San Diego recently ranked third in the nation for searches by visitors to the travel booking sites of Expedia Inc., behind only Las Vegas and New York City. It’s among the latest signs of what industry experts describe as the rising influence of the Web and social media on the local economy’s tourism fortunes and its ability to compete with other prime destinations.
“The online sites first became important after 9/11, and they were originally seen primarily as a way to fill up space in distressed properties, but that’s no longer the case,” says Dave Gerdes, San Diego regional sales director for Colorado-based Destination Hotels & Resorts. “They’re a vital component of everybody’s business plan now.”
Gerdes estimates that online travel booking sites, led by Expedia, Orbitz and Travelocity, now account for about 20 percent of the total non-group room nights booked annually at the three upscale local properties managed by Destination — L’Auberge Del Mar, Estancia La Jolla Hotel & Spa and Paradise Point Resort & Spa.
The impact is regionwide. According to the San Diego Convention & Visitors Bureau, also known as ConVis, the top three booking sites alone accounted for the sale of 1.1 million hotel room nights in San Diego County during 2010 — about 8 percent of the total 14 million room nights sold locally.
One in Two Visits Booked Online
Robert Rauch, who heads the locally based consulting firm R.A. Rauch & Associates Inc. and operates two Hilton-branded hotels in San Diego, said local hoteliers now see just over half of all bookings made through online channels.
The bulk of reservations are still made through hotels’ own Web sites, he said. However, the travel-focused booking and review sites are pivotal to the initial consumer research process, especially when travelers are not familiar with the destination.
Depending on the individual arrangements they have negotiated, Rauch said hoteliers generally pay an amount ranging from 18 to 30 percent of booked rates to the major booking sites.
Beyond the boost they provide during recessionary periods, he said an ongoing presence on the booking sites can significantly heighten the profile of local tourism markets as well as individual properties.
“There are some people in the business who look at the online travel sites as the bad guy, but I’m not one of them,” Rauch said.
Based in Bellevue, Wash., Expedia operates the flagship reservation site and related marketing services geared to the hospitality industry. It also owns Hotels.com and Hotwire, and is in the process of spinning off its popular consumer review site, TripAdvisor.
Flood of Visitors Ahead?
The largest of the online travel players recently reported that its Expedia site visitors made 1.3 million searches of the San Diego market during July, just behind the 2.5 million for Las Vegas and 2 million for New York.
According to Expedia, that could mean a significant influx of local visitors over the next three months, since 87 percent of U.S. travel is booked zero to 90 days in advance.
Noah Tratt, vice president of Expedia’s Media Solutions division, said tourism organizations are making increasing use of industry-focused services on the Expedia site, including display ads and its TravelAds program that enable high-ranked sponsored search listings on its site, similar to services offered by Google.
“San Diego has been very aggressive and very creative in setting up promotional materials in places like Expedia,” Tratt said, adding that the local market has consistently ranked in the top 10 nationally for searches during the past year.
Joe Terzi, president and CEO of ConVis, said the agency spends approximately $1 million annually on advertising tied to the major travel booking sites. Those efforts supplement its own internal Web search engine optimization and related efforts that help bring around 5 million visitors annually to the ConVis Web site.
‘Where the Eyeballs Are’Rising collections from the regional tourism district, supported by the hospitality industry, have enabled the agency to boost its online promotional efforts in recent years. Terzi said ConVis has been gravitating away from print venues and will be boosting its presence on social media sites including Facebook and Twitter.
“We generally are going to be where the eyeballs are, so that’s why we still have a large investment in TV advertising,” Terzi said.
Isaac Gerstenzang, Destination Hotels’ assistant vice president of corporate e-commerce, said the growing impact of online venues in the travel space, especially the capacity of visitors to give instant reviews, has prompted hoteliers to ratchet up their “reputation management” efforts.
For instance, Destination uses an industry-focused service, offered by San Francisco-based Revinate Inc., which presents users with an online dashboard showing every Web and social site where the client hotel is being commented on.
“One bad review is not the end of the world,” Gerstenzang said. “It’s when you have something that’s recurring where you need to see it and make the necessary adjustments.”
“This way if someone puts out a nice tweet about us, maybe we can immediately say thanks to that customer directly on Twitter,” he added.
