Facebook failing to drive booking conversions
 
Facebook failing to drive booking conversions
29 MAY 2012 6:48 AM

Hoteliers rushed to add booking widgets to their brand and property pages a year ago. But booking conversions on Facebook thus far have been negligible.

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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.

 

Michael Hraba, owner of San Francisco-based Hraba Hospitality Consulting

“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.

 

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.

Always on
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.

 

Henry Harteveldt, chief research officer and co-founder of Atmosphere Research Group

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.

 

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.”

Market potential
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.

 

Douglas Quinby, senior director of research at PhoCusWright

“Use social channels to offer certain types of incentives to your fan base,” he advised. “It is a loyalty program in effect.”

 

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.”

4 Comments

  • lbernste May 30, 2012 4:33 AM

    Oh no! Say it isn't so. Who would have thought that SM media, including (but not limited to) Facebook would be found, like the emperor, to be wearing no clothes. Not that it matters, of course, because, unlike the emperor's clothes, SM marketing is viewed by marketers as close-to-free and therefore a huge savings from the old-fashioned, Luddite approach! So, even if it doesn't work, it does work. So waht's the problem?

  • John McAuliffe May 30, 2012 5:20 AM

    There are two things that never cease to amaze me about articles on marketing and in particular travel marketing: 1. How we sensationalize headlines to get people to read an article. This article is a perfect example in that it is really less about Facebook failing vs. Facebook as a marketing tool and what role it plays in the shopping journey. 2. How many marketers, and again in particular travel marketers, are fixated on what I call last click attribution. For my take on this read one of my blog posts. Michael and I have discussed this topic on other blogs (Tnooz). I think the important element for marketers to better understand is what role does Facebook and a hotel’s Facebook page play in the consumers shopping journey. In the broader context what role does social media play and how can social media be used to amplify a hotel’s story to consumers that are shopping (active or not) for travel. It is only when we understand this will we know how to use Facebook for maximum effect. Yes, you should provide all necessary paths to purchase and make it easy for consumers to book from any channel they find your hotel on (i.e. a booking widget on your Facebook page is better than not having one) but it is more important to ensure a compelling and informative story of your hotel is being told on all the channels consumers use to shop for hotels…including Facebook. Measuring the worth of every channel and marketing activity solely on how many consumers click the booking button and/or make a booking is the sucker punch equivalent in marketing. Marketing is cause and effect oriented, or as we learned in science every action results in an equal or opposite reaction. How you tell your hotel’s story directly impacts how consumers evaluate your hotel as an option that meets their needs and if they move through the shopping stages and eventually book with you. Hotel marketers would be well advised to really understand their story and then find ways to amplify that across the internet; through their voice and other voices...Facebook is a great channel to do both. Focusing solely on the booking transaction is like a retailer focusing all efforts solely on the cash register and not on the store – this retailer will never be able to figure out how to attract more people to the store and sell more to those people… Find a way to tell your story then put it into action on all channels.

  • BJ Shell May 30, 2012 8:57 AM

    I would bet that it has a great deal more to do about page management than it does anything else. 1. What have they done to engage their audience? 2. What did they do to promote their "widget"? 3. What size is their audience? 4. Who are their audience? I can go on and on... Too many questions and not enough answers.

  • Lucas Cobb June 7, 2012 10:09 AM

    John, love this: "Focusing solely on the booking transaction is like a retailer focusing all efforts solely on the cash register and not on the store" Facebook is an inspiration engine. Use it to fill the funnel. Inspire people and their influencers and they'll find a way to buy from you when the time is right.

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