2013 Digital IQ Index: Hotels

Excerpt from the 2013 Digital IQ Index ®
: Hotels
To access the full report, contact membership@L2ThinkTank.om

Hotels
January 31, 2013
SCOTT GALLOWAY
NYU Stern

In partnership with:

© L2 2013 L2ThinkTank.com
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Inquire about your brand’s ranking: Info@L2ThinkTank.com

: Hotels
To access the full report, contact membership@L2ThinkTank.om Year-Over-Year Growth in Digital IQ and
52-Week Percent Change in Stock Price

20 & 92
Hotel Companies with Published Data, n=10
60%

52 Week Change in Stock Price
50%

40%
r=0.447
30%

Nearly 20 years since the advent of the Netscape browser, 20%

10%
92 percent of U.S. travelers book hotel reservations online.1 0%

Several factors have converged to make digital key to a brand’s -10%
-40% -30% 20% 10% 0% 10% 20% 30% 40%

success or failure: Growth in Digital IQ Percent Rank

• Sixty-six percent of travellers indicate they will spend more Upgrade months, but no brand in the Index hosts a fully optimized
time online researching travel purchases in 20122 (up from Eleven brands in the Index launched sites in the past year touch commerce and browsing experience. And, while 74
59 percent in 2011). In an industry flooded with choice, deft including icons Hilton, Mandarin Oriental, and Sofitel. percent of affluent travelers suggest that they are more likely
search engine marketing, loyalty initiatives, and site content Eighty-one percent of hotel brands now boast a mobile- to book after watching video,8 just 25 percent of the brands
investments are the sharpest tools to cut through the clutter. optimized site, up from 66 percent in 2012. Eighty-one feature video on their property pages.
percent feature at least one iOS application, many of which
• Direct bookings via brand websites are three to five times Digital IQ = Shareholder Value
are designed to enhance the guest experience during their
more profitable than bookings secured through OTAs and/ Brands that have embraced digital innovation—and their
stay. All but two brands are present on Pinterest and 82
or travel agents.3 Rooms booked through a hotel brand site shareholders—are reaping rewards. Our data reveals a
percent are present on Instagram—social media’s latest
also register a higher average price. positive relationship between year-over-year growth in Digital
objects of affection. Content destinations, ranging from the
Four Seasons’ Weddings and Taste features to Fairmont’s IQ (across multi-brand companies) and change in stock
• Sixty-three percent of travelers consult online reviews before
“Everyone’s an Original,” transform sites from booking price, supporting our thesis that digital competence is linked
booking, including 73 percent of consumers between the
engines to travel portals. to shareholder value in the hotel sector.
ages of 18 and 34.4 Transactional data from Travelocity
indicates a one point bump in review scores (on a five point Our third annual study quantifies the digital competence
scale) which translates to an 11.2 percent price premium.5
Vacancy of 57 global hotel brands. Our aim is to provide a tool for
There is considerable untapped opportunity. Despite the
identifying areas of strength and weakness, helping brands
• Fifty-seven percent of business travelers access travel importance of online reviews, just 28 percent of brands in
achieve greater return on digital investments. Like the
information from a mobile device, up from 25 percent in the Index include user reviews or link to third-party review
medium we are assessing, our approach is dynamic. Please
2009.6 A third of mobile searchers reserve within 24 hours, sites such as TripAdvisor, which is now worth ($6.7 billion)
reach out with comments to improve our methodology and
resulting in high margin bookings.7 more than the majority of firms in the Index. Tablet searches
findings. You can reach me at scott@stern.nyu.edu.
for hotel brands are up 180 percent in the past 12

1. Travel Booking—U.S., Mintel, December 2012. 5. Cornell Hospitality Report, November 2012.
2. The Traveler’s Road to Decision, Google and Ipsos MediaCT. July 2012. 6. The Traveler’s Road to Decision, Google and Ipsos MediaCT. July 2012. Scott Galloway
3. Distribution Channel Analysis: a Guide for Hotels,” Green, Cindy Estis & Lomanno, Mark, 2012. 7. Tnooz. Professor of Marketing, NYU Stern
4. Travel Booking U.S., Mintel, December 2012. 8. The Traveler’s Road to Decision, Google and Ipsos MediaCT. July 2012.
Founder, L2



: Hotels

ABOUT THE RANKING
The Methodology

40% 30% 20% 10%
Site Digital Marketing Mobile Social Media
Effectiveness of Brand Site 75% Search, Display, and Email Marketing Efforts Compatibility, Optimization, and Brand Presence, Community Size,
Site Technology and Tablet Experience Search: Marketing on Smartphones, and Tablets Content, and Engagement
Site Search and Navigation Traffic, SEM, SEO, Web Authority  Mobile Site: Facebook:
Reservations Compatibility, Functionality, Transaction Likes, Growth, Tabs & Applications,
Advertising and Innovation:
Property Pages and Destination Guides Capability Responsiveness, Interaction Rate
Display, Retargeting, Cross-Platform Initiatives
Customer Service
iOS Applications (both iPhone & iPad): Twitter:
Account Functionality and Loyalty Programs Blog & Other User-Generated Content:
Availability, Popularity, Functionality Followers, Growth, Frequency,
Mentions, Sentiment
Brand Translation 25% Online Voice 
Android:
Aesthetics Email:
Availability, Popularity, Functionality YouTube:
Messaging and Visuals Frequency, Content, Innovation, Segmentation
Search Visibility, Views, Number
(Provided by SapientNitro) and Trigger Emails Innovation:
of Uploads, Subscriber Growth,
Geolocal, Recent Brand Initiatives
Viral Videos

TripAdvisor:
Site and Social Media Integration,
Brand Responsiveness, Number
of Reviews

Emerging Social Media:
Instagram, Google+, Pinterest, Tumblr

Digital IQ Classes
Genius 140+ Gifted 110–139 Average 90–109 Challenged 70–89 Feeble < 70
Digital competence is a point of Brands are experimenting and innovating Digital presence is functional Limited or inconsistent adoption of Investment does not
competitive differentiation for these brands. across site, mobile, and social platforms. yet predictable. Efforts are mobile and social media platforms. match opportunity.
Creatively engineered messaging reaches Digital presence is consistent with brand often siloed across platforms. Sites lack inspiration and utility.
travelers on a variety of devices and in image and larger marketing efforts.
many online environments.



: Hotels
GENIUS
W Hotels
GIFTED
InterContinental
Westin

DIGITAL IQ RANKING
Four Seasons
The Luxury Collection
Sheraton
St. Regis
Hilton
Fairmont
The Ritz-Carlton
RANK BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Mandarin Oriental
Sofitel
Gifted Waldorf-Astoria
Hotel Indigo
Marriott
2 136 9 122 Renaissance
MGM Resorts
Swissôtel
InterContinental Hotels Group Fairmont Raffles Hotels International Le Méridien

1 142 Omni
Hyatt
Shangri-La

2 136 10 118 AVERAGE
Conrad
JW Marriott
Starwood Hotels & Resorts Worldwide Marriott International Loews
Radisson
Orient-Express
Starwood Hotels & Resorts Worldwide Radisson Blu
Small Luxury Hotels
4 134 11 117 of the World
Wyndham
Kimpton
Four Seasons Hotels Mandarin Oriental Hotel Group Park Hyatt
Jumeirah
Dream
CHALLENGED
Morgans Hotel Group
4 134 11 117 Viceroy
Joie de Vivre
The Peninsula
Starwood Hotels & Resorts Worldwide Accor Kempinski
The Leading Hotels
of the World
Pullman
Taj
6 133 13 115 Millennium
Preferred
Tryp by Wyndham
Starwood Hotels & Resorts Worldwide Hilton Worldwide One&Only
The Langham
Rosewood
Dorchester Collection
MGallery
7 130 14 114 Warwick International Hotels
Pan Pacific
Concorde
Starwood Hotels & Resorts Worldwide InterContinental Hotels Group Relais & Châteaux
Oberoi
FEEBLE
Raffles
Banyan Tree
8 127 14 114

Hilton Worldwide Marriott International



: Hotels
GENIUS
W Hotels
GIFTED
InterContinental
Westin

DIGITAL IQ RANKING
Four Seasons
Sheraton
St. Regis
Hilton
Fairmont
The Ritz-Carlton
Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Mandarin Oriental
Sofitel
Average Waldorf-Astoria
Hotel Indigo
Marriott
14 114 23 109 30 98 Renaissance
MGM Resorts
Swissôtel
Marriott International Hilton Worldwide Wyndham Hotel Group
Le Méridien
Omni
Hyatt
Shangri-La

17 112 24 105 31 96 AVERAGE
Conrad
JW Marriott
MGM Resorts International Marriott International Kimpton Hotel & Restaurant Group Loews
Radisson
Orient-Express
Radisson Blu
Small Luxury Hotels
17 112 24 105 31 96 of the World
Wyndham
Kimpton
Fairmont Raffles Hotels International Hyatt Corporation Park Hyatt
Loews Hotels
Jumeirah
Dream
CHALLENGED
Morgans Hotel Group
19 111 26 104 33 95 Viceroy
Joie de Vivre
The Peninsula
Starwood Hotels & Resorts Worldwide Carlson Rezidor Hotel Group Jumeirah International Kempinski
The Leading Hotels
of the World
Pullman
Taj
19 111 27 101 34 92 Millennium
Preferred
Tryp by Wyndham
Omni Hotels & Resorts Orient-Express Hotels Wyndham Hotel Group One&Only
The Langham
Rosewood
Challenged Dorchester Collection
MGallery
21 110 28 100 35 88 Warwick International Hotels
Pan Pacific
Concorde
Hyatt Corporation Carlson Rezidor Hotel Group Morgans Hotel Group Relais & Châteaux
Oberoi
FEEBLE
Raffles
Banyan Tree
21 110 29 99 35 88

Shangri-La International Hotel Management Small Luxury Hotels of the World Viceroy Hotel Group



: Hotels
GENIUS
W Hotels
GIFTED
InterContinental
Westin

DIGITAL IQ RANKING Four Seasons
Sheraton
St. Regis
Hilton
Fairmont
The Ritz-Carlton
Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ Rank BRAND DIGITAL IQ
Mandarin Oriental
Sofitel
Waldorf-Astoria
Hotel Indigo

37 87 43 82 51 76 Marriott
Renaissance
MGM Resorts
Swissôtel
Joie de Vivre Hospitality Preferred Hotel Group Warwick International Hotels and Resorts
Le Méridien
Omni
Hyatt
Shangri-La

37 87 43 82 52 75 AVERAGE
Conrad
JW Marriott
Pan Pacific Hotels Group Loews
The Hongkong and Shanghai Hotels Wyndham Hotel Group
Radisson
Orient-Express
Radisson Blu
Small Luxury Hotels
of the World
39 85 46 80 53 74 Wyndham
Kimpton
Park Hyatt
Kempinski Kerzner International Resorts Concorde Hotels & Resorts
Jumeirah
Dream
CHALLENGED
Morgans Hotel Group
39 85 46 80 53 74 Viceroy
Joie de Vivre
The Peninsula
The Leading Hotels of the World Langham Hotels International Relais & Châteaux Kempinski
The Leading Hotels
of the World
Pullman
Taj
41 84 48 79 55 71 Millennium
Preferred
Tryp by Wyndham
Accor Rosewood Hotels and Resorts The Oberoi Group One&Only
The Langham
Feeble Rosewood
Dorchester Collection
MGallery
41 84 49 77 56 69 Warwick International Hotels
Pan Pacific
Concorde
The Indian Hotels Company Dorchester Collection Fairmont Raffles Hotels International Relais & Châteaux
Oberoi
FEEBLE
Raffles
Banyan Tree
43 82 49 77 57 65

Millennium & Copthorne Hotels Accor Banyan Tree Holdings



: Hotels

Average Digital IQ

Key Findings By Region (HQ)
January 2013

Regional Leaders
PhoCusWright and PricewaterhouseCoopers reported

106
that in 2010 59 percent of U.S. travel revenues originated North
online, versus 43 percent in Europe and 21 percent in America Europe
the Asia-Pacific. Hotel brands headquartered in North
9

America boast significantly higher digital IQ’s than global
n=35
94 n=12

counterparts.

Regardless of HQ locale, the lion’s share of growth will
come from emerging economies. Brands are beginning to
customize site experiences, regardless of where properties
are located. Two thirds of brands offer a Chinese version
of the site and more than half offer German, French and 88 Middle East
86 Asia
Spanish versions. Pacific
& Africa
n=8
n=2

Percentage of Brands with a Site Available
in the Following Languages
January 2013
Travel Accomodation Market Size by Region
Deutsch
64%
Market Size (2011, USD billion) Growth (2011-2016 CAGR)

Chinese
55% German
212.4
1.0%

español français
53% 53%
日本語
48% Western
Japanese North America Europe
Spanish French

Asia Paciﬁc
português Italiano 한국어 русязык ‫رى ِعب َةرَ ع/ ي ِرَ علا‬
с и
к й َ‫َ /ُ يِب‬ 153.7 Middle East & Africa
180.6
29% 28%
Portugese
16% 14% ‫ب‬
9%
Italian Korean Russian Arabic
3.8%
4.9%

25.4
5.1%
9. “Web Is Bright Spot in Europe Travel Market,” Karin von Abrams, eMarketer, January 14, Source: Euromonitor
2010.



: Hotels

Key Findings
Customer Service
The Booking Engine Percent of Brand Sites with the Following Features
Nearly two-thirds of travelers are booking hotels online, with December 2012
43 percent of business travelers and 39 percent of leisure
travelers booking directly from a lodging website.10 While 88
percent of travelers comparison shop and 63 percent consult
travel reviews before booking, more sophisticated site features
such as 360 degree tours, product-page video, and hotel staff
tips are just starting to emerge. Use of on-site user ratings and
reviews is 28 percent versus 17 percent in 2012.

Fewer than one in four brands provide live chat functionality. 28% 23% 19% 16%
Ratings and Reviews Live Chat Callback Contact Concierge
When Omni Hotels implemented live chat features in 2010, it
registered a dramatic lift in conversion rates (from 3 percent for
site visitors who did not use the feature to 18 percent for those
that did), and an 8 percent increase in AOV.11 On average,
visitors spend 27 percent more time and register 39 percent
more page views on hotel sites with live chat. Property Functionality
Percent of Brand Property Pages with the Following Features
Forty-two percent of leisure travelers indicate that virtual tours December 2012
or pictures are important features when selecting a hotel,12
however just 28 percent of hoteliers offer detailed photographs
of their accommodations, and only 28 percent offer virtual
tours or 360 degree views.

“Curated, personalized content is
resonating more with luxury hotel
guests. Videos, local tips provided by
experts, exclusive amenities, booking 39% 28% 28% 25% 21%
Restaurant Reservations Detailed Room View 360 Degree Room Videos Book Hotel Amenities
rewards—all play an important role in providing a
View or Virtual Tour (Spa, Golf, etc.)
unique guest experience.”
bill kanarick
worldwide cmo, SapientNitro

10. “The Hotel Traveler’s Road to Decision,” Google Ipsos OTX MediaCT, July 2012.
11. http://www.liveperson.com/sites/default/files/pdfs/Omni_CaseStudy.pdf
12. “The Hotel Traveler’s Road to Decision,” Google Ipsos OTX MediaCT, July 2012.



: Hotels

Key Findings
Search continued Organic Search Real Estate
Seventy-four percent of brands purchase against their Average Percent of Brand-Owned

own brand keywords. The competition for paid real estate Real Estate by Industry

between brands and OTAs is fierce. Brands command 49
percent of real estate for brand terms, OTAs are not far
behind garnering a third of the search results.

46% 38% 36% 30% 27% 25% 25%
Hotels Specialty Beauty Sportswear Fashion Spirits Watches &
Retail Jewelry

Percent Organic Real Estate of First Page Percent Paid Real Estate of First Page
Brand Search Results Brand Search Results
December 2012 December 2012

8% 4%
Competitors TripAdvisor
3% 7%
Competitor
15% TripAdvisor
OTA

46% 8% 49%
Other Brand
Brand

29% 32%
Other
OTA



: Hotels
Mobile Adoption
Percent of Brands on the Following Mobile Platforms

Key Findings 2011 vs. 2012 vs. 2013
2011 2012 2013

Mobile 81% 81% 65%
68% 66% 46%
Eighty-one percent of the brands in this year’s Index offer
54% 63% 10%
a mobile site experience, a year-over-year increase of 15
percent. Across the app ecosystem, increases in mobile
platform adoption are substantial, with each operating system
seeing double-digit growth. Both Android and BlackBerry—
with a waning, but travel-savvy user base—saw increases of
above 18 percent in app adoption. Eight of 10 smartphone iPhone App Mobile Website Android App
60% 40%
users and nine of 10 tablet users who have booked travel on
44% 22%
their devices reported they would do so again.13 12% 20%

Hotel brands’ mobile sites and apps typically have different,
complementary foci. Brand sites focus on the m-commerce
(bookings) experience, while many apps provide functionality
to enhance the in-stay experience. Forty percent of iOS apps
feature city guides, 18 percent provide concierge services,
and 15 percent allow users to order room service directly iPad App Blackberry App

from the app.

Hotel brands are investing heavily in mobile search, iOS Mobile App Functionality
43%
with the average brand owning 57 percent of its organic Percent of Apps
40%
results for brand search. Starwood saw its monthly mobile December 2012

bookings increase 20 percent after running click-to-call 33%
ads for its brands. 14

26%

“Once again, accessible mobile platforms 20%
18%
are the dominating factor in reaching 15% 14%
consumers. Connecting your consumer to 12% 12%
10%
your hotel needs to be immediate, constant,
and compatible across media channels.”
bill kanarick
s s t s t
worldwide cmo, SapientNitro on ide ten tor
y Up rge rvi
ce tio
n
pin
g
ew Ou
rvati Gu on ec ign cie Se lec ee evi in/
se y aC Dir il S on Se ek tR ck
Re Cit ed
i
rty a C o m
ge us es Ch
e
pe Em Ro ua Ho Gu
hM ng
13. “The Rise of Mobile Adoption, Sentiment and Opportunity,” comScore, November 2012. Ric Pro La
14. “Advertising Relearned for Mobile,” Claire Cain Miller, New York Times, October 28, 2012.



: Hotels

Watch the
TABLE OF CONTENTS Hotels Video
Click to Play

Click to Jump To:

4 Methodology 30 The New Kid
31 YouTube
5 Digital IQ Rankings
33 Mobile
5 Genius
34 Property All Stars
6 Gifted
7 Average 35 Flash of Genius
8 Challenged 35 Shangri-La, W Hotels, and Four Seasons: UGC Contests
9 Feeble 36 Fairmont, One & Only Resorts: Digital “I Do”
37 Hilton Hotels & Resorts: Vacation Rx
10 Key Findings
38 Hotel Indigo, Relais & Chateau: Destination Guides
10 Digital IQ Distribution
39 Conrad: Swipe for Service
11 Enterprise Effect
40 Renaissance: Digital Rebirth
13 Regional Leaders
41 Sofitel: Pick a Pastry
14 Biggest Winners & Losers
42 Lowes, Millennium, Only&Only, SLH: Crucial Communication
15 The Booking Engine
43 Shangri-La: Incentivizing App Adoption
16 Loyalty
44 Four Seasons: The Many Faces of Luxury
17 Touch
19 Search 45 L2 Team
21 Email: Baby Steps
46 About L2
22 The World’s #1 Travel Destination
23 Social Media Penetration
25 Global Management
26 F-Booking?
27 Size vs. Engagement
29 Instagram > 1k Words


: Hotels

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