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March 27, 2008
In contrast to the upside offered by the online channel, the dynamic growth of the online environment also creates a range of new risks and opportunities for strong competition in hospitality. TIG Global shares some valuable insights on how to meet these challenges.
by TIG Global
With purchases of online travel continuing to scale at a feverish pace, the Internet is quickly becoming the most significant distribution channel for hotel revenue growth. It is predicted that at least 60 percent of all hotel bookings will be made online by 2009, and, therefore, the Internet affords hospitality professionals an immense opportunity to leverage increased brand awareness and highly profitable revenue contribution.
In contrast to the upside offered by the online channel, the dynamic growth of the online environment also creates a range of new risks and opportunities for strong competition in hospitality. When this competition crosses the line of legal propriety, hotel professionals should identify and address the transgressions in order to protect their assets, revenues, and brands. Illegal or improper online activities by others can cost hotels revenue, profit margin, brand value, and goodwill. Hoteliers themselves also should avoid running afoul of the formal laws and informal ?rules? of online marketing. Missteps can be costly.
Daily decisions about the online space ? including what photos to post on a hotel website, what to name a new package or promotion, whether to bid on a competitor?s brand as a paid search keyword, and how to write the title of a new email blast ? should be made by business people who are mindful of the areas where trademark, privacy, contract and other branches of law might come into play. Proactive awareness can often avert matters that ultimately might fall into the hands of lawyers.
Hospitality professionals can protect their brands online more effectively and avert legal snares by adhering to the following guidelines of online marketing (summarized from ?Profits and Pitfalls of Online Marketing: A Legal Desk Reference for Travel Executives? written by Mike Heilbronner, Sue Heilbronner, and Cindy Estis Green).
Clear Your Trademarks
Before creating and publicizing a new name for a resort, hotel, or program, hire counsel to ?clear? the name and evaluate the potential risk of infringing an existing trademark. Several vendors offer comprehensive search services, and intellectual property attorneys regularly evaluate such searches and provide opinions about the risks associated with using new trademarks. Companies should seek to register new trademarks that are important to their marketing plans (e.g., the name of a new spa treatment, a unique hotel package, or the name of a kids-camp program at a group of hotels). Once a company is ready to use a new trademark, and after the trademark has been cleared, the company should file an application to register the trademark with the U.S. Patent and Trademark Office.
Continually Register Your Copyrights
Copyrights protect original works of authorship fixed in a tangible medium (e.g., a work saved on a computer hard drive, written down, photographed, or recorded). Make sure to register copyrights for all commercially significant marketing materials. Such materials often include the creative elements that comprise the overall ?look and feel? of your website, individual graphic components, photographs, film clips, etc. Continually re-register your materials when important new website content is added and when material design changes occur. Copyright registration is not mandatory, but it enables you to protect your creative material when someone infringes on it. Registration also offers valuable potential remedies in litigation.
Solidify Your Rights to Your Intellectual Property
Companies should take steps to secure ownership rights or licenses for all content that is entitled to copyright protection, including content on their websites. The financial and other risks associated with copyright infringement are substantial. Hospitality professionals need to ensure that all vendors, photographers, and web designers who create copyrighted material on their behalf sign over the rights to that material in a clear, written assignment agreement. Hoteliers also need to be sure that all vendors have cleared the rights to any photos or other intellectual property used on your hotel websites and in other marketing materials since, as an involved party, you share potential liability. Lastly, if you or your vendors take original photographs of recognizable people for commercial purposes, model release agreements need to be signed in order to protect your ongoing rights to the images.
Proactively Register Related Domain Names
To avoid cybersquatting and related problems, hoteliers should be extremely aggressive in registering a variety of domain names related to their own domains and future business ventures. The expense associated with registering additional domains (as low as $8 per year per registration) pales in comparison to the expense and resource drain associated with securing the transfer of a valuable domain from a squatter. Hoteliers should register the following types of marks for most top-level domains (.com, .org, .net):
- Common misspellings of trademarks
- Trademarks plus other descriptive phrases (e.g., brand + ?hotel?)
- Trademarks plus common negative phrases (e.g., brand + ?sucks?)
- Planned or possible future sub-brands in development at the hotel company (e.g., brand + ?express? or brand + ?spa?)
Adhere to Proper Search Engine Optimization Practices
Avoid being penalized and delisted by the search engines for improper search engine spam techniques. Do not hide keyword-dense text on your website or repeat certain phrases within ?hidden? source codes for only the search engines to read. These practices are called ?keyword stuffing? and, when detected, a website can be quarantined by the search engines. Additionally, do not deliver one version of a webpage to a user and a different version to a search engine for indexing purposes. Creating a homepage with chunks of keyword-heavy text to increase your rankings on the search engines and then redirecting consumers to an actual informative and engaging homepage is called ?cloaking? and can result in a site being delisted by the search engines. Create web pages for users and continually optimize your site in accordance with search engine guidelines, which can be found on the various search engines? corporate websites.
Monitor the Use of Your Brand Name by Advertisers on the Search Engines
Monitor who is bidding on or using your trademarks in pay-per-click (PPC) advertising. Competitors and third party intermediaries could be bidding on your hotel name and stealing part of your market share. Consistently monitor the search engines for these types of PPC advertising and determine if it infringes your trademark. Large, national franchisors/brands should also be mindful of how their franchisees are bidding on the brand trademark. Franchisee hotels should be educated on the franchisor/brand?s PPC bidding practices in their region to ensure efforts are not duplicated and that PPC expenses are not unnecessarily inflated by dual bidding on the same keywords. Currently, there is no specific law directly preventing or even discussing PPC bidding on the trademarks of others, but there are many cases currently in the courts grappling with this issue under broader trademark laws. When facing an infringement problem, seek legal advice on whether recourse is available for improper behavior by advertisers or the search engines.
Bid With Caution on Other?s Trademarks
The relatively unsettled legal landscape of using others? trademarks in PPC advertising has sparked a range of non-legal responses in the form of policies and contractual requirements by the major search engines, the hotel brands, and industry trade groups. Most of the major search engines have published guidelines on their corporate websites to communicate their stance on the various forms of trademark bidding. The search engines? guidelines differ greatly, but all of them provide for some form of penalty for noncompliance. Self-imposed restrictions from the search engines fall into two general categories: first, rules about whether a third party?s trademarks can be the subject of bids; and second, restrictions on the use of a third party?s trademarks in the heading or text of an ad that appears in the PPC results.
Comply to CAN SPAM Laws When Conducting Email Marketing
Email marketing is an extremely valuable tool for hoteliers to communicate with potential guests and generate business through e-newsletters, email promotions, and loyalty programs. Due to a variety of illicit tactics and abuses involving personal email addresses - most notably ?spam?- laws have been created to govern the dissemination and content of email marketing messages. The Can Spam Act of 2003 applies to all marketing and promotional email distribution except for transactional emails (e.g., reservation confirmation emails or thank-you correspondence). Can Spam requires that the following elements be included in all commercial email covered by the Act:
- A subject line that clearly and conspicuously identifies the email as a commercial solicitation or advertisement. Potentially acceptable phrases in subject lines include ?Special Offer? or ?New Promotion.?
- The subject line must be clear as not to deceive recipients. The content of the email must also be consistent with the subject line.
- The content of the email must contain an obvious and functional method for recipients to opt out of future communications. A working unsubscribe link or return email address likely is satisfactory.
- The email must contain a valid physical address that will enable consumers to make offline contact with the sender.
Watch Online Travel Blogs and Review Sites
Hotels generally lack control over the information that is shared about them online by the public. Stay aware of the ?buzz? that travel blogs and review sites are posting related to your property. Negative reviews can cost hotels thousands of dollars in lost bookings and decrease a property?s ?star? rating on sites like TripAdvisor.com. Negative statements about a hotel should be identified immediately and evaluated to determine if they are true, false, or possibly fake. Accurate, but negative reviews should be treated as a free focus group and used to fuel improvements at the property. False, negative reviews require recourse by pursuing the appeal or response process of the specific site. Most travel review sites have established processes for handling negative reviews. Some sites allow hotels to submit ?management responses? that are posted alongside negative reviews and others allow you to appeal a negative review and request its removal from a site.
Related Link: TIG Global
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