With Priceline Group Inc. (Nasdaq:PCLN) and Expedia Inc. (Nasdaq:EXPE) dominating the online travel-agency business, the launch of any new hotel-booking site is a bold move.
So StayVancouverHotels.com likely raised eyebrows when the Vancouver Hotel Destination Association (VHDA) launched the site in January with an aim of marketing downtown Vancouver hotel rooms.
Executives, however, say the new portal can succeed because it will target a tight customer niche and provide those who book hotel rooms through the site with perks such as free tickets to events or free gift cards that can be redeemed at stores and restaurants.
The VHDA’s 36 member hotels are also likely to help the portal gain its footing by promoting it because the hotels pay much lower commissions on its bookings than they would for bookings done through Expedia or Priceline brands.
“The big online travel agencies are good for finding a flight to New York or a hotel in Toronto but when it comes to something a little more local, that seems to be where they are lacking,” said Innovation Partners Group CEO Dipik Rai, who is the VHDA’s marketing partner for the portal.
Rai told Business in Vancouver that he plans to buy geographically based advertising on Facebook (Nasdaq:FB), Google (Nasdaq:GOOG) and other social media platforms to target suburban Vancouverites with promotional posts for StayVancouverHotels.com that appear in their social media timelines.
The posts will highlight various giveaways that come with booking a downtown hotel for a night or two.
Rai also intends to target people around the world who visit websites for large Vancouver events such as this week’s Vancouver International Wine Festival or next month’s 2018 Juno Awards and HSBC Canada Sevens rugby tournament.
Cookies placed in browsers mean that when those people visit other websites in the future, they are likely to see ads for StayVancouverHotels.com promotions.
“Our efforts are also very much focused on the traditional off-season period,” said VHDA CEO Russ Cowan.
That time frame includes the shoulder season, which ends in early May.
Cowan’s organization spent about $200,000 to create the new portal, and it contracted Innovation Partners to create the site and do the digital marketing.
Innovation Partners is motivated to increase traffic to the site and attract bookings because it gets revenue from low-single-digit-percentage commissions on each sale. That contrasts with Priceline and Expedia, which have brands that charge commissions in the 12% to 25% range, and sometimes more.
VHDA last summer decided to create StayVancouverHotels.com as a replacement for a former portal, BeVancouver.com, when that portal’s marketing partner opted to sever ties, Cowan told BIV.
The new site enables the VHDA not only to provide blanket promotions, which cover all of the 36 hotels, but also to have targeted promotions with one or a few hotel partners, Cowan said.
VHDA operates on a $5 million to $6 million budget, which is financed by a 1.5% fee that its 36 downtown-hotel members attach to guests’ bills.
That fee is on top of the 8% provincial sales tax, which goes to Destination British Columbia, a 5% federal goods and services tax and a 3% hotel tax that goes to Tourism Vancouver.
“We’ve had a few bookings so far from StayVancouverHotels.com but I envisage that it will increase a bit,” said Brad Simmons, Rosewood Hotel Georgia director of sales and marketing.
Simmons pointed to a promotion on the site that offers a $125 American Express-branded gift card for the first night, and a $50 gift card for each additional night, to people who use the site to book a hotel room on most dates through the end of April.
“That’s an exceptional deal,” said Simmons, who added that his hotel planned to promote the deal through its newsletter and other marketing channels.
“In an ideal world, every hotel wants bookings to come through its own website, or brand, but this is a great promotion.” •
To read a companion story on what promotional strategies new independent hotels can use, click here