night, the website is currently generating at least US$100 million a year in gross revenue.
- The current website is producing just 12% of the brand?s total room revenue, well below industry average. It was reported that the website contribution has grown just 2% in five years.
- With a modest increase in conversion, it is feasible the new Four Seasons website will generate more than US$600 million in rooms during its lifetime. Our experience with luxury hotels is that they generate a similar amount of other revenue per occupied room from food & beverage, spa and other income departments. Not a stretch to get to more than US$1 billion in revenue from this US$18 million investment over the next five years.
Investing US$18 million on a channel that will be responsible for up to US$1 billion in business seems pretty reasonable to me. In fact, I believe Four Seasons has taken a deliberate and decisive approach to its marketing priorities, funding its digital marketing efforts at a level that allows the company to be successful. I would never advocate throwing money away, but the truth is we can only speculate about just what technology and functionality went into the new website. Here is what we do know:
- The stated goal of the executive vice president of marketing for Four Seasons is to make this website the only site people need to visit before making a reservation. Travelers are visiting dozens of sites to research properties, read reviews and view rich content before making a reservation. To truly accomplish the lofty goal of being a one-stop website, Four Seasons needed to take bold steps in design, functionality and usability.
- Four Seasons claims the website will be fully optimized to display beautifully on mobile devices and tablets. Mobile websites have gone from aspirational technology to an essential piece of any digital marketing campaign.
- The website features customized guest profiling. We don?t know exactly how this will be used, but the possibilities are exciting. The custom guest profiling could allow Four Seasons to deliver dynamic, custom website content to each individual guest who visits the site.
- Four Seasons custom-built a booking engine for the site. The functionality blends seamlessly with the website, supporting the core tenets of the brand. For example, when you look for more information on a specific room type, the information presented is simple, elegant and evokes a feeling of luxury.
- Each property has significant content throughout the site. Stunning photography, dynamic maps, traveler review integration and an introduction to the destination are featured on the front page of each property section. Someone spent a lot of time crafting the individual property messages ? time that will help draw on travelers? desires.
The website is still in beta-launch, so the usability testing will hopefully lead to a successful launch. Ad Age featured an interview with Susan Helstab, executive VP of marketing for Four Seasons in which she describes the company?s deliberate and thoughtful approach to its digital strategy. It is clear that Four Seasons plans to use the new website as the centerpiece of its global marketing effort, combining personalized presentation, social media integration, trip planning and overall brand-building initiatives to introduce Four Seasons to a new generation of travelers.
The company is leaping into tomorrow, but it?s worth noting that it will be yesterday far too fast. To stay ahead, it will need to continue to adjust and refine its strategy. That said, this site has put Four Seasons well ahead of the curve, wherever it may lead.
If this website works, US$18 million is but a small price to pay. I commend Four Seasons for its bold choice.