Part – II of WeChat Special
ChinaTravelNews, Ritesh Gupta – Hotel organizations in China are eyeing extensive digital transformation, an initiative that can pave way for a personalized service via different touchpoints. And the cornerstone of such effort is serving guests through company-owned mobile apps, be it for online booking, room selection, payment, check-in or check-out.
But as much as established hotel groups are investing in refining their own mobile portfolio, they aren’t ignoring WeChat as a booking channel. As we highlighted in our first report on WeChat, brands need to be proactive considering the way Tencent continues to reveal interesting features for WeChat.
Using WeChat for incremental gains
Established hotel company China Lodging Group (Huazhu) is currently using both its own mobile portfolio as well as third-party app WeChat for bookings.
Last year China Lodging’s mobile web and apps accounted for 40% of total room revenue, and WeChat contributed 0.4%. The group expects WeChat to contribute 3% of total room revenue by 2017. The current share of WeChat is more than 1%, according to Xinxin Liu, CIO, China Lodging Group.
Of course, one major aspect that stands out in the case of mobile app is the control over scenario service notifications and precise promotions, says Liu. This also essentially means that the group is in a better position to serve its loyal guests. As Liu shared, WeChat is generally marked for targeting new set of customers and getting them enrolled in the loyalty program. The group’s loyalty program, HuaZhu Club, had more than 31 million members last year.
In all, around 85% of room nights were sold to HuaZhu Club members. And the majority of these bookings from loyal guests - around 70% - came from the group’s mobile app.
Overall, if we also take a cue from China Lodging Group’s distribution strategy, over 90% of China Lodging’s room nights were sold through its direct sales platforms. So this means the company generally tends to rely less on third party apps or intermediaries. Overall bookings from WeChat are miniscule when compared with its own mobile portfolio, and WeChat bookings are generally related to room sales/ accommodation.
Like any travel supplier, China Lodging is ensuring that the full cycle experience of staying with any of its property proves to be a pleasant one. The group actively tracks its loyal guests’ booking history and pattern, points garnered and redeemed etc. And in this context, mobile apps are playing a pivotal role at this juncture. Considering the CRM program run by the group, apps can currently offer relevant information about hotels, search options, including a feature for nearby properties based on location, services offered, best pricing, online mixed payment（Points, Prepaid card and any 3rd party payment way) and online room selection functions etc. Loyal guests are offered discounts on room rates, free breakfasts (for gold and platinum members), smooth mobility check-in, suitable 0-second check-out etc.
Another key aspect, according to Liu, is the ability of the group’s app to fulfil overall trip requirements of guests via company-owned apps, and this also means China Lodging Group can leverage the travellers’ need via sale of air tickets, train taxi bookings etc.
There are major differences between mobile apps and WeChat, especially in terms of relatively lower-cost, targeted marketing campaigns that a hotel group can run through its own platform. “There are few advantages of a running a hotel mobile app in an efficient manner. Other than the ownership issue, for a third-party service like WeChat we need to break the clutter, as a user might be getting numerous messages throughout the day. Also, there are limitations with WeChat business accounts, be it for messaging or sales promotion, such as the restriction of the number of words,” shared Liu.
Facilitating bookings via WeChat
Tony Shen, EverMotion’s founder and CEO underlines that completing a transaction via WeChat is a convenient payment experience. He says it is more suitable for mobile end shopping experience, just six steps to complete the entire shopping process. The order process for non-room products for hotels is as follows:
1.Follow WeChat public account
2.Browse WeChat mall
3.Select favorite restaurant and dishes
4.Fill in the name and place an orders on WeChat (no registration required)
5.WeChat payment (enter six payment password)
6.Obtain consumption coupon and use it in store
Other highlights include:
With social sharing function, coupons can be shared on WeChat with friends who intend to experience offline store services as well;
Introduce card coupons, points etc. to stimulate the frequency of consumption;
Combining payment behavior with brand marketing activities. “For example, we initiated an anniversary promotion for a hotel in Shanghai on WeChat simply by using the shake function. People who join in the activity would receive a 2-Yuan coupon for gifts. This event drove sales that exceeded RMB100,000 only in a week,” shared Shen.
Few months back Kempinski Hotel Chengdu chose to offer 30% discount on the room booking coming from the followers of the hotel’s official WeChat account. Plus, guests were also given an option to select a room with one of the following benefits: a free upgrade to the next higher room category, late check-out until 16:00 or a complimentary 0.5 L of home-brewed beer. Other promotions included - more privileged laundry services and discounted limousine service for airport transfers.
Shen says the buying behaviour - what is being bought, average booking value etc. depends on various factors. For example, in case of a business-oriented customer who tends to travel throughout the year, the team would assist the hotel in launching a collection of rooms and packages to meet their behavior and lifestyle. An offering would be say a private fitness instructor course package for those guests who lay special emphasis on fitness and wellness.
In terms of features that facilitate transactions, monetization on WeChat is also happening via membership card purchase and recharge, and credit exchange mall.
Explaining how these options work, Shen says membership card can be purchased on WeChat with functionalities including money recharge and credit accumulation. “People who get membership cards are able to shop both on WeChat mall (online) and in hotels (offline). Meanwhile, each purchase will generate corresponding credits and automatically go into membership cards. It is convenient for customers to exchange small gifts, coupons and some free services with remaining credits in the WeChat mall any time,” says Shen.
When a user is opts for transact via WeChat shops, one needs to open the page automatically created by the payment system. After scanning the QR code, the payment is done.
Shen says hotels only need to upgrade or open WeChat service account and complete certification, and then apply for WeChat payment API. No other tedious preparation work is needed, he says.
He also asserts that hotels need to “guide users to follow their public accounts and place online orders”. And for hotel apps, one needs to consider the channels that are apt for app promotion, and nurture the habit of using apps. Shen adds in addition to developing apps for iOS and Android, it needs to be remembered that the cost of technology upgrades and maintenance is relatively high. “Whereas WeChat ordering is based on HTML5 with wider compatibility and easier expansion to continuously meet the needs of the user experience,” he says.
Overall, according to Shen, “WeChat ordering has the characteristics of lower investment, shorter development cycle and stronger flexibility”.
But as Liu pointed out, the load of WeChat messaging means a brand has to work its way through to ensure a message or a promotion is understood by a WeChat user. The challenge is here to break the clutter as WeChat users are receiving too many messages in a day. Whereas if the app is being used regularly, especially by loyal users, then the company stands to gain.
At the end of the day, a brand needs to assess how its company-owned app and WeChat can enhance the overall experience.
For instance, China Lodging is supporting several functionalities via WeChat that are relevant for planning and booking stages, as well as the stay of the guest. “Guests can book room, pay online (optional) and opt for a room before arrival. But when they arrive, they can use Huazhu Self-Service machine and use it for check-in, scan their id card, pay money (support WeChat payment), and make room card/ key. Also, guests can share the hotel and booking information with their friends,” shared Liu.
Shen says the challenge for hotels is to efficiently treat different types of users and provide continuous personalized products and services. He also recommends that one needs to “use Internet thinking” so that guests are willing to participate in O2O interaction. For instance, with China Lodging, during their stay guests can find the QR code in some new rooms, they can scan the QR code and buy goods which are in the rooms and can avail them.
Rather than focusing on too many sales promotion messages on WeChat, hotel companies need to make diligent use of their resources and marketing expenditure to make sure it is the guest who benefits the most as they use WeChat for their hotel planning, booking and during their stay.
Learn more about WeChat as a touchpoint with Part 1 of the WeChat Special.