Max Starkov, President & CEOMax Starkov, President & CEO of HeBS Digital, sees an industry in crisis. “The hospitality industry is facing flat or falling occupancy rates for the next several years, an existential threat in the form of Airbnb, and lagging investments in technology.” The evidence is convincing: 25 of the top 50 markets in the U.S. have an oversupply of hotel rooms—and Airbnb is capturing 10-12 percent of demand. Moreover, Starkov insists that the industry is overly dependent on Online Travel Agencies (OTAs). “In 2011, there were 4.3 direct bookings for every OTA booking. Today there are less than 2.7.” This poses a problem because the distribution cost for direct bookings is about 4.5 percent, while for an OTA it averages 18-25 percent.
Over the next 12-18 months, the industry needs to focus primarily on driving direct website bookings and lowering distribution costs. This can be done with best in breed technology, a space where HeBS Digital has always excelled. “Of six major cost drivers for hotels, five are beyond the operators’ control: increasing wages, debt service, franchise royalties, rising real estate taxes, and utilities,” he says. “Distribution costs are the only costs driver hoteliers can influence, and that is where HeBS Digital has always focused on helping the industry. The concept of ‘Direct is Always Better’ has been our mantra for 15 years.”
HeBS Digital helps clients increase direct bookings and lower distribution costs through best-in-class digital technology built and customized for the hospitality industry’s needs, strategy and consulting, and of course, digital marketing services.
“Technology cannot exist outside the realities of the marketplace. What’s the big picture? What are the current trends? Every CIO, CTO and CEO needs to ask themselves these questions when evaluating investments in technology.” The flagship HeBS Digital offering is its Website Technology Platform, centered around the smartCMS®, which has won multiple awards. More than a Content Management System, the smartCMS® powers the most innovative and revenue-generating hospitality websites in the industry today and includes technology to help hoteliers recover abandoned reservations and personalize content on their websites. “It is criminal for the hotel website to treat every person the same, whether they are a brand-new visitor or someone who has stayed with you 20 times.”
We are always working to improve our systems to provide a more personalized product for our clients, always with the end goal of increasing direct bookings
Other technology offerings specific to HeBS Digital include Smart Data Marketing and Dynamic Rate Marketing, proven to work for their clients. The company devised a multi-channel digital marketing campaign for a high-end Washington, D.C. hotel that recently reopened. Through Smart Data Marketing, the campaign focused on travel consumers who showed intent to travel to the D.C. area and had just searched for flights to Washington, serving them banner ads with pricing for the dates indicated by the flight searches. “By featuring real-time rates and availability in the marketing messages, and making sure we were reaching an audience that was actively planning travel to our client’s destination, we increased revenue through the website by 55 percent,” Starkov reports.
HeBS Digital is Starkov’s third Internet startup, founded in 2001. “Today, we have 120 employees in four offices, with new offices opening in London and Singapore.” Starkov looks for deep industry expertise in those he hires and follows the advice he received from a manager years ago: “Always hire people who are smarter than you.”
Looking to the future, Starkov plans to take the company’s Website Technology Platform to new levels. The company will also expand in European, Asian-Pacific, and Central American markets, which Starkov contends are “badly underserved.” “We are always working to improve our offerings to provide a more personalized product for our clients, always with the end goal of increasing direct bookings.”