Mary Meeker, partner at Kleiner Perkins Caufield & Byers, annually produces an Internet Trends Report covering trends in the digital space. In her 355-page 2017 report she addresses 10 areas: Global Internet Trends, Online Advertising (+ Commerce), Interactive Games, Media, China Internet, India Internet, Global Public/Private Internet Companies, Macro Thoughts, Healthcare, and The Cloud.
Since it is unlikely you have the time to digest the whole thing, HSMAI’s Digital Marketing Council took a stab at highlighting 4 key things to which hoteliers should pay special attention.
- Economic Forces
The economic piece is fascinating and has significant implications for the hospitality industry and the digital marketing space.
- Base economic data is at the end the report. Of special interest is the U.S.A. Income Statement which shows a negative 19% average net margin from 1991-2016. A chart illustrates USA Annual Profits and Losses from 1967-2016, during which time there have been net losses for all but 5 of the last 50 years.
- The U.S. Net Debt to GDP Ratio for 2016 was 77%. This ratio peaked at 105% after World War II. While it is currently on the rise, the forecasts are that by 2034, it will reach and exceed the 1946 ratio of 105%. These projections should be of concern to everyone.
- Looking at U.S. Expenses by category, in 1991 there was $1.3 trillion in spending, which rose to $3.9 trillion in 2016 – a tripling of expenses largely driven by entitlement spending. Mandatory outlays in this category have grown from $600 billion in 1991 to $2.4 trillion in 2016 – quadrupling in expenses.
- There are huge issues here to be dealt with, starting with an understanding of where our tax dollars go. There are lots of arguments in Washington, but no resolution regarding our revenue and expense problems.
- The Leisure Market
One anomaly in the economic data is the resilience of the leisure market, which seems to contradict economic forecasts. Currently these numbers seem to be exceeding expectations, which is counterintuitive.
- Household debt is at $13 trillion, which is where it was at the start of the financial crisis. This includes debt as a country as well as individuals. If this trend continues, the next downturn could be ugly – we must fix our problems before we get to a crisis point again.
- Experiences are Highly Valued
- Experiences are replacing products. For millenials, food and beverage purchases are greater than the amount spent on clothing. For hotels and destinations providing unique experiences, this is a good thing.
- Consumers are looking for experience-driven travel relationships. While Airbnb is investing in destination value propositions, hotels are still very product-driven. This is evident in how their offerings are displayed with a focus on rate and room type. Airbnb does not talk about rate, but rather about the experience you will have, and only then do they describe their prices. Hotels will talk about price and availability, which is an inversion to how consumers want to buy. The market is confirming this trend with the year-over-year increases in value:
- Airbnb is up +31%
- com is up +7%
- Marriott is down -8%
- com is down -3%
- Hotels could benefit from offering and displaying experiential packages. Take an example from the retail clothing industry. One approach to selling a jacket is to offer size and price. Another way to sell that jacket is to show how it makes you feel when you’re wearing it…and if it feels good, then determine whether it is worth the amount being charged. This is no easy feat – marketers are impeded by today’s technologies which are not made for what the consumers want or how they want to buy.
- Smartphone Usage
- The time consumers spend on mobile devices has increased…growing by 26% while mobile advertising spend only increased by 21%. There is an opportunity here for marketers (Meeker suggests it’s worth $16 billion in the U.S.).
- You may need to institute a culture shift in your organization to help your teams understand how more and more of the world is using phones and not desktops.
There are takeaways on every page of the 2017 Internet Trends Report – and hoteliers would benefit from reading the whole thing and discussing implications for your business with your teams.
About the Author
Maureen O’Hanlon is a 25-year veteran of the travel and hospitality industry. As a partner with the Prism Partnership, she leads marketing initiatives large and small. Her primary areas of expertise are loyalty programs, sales and reservation training, customer relationship management, digital marketing, sales and marketing audits, and destination marketing.
Prior to joining Prism, Maureen served with Prime Hospitality as SVP of Sales and Marketing overseeing all marketing, advertising and communications efforts in addition to the National Sales efforts and reservations department. She also served for 16 years at Carlson Companies in a variety of roles including EVP of Marketing and Sales for Radisson Hotels and SVP of the Loyalty Division for Carlson Marketing Group.
Maureen is a past chair of HSMAI’s Americas Board of Directors as well as a past President of the HSMAI New York Chapter. She has received numerous industry honors including being recognized as one of the 25 most influential industry executives by Tour and Travel News.
About HSMAI’s Digital Marketing Council
HSMAI’s Digital Marketing Council connects travel marketers in a way that leverages interactive customer engagement as a marketing medium while increasing the awareness of emerging issues, opportunities and trends. This is accomplished through a wide range of information sharing, networking and educational opportunities. 2016-2017 members include:
- CHAIR: Holly Zoba, CHDM, Senior Vice President of Hospitality Sales, Signature Worldwide
- VICE CHAIR: Shawn Paley, CHDM, Director, Global eCommerce & Digital Services, Marriott International
- Shaun Aukland, Senior Account Executive, Google
- Aimee Cheek, CHDM, Director of eCommerce, OTO Development
- Robert Cole, Founder-CEO, RockCheetah
- Chris Copp, VP, Global Digital Marketing, IHG
- Joey Egan, Vice President, Marketing & Customer Experience, Leonardo
- Erica Eyring, CHDM, Director, Account Management, Expedia Media Solutions
- Isaac Gerstenzang, CHDM, Assistant Vice President, Corporate E-commerce, Destination Hotels
- Loren Gray, CHDM, Founder, Hospitality Digital Marketing
- Jamie Hansen, CHDM, Director, Marketing, Best Western Hotels & Resorts
- Carolyn Hosna, CHDM, Sr. Corp. Director, Marketing & Distribution, White Lodging
- Jay Hubbs, III, CHDM, Senior Vice President, eCommerce, Remington Hotels
- Michael Innocentin, Executive Director, Digital Marketing, FRHI Hotels & Resorts
- John Jimenez, CHDM, Vice President of E-commerce, Pyramid Hotel Group
- Chris LaRose, VP, eCommerce Americas, Hilton Worldwide
- Sarita Mallinger, Regional Director, Digital Marketing, Kimpton Hotels & Restaurants
- Delana Meyer, CHDM, Corporate Director of eCommerce and Marketing, Crescent Hotels & Resorts
- Amy Mierzwinski, CHDM, Principal , John Fareed Hospitality Consulting
- Anna Paccone, CHDM, eCommerce Director, National Sales, Pillar Hotels & Resorts
- Donna Quadri-Felitti, CHDM,PHD, Director and Associate Professor, Pennsylvania State University
- Chris Rockett, SVP Sales, Milestone Internet Marketing
- Mariana Safer, CHDM, Senior Vice President, Marketing, HeBS Digital
- Kevin Scholl, CHDM, Director of Digital Marketing, Red Roof Inn
- Dave Spector, Partner, Tambourine
- Dan Wacksman, CHDM, Senior Vice President, Global Distribution, Outrigger Resorts
- Christine Beuchert Williams, Sr. Director of Marketing & Ecommerce Strategy, Marcus Hotels & Resorts