INNOVATIVE DIGITAL MARKETING OF SME HOTELS

104.Digital Marketing of SME hotels - Theory and Literature Review

The importance of entrepreneurship in SME hotel companies and the possibilities of their market positioning and placement as a trend of modern tourism is analysed by many authors at an international level. Jones and Haven (2005) researched Tourism SMEs, Service Quality, and Destination Competitiveness and Lee-Ross and Lashley (2009) explored family businesses, hospitality and commercial homes within entrepreneurship concepts. Small and medium-sized entrepreneurs, as opposed to large hotel companies, find themselves more often in economically problematic positions, given that numerous SMEs have grown from independent tourist activities and, in the circumstances of organised international market economy, they come across difficulties conditioned by a lack of education, experience and limited resources, discuss Soriano and Castrogiovanni (2013) and Bell et al. (2005) who analyse the aspects and challenges of internationalisation.

Numerous authors analyse the importance of digital marketing as an innovative technology which, to SME entrepreneurs, facilitates a wide accessibility at the international level. Cox and Koezler (2005) write about Internet marketing for hotels, restaurants and tourism, considering it from both large hotel and SME tourism entrepreneurship aspects; Dulčić and Petrić (2008), Paulo (2000) and Samardžić (2010) consider the importance of web marketing for development of the tourism destination and SME hotel business in the system. Panian (2000) analyses electronic business determinants, while Marić (2006) studies business process management, within which also are the new technologies and innovations. As the Internet is a dynamic technology going through continuous and constant changes, innovations are formed and applied in systems on a daily basis, from the development of user friendly smart phone applications, through the evolved web search engines, to different innovative implementations of digital technologies in the hotel business. Finding an optimal mix is of key importance, suggest both Kriechbaumer and Christodoulidou (2014) and Marshal and Todd (2009).

Real time communication is increasingly gaining in importance; using search and booking engines, tourists wish to make their bookings straight away, receive a confirmation of the booked service at the price offered and pay using online banking services which include card business, with which innovative payment services also emerge.

Both large corporations and independent SME hotels consider communication with tourists from informative, transaction or consumer aspects, i.e. the organisation of technology and website can be either interactive or only informative. Websites, whose main goals are transactions, are focused on facilitation of reservations, i.e. purchase, also offering functions and tools which support the creation of long term relationships with visitors. Examples of such functions are newsletters, website photography, virtual visits, instructions or other ways of building positive relationships with clients. Numerous web portals implement tools for consumer relationship marketing by means of which they collect data on website visitors, users or clients and profile it in the CRM database. Hotels use this data for adaptation of their website, promotional actions, marketing events and other activities, driven by clients’ needs, tastes and priorities. Cox and Koezler (2005) consider the features which Internet websites should have; from attractive appearence, the design with which the hotel positioning wishes to be expressed, attractions and original features which distinguish it from a multitude of competition, as well as consistency, clarity and efficient organisation which facilitate accessibility of the requested information.

On the other hand, the aspect of financing marketing costs, which represents an important segment in the overall budget, is the subject of consideration of the authors who examine returns on investment into marketing in realised income. To remain competitive in the aggressive global market, the tourism industry and service providers face the need to collaborate and share their expertise and resources, as well as their costs and risks, considers Afsarmanesh (2000). This includes linking into clusters, as well as collaboration in strategic marketing campaigns with other stakeholders, institutions and hotel companies with which it is synergically acted in the market.

Koryak et al (2015) also discuss the competencies of entrepreneurial leadership, capabilities and their influence on the growth of small and medium-sized enterprises (SMEs), as well as El Gohary et al. (2013), who pointed to the fact that SME owners and marketing and sales managers have a limited knowledge in relation to the different available export entry modes in the sense of affirmation of the placement channels. Furthermore, Gratzler and Winiwarter (2003) explore the major threats and opportunities for hotels by evaluating the framework for competitive advantage in eBusiness. The international standard for the hotel marketing budget typically amounts to approximately 4-5% of an asset’s total revenue. Given the flexibility of needs, the budget is characterised by certain flexibility, according to the needs of adaptation and choice of the marketing tools required in order to meet consumer communication methods and demands.

Although only a small amount of a hotel’s revenue is traditionally allocated for the marketing budget, the hotel’s performance is directly reliant on how effectively that budget is utilised, and which digital marketing tools are used. Independent hotels, particularly those with no affiliation to a soft brand or alliance with a marketing consortium of some kind may need to invest more on their marketing than those that are branded. When choosing which channels they decide to use, the calculation of efficiency should be conducted especially when new tools of digital marketing are continually coming along.⁰ Digital marketing is an umbrella term for the basic modern ICT technology tools in hotel marketing.

SEO (Search Engine Optimisation) is a tool which is important when having to meet standards of search engines which demand constant improvement of unique content and rejuvenation of the existing content. It gives the opportunity to independent hotels to penetrate the marketing space without losing its special features. SEM (Search Engine Marketing) includes paid search, and, aligned with SEO, produces a greater ROI – return on investment, which amounts to about 27-29% of the digital marketing budget. Meta search marketing is a cost-per-click (CPC) advertising format, where the advertiser only pays when someone clicks on the listing and is then led deeper into their booking engine. Dynamic Rate Marketing is a direct response marketing system which allocates real-time hotel inventory and pricing.

E-mail marketing gives hotels the opportunity to reach many potential customers and it is based on data collected on website viewers which is translated into personalised emails about information they were just viewing on the website. E-mails, including newsletters, are optimised to be responsive for desktop, tablet and mobile devices. Organic and paid social media channels could enable an independent hotel to distinguish itself among current buyers and also imprint a lasting message and/or visual for social media platform viewers. The social sites should continuously be updated in order to reply to customers promptly, provide viewers with the most current information and perform their function effectively in real time.

Application development is an important segment of digital marketing strategy that SMEs invest in. It includes the creation of attractive and informative smart phone applications which are accessible all the time and which enable hoteliers to achieve organic search visibility, website traffic and direct online revenue. E-content marketing is a tool which is related to quality, design and information on a website. It includes different types of information and formats linked to the website i.e. maps, films, social media links, etc. Video productions which are posted on websites include virtual reality, films and direct real time insight into the facility, its services and characteristics.

In analysing the importance of web search engines, research companies have determined the supremacy of Google tools in digital business⁰. It is estimated that 87% of all travel-related searches begin online and we all know how dominant Google is in this area, controlling anywhere between 65-90% of the online search market, leaving Bing and Yahoo far behind on the worldwide scene. Among the tools, the accent is on Google Analytics, which monitors performances of the site, time spent, number of visitors per page, pages viewed per session and bounce rate on the site or specific pages. It also monitors where traffic is coming from, whether it is it organic, direct, referral, social or paid; it recognises the device which generates traffic and the conversion rate: downloads, subscriptions and reservations. Google Alerts deals with management of online reputation by recognising key words set as criteria and posted on the air. Google AdWords includes paid advertising which is shown in the prime positions, making it much more difficult for organic results to appear at the top. Thus, using AdWords campaigns has become a must, even though results and costs vary greatly per market, per industry and per brand. Google search console enables hotels to analyse what keywords online travellers use in order to reach websites and, along with Google keyword planner, an SME hotel could plan more efficient web placement. Google street view brings virtual reality of destinations and hotels directly to the traveller. Google Hangout is a free tool which can be used between individuals in the same way as Skype conversations, but it also has broadcasting features that can be useful when launching a new product or service. YouTube as a video platform contributes to awareness of a hotel through video materials and enables key word search and presence. Google my business is tool and Google + allows hotels to ensure that all relevant details about the organisation are correct on Google Map listings (address, city, postcode, etc.) as well as allowing management of online reviews, among other things. Google instant booking is still not developed but is under consideration; it has huge potential for development.

105.2 Research, Findings and Discussion

The research is divided into two parts. The first part of the research was conducted in March 2015 at the International Travel Trade Fair ITB in Berlin, which represents the world’s largest gathering of supply, demand and associated stakeholders and which sets the future trends and potentials of international tourism development. In order to explore the level of implementation of digital technologies in marketing strategies of SME hotels, the research of hotels was conducted on a sample of 22 independent hotels by using the interview technique. The results were processed by statistical methodology, together with creative thinking techniques, aiming to explore the perception and attitudes of hotel management and entrepreneurs of SME hotels in regard to digital marketing. The second part of the interview was conducted in the Southern Istrian region, by using a questionnaire with several types of questions and the explored sample were random tourists (58 persons) who visited Istria during the Easter holiday season. The research included demographic characteristics, motivation, personal attitudes and behaviour related to the use of digital technologies when planning, booking and travelling for tourism purposes. There were limitations regarding reaching respondents, the contacted sample was 105 persons and only 55% accepted the survey of consumers’ attitudes. Projection of future research will include larger sample of respondents and it would develop new theories originated from this paper.

2.1 Innovative digital marketing of SME hotels

The first research question referred to consideration of implementation of digital technologies in the hotel marketing of small and medium-sized hotel companies. The sample research showed that 77% of respondents develop digital marketing as a part of their hotel’s marketing strategy. Ranking the digital marketing tools, respondents marked which innovative technologies they apply in their business activities. Looking cumulatively, a rank of implementation of different digital marketing tools was determined, as follows:

Table 1. Rank of implementation of digital marketing tools

Digital marketing tool	Rank	Number of respondents N
Social networks	1	16
Web design	1	16
E-mail marketing	2	15
SEM/SEO	3	12
Metasearch	4	7
Video production	5	6
Website revenue	6	5
Application development	6	5
Content marketing	7	4

Source: Author’s research

The data points out that different social network tools, together with web design tools, are the most represented among the tools for digital marketing in strategic positioning. This is directly interlinked, given that linking to different social networks is facilitated to users through websites and that it is also linked to direct marketing email, by which the existing and potential consumers, guests, are linked to the hotel, continually informing them of and involving them in new hotel offer and service aspects. The direct marketing email refers to periodic newsletters and forms part of the CRM tool⁰, with which the clients’ interest in various offers and activities which an SME hotel provides, ultimately leading towards the realisation of bookings. As a response to the question of implementation of this tool in their marketing presentation, 68% of respondents answered affirmatively. In the respondents’ perception, (12 respondents), SEO/SEM search engine optimisation and a better hotel positioning in search on the most well-known search engines (Google, Yahoo...), is in the third ranking place by importance and the importance of metasearch (rank 7) is also recognised, as well as other tools which hotels implement in order to improve their digital marketing performance. 7 respondents market video production as an important tool which they use, as well as content marketing (4). The data relating to the development of mobile telephony applications, as well as the importance itself of the tools for monitoring of the website revenue, which are at the bottom of the rank scale, points to the trend of negligence of the importance of mobile applications which, given the increase in the use of smart telephones in everyday life, represents a potential threat of loss of visibility in the Internet search engines⁰, as well as the communication with direct guests. Finally, the Website revenue is a tool, but also a goal towards which all other tools are directed, in the form of support. Income realisation by means of digital marketing and measurement of profitability belong to the sphere of controlling and measurement of investment which we consider from the aspect of the SME hotel budget represents an important item and that is why its considerable relevance should be recognised.

Asked to grade whether digital marketing raised their income, 68% of hotel managers responded affirmatively, 23% stated that they were not sure, while 9% of them responded to the question negatively. Further, the potential for raising income was researched and 73% of respondents expressed their agreement with the potentials for future increase, 18% were indecisive, while 9% of them do not agree with it. Considering budget allocation for marketing and channelling of a part of it for digital marketing, 50% of hotel managers stated that they had special funds planned for it.

As the next aspect, the potentials for common marketing with the DMOs was researched, where 50% of respondents confirmed that they plan and organise mutual digital promotional campaigns, which points to the awareness of independent hoteliers of the fact that, with synergic marketing activities, it is possible to obtain higher quality and more comprehensive results and realisations. Considering the placement through sales channels and the importance of digital distribution, 45% of respondents declared that the majority of bookings are realised through traditional offline channels, 45% implement innovative digital distribution channels, while 10% of them primarily use placement through tour operator businesses. 73% of respondents realise cooperation with online travel agencies, while 68% of them use one of the Channel Manager distribution platforms. In conclusion, 64% of respondents think that digital marketing provides them with competitive advantage in benchmarking with other hotels which do not apply the same tools in their marketing presentation.

2.2 Digital marketing and tourist demand

Examination of the attitudes of tourism consumer demand and activities is the subject of the second part of this research which, in a complementary way, follows the organised aspects of hotel offer digital marketing. The aim of the research is to examine to what extent tourists use digital marketing tools and in what measure they recognise the importance of distribution channels and promotional activities of SME hotels which are available online. The research is based on a sample of 58 tourists and was conducted during the Easter holiday season, using a structured survey questionnaire, processed using the statistical methodology which provides qualitative and quantitative results and knowledge that could serve for future comparative studies.

According to the research demographic aspects, the sample consists of 62% women and 38% men, divided into three age categories, young to middle aged, 28%, middle aged, 40% and older aged, 31%. The emissive countries' market indicators show that 29% of respondents were from Austria and equally 29% respondents from Italy, while from Slovenia and Germany 16% each and from Croatia and other countries 5% each, which implies the importance and affirmation of easily accessible markets, i.e. car destinations. Examining the information sources which tourists communicated in planning of their trips, tour operators are evidenced with 45%, Internet and social networks with 33%, TV and newspapers 5% and direct hotel marketing with 17%. The quoted results show that although digital marketing activities realise a considerable share in the hotel placement, it is still the traditional distribution channels that are predominant in this segment. For the purpose of an in-depth examination of the problem area and given that, in the demographic sample, middle and older respondents' age groups dominate, the segment of older tourists was researched and their use of smart phones as a medium for online communication. The research shows that, from a sample of 18 respondents, a mere 6% use smart phones for obtaining information and for booking of hotel accommodation and that nobody uses it for obtaining information about destination offers and possibilities. This implies and confirms that, with development of modern digital marketing, hotel strategies should be diversified and that targeted marketing activities should be focused on specific market segments.

Examining the whole sample, the answer to the frequency of use of computers for tourist needs is the following: 52% of respondents use it often, 33% use it from time to time, while only 15% of respondents answered the question on frequency of use. 43% of respondents confirmed the use of smart phones in hotel offer searches while the same percentage, 43% of respondents confirm using it to obtain information about tourism destination offers. This points to the fact that younger demographic segments are more interested in the activities and facilities which a tourism destination offers and they search it more frequently than the older population segment, who does not accept smart phones as a means of digital communication. Examination of the effects of the review in making decisions on booking follows, where 59% of respondents confirm the importance of positive reviews, as well as the influence of hotel email communication on market demand. Out of the total number of respondents, 40% receive and read newsletters sent by the hotel, which contributes to their decision on the choice of a particular hotel. Website design has supremacy over newsletters when it comes to making a decision on the choice of hotels; 59% of respondents answered affirmatively regarding its importance. Given the importance of price definition, the last question to which the respondents gave their answers refers to the check and comparison of different hotel offers on the Internet. The quoted topic area also includes consideration of specialised small and medium-sized hotels, as well as marketing activity in affirmation of their special features and specificities in the competitive environment.

Using the Likert scale in research of tourists' attitudes, attitudes were evaluated and the importance of the perception of the digital marketing segment was ranked. In table 2 the results of the average grade per individual attitude follow.

Table 2: Tourists’ perception of digital marketing aspects

Tourists’ perception survey – statements	Average grade
Internet is important for information in the travel industry	2.5
Hotels are well promoted via Internet	2.3
Destination offer is well promoted via Internet	2.2
Brochures and magazines are the best informative materials	2.1
Smart phones have changed the travel industry	2.4
Digital marketing is in growth and expansion	2.6

Source: Author’s research

The results show that the statement in which the respondents grade the digital trend marketing, i.e. recognise its growth and expansion, obtained the highest average grade. However, this does not reflect on their consumption habits, which was proved by the previous part of the research. They recognise the importance of the Internet technologies for tourism and travel and respect hoteliers' efforts (grade 2.3) and tourism destinations (average grade 2.2), targeted to as high as possible promotion through digital marketing tools. On the other hand, the statement relating to traditional informative tourism media, which would be expected to be more strongly affirmed by the respondents who do not implement digital marketing in a greater measure in communication with the hotel, produced the poorest grade rank. This and the statement about the effect of smart phones on the changes in the tourist travel industry (average grade 2.4) additionally support recognition of the importance of hotel digital marketing. Still, in the final examination of the result discussion it can be concluded that independent hotels need to be “online” in order to realise their market competitiveness, but, with implementation of the digital marketing strategy, they need to respect also "offline" communication with the market segments which are not prepared for tourism digitalisation.

106.Conclusion

Implementation of digital marketing is a fast growing trend in the development of the international hotel industry, both in large hotel chains and brands and SMS independent hotels. The conducted research shows that, on one hand, independent hoteliers are interested in implementation of as wide as possible a spectrum of digital marketing tools, given that they facilitate their market presence at the international level, with considerable savings in the area of promotional activities. On the other side, since the technology is in fast change and development, the know-how about efficient inclusion of advantages and general awareness should be increased. Numerous tools are available free of charge; SME hotels can deal with some of the activities using their own resources, while particular digital services are quite expensively defined. By choosing an optimal mix, independent hotels have options for a more successful market placement and, in combination with offline promotional and distribution channels, it is possible to cover all consumer market segments. Bearing this knowledge in mind, it is evident that both hoteliers and tourists recognise the importance and possibility of a continuous growth of digital marketing positions. However, for inclusion at all levels, education and knowledge dissemination are needed. As innovative shifts of the Internet technologies occur on an everyday basis, tourism stakeholders are included in a circle of numerous opportunities and possibilities, but also in the challenge of modern digital marketing which open a new spectrum of implications for future research.

107.References

Afsarmanesh, H. (2000). Future smart-organizations: a virtual tourism enterprise - Web Information Systems Engineering. Proceedings of WISE 2000 – 1 ACM/IEEE International Conference, 1, 456-461.

Bartoluci, M. & Budimski, V. (2010). Upravljanje poduzetničkim projektima u turizmu Republike Hrvatske. Acta turistica, 22 (2), 180 – 200.

Bell, J., Crick, D. & Young, S. (2004). Small Firm Internationalization and Business Strategy. International Small Business Journal, 22(1), SAGE Publications, 23-56.

Čavlek, N., Matečić, I & D. Ferjanić Hodak. (2010). Drivers of innovations in tourism: Some theoretical and practical aspects. Acta turistica, 22(2), 201-220.

Cetinski, V. (2003). Menadžment malog i srednjeg ugostiteljskog poduzeća. Opatija: Fakultet za turistički i hotelski menadžment.

Cox, B. & W. Koezler. (2005). Internet marketing za hotele, restorane i turizam. Prentice Hall, Inc, Pearson Education Company. Zagreb: M Plus d.o.o.

Dulčić, A., Petrić, L. (2008). Upravljanje razvojem turizma. Zagreb: MATE.

El-Gohary, H., Edwards, D., Eid, R. & Huang, J., (2013). Choice of export entry mode by developing economies SMEs: An empirical investigation of Egyptian SMEs. Journal of Economic and Administrative Sciences, 29 (2), 113 – 133.

Gratzler, M. & Winiwarter, W. (2003). The Role of the Internet in the SME Hotel Sector in Austria. Lecture Notes in Computer Science, 2713, 85-95.

Höpken, W. (2011). ICT and Travel & Tourism, Present achievements and emerging issues, Presentation retrieved on 27.01.2016. from http://www.tayarut-school.co.il/_Uploads/HOP.pdf

Jaafar, M., Abdul-Aziz, A. R., Maideen, S. A., & Mohd, S. Z. (2011). Entrepreneurship in the tourism industry: Issues in developing countries. International Journal of Hospitality Management, 30(4), 827-835.

Jones, E. & Haven, C. (2005). Tourism SMEs, Service Quality, and Destination Competitiveness. CABI Publishing.

Koryak, O., Mole, K., Lockett, A, Hayton, J., Ucbasaran, D. & Hodgkinson, G. (2015). Entrepreneurial Leadership. Capabilities and Firm Growth. International Small Business Journa, 33, 89-105.

Lee-Ross, D. & Lashley, C. (2009). Entrepreneurship and Small Business Management in the Hospitality Industry. Butterworth Heinemann /Elsevier Publishing.

Marić, G. (2006). Upravljanje poslovnim procesima. Zagreb: Školska knjiga.

Marshall, P. & Todd, B. (2009). Kako doprijeti do milijuna klijenata u 20 sekundi. Zagreb: Masmedia.

Panian, Z. (2000). Elektroničko poslovanje. Zagreb: Sinergija.

Paulo, R. (2000). Web Marketing Tourism Destinations. Proceedings of the 8th European Conference on Information Systems, Vienna: University of Economy & Business Administration.

Samardžić, J. (2010). Primena e-marketinga na nivou turističke destinacije. Beograd: Singidunum.

Schegg, R., Stangl, B., Fux, M., & Inversini, A. (2013). Distribution channels and management in the Swiss hotel sector. Springer Berlin Heidelberg, 554-565.

Soriano, D. R., & Castrogiovanni, G. J. (2012). The impact of education, experience and inner circle advisors on SME performance: insights from a study of public development centres. Small Business Economics, 38(3), 333-349.

THR & Horwath Consulting Zagreb.(2003). Master plan razvoja turizma Istre (2004-2012.). retrieved on 20.01.2016 from www.mint.hr

Vuković I., (2006). Suvremeni trendovi u razvoju turizma u Europskoj uniji i implikacije na Hrvatsku. Tourism and Hospitality Management, 12(1). Opatija: Faculty of tourism and hospitality management.
Assistant Professor Tamara Floričić, PhD

Juraj Dobrila University of Pula, Croatia

Zagrebačka 30, HR- 52100 Pula, Croatia

tfloricic@unipu.hr

Directory: wp-content -> uploads -> 2015
2015 -> Police Militarization
2015 -> 2015 ihbb championships: hs history Bowl Round 4 – Prelims First Quarter
2015 -> Wrtp/big step · 3841 W. Wisconsin Ave., Milwaukee, wi 53208
2015 -> Rao bulletin 1 December 2015 html edition this bulletin contains the following articles
2015 -> Darton College
2015 -> Training Workshop on Planning and Implementation of Multi-Sectoral Development Programme (MsDP) in Bihar Date : 6th
2015 -> Rao bulletin 15 June 2015 html edition this bulletin contains the following articles
2015 -> Rao bulletin 1 September 2015 html edition this bulletin contains the following articles
2015 -> Rao bulletin 1 August 2015 html edition this bulletin contains the following articles
2015 -> Science, and transportation united states senate

Download 2.73 Mb.

Share with your friends: