A hotel is a business as any other business and follows the same general rules for management. Let's look outside our industry and start with some wisdom from management guru Peter Drucker. One of his most referred quotes is, "The purpose of a business is to create and keep a customer." He also had a profound observation about what drives a business, here freely transformed to the hotel industry. "A hotel has two --and only two--basic functions. Marketing and innovation to produce results. All the rest are costs."
Many hotel companies have other priorities. Some of these are applying revenue management to optimize occupancy and rate, sales, managing labor scheduling to minimize costs, legal (GDPR), managing distribution complexity to drive direct bookings, compliance with rules and regulations, and communicating with owners and landlords. Marketing and innovation are often missing on the long list of priorities.
Now, the hospitality industry talks about recovery every single day. Will hotels recover automatically, just as the pandemic occurred out of the blue, or must hotels do something to recover or speed up the time to recover? For years to come, fewer people will travel. At the same time, the supply of hotel rooms will continue to grow. The consumer will have more choices than ever before. There are two options for hotels. One is to wait until the demand for accommodation match the supply and the industry as a whole regains a healthy profit level. The waiting time for this option is five years or longer.
The other option is to focus on marketing and innovation to attract guests and speed up the recovery to reach a healthy profit faster. The trick to recover more quickly is to find success in the market by better insights about potential guests and customers to find more innovative ways to reach and attract them. Here are some ideas.
All hotel companies seem desperate to fill their rooms. The options for the consumers are endless. The overall message from the industry to the consumers is that you will get a great offer if you come and stay in a hotel. Great offers are what consumers expect, and this perception is present in their minds when searching for accommodation.
To be the same is not a great strategy. The only differentiator left then in a generic product is price. The lowest price wins. The right way forward is to be unique, to be one of its kind. Find something that separates the hotel from its competitors. Think broadly about consumer needs and not only about how to differentiate the product. There are many other differentiators, such as service, offerings, booking process, location, target group, concept, events, and safety, to mention a few.
The trick is to find a genuine difference that has a real benefit for the targeted guests. The hotel has to have the credentials to support the differentiating idea to make it real and believable. Every hotel needs to be able to demonstrate or prove that the uniqueness is true. Claims of the difference without proof are just empty claims. Guests will instantly reveal the truth in guest reviews and comments. False claims might even turn off guests and drive them to the competitors.
A long time ago, the industry worked by the principle, "if you build it, they will come." This concept does not work anymore in a world with endless choices. No one will know about the hotel's uniqueness unless the hotel communicates the difference to potential target groups. Every day, the flow of advertising messages overwhelm the consumer, so it isn't easy to reach the consumer. Therefore, every aspect of the communications, on the website, in social media, advertising, pre-, and post communication with the guests, should reflect the hotel's difference. Every team member in the hotel has to know how to answer the question: "What makes this hotel different"?
Planning is everything in the recovery phase. The plan must include rightly crafted messages (both copy and images) and the proper formats for ads, postings, and voice. Market conditions change quickly and without any warning, so, therefore, the plan must be flexible in the sense of timing. When the booking window opens up, the hotel presents all the great well-differentiated deals in the selected distribution channels.
Marketing is essential for the recovery and must be on top of the GM's priority list.