Hospitality Marketing Blog.com

Here’s the situation:  You’re the GM of a small luxury hotel.  Demand is soft in your market and your chief competitor started offering huge discounts.  How can you compete? (Sound familiar?)
Matching discounts won’t stimulate demand and you’ll end up in a lose-lose situation (see Hotel Discounting - Part I ).  On top of that, deep discounting will diminish brand integrity making it harder to achieve premium pricing in the future.

To weather the storm you take a page from marketers of other luxury products such as Lexus, BMW and Mercedes-Benz.

• You offer a modest price reduction letting travelers know you’re sympathetic to their current situation and are willing to give them a break.
• You offer some value added amenities with a high perceived value but a relatively low out-of-pocket cost.

For example a $100 drink certificate will only cost you around $30.  Depending on your spa arrangement a free couples massage which has a very high perceived value may not cost you much at all.

One of our hotels offers guests a free one-day car rental.  The rental company give it to the hotel for free in hopes of getting guests to take it for several days.

Put yourself in your guest’s shoes.  You’re a luxury traveler and you have a choice between two hotels.

• One is offering 5 nights for the price of 3 (a 40% discount).
• The other is offering a 10% discount along with a free couple massage, a free one-day car rental and a $100 drink certificate.

Our experience with affluent travelers leads us to believe some will opt for the 40% discount.  However many others will wonder what’s wrong with the hotel that it has to discount so much.

By providing not so costly value-added amenities you compete effectively, maximize RevPar in a down environment, maintain the integrity of you brand and attract quality guests you can grow into loyal customers.

What do you think?  Safe travels - Madigan Pratt

Tags: hospitality marketing, hotel discounting, luxury hotels, RevPAR, value-added

In times of slack demand companies with perishable product (hotels) are often quick to offer discounts in an effort to stimulate occupancy.  But is this the right marketing strategy?

Large hotel chains with sophisticated revenue management systems can surgically modify pricing months in advance to minimize the disruption discounting can cause on the bottom line.  But what if you are a small luxury hotel?

The biggest problem with discounting is that it is the easiest strategy to copy.  Your competition discounts and you follow suit.  It’s a lose/lose situation.  Hotel rooms are only one part of the travel experience and discounting may not stimulate the added demand need to offset the price reduction.  In the end RevPAR suffers.

What do you think?  Safe travels - Madigan Pratt

Tags: hospitality marketing, hotel discounting, luxury hotels, revenue management, RevPAR

The world’s largest travel community conducted a survey of 2,200 travelers worldwide recently and just announced the results.  They wanted to know what travelers say makes hotels great. Interesting results indeed - here are the 3 most important factors:

• When asked what makes a hotel great, 30% of respondents said location is the most important factor.  Implication - if your hotel has a great location (a magnificent beach, overlooking a beautiful bay) flaunt it!
• A total of 29% cited comfortable beds make a hotel great.  Implication - Starwood hit the nail squarely on the head with their Heavenly Bed.  Maybe you can’t call your beds heavenly, but your marketing sure as heck should communicate they are.
• Another 24% said hotel staff/great service help make a great hotel.  Implication - training is very important.  (I would have thought this would have been more important - what do you think?)

The research also had an important nugget of information for small luxury hoteliers in these difficult economic times.  When asked what type of hotel promotion offers the greatest incentive to book, 73 percent of travelers said it is a reduced room rate.

The world’s largest travel community is, of course TripAdvisor, which claims 32,100,077 Travelers from 190 countries planned trips there this week.  According to the research - 92% of respondents said they are planning to stay at a hotel or B&B in the next 12 months.

That’s a lot of trips - and a lot of hotel rooms researched and booked.

What do you think?  Safe travels - Madigan Pratt

Tags: great hotels, hospitality marketing, hotel research, luxury hotels, travel research, Trip Advisor

How is this for telling it like it is?

“Businesses today exist in an era in which it’s nearly impossible to escape the likelihood of being evaluated.” said Linda Shea, senior vice president at Opinion Research, in a statement, “There’s nowhere to hide.”

Like it or not consumers have taken over control of hotel comment cards. And where management use to keep results to themselves, today consumers are sharing results with the world. There is no where to hide!

• And guess what! Consumers are loving it. According to a Opinion Research Corporation June 2008 report 61% of people surveyed indicate they check online reviews, blogs and other online customer sources before buying a new product or service. That number is even higher for travel products at 82%.

• Wait - there’s more! People who shop online value the reviews of fellow consumers more than those provided by professionals in the field. That’s according to a 2008 study commissioned by InQuira.

The implications for small luxury hotels is clear - you have to be at the top of your game with everyone you talk to on the phone, send an email to or who enters your lobby.

You also need to have a clear strategy designed to monitor, manage and respond to comments made about your hotel online. It is just too damn important to ignore. Where is your TripAdvisor strategy?

What do you think? Safe travels - Madigan Pratt

Tags: hospitality marketing, online reviews, small luxury hotels, TripAdvisor

Advertising Age Magazine has a great article on the changing demographics of American households that every hospitality marketer should read - it titled “The Changing Face of the American Consumer.”

In addition to outlining how demographics are changing the article adds insights in marketing tactics and messages to use and to avoid when talking to different demographic segments.

Did you know the average U.S. head of household is now nearly 50 years old (49.5, to be precise)?   Did you know that using the trite expression “60 is the new 40″ is not an approach you should use when marketing older demos?

There is good news and there’s bad news for the small luxury hotel marketer as the demographics of Americans evolve.  Knowing how to exploit the good news to build occupancy and revenue will be key in the years ahead.

While not a definitive read on the subject the article provides valuable insights on what you should be doing (or at least planning for) now.  Well worth a read.

Let me know what you think.  Safe travels - Madigan Pratt

Tags: demographic insights, hospitality marketing, Marketing Strategies, small luxury hotel

New information published in April by Jupiter Research confirms that the ranking of your web site on Google is critical to being seen. Search Engine Optimization has never been so important!

Today nearly 30% of web searchers confine their searches to the first page - only. This is up from 15% in in 2002.

There are two possible explanations:

• People are more impatient than ever before
• Search is producing better results and people don’t have to look much beyond the first couple of pages

The truth most likely is a combination of the two.

As a small luxury hotelier make sure your site is being updated and optimized on a regular basis - the search engines are continuously adjusting their algorithms.

If your site does not come up on the first page for key words like “luxury hotel” in your destination, the chances are you’re at a severe disadvantage vis-a-vis your competition.

The Goal - Page #1 for keywords.

What do you think? Safe travels, Madigan Pratt

Tags: hospitality marketing, hotel web site, search engine optimization, SEO, small luxury hotel

It’s January 2008 and Hillary Clinton was ready for the coronation.  As the front runner for nomination as the Democratic Presidential candidate she looked invincible.

How times have changed.  As the media pundits start to dissect what went wrong a valuable marketing lesson for small luxury hotels is emerging.

To begin with, Hillary’s main message (experience) was off target.  It wasn’t what people wanted or were interested in hearing.  Later her message started to waffle from one topic to another and in the end what she really stood for became nebulous in voter’s minds.

In the meantime Barack Obama kept a single minded focus on delivering the same message - one people wanted to hear - change.

So what’s the lesson for small luxury hotels? 

• Make sure your marketing message is very clear and delivers a benefit people are looking for.
• Be consistent!  Drive your message home with every piece of communication your deliver.

There are marketing lessons just about everywhere you look these days.  Good ideas and important lessons can be gleaned from beyond the hospitality or travel industries.

What do you think?  Safe travels - Madigan Pratt

HospitalityMarketingBlog.com Home Page

Tags: hospitality marketing, hotel marketing, marketing benefits, marketing lessons, marketing small luxury hotels

A recent survey by Habeas, an online reputation management firm, reveals consumers prefer e-mail as a primary method of communications in their personal and business lives. 

In fact 67% preferred email and 65% believe this will continue to be true for at least the next five years vs. video conferencing (19%), instant messaging (17%), SMS text messages (12%) and Web meetings (12%).

Nearly 70% are concerned about being victimized by online fraud and 43% are concerned about spam and virus threat to mobile devices - both considerably higher than last year.

So what does this mean for hospitality marketing - especially for small luxury hotels?

• Email is vitally important in communicating to past and potential guests.
• Email is here for the long-term.
• If you are using email to foster loyalty, invest in making sure you are following industry best practices, are in compliance with the CAN-SPAM Act and are up front with privacy rules.
• While mobile messaging may seem sexy - your time (and $) might be better spent making sure your email program is the best it can be.

What do you think?  Safe travels - Madigan Pratt

Tags: CAN-SPAM, email research, hospitality marketing, small luxury hotels

Here’s some news that got me wondering about the future of hotel brochures - Bloomingdale’s is shutting down its catalog business in 2009 to concentrate its direct marketing efforts on the web where sales are growing faster. 

Higher paper, production and mailing costs are affecting every business that employes brochures, catalogs and direct mail.

A small luxury hotel can easily spend $50,000 to $60,000 to produce 20,000 brochures - maybe $75,000 once you factor in postage and handling to get them in the hands of agents and travelers.  $75,000 over the course of two years could go a long way toward enhancing a hotel’s web site, Search Engine Optimization and pay-per-click.

In today’s Internet focused world is the hotel brochure about to go the way of the buggy whip?  What do you think?

Safe travels - Madigan Pratt

PS - Bloomingdale’s is expected to generate in excess of $1 billion in web sales this year.

Tags: Bloomingdale's, catalog sales, hotel brochure, pay-per-click, PPC, search engine optimization, small luxury hotels

On a recent [very long] flight I had time for a thorough read through the HSMAI special report entitled, “The Travel Marketer’s Guide to Social Media and Social Networks: Sales and Marketing in a Web 2.0 World.”

If you have ever wondered about what was happening in Social Media, what the fuss is all about or how you will ever get up to speed, I would strongly recommend you get a copy.  The cost is $99 for HSMAI Members and $149 for the great unwashed.

The book is 170 pages long and provides a comprehensive review of the market as it stands today - well maybe yesterday.  The whole social media phenomenom is changing at an increasingly fast pace.  In one place the book mentions Trip Advisor as having 6 million hotel reviews.  Check the post below - TripAdvisor is now up to 15 million reviews!

So if you don’t want to slip even further (perhaps hopelessly) behind order a copy and read it.  Can’t imagine anyone responsible for marketing a small luxury property not wanting to get aux fait with Social Media.  Well maybe if you are on the verge of retirement…or maybe not interested in advancing…

If you’ve already read it, what do you think?  Safe Travels.  Madigan Pratt

Tags: luxury marketing, small kuxury hotels, social media, travel 2.0, TripAdvisor, web 2.0