24 March 2011

Facebook leads to hotel room revenue

23 March 2011 8:27 AM

By Christine Blank HotelNewsNow.com contributor

cblankwriter@yahoo.com

Michael Hraba

owner Hraba Hospitality Consulting

INTERNATIONAL REPORT—Facebook is fast becoming more than a

customer relationship tool for many independent properties and chains. Many hotels now offer room-booking technology on their Facebook pages,

which is leading to incremental sales.

“There is real commerce that is starting to grow on Facebook. Companies

like Delta (Airlines) are putting booking engines on Facebook, and Sony just started a deal where consumers can rent movies,” said Michael

Hraba, owner of Hraba Hospitality Consulting in San Mateo, California.

For the independent properties that Hraba

Hospitality advises, Facebook booking engines do not yet produce a lot of revenue, but Hraba

believes it is necessary to offer the option. “If

you are there, you (won’t) miss the ones who do

want to book. You are available in every possible

way your guests need you,” Hraba said.

Facebook conversions growing

“Over the course of 2009, we saw the volume of

direct referrals from Facebook to hotel websites

grow. The conversion rate was higher for

Facebook than it was for TripAdvisor and other travel review sites,” said Douglas Quinby, senior

director of research for PhoCusWright, a travel

research firm in Sherman, Connecticut. The

conversion rate on direct referrals from traveler review sites to hotel

supplier websites ranged from 4% to 6% in 2009, while conversion from Facebook to hotel websites was 8%.

Starwood Hotels and Resorts Worldwide has provided a booking function

within a tab on Facebook for all of its brands and properties since it has

been on Facebook.

“Conversion on Facebook is smaller but close to conversion on our brand

websites. (Starwood’s Facebook fans) start to see other people’s

experiences at the properties,” said David Godsman, VP of global Web for

Starwood.

While Starwood primarily uses Facebook to “engage” with its guests, the

company’s executives realize the valuable e-commerce potential on the

global social-networking site. To that end, Westin Hotels & Resorts in

January introduced a “Shop” tab on its properties’ Facebook pages. The shopping widget serves as a fully-contained shopping transaction, instead

of working as a link from Westin’s website.

“What we are seeing now is an emergence of technology that that we

didn’t see six months ago. There is an opportunity for ourselves and other hotel brands to enable these type of transactions within Facebook,”

Godsman said.

Facebook booking engines

While most hotel companies have a booking link within Facebook that takes users to their websites to make transactions, Bolongo Bay Beach

Resort in St. Thomas, U.S. Virgin Islands, sports a unique, free-standing

booking engine on the social-networking site.

“We had a hotel-and-air booking engine on our website for years, so we asked our Web developer to put that on Facebook. They can click on the

Reservations tab on Facebook and book rooms,” said Katarina Doumeng,

director of sales, marketing and Internet for Bolongo Bay.

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Katarina Doumeng

director of sales,

marketing and Internet

Bolongo Bay

Bolongo Bay

The hotel-and-air engine has proven successful

for Bolongo Bay.

“In the last four weeks, for example, we had 207

people on Facebook who either booked or checked rates. That is big, since we are a 62-

room property,” Doumeng said. Because the

property has made a concerted effort to interact

with its guests on Facebook, it has grown its fans

from 300 in 2009 to 9,000 this year.

Shopping on social networks

The booking success that hoteliers are

experiencing on Facebook makes sense because

consumers are using social-media sites much more for travel research and purchases than in

the past, according to PhoCusWright. Nearly 13% of social-network users

use social networks to shop for travel, according to the firm’s “Traveler

Technology Survey 2010.”

In addition, 35% of U.S. online travelers interacted with a travel company on an online social network in the past year. Not only are guests talking

with their friends and family about travel on Facebook, but they are also

being served travel-related ads, Quinby said.

Given such engagement, other hotels are quickly jumping on the Facebook booking bandwagon. The Hyatt Regency Irvine in Irvine,

California, for example, recently became the second Hyatt hotel globally

to offer room booking capability on its Facebook page.

“We believe social media is part of the future of how guests will interface with hotels prior to checking in,” said Colleen Kareti, manager of Hyatt

Regency Irvine.

While Fairmont Hotels &

Resorts does not yet have a booking function on its

Facebook pages,

executives plan to add the

capability soon. “Part of

the audience does want and expect to find out

about offers. They may feel

excluded if they don’t hear

about offers,” said David

Doucette, executive director of internet

marketing for Fairmont.

Fairmont's social-media policy is to have 80% of its information about

travel, hotel and its hotel's food and beverages options. Only 20% of Facebook posts have anything to do with travel offers.

Meanwhile, Fairmont’s Swissotel brand in Zurich, Switzerland, is realizing

limited success with a booking link on its Facebook page. “We have seen

a slight increase in conversions, but it is not dramatic. Their activity on

Facebook is not as evolved as Fairmont’s is yet, so we don’t want to use that as a case study for analyzing potential,” Doucette said.

Despite the current and future success with hotels’ e-commerce activities

on Facebook, hoteliers still say their primary purpose on social-

networking sites is to develop relationships with their guests.

“We didn’t enter this space with a commercialization concept—we entered

it to really re-define the relationships we could have with our guests,”

Starwood’s Godsman said. “We haven’t tried to get as many fans as

possible. Instead, we have a really engaged group of people.”

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