A recent study indicated that 65% of motivated shoppers – that’s consumers with money in their pockets, failed to make a purchase after their transaction began. I am sure that most of those consumers, some of whom were making hotel reservations, had tried at one time or another to let the web site owners know they were frustrated before they abandoned their purchase – My guess is most of those web site owners left the lights on but failed to answer the door.
If you are like most web site owners in the hospitality sector, over the last several years you have invested hundreds of thousands, possibly millions of dollars building a web site and a supporting infrastructure. You also recognize that the web channel has the potential to be an extremely valuable tool to enhance your CRM (customer relationship management) initiatives, decrease costs related to acquiring new customers and most importantly DRIVE REVENUE.
The nagging question foremost in the minds of many site owners and a source of constant frustration is - “if our web site is offering real satisfaction to our users, why are we not seeing stronger reservation conversion rates on the site?” Our answer for now at least, is that, hospitality based web sites are seeing high overall user satisfaction rates (as high as 80%) but seem to be missing the mark in the minds of their users when it comes to delivering value in terms of “does the site save me money when I make a room reservation?”
This is supported in part by a recent study conducted by Dr. Peter O'Connor of the Institute de Management Hotelier International (IMHI) – France 07 March 2002 which stated “the price at which a product is offered for sale has been identified as one of the key motivators for encouraging customers to purchase online”.
Another study conducted by Yesawich, Pepperdine & Brown (2000) revealed that almost six out of ten leisure travelers now actively seek the "lowest possible price" for travel services. Similarly, a recent Forrester Research study (2001) found that 66% of all buyers used an online discount in the past 12 months to buy travel online.
In their 1999 survey, O'Connor and Horan (1999) found that, in the majority of cases, rates obtained over this channel were significantly higher than those obtained by contacting the Central Reservations Office. Often the rate quoted by the company's Web site was substantially higher, despite the associated lower cost of distribution.
We also see a strong disconnect between the way visitors are using a hospitality web site and the way we believe site owners want them to use the site. It appears users are happy using the site as an information resource and time saver but stop short of making that final reservation online, something property owners had expected their web initiatives to achieve.
Could this be a reason for the low “look to book” ratio many properties now face with their present web sites? It is our belief that if site owners can demonstrate their site will save their users money or offer them the best available rate online, they will fill the missing link in the customer retention chain and improve that online look to book rate.
For the record, all of the statistical data and information in this article are supported by research findings from iPerceptions’ “User Satisfaction & Competitive Analysis Report” for the hospitality sector, May 2002.
The Aggregated User Index is derived from feedback from 26,000 actual visitors obtained during 19 individual surveys run on some of the most prominent sites within the industry, such as: Holiday Inn, Sheraton, and Omni and represents over 1,000,000 data points. A common set of eight attributes was used to determine user satisfaction including breadth of information, site convenience and bottom line savings. These attributes were associated with the five key sites dimensions of navigation, content, interactivity, motivation and adoption. This index serves as a comparative benchmark that allows web site owners to continually measure their relative position within the industry and with their own previous performance.
Just as a matter of interest, you may want to compare the user stats from your web site with the following to see how in sync your site is with the feedback from the 26,000 visitors from the nineteen iPerceptions studies.
Type of visitor Purpose of Visit
Business 29% Make a reservation 27%
Leisure 41% Research/comp rates 29%
Business/leisure 18% Hotel info 27%
Other 11% Other 16%
Let’s start by first looking at what value means to a web site user and more specifically, how you, as a web site owner, can benefit from understanding that at the moment web site users are not getting the message that hospitality based web sites can save them money.
We know from our research that users perceive web sites that save them time are offering true value. Based on the ratings from the iPerceptions hospitality index, “saves you time” has a very high correlation with user satisfaction. By saving their users time, sites may be easy to navigate, have all the right information in the right place and interact with the user quickly and efficiently. Saving users’ time also means allowing users to easily identify the property they are interested in and quickly allowing them to review the amenities and the room availability for the dates they wish to reserve.
Value can also be measured by looking at how users rate the breath and relevancy of the site’s overall information. In both cases, as the ratings for breadth and relevancy increases, so too does the user’s level of satisfaction.
Our index indicates that the picture changes quite radically when users rate sites for their ability to save them money when booking reservations online. Within the hospitality sector the attribute “saves you money” ranks dramatically lower than all other attributes.
And it doesn’t seem to matter whether the user is at the site to make a reservation or just to research and compare room rates or whether they are business or leisure travelers – they all rate “saves you money” lower than any other attribute. This is a strong sign that users are fed up with uncompetitive pricing, and frustrated and disappointed with the sites’ ability to provide great online pricing.
One company that seems to be addressing this issue and may be on the edge of a new industry trend is the Starwood Group of properties. Their Westin, Sheraton, Sheraton Four Points and W brands now feature a very prominent “Best Rate” guarantee that assures users they will be getting the best available rates for these properties. This no nonsense message should, if they are able to deliver on the promise, increase their user rating of whether the site “saves them money”.
What does all this tell us – simply put, to translate strong user satisfaction into stronger conversion/look to book rates, your web site must have the right mix of web site attributes plus provide a strong price story that matches your user’s needs and expectations. Give users the right combination of content. Make that content easy to find and make it relevant. Make the site easy to navigate. Make it simple and quick to confirm a reservation or redeem reward points and last, but surely not least, make sure your user knows that they can save more than just time by booking online.
Jerry Tarasofsky is CEO of iPerceptions Inc., a predictive business intelligence company headquartered in New York that is focused on providing rapid multi-channel technological solutions that allow web site owners to profile and to manage actual user/customer online experiences, preferences and intentions. He can be reached at jerryt@iperceptions.com.
Legal Disclaimer:
The statements contained in this feature are based on accurate and reliable information. However because that data is gathered from a variety of sources, I cannot guarantee it is complete and error-free.
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