The coronavirus pandemic has destroyed the businesses of countless Greek hotels. Nobody really wants to talk about this. But, it’s common knowledge that as many as half of all the country’s hotels may soon be out of business. Here on Crete, the mood is surprisingly positive, or at least resigned to the fact the 2020 touristic season a wash. There is a needle of light that shines through the dismal dark of uncertainty, however.
Some Greek hotels will survive, no matter what. And those that do will be those that are both liquid, and progressive in thinking about moving forward. While the Greek authorities try to conjure up solutions like road travel taking the place of airlines, the smart business people are busy developing strategies to keep brands alive, and to minimize expenses during the crisis and after it has passed.
To get a handle on the latest market strategies, I called my old friend Minas Liapakis this morning. The founder of EyeWide Digital, and a key player developing tools like the much talked about RevitUp holistic marketing service, Liapakis knows the Greek hotel business better than anyone. After reading about the President of Corfu’s hotel association Charalambos Voulgaris telling local media the Greek mainland and the islands were facing the “biggest crisis of a generation,” I asked Liapakis if he could share any bright spots at all.
The veteran Greek hotels marketing executive pointed me to a Kantar survey carried out back in February, which analysed search words on Google associated with hotels as “hotels NY Hotels”, “Hotels Las Vegas” desktop & mobile. At first I was confused because of the reference to Google and clicks at a time when Greek hoteliers and authorities are in a panic, then he explained.
“We cannot focus on factors we are unable to change in a crisis. As marketers we must analyze and then create concrete strategies with profit in mind. The market is upended, to be sure, but some variables remain constant. The cost of advertising is one of these constants.”
Branding and clicks are huge for hotels, but even before the pandemic and the ensuing crisis, Online Travel Agencies (OTAs) and Metasearch dominated relevant keywords for hotels on Google. According to the aforementioned study, more than 75% of the clicks belong to online travel agencies. But, Liapakis told me a curious thing about the COVID-19 crisis, OTAs and the metasearch entities have stopped investing in ads, which has opened an interesting door for hoteliers.
Before the pandemic, OTAs got the lion’s share of clicks and ensuing bookings. The middlemen more or less ran native hotel sites and brands off the advertising map, in fact seven of the top ten advertisers on Google were OTAs. The numbers broke down something like this:
- Hotels.com won 19,3% of clicks
- Expedia took 16,7%
- Kayak got 13,6%
- Booking.com received 19,8% of mobile clicks
- Only Marriott arrived in the first five searches on mobile
- And Airbnb ranked sixth
And then COVID-19 turned the world upside-down. The share of Google ads for OTAs and meta-search hit bottom as demand disappeared. Based on the research, Liapakis’ Eyewide began advising hotel brands to take advantage of much lower cost-per-click opportunities in order for clients recover a greater share of viewing. With the OTAs and metasearch out of the bidding, smart marketers can preserve continuity, establishing brand name, and make ads more cost prohibitive for competitors to advertise.
More specifically, according to the EyeWide executive, and partner Antonis Papachrysanthou, there’s an advertising loophole or search cost reduction, which will make Greek hotels competitive for a fraction of the former cost. At least this the case for now since the OTAs are not making the expenditures. In addition, I’m told hoteliers taking advantage now may be able to lock in ad prices for certain keywords etc.
Liapakis says when the profit from paid clicks plus organic clicks exceeds the value of the organic clicks, then it is wise to buy (i.e. invest in paid search). He also says advertisers should increase the advertising budget when:
- the profit margin on clicks is high,
- the rate of replacement is low
- the relative value of organic clicks is low
Last week, Greece’s Tourism Minister Harry Theoharis said the government’s “goal is for the season to begin in July and perhaps extend through October or November.” According to Theoharis, tour operators and hoteliers are hopeful for a July start, but most are “waiting to see what the health safeguards, the new rules, will be.” However, even the most positive outlook ends up with bare minimum occupancy for every hotel. A recent study by the Hellenic Chamber of Hotels found that 65 percent of hoteliers say that they are “likely” to go bankrupt on account of the crisis.
With this in mind, I asked Liapakis how branding and advertising strategies will make a difference in a broken Greece tourism market. His answer, while surprising, made all the good sense in the world. The Heraklion, Crete native said:
“We are working to ensure that our clients get the best possible RevPAR and occupancy possible, no matter what the tourism inflows are. Our job is to put our clients first, as mercenary as this may sound.”
EyeWide’s founder went on to express concern for Greece and Europe as a whole. He even expressed concern for the OTAs, since the intermediaries are such a critical focal point for bookings. At the end of the day optimizing the market is what this business is all about.
Hoteliers and marketers only have so much leeway. It’s lawmakers and official agencies that play the bigger role in ensuring a safe and profitable industry. Saving hoteliers a bundle projecting their brands, while leveraging position on the OTAs at the same time, is just brilliant marketing strategy.