REPORT FROM THE U.S.—Back in March 2011, Michael Hraba, like many hoteliers, was excited by the commercial potential of Facebook. There was revenue to be had, and hoteliers and brand companies were rushing to put booking widgets on their profile pages to encourage easy, seamless transactions.
My, what a difference a year can make.
Hraba, who is project manager and communications for Waterford Hotels & Inns and owner of San Francisco-based Hraba Hospitality Consulting, has jumped off the Facebook bandwagon, citing low transactional booking volume for his clients and the broader industry alike.
“Until they somehow monetize their users into consumers, when somebody enters Facebook under the premise that I might buy something, I don’t think Facebook will ever be a relevant revenue-generating tool,” he said.
Michael Hraba, owner of San Francisco-based Hraba Hospitality Consulting
Hraba is not alone in his sentiment. Industry pundits are beginning to question the use of Facebook as a booking channel in the absence of any meaningful data. And the major hotel chains—six of which declined to share data for this article—have been reticent to disclose conversion rates.
“Generally when companies are reticent about disclosing conversion rates, it’s because it’s going to be pretty negligible. That would be my expectation,” said Douglas Quinby, senior director of research at PhoCusWright.
“In general, we have never advocated that anyone should look at Facebook as a booking platform,” he said. “We see this continually in our consumer research, especially in the U.S. and Europe—consumers don’t think of Facebook and their social networks as a place to go shopping and buying travel.”
Henry Harteveldt, chief research officer and co-founder of Atmosphere Research Group, said Facebook booking conversions are somewhere in the single digits.
“Booking levels are very, very small from the Facebook widgets,” he said.
Does that mean hoteliers should remove booking widgets from their Facebook pages? Not at all, said the sources interviewed for this article.
“That doesn’t mean that hotels should give up on having a Facebook page. Not at all,” Quinby said. “We’re just saying that the type of engagement you want to think around social networking … has got to be nuanced. If you are hyper fixated on referral and conversion, then you’re going to limit the opportunity for boarder engagement.”
“Facebook is a marketing tool. … It’s not easy to turn it into a commercial tool,” Harteveldt said.
The social network is great for customer engagement, establishing relationships and understanding consumer sentiment, he added.
It’s also a great way to keep your brand top of mind for consumers when they do go to shop, Quinby said, citing evidence of a “billboard effect” on the platform.
“You got to be where people are. You’ve got to be there and hang out and wait,” Hraba said.
Indeed, new research suggests travelers are always shopping for travel, even when they’re not planning a specific trip.
“In an online world in which travelers are constantly connected to the Internet and often receptive to information about travel, the linear travel-buying pattern many distributors have clung to is being overtaken by an ‘always-on’ model of travel distribution. This model places the traveler at the center of a constant hive of information exchange across the entire travel ecosystem,” according to “Travel 2020: The distribution dilemma” from the IBM Institute for Business Value, which surveyed 1,020 business and 1,030 leisure travelers from both developed and emerging economies.
Consumers are cognizant of ads and promotions delivered via social media, according to Harteveldt. Atmosphere conducted a survey of more than 5,000 travelers, 31% of whom said they noticed such commercial engagement.
Henry Harteveldt, chief research officer and co-founder of Atmosphere Research Group
But while hoteliers who already have booking widgets on their Facebook pages should leave them there, smaller players who haven’t yet done so shouldn’t fret, Hraba said.
“If that’s a daunting concept to anybody reading this, I wouldn’t worry about a booking engine in there,” he said. “… Are you going to lose a reservation because your booking engine isn’t in Facebook? I doubt it.”
Just because Facebook booking widgets have yet to yield strong transaction volume doesn’t mean hoteliers should give up on the channel altogether, Harteveldt said.
“Part of the reason is that no travel company is giving consumers necessarily an incentive to use the widget,” he said. “… To make Facebook commerce work, you need to really understand what it’s about.”
If Facebook developed a type of “currency” that could only be used on the channel, that might drive more commercial value, Harteveldt suggested. Or, companies could offer incentives and special offers to book through Facebook.
Quinby said hoteliers might find success by approaching Facebook as a “loyalty light” channel. Companies such as Joie de Vivre do an excellent job in this regard by offering incentives to its Twitter followers during “Twitter Tuesday” promotions.
“Use social channels to offer certain types of incentives to your fan base,” he advised. “It is a loyalty program in effect.”
Douglas Quinby, senior director of research at PhoCusWright
While travelers might not approach Facebook or other social networks with a commercial mindset now, that doesn’t mean they’re not open to the idea, Harteveldt said. In that same Atmosphere survey of 5,000 travelers, he found that one-third of respondents said they would try to purchase travel through a social network within the next 12 months.
“There certainly is a critical mass open to using a social networking site like Facebook as a booking tool, but what the Facebook engine has to offer has to be more than what they can get from the brand website. There has to be something more compelling,” he said.
That shift in thinking might be more pronounced in emerging markets such as Brazil and China, according to PhoCusWright research.
“Travelers (in those regions) will go in and specifically engage with their network around recommendations when they are shopping for travel online. Facebook and their social network become a much more central part of that,” Quinby said.
Still, Harteveldt doesn’t expect Facebook to be “transactional” for at least a few years.
“This isn’t Field of Dreams. You can’t just build it, and they will come,” he said. “You’re going to have to work at it. And I’ll be honest, it won’t be easy.”