Australian hotels hopeful about year ahead, but online presence key to driving profits

Hotel operators are more optimistic about business conditions compared to last year, according to the latest TripBarometer study by travel website TripAdvisor.

The research found 70% of hotel owners are optimistic about profits in the year ahead, up from 67% last year. The news is especially good for Australian businesses, with three in four optimistic about a growth in profitability this year.

The study also found hotel owners see online reviews as having more of an influence than price or recommendations from friends and families when it comes to travellers making booking decisions.

David Beirman, senior lecturer in tourism at the University of Technology Sydney, says with the low dollar and a rise in domestic travel Australian hotel owners can expect to be more confident about the year ahead.

“That’s always good news for hotels,” he told SmartCompany. “However, that good news is not always spread around as evenly as it could be.”

Beirman says while overall confidence figures look good, the gateway cities – such as Sydney and Melbourne – will enjoy a greater share of benefits than regional and rural areas.

“This is a big problem that we have in Australia in that access to a lot of provincial areas tends to be very expensive. More high-profile destinations in the country tend to do well.”

According to TripAdvisor’s research, there is a discrepancy between how travellers plan a holiday and how hotel operators estimate when clients make a booking. More than a third of Australians plan their trip seven to 12 months beforehand, with one in 10 planning a whole year in advance. However, the majority of hotel owners (65%) estimate their clients book within around four weeks of arrival.

The survey also found the online market is the most significant when it comes to travel planning, with 98% of people using online resources to plan a holiday.

Beirman says these days an online presence is crucial for those in the tourism industry. The good news for cash-strapped SMEs is that online marketing methods can be relatively cheap and easy.

“Online marketing provides a very inexpensive way to promote your service,” he said. “If you’re going to run a business and you want it to be a success, you’re going to have to get out there and market it.”

Azim Barodawala, chief executive of travel search engine and booking app Adioso, says the online tourism market is huge.

“It’s growing so much faster than offline channels,” he told SmartCompany. “But the way I would think about it if I ran a hotel and wanted to have a good online presence is to have a great product. Start with a great product and have a website, a place people can find out about your property.”

Barodawala also says the key for tourism operators is to leverage the travellers who come to the business’s area on a regular basis.

“Because those are the people who through word-of-mouth – especially through social media – will promote your brand. It’s about reaching people who care.”