From a consumer perspective, travel planning opportunities are ubiquitous – many major digital platforms offer some sort of travel planning, whether it be Google, Uber, or even major banks.

NB: This is an article from Roomdex, one of our Expert Partners

For hotels, however, it means they face significant challenges in customer acquisition. Third party encroachment on the customer booking journey means higher costs required to achieve visibility in the eye of the consumer. In order to regain travel planning primacy, hotels need to offer something nobody else can.

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The evolving landscape of customer attention – and the challenge for hotels

At the turn of this century, planning a holiday might have entailed a visit to the local travel agent, a well-thumbed guidebook or word-of-mouth recommendations. But today, digitization has transformed the industry, changing the way consumers plan, book, and experience travel. From OTAs to meta search and even banks, consumers have access to more travel planning triggers than ever before.

Why do the likes of Uber, Google, Meta, and big banks now want a bite of the customer travel experience? It might be something to do with the fact that the Online Travel Booking Market was valued at US$ 561.99 billion in 2022 and the total revenue is expected to grow at 9.7% of CAGR through 2023 to 2029, reaching nearly US$ 1074.4 billion. These digital gateways not only hold consumer information, but also hold the customer’s attention most of the time. As a result, they are in a strong position to get into travel and hotel promotion and earn some serious dollars. But, in doing so, they pose a significant challenge to traditional hotel brands, intensifying the competition for customer attention and loyalty.

One of the challenges hotel brands face is the continued erosion of their primacy in the overall travel planning process. In the past, the hotel owned the customer and was the clearinghouse for information and services for the guest stay. The increasing presence of non-travel brands and intermediary platforms act to decrease direct customer engagement with the hotel. At the current rate of market evolution, this new, broader array of sources will increasingly shift consumer reliance from hotels to non-travel brands for travel arrangements.

As more third parties enter the travel space, and the OTAs and wholesalers are distributing their inventory in more channels, hotels continue to pay fees on a growing percentage of their bookings. When OTAs, brands and metasearch are all competing for a presence on the same large tech platforms, it raises the cost of the entire ecosystem. Ultimately, hotel owners and operators foot the bill and at 15-25% to acquire their customers, these costs will challenge profitability especially when combined with increasing labor, construction and energy costs. So, what can be done?

Re-capturing customer attention with new products unique to hotels

You would think that the one thing hotels have that 3rd parties don’t is…hotel rooms. But as long as that inventory can be sold through 3rd party channels, it isn’t a unique product. So what hotels need are new products that only they can provide and sell. Think hotel features that are not yet productized: early arrivals, late departures, specific room locations and more. Hotels don’t sell these now because it can be operationally challenging. But with the right technology they could – and they could have the exclusive on those products. That technology is called ABS (Attribute-based Selling).

ABS represents a strategic lifeline for hotels aiming to differentiate themselves in an increasingly competitive landscape. What can ABS do?

  1. Reconnect with travelers: With ABS hotels have the opportunity to offer a customer-centric and flexible approach to booking via feature-based merchandising and shopping. This innovative strategy empowers travelers to curate and personalize their hotel stay, with specifically chosen room preferences, features and add-ons, effectively making each stay unique. By placing this level of customization at the forefront – something which third party intermediates cannot offer, hotels not only enhance guest satisfaction but also rekindle their relevance in an era where travelers seek meaningful, tailored experiences.
  2. Strengthen brand loyalty: As ABS allows for a more personalized and tailored experience it helps foster a deeper connection and affinity with the brand. More notably, with ABS, hotels have the opportunity to solidify their position as the go-to choice for travelers seeking exceptional and personalized stays. While it may be called “Attribute-based SELLING,” when it comes to loyalty, you could consider it “Attribute-based Fulfillment of Loyalty Benefits.” Price points can reflect loyalty tier.
  3. Reduce customer acquisition costs and increase direct revenue: ABS offers a dual advantage for hotels, simultaneously reducing customer acquisition costs while boosting direct revenue. By being the sole source of unique stay products, such as room location selection, hotels increase the likelihood of repeat bookings to the lowest cost acquisition channel – their website. In addition, by leveraging ABS for automated upselling, hotels can unlock multitudes of high-margin ancillary revenue opportunities. When selecting an early check-in, late check-out, or customized room placement, hotels are selling room product that is nearly pure profit margin.

Regaining Primacy in Travel Planning With ABS

The increasing involvement of non-travel brands in the travel industry is, likewise, increasing the cost of being central to your target customer’s attention. Hotels will need to provide more attractive – and exclusive – offerings to stay relevant. ABS is core to that strategy.

ABS can give your guests a uniquely tailored experience that non-hotel simply brands can’t – because they don’t have access to it. ABS is a cost-effective, revenue-efficient and reinforces hotels’ primacy in what is a highly competitive industry.

Read more articles from Roomdex