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Finding Salvation Online

"More and more hotels are looking at online marketing tools like social media site Facebook to help them bring guests through the doors", writes Alex Gibson.

The Irish hotel sector has been rocked by the perfect storm of over-capacity, a sharp weakening in the value of sterling and the dollar, and the falling away of demand from the domestic sector. A recent survey from the Irish Hotels Federation indicated that only about 10% of hotels could expect to turn a profit in 2009, and even this may prove an optimistic assessment if the stories of cancelled Christmas parties are to be confirmed, thereby taking away the last glimmer of hope for many of them.

Against this backdrop the marketing teams of Irish hotels are expected to perform something akin to a loaves and fishes act - getting more rooms filled and protecting the rate at the same time. The evidence appears to be that, while there has been deep price cutting, it has not served to increase demand - something that a first year economics student might have pointed out was an inevitable outcome in a recession.

The era of €20 rooms in Ballsbridge may have heralded a short-term boost in that locale, but it's left a bitter taste in the mouth of most hoteliers. The average room rate in Dublin is now one of the lowest in Europe's capital cities according to Smith Travel Research. And what's more worrying perhaps is that increasing this will be a long climb.

I recently attended a conference in Canada where the head of STR said that it might take a full ten years for US hotel rates to return to their pre-recession levels, and it seems likely to me that this is equally the case here. Yet among the gloom there are examples of hotels that are, if not quite bucking the trend, at least pointing the way to recovery. The recession has certainly caused the hotel sector to radically re-evaluate the way that it runs marketing campaigns. The Celtic Tiger economy led to an over-reliance on domestic marketing where traditional channels such as print advertising and direct mail had dominated in the budget allocations; with that market gone more innovation is called for to reach niche markets via the internet.

The tourism industry has been to the fore in exploiting the internet's potential not just in terms of lowering distribution costs and increasing marketing coverage, but also as a tool to really engage the customer. As customer empowerment is facilitated by sites such as Tripadvisor, Dealbase and Aboutanywhere, hotels will have to be more conscious of the need to be ever present in responding to the opportunities provided.

This degree of nimbleness required is magnified even more when it comes to social media. In this environment people talk a lot about the hospitality product, where they've been, where they've stayed, what they did. Social media sites such as Facebook and Twitter are perfect social environment for hotels to, in the first instance, listen to conversations about their sector, their competitors and, yes about themselves.

I recently chaired the Hotel Website Marketing conference (www.hotelwebsitemarketing.com) where one of the speakers, Guillame Thevanot from Hotel-Blogs.net,  pointed to the dramatic rise in social media influenced sites where people could effectively organize their own collective clubs to drive down prices from hoteliers - expect to see more of this ‘people-power' emerge in the future. Sites such as Inoqo.com are examples of how the hotel marketing process is moving more towards a model that will require a dexterity of approach hitherto not seen before. It's also the case that hotel marketers will have to perform a role as destination marketers as much as product marketers. Sure, the national tourism agencies will continue to have a key role in building the attractiveness of Ireland as a destination, but if we are to take anything from the emergence of social media as a powerful driver of demand, then the hotel industry itself will have to exploit the opportunities to join the conversation with prospective visitors.

Alex Gibson is Senior Lecturer in Marketing at the School of Hospitality Management and Tourism, DIT and presents The Persuaders radio show and podcast (www.persuadersonline.com)

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