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Headline: Customized Loyalty for Hotels

LMA Admin — 2012-06-19T19:53+00:00

Summary: Many hotels are now being outpaced by other large companies in terms of customizing the experience on a consumer-by-consumer basis. Such businesses use specific data collection techniques to generate a superior customer experience, heightening loyalty to the brand as well as triggering a new standard for expectations. Properties need to treat every interaction with their guests as a way to fine-tune their stays – both present and future – so much so that guests become friends of the hotel. Here’s an easy question: have you ever browsed or purchased from Amazon? If yes, and I’m sure many of you fall into this category, then you are familiar with how well the website will remember your individual tastes. The next time you log on, it’ll offer you specific recommendations built right into the homepage based on what you looked at last. Their e-blasts and each specific product page both work the same way. Being an Amazon member has its privileges – personal recommendations and special deals being foremost on my mind. Many airlines apply similar principles. For repeat customers, you can get increased mileage accumulation, priority luggage, the ability to reserve seats and reduced fees. All said, their marketing principles are driving loyalty and this loyalty means steady, incremental revenue increases without the heavy costs of seeking new customers eating away at your profit margins. So, what can you apply to your property? Just as each hotel is unique, each customer is also unique. I wholeheartedly encourage you and other managers to get out on the lobby floor and engage your guests face to face. This is a no brainer. If you really want to know every habitué, however, you better start collecting data. The more data you have for past customers, the better you will meet and exceed their future desires, so much so that you will know a person’s preferences before he or she arrives. The idea that sparked me to investigate this principle occurred while I was touring Southeast Asia last year. One evening, my wife and I dined at the hotel’s restaurant, casually mentioning that it was our 30th anniversary. After dessert, our waiter presented us with an embossed menu with both of our meals printed on the inside covers. During the ensuring conversation, this staff member also told me that our meal was recorded on computer, so whenever we visited next they could prepare it to the tee. Imagine how this application of data collection could be applied to the weddings and engagement dinner business. It is very often and quite romantically the case that couples will revisit the restaurant where one of the two fell to a knee and asked the question of all questions. This could well happen at your hotel, and it’d be wise to take note of what each person had so they could relive that moment when they returned. Better yet, tell them that you have their meal on file so they’re more inclined to return. The embossed menu was an astonishing extra and I’m sure you could set up a template for your in-house printers to manage this task. The point here being not only that you demonstrate how much you value guests sharing one of their most intimate moments at your property, but giving them enough reason to talk ecstatically about how much you actually care. Rest assured, this is not a new concept. When I call to order pizza, I’m first prompted by an automated voice to select whether I want the same order as before, and this system has been in place for years. Mind you, I’m ordering off of a regional call center for a national pizza restaurant chain, but the kernel of the idea remains the same. The automated voice offers me selective deals past on how I’ve ordered in the past, and then allows me to streamline my favorite order, helping reduce their labor costs in the process. My experience in Asia was simply the flawless execution of this. Imagine if every hotel you stay at remembers all your previous meals at their in-house restaurants? The waiter approaches you with this knowledge, and he or she can already make suggestions more attuned to your individual tastes, whether it be appetizers, mains, desserts or wine pairings. Now picture tablets used in place of menus and the personalized suggestions scrolling along like they appear on Amazon. Then, extend this idea to room service, spa amenities and your reservation system. The idea here is to use technology to build rapport so that your guests are not just your consumers, but your friends as well. For consumers you ask questions, but for friends you already know the answer. Staying with the topic of food, suppose that a recurrent guest consistently orders the same appetizer or has expressed admiration for the dish. Why not reward such loyalty and show your gratitude by having that appetizer ready and in their room upon arrival? Your friends would remember such minor details about you, so why not a hotel? And this doesn’t just apply to frequently purchased menu items, but also whether a person has specific allergies. If you are allergic to nuts, then wouldn’t you be relieved if you didn’t have to remind the restaurant staff over and over again? Since returning from Asia, I’ve had many insightful conversations about how hotels are already applying customized loyalty principles to make for better consumer experiences. In particular, when it comes to business trip, consistency in specific necessities is a definite plus, helping bring peace of mind to the wearied traveler who wants everything in order upon arrival. Much like how you can reserve a window seat on an airplane because you don’t want to be disturbed, you should also be able to reserve a room far from the elevator to reduce hallway noise. And the hotel in question, along with its sister properties if it’s a franchise, would be wise to remember and automatically execute this preference for the next time you travel. Even better, book the same room for such a loyal guest, and then offer recommendations on other similar rooms that may be worth trying. From personal experiences, I’ve noticed that remembering the little details that complete a guest’s experience will not only make their more loyal, but also make them more perceptive to your proffered extensions. Suppose that you are new to Amazon’s services. It is most likely the case that for your first or second purchases, you’ll be ‘testing’ the service’s reliability. Once that trust has been formed, only then will you give serious consideration to some of the marketed items that Amazon displays at checkout or within one of their e-newsletters. As it concerns hotel e-newsletters, would you deem a golf e-blast to be as efficacious when read by a golf customer or a spa customer? My bet’s on the former, and the only way to discern between the two psychographics is past data on spending habits. Amazon does this expertly with emails and cookie-based browser widgets coded from an individual’s past purchases. “But it doesn’t hurt to advertise with the spa customers,” shouts the skeptical hotelier. This is a double-edged sword. True, targeting spa people will raise awareness for your golf program and compel a few to spend. But, it might also compel them to ignore future e-newsletters as there’s no personal value, so much so that when a spa-specific advertisement comes their way, it’s already in the trash. Taking another look at airlines and how they treat their loyal customers, there are many other cross comparisons for hotels. Instead of increased mileage accumulation, how about increased complimentary F&B rewards? Priority luggage equates to priority check-in and check-out. Waived baggage fees or service charges should hopefully get you thinking about waived Internet fees or free spa treatments or rounds of golf. How about a dedicated phone line for specific services or for catered offers to certain classes of guests? Use your imagination. What I’m proposing for hotels goes well beyond loyalty reward programs or wish list programs. It’s a full shift in mentality towards valuing everyone as having elite status, or at least the potential of rapidly becoming a loyal, elite guest. What this requires is lots of questioning and note taking when it’s a guest’s first time with you. For instance, motivate them to complete an online survey prior to arrival so you have a better idea (and a record) of what they want. Also keep in mind that people hate being over-questioned to the point of interrogation, so counter this by explaining your long-term motivations and how much you value personal preferences. Obviously with all this data collection comes a need for lengthy software upgrades. I don’t want to get into semantics about how dollars and time spent on software will translate into heightened loyalty. The fact remains that return guests are cheaper than new guests, so augmented data collection systems will help you maintain your current clientele and get them talking about how much they are valued, continuing the marketing efforts for new consumers on your behalf. Treat customers like friends and the sky’s the limit.

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Online Booking Engines Come of Age

LMA Admin — 2012-06-06T19:52+00:00

I recall a conversation with an owner of a Relais & Chateau affiliated property in the early days of the Internet. He questioned the need for a web site and proclaimed to all, “no one I know will book my property over the Internet.” The first Internet booking engines were somewhat crude, clunky and expensive. Moreover, hoteliers had to load room inventory onto the Internet system, as they did not properly link to the property’s internal PMS. Luckily, those days are long gone, and most Internet booking systems offer 2-way interfaces. There are many providers of Internet booking engines, a field that is dominated by two excellent products: TravelClick’s iHotelier and Sabre’s Synexis. Both of these are widely available and offer a myriad of add-ons and back-end systems designed to enhance connectivity and rooms inventory management. But just as one thought that this was a two-horse race, making your decision rather straightforward, a number of new entries have come into the market. One of them that deserves your attention is a Canadian-based upstart called B4Checkin. I had an opportunity to spend some time with the Company’s founder and CEO, Saar Fabrikant, a few weeks ago, to talk to him about this industry and their positioning within the field. 1. Tell me a little bit about the history of booking hotel inventory over the Internet. According to a survey by the Hotel Association of Canada, and parallel activity by AH&LA, nearly three-quarters of all hotel reservations are made online. This is either through an Online Travel Agency (OTA) like Expedia or on the hotel or hotel brand’s website. This is a stark contrast to 10-15 years ago when the telephone was the dominant channel. By using the Internet, the online booker can easily compare services, facilities and prices for a variety of hotels. They can also access an OTA to get this information in one place. In order for properties to take advantage of the online travel booker, it is necessary that they have a searchable, aesthetically-pleasing, and functional website with booking capabilities. This will allow the property to meet the guest’s information needs and to make a reservation. These hotels require a “booking engine” application to be attached to their website to permit people to book rooms in real time. One advantage of booking with the hotel directly is the use of the hotel’s full cancellation policy as well as not needing a deposit as is the case with most OTA’s. Based on these increasing trends, it is important that hotels have a robust and functional booking engine to capture the reservations of the modern traveler. 2. When you first looked at starting your venture, what was the status of these booking interfaces. This was started as a custom solution for the Canadian hotel management firm, Centennial Hotels & Suites. They used Visual One as their PMS. It was determined after they used the product for 18 months that we met all performance criteria. The ‘stand alone’ non-interfaced version was developed next and we started to actively market the product. The next PMS we became certified with was Micros ‘Opera’. With the addition of the Micros interface, we learned that interfaces were standardized through HTNG (Hotel Technology Next Generation) and that PMS vendors would not allow us to develop these interfaces unless they were initiated by existing or potential customers. 3. What was the unique niche that you wanted to exploit. The simple situation that hotels were buying PMS packages, that include reservation systems, then they decided to switch to a 3rd party reservation system, 3rd party email CRM solutions, and third party feedback systems, we identified this as a ‘unique niche market’ that was under serviced in ‘a one stop shop’ to become ‘an extension’ of any given PMS. 4. The leaders in this industry are Sabre’s Synexis and TravelClick’s iHotelier. How do you successfully compete against these “big boys.” The big boys are selling a ‘canned’ solution, similar to Microsoft Office, which was designed for the masses. They are both large companies that have a full suite of products. Both companies added products after being primarily GDS providers. Their pricing models are a % of revenue or a $ per transaction fee. This can penalize hotels with large average daily rates (ADR) or a high number of transactions. B4Checkin offers a more customizable solution that has similar features as the ‘big boys’. With our new 2.0 version coming in Q3 2012, B4Checkin will be the first booking engine to allow the customer to choose from four design templates. This will allow the hotel to have a truly customized look. B4Checkin also charges on a flat monthly fee model that allows hotels to save thousands of dollars as booking volume increases. 5. Why did you pick Halifax, Canada as the home for your business. I moved from Israel to go to school in Halifax, met my business partner at a co-op term that I did prior to graduation with his previous company, and we started a software development company, then project managed a PMS installation for a group of Canadian hotels and identified the niche mentioned above and the rest as they say, is history. 6. What are your expansion plans? From a tech perspective, we are currently in development of our platform to the latest technology and adding various new products to encompass all our offerings under one platform, as well as a couple of new product developments. From a sales perspective we are planning to start looking at Europe and Asia as new markets for us. 7. How does your product go beyond those of your competition. Because we see ourselves as an ‘extension of any given PMS’ our products offer interaction to all customers that are present in the PMS, regardless of how they made a reservation, and whereas all our products focus on increasing and maximizing revenues from the most cost effective channel of any hotel, and retaining customers loyalty & feedback, we are currently the only player in the marketplace that focuses on ‘all these types of products’ as our core business. 8. What does the future hold for this business. Distribution in general has become the main focus of hotel operations, which changed radically from 8-9 years ago, OTA’s and distribution channels literally ‘created’ the revenue manager position in the hotel world. Personally I believe the hotel industry is going to have to redefine the reality of expensive distribution channels, and we are going to continue to develop tools to increase even further and maximize the value of the direct channel.

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Four Examples of Service Excellence

LMA Admin — 2012-05-25T19:50+00:00

Here are four examples of service above and beyond the ordinary. I present them here as “GOLD” award winners, something that all hoteliers can aspire to. Hotel Im Palais Schwarzenberg, Vienna, Austria: Several years ago, I had the pleasure of spending several nights at this magnificent property. While the hotel is now closed, the service was of such a high standard that one tended overlook the hard and soft good repair issues. An example: While checking out, I was engaged in a conversation with a staff member and departed to the airport without getting my credit card back. I received a call on my cell phone from the hotel and a bellman arranged a rendezvous with us halfway to the airport, costing me only ten minutes of travel time, but saving a much larger headache. Lanesborough Hotel, London, UK: Visiting this world-class property with my wife, we experienced a superlative service touch while we were departing for the theatre one evening. Coming to the front door of the property, the doorman greeted us with the usual umbrella handy. It was one of those hot, humid nights that you would expect in the southern USA, but not in London. My wife was not dressed for this type of weather; her shoes being of the rather delicate (and expensive) genre that don’t take water all too well. Somehow the doorman noticed. He promptly called for the hotel’s chauffeur, who not only drove us to the theatre, but also arranged to wait for us at a pre-designated location when the play ended. St. Regis, Rome, Italy: A birthday party that almost didn’t happen punctuated our stay at this magnificent property. My harried brain had forgotten my wife’s birthday! Reminded by my son the day before, in a panic I called the concierge, and arranged for a surprise setup in our suite while out for dinner. I had no idea what the concierge and his coordinated team were going to do. To my surprise, and my wife’s, we returned to streamers on the wall, hundreds of balloons, a fantastic (and personalized) cake and champagne. Above and beyond what any of us were expecting, it was a lifesaver that to this day my wife thinks I planned. COMO Shambala Estate, Bali, Indonesia: Asian hospitality and service is increasingly setting the standard for the world. On a recent visit to this property, we arrived late at night a little bit disoriented after a long and delayed flight. The hotel team not only picked us up at the airport, but as well, helped sooth our stress with cool lemongrass scented towels in the car. Upon arrival at the property, this was further enhanced with ginger tea, Our bags were taken to our room in advance while we chatted with a manager. We were then escorted to our room, which was pre-prepared with much more than a simple welcome fruit bowl. Knowing that we were tired and a tad jet-lagged, a meal was laid out for us including a sampler of local fruits and vegetables, hors d’oeuvres, fruit juices, mineral water and herbal tea. The soft Balinese music playing in the sound system was a perfect complement to this experience. (Article by Larry Mogelonsky, published in the March/April issue of Hotelier Magazine)

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A Survey Of How Early Career Business Travellers Select Their Hotels

LMA Admin — 2012-05-09T19:48+00:00

A recently completed survey (Summer 2011) of hotel purchase behavior indicates some potentially troubling news for hoteliers. In particular, this research reveals a significant weakness in hotel brand recognition. About the Survey When I started my business career, travel arrangements were regimented. All requests went through the office travel department – our own in-house travel agency. There were few choices given to the employee. But it didn’t matter, I loved to travel. I looked forward to the ad agency visit to New York City, the tradeshow in Orlando, or the plant tour in Michigan. My boss had some pull, and we enjoyed staying in such grand properties as the Waldorf Astoria, the Hay Adams and the Drake. Loyalty programs, the Internet, and, of course, OTAs did not exist. The world has changed in the past thirty years. Many companies have disbanded their in-house travel arrangements; recognizing the efficiencies of the Internet coupled with a desire to keep costs to a minimum. Given security, travel itself has become more of a chore. As well, the myriad of hotel brands offered to the traveler is sizably greater. The influence of loyalty programs for hotels, airlines, and online booking systems now form critical factors in how travel is both arranged and consumed. To my knowledge, not much research has been done, or perhaps published, on the young business traveler – those just starting in their business careers. Just as my early experiences in travel (and love of great hotels) were formed by my business trips working with Procter & Gamble and Pepsico, I was wondering what the travel experience was like for such modern day ‘newbies.’ Importantly, as habits are formed in our early years, I wanted to see how these travelers were planning their accommodation purchases. One hundred (useable) one-on-one interviews were conducting in the summer of 2011, split almost equally between male and female respondents and between the ages of 24 and 34. Moreover, respondents were screened for those who had traveled for their business by air at least twice within the past twelve months. Those surveyed lived in Boston, Chicago, Los Angeles, New York City and Toronto, all having worked in a company with at least 25 employees. Note to reader: With a survey size of only 100, these results require verification through larger scale research programs, and as such, should be considered directional, rather than statistically significant. Never-the-less, the results require careful examination. Survey Questions and Results How would you best describe your business travel experiences (pick one of these that best describes your feelings): I love to travel and enjoy new surroundings and experiences: 77% Business travel creates even more work for me, and is an inconvenience: 4% Travel is a necessity of my job/career, I have no choice: 12% No response: 7% Does your employer have written policies that govern travel by air and hotel usage? Yes: 60% No: 12% Not sure: 28% When traveling on business overnight by air, is this travel primarily: Domestic: 88% International*: 12% (Cross border Canada-US considered as International travel) For these trips, who makes the majority of your business travel arrangements? Reservations done by self: 73% Travel agent, office travel coordinator, other: 27% For those who make travel arrangements themselves, what is the primary method? Internet, using an online travel agency such as Expedia, Travelocity, Orbitz, etc.: 68% Internet, booking direct with hotels and airlines on their respective web sites: 26% Via telephone direct to hotels or airlines: 6% When you travel by air, how often has this travel required an overnight hotel stay? 1 to 3 times in the past 12 months: 74% 4 or more times in the past 12 months: 26% For those who can choose, when traveling on business, what are the criteria you use for selecting your hotel accommodation? (Rated on a scale of zero to ten, where zero is not at all important, ten is most critical.) Location relative to destination: 8.1 Cost of room per night: 7.6 Free WiFi or fee high-speed internet: 7.0 Free breakfast: 4.0 Room type (suite, bed type): 3.5 Airline loyalty program points: 3.2 Hotel brand: 2.5 Coffee maker in room: 1.5 Hotel loyalty program: 0.2 Name three major hotel brands (unaided). Top 5 results were: Hilton (or Hilton brand variations): 83% Marriott (or Marriott brand variations): 76% Sheraton or Sheraton Four Points: 65% Expedia: 54% Holiday Inn: 53% Have you ever heard of (aided, yes responses)? Relais & Chateaux: 11% Preferred Hotels and Resorts Worldwide: 4% Leading Hotels of the World: 4% Historic Hotels of America: 0% Summit Hotels: 0% Small Luxury Hotels: 0% How many employees does your company have (your best guess)? 25 – 100: 24% 101-1,000: 39% More than 1,000: 37% Do you belong to at least one airline frequent flyer/loyalty program? Yes: 64% No: 36% Do you belong to at least one hotel frequent guest/loyalty program? Yes: 5% No: 95% Conclusions While this is only a small-scale snapshot, and is by no means statistically significant, the hotel industry appears to have some work to do. Despite the economy, there is still some very strong enthusiasm for travel. As expected travel arrangements focus on efficiency and cost, with most of those surveyed going to the OTAs to make their arrangements. Hotel brands were not really part of their accommodation selection criteria, rating scarily close to the bottom. Perhaps what is most revealing was a response to a question on major hotel brand names, where Expedia beat out Holiday Inn. Since when is Expedia a hotel brand name? Not surprisingly, the survey also indicated a lack of awareness in the hotel affiliation programs such as Preferred or Leading. Hotel loyalty programs are bordering on non-existent. Indicated Actions This survey demonstrates a further impact of the OTAs: the decline of brand differentiation amongst the youthful business traveler. Corporate hotel marketers should conduct their own research to validate these findings, and propose ways to penetrate the mindshare of this segment, wholly independent of the OTAs and potentially utilizing their hotel loyalty programs as a (yet untouched) tool. Remember: these customers are the future of our industry.

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The Year Of The Tablet

LMA Admin — 2012-04-25T19:47+00:00

Why it’s important to integrate computer tablets into your hotel operation You know a lot about them. You might even have one. They’re popular for business and leisure and satisfy the trendy factor consumers seek, but are they right for your property? When it comes to tablets the answer is yes. The real question for most hoteliers is whether or not this new technology is feasible. First-hand experience with the iPad has made me a believer. Initially just a novelty during our courtship, the tablet is now my main point of access for email, web surfing and reading. It handles the functions flawlessly and has happily moved one more reader away from paperbound books. Travelling regularly for short business and leisure trips, the iPad is a good compromise between the 17-inch laptop computer and three-inch smartphone display. And the tablet’s screen, much larger than a mobile phone, makes swapping the lighter tablet for a dead-weight powerbook second nature. I take it everywhere. For example, during my travels, something fascinating happened. Sitting in a restaurant for lunch, the waiter approached me with a shiny iPad that displayed the menu beautifully. While selecting an entrée and a favourite dessert, my new friend suggested downloading the restaurant’s menu to my device for future reference. Impressive. The place had a tech-savvy sensibility about it and left a positive impression. Used as a replacement for what’s traditionally been printed — menus, table-top displays and special-offer coupons — the tablet has incredible versatility that outweighs the associated startup costs. The most prevalent application for the lodging and hospitality industry is the aforementioned food and everage integration. It’s a fun way to liven up an atmosphere and heighten menu presentation. Tablets can personalize any restaurant menu and allow it to be updated with specials. Imagine the possibilities — a smart operator could install features that provide recommendations based on past order history or offer wine pairings that tempt the palate. Picture several tablets propped up at the lobby bar where customers effortlessly flip through the list of elixirs while they sip their first beverage. Another area of the hotel that lends itself to the newfangled Etch-a-Sketch is the guestrooms. In-room tablets could become the universal solution for TV channel hopping, while doubling as alarm clocks and room-service hubs. It sounds crazy, but with new apps for the iPad and Android-based tablets arriving daily, and more programmers fluent in both languages emerging almost as quickly, it’s not hard to envision these ideas in the near future. However bold as this might seem, installing several tablets in the rooms, lobby and hotel lounges is even bolder. The cost of buying a tablet for every room is significant, but the technology is getting cheaper and sturdier tablets are now on the market for under $400. The more elusive cost is the price of a custom app. It’s best to look into a standardized app that leaves space for additional functionality once you’ve received feedback. Given the novelty, guests will likely respond to a short questionnaire. For staff applications, managers should be involved from the onset to ensure proper implementation with extensive feedback monitoring. The third major area in which to incorporate tablets is housekeeping, maintenance and other back-end operations. These departments can benefit from the device’s mobility. Using the tablet as a clipboard makes sense. Housekeepers can jot down notes on room deficiencies; even reporting vandalism and documenting theft can be easy on a tablet. With the Internet so accessible, tablets are handy communication devices, able to relay urgent messages or other critical guest-service needs. For instance, in the engineering department, maintenance workers can be alerted to problems onsite and provide quick status updates, ensuring operations run smoothly. Of course, a healthy dose of training would be required; have faith, in no time you’ll master straightforward touch-and-go applications. Arming your staff with tablets is only half the solution; the beautiful, sleek devices will also need connectivity. Think about widening the Wi-Fi coverage for your property to include rooms, restaurants and back-end areas. That may be an obvious solution where you require your staff to use tablets on-the-go, but there’s added benefit for your guests, too. Many hotel brands don’t use an ethernet port, so Wi-Fi accessibility is a must. And, to be deemed a true ‘tablet-friendly’ zone, Internet connection should be provided at no cost. The fourth major use for tablets is for the planning committee. Instead of relying on sheets of paper for the weekly briefings, a robust file reader can cut the mounds of reports that stack up, affording managers a quick access point to check in — whether at a remote location or offsite. With feasible uses for front-end staff, housekeeping, maintenance workers and managers, integrating tablets is the first step to staying on top of technology trends. Last year tablets went mainstream; 2012 is expected to echo the trend with increased customer sales forecast worldwide. Make this the year you stay in touch with guests by outfitting your property with tablets. (Article by Larry Mogelonsky, published on HOTELSmag on March 16, 2012)

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Jump On and Off the Brand Bandwagon

LMA Admin — 2012-04-10T19:45+00:00

It seems like the distant past, but every time I read an article in the press about hotel brands or branding, it reminds me of my old days in Procter & Gamble’s brand department. Yes, it was called the BRAND department, not advertising or marketing. Why? As BRAND managers, our responsibility was to manage the critical equity of the company — namely, its brands. Here’s an example from Crest toothpaste, a brand I managed for several years. When P&G wants to market a new oral care product, it doesn’t create a new brand name. Rather, it uses the “umbrella” brand — Crest 3D Whitestrips, Crest ProHealth, Crest Rinses and so on. All have a common purpose: better oral care. This makes sense to consumers, as they recognize the brand and make purchases of related products based upon their core knowledge. This is the essence of branding: being instantly known for some attribute. This is why brands have value in the marketplace. Now, let’s talk branding in the hotel marketplace. You would think the Marriotts, Hiltons and Starwoods of this world would pound the success of their respective brands into the psyches of travelers. This, after all, would leverage those countless years of recognition amongst the traveling public. Alas, this is not the case, as each of these corporations seems hell-bent on cluttering the hotel landscape with even more brand variations, each requiring its own logo, positioning and, ultimately, marketing support. This very issue became a discussion topic at ITB-Berlin. It was widely reported that Osama Hirzalla, vice president for brand marketing/eCommerce, Europe, for Marriott International; Cassidy Morgan, CEO, Central/Eastern Europe, for Interbrand; and Bernold Schroeder, CEO, Jin Jiang International Hotels, met to review hotel brands. While not putting words in anyone’s mouth, even these supposed “gurus” were expressing their concern at the proliferation of brands facing the traveler today. Their dismay is not surprising. We have too many hotel “brands” chasing travelers who lack the knowledge necessary to differentiate between them, since marketing support of these products is seriously insufficient. Brands need to be rationalized so appropriate marketing efforts for those remaining can be effective. It cannot come soon enough. Scary as it may seem, a recent survey I conducted amongst young business travellers named EXPEDIA as their third choice as a hotel chain! That’s what happens when the distribution channel outshines the underlying product.

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Is It Time To Get Bullish On Meetings Business Again?

LMA Admin — 2012-03-21T19:43+00:00

My favorite TV show, “Mad Men,” is back this month for Season 5. And, I was wondering, are groups flocking back on property as well? I get that feeling reading some excellent in-depth research done by Meetings Focus magazine. In a similar vein, Benchmark Hospitality International recently released optimistic meetings business predictions for 2012. I am excited by the prospects of a return to some sense of normalcy in this critical business segment. I sure hope it is true. The concept of pent-up demand is one we have heard of many times. It works this way: You have a car, and you typically replace it every five years. Now business is a little soft, year five comes around and you elect to hold off for a while. That “overdue” sale is considered pent-up demand. The older that vehicle gets, the higher the propensity for a purchase. The broader question is this: Does the same concept apply to the meetings marketplace? In other words, do we believe that a company that withholds or cuts back its convention expense budget creates a pent-up demand for future meetings? If this is the case, then the past three years have indeed created pent-up demand for meetings activity. To shed some light on this, I contacted three colleagues, all senior sales executives in Fortune 50 firms. While they are not directly involved in the arrangements or authorization of specific meeting plans, they each have a good pulse on their company’s activities. They acknowledged a significant reduction in budgeted meeting expenses over the 2009-2011 period. When asked if they felt the trend would start to reverse in 2012, they were somewhat guarded, but expressed some positive thoughts. As it was explained to me, the “new normal” embraces more technology and less face time. Nevertheless, they all acknowledged that they needed to get more team involvement. A small sample, to be sure, but again, another indication that we might be starting to get out of the woods. I agree with the Meetings Focus research and support Benchmark’s sentiments. But success will not happen overnight. While we are still in the tail end of the “buyer’s market,” the time may be right to start looking at hiring some top flight sales managers. No doubt, they will be in short supply by year-end. Call it pent-up demand or, simply, its about time. (Article by Larry Mogelonsky, published on hotelsmag on March 6, 2012)

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Is Room Key the Game Changer We’ve Been Waiting For?

LMA Admin — 2012-03-06T19:25+00:00

January 2012 has already been marked by the launch of what has been touted as the panacea for our industry – a rebuttal to the online travel agency onslaught that has so dramatically shifted the hospitality power structure. I am referring of course to Room Key, the new (supposed) OTA managed by the hotels. My initial thoughts on www.roomkey.com(still considered and marketed as a ‘beta’ site) are that it’s a very good try, but not enough to get a consumer to switch away from their current favorites. First, for those who don’t know, or who haven’t yet taken the time to analyze Room Key, I encourage you to spend a few minutes touring this new website. Launched by a consortium of six major hotel chains including Choice, Hilton, Hyatt, Intercontinental, Wyndham and Marriott, the site allows visitors to search by destination to easily find a given property. (Note the current beta version is for the US only, with other English speaking countries to follow shortly.) Once a location and property is selected, the site refers a visitor directly to the selected hotel’s official website. This transfer is seamless to the user, and low and behold, reservations are made directly with the property, thus avoiding the significant commissions that the OTAs proscribe. Room Key’s aesthetics are sophisticated, clean and quite welcoming. The performance of the site is also exemplary. Try as I might, it completed searches quickly and flawlessly, delivering accurate results, even in locations that I thought were obscure. Immediate results allow you to search by star rating or price. Links to Google Maps in the same interface allow for easy understanding of micro-location details. A terrific feature allows for instant email to a user’s traveling companions of details on a prospective property. Of course, not all hotel properties are participating at this stage. However, it’s clear that the functionality of Room Key was not just tacked together at the last moment. It’s perhaps the best interface for querying hotel properties that exists today. But the question remains, why would a consumer go to this website in lieu of their current favorite OTA? Frankly, at least at this stage, there is no reason to do so. Here’s why: 1. Room Key is all about hotels and does not complete the journey.Airlines? Car Rentals? Attractions? Restaurants? Stores? Sorry, but Room Key is about accommodations only. The OTAs cover the entire trip and that is a significant consumer advantage. Most travel planning starts not just with the hotel, but with physical movement component, whether it be plane, train or automobile. Unless you’re driving your own car or are privy to preordained business arrangements, you’re likely to first search by airline for available dates, and then browse accommodations that fit. Why? It’s usually the airline that has the least price flexibility, and so the leisure traveler first books the flight, then the hotel room, and lastly the car rental, dinner reservations or events. Does anyone expect a consumer to book their airline ticket through one of the other OTAs then mosey on over to Room Key for their hotel room booking (let alone go to a third site for their car rental)? 2. Room Key lacks completeness. With inventory limited to the participating hotel chains, Room Key is highly exclusionary in its present form. In many places, the smaller chains, independents and non-participants provide useful accommodation alternates. Without them involved, Room Key is only a partial search tool. Now, maybe the plan is to add more hotels once it is out of beta, but until then, the website remains as only a consolidator of the six participating chain. The OTAs have almost a decade of property input to leverage. And going beyond hotels, the OTAs offer a complete travel experience, with widgets that include everything from weather to travel advisories, from packing tips to essential travel tools. 3. The OTAs have gone beyond the basics to include promotions, last minute offers and package deals. In contrast, Room Key’s approach is straight up, no-nonsense, and just the rooms. For business, this is spot on. Business customers want a room, with location as the key decision factor. Leisure consumers, however, have a wider degree of flexibility. They are much more prone to be influenced by a shiny deal or package. Room Key does not offer any promotional activity, except for those that might be ‘buried’ within the participants’ linked websites. 4. Room Key has a major user convenience issue. Inherent in the design of Room Key, the interface efficiently pushes the user to the individual property website for each booking. In doing so, there’s no thorough storage of customer profiles, as this data resides with the booking property. While this is terrific for the hotel, it’s counterintuitive for the user. Each time a booking is made, the consumer has to reenter all of his or her information, creating a new profile with each of the chains. If users were interested in only one hotel chain, they would already booking with that company directly. 5. Room Key is cold and lacks a ‘warm and friendly’ consumer interface. While its true this is still a beta launch, the site has no substantial method for the user to fluidly interact. Even if you burrow down to the ‘About Us’ page, you’ll see three fun postcard images and roll over bios of the three founders of Room Key. But there’s no way to email them; no phone number; not even a contact address. Of note, there is an email form and an FAQ section. Perhaps the ‘live’ site will be more consumer-friendly. Let’s hope so! 6. What logic is there for the hotel chains to promote Room Key? I’m still scratching my head on this one. If I were the CEO of a hotel chain, I wouldn’t see the logic of putting funds into promoting or advertising Room Key, not unless all partners were equal financial contributors. That might indeed build a sizeable war chest. But for what purpose? It still doesn’t help the one critical factor that the major hotels are facing – lack of brand awareness. Creating Room Key as yet an additional brand to support and promote only serves to further dilute and complicate the branding challenges already being faced by the majors. 7. The OTAs have a massive head start. Is this a case of too little, too late? Perhaps. Look at the total dollar spend by the OTAs over the past five years. Look at the Alexa traffic ratings and you’ll see a very tall mountain for the hotels to climb. In social media, which Room Key doesn’t yet to have a very active presence on, the OTAs are well ahead with tens of thousands of Facebook fans and Twitter followers. I’m afraid that Room Key does not have the ‘legs’ to help customers make the switch. It will take some very serious monetary efforts to bring Room Key up to a standard that the OTAs have developed organically over the past decade. Plus, one of the most important features of the OTAs is each hotel’s inherent credibility through its numerous critiques. Room Key will have to do some sizeable front-end promotions to get travelers to kick-start the review process. The Bottom Line I would like Room Key to succeed. But unless it adds a lot more functionality, I’m afraid that it may be a hotel search tool for those sophisticated travelers who never use OTAs (like myself), and who go to the airlines then search hotels separately. If all properties were involved, it would be a terrific product for that narrowcast requirement. An OTA blocker? I would call it, at best, a speed bump. (Article by Larry Mogelonsky, published on eHotelier on January 23, 2012)

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Marketing that Works: Five Examples of Excellence

LMA Admin — 2012-02-24T19:40+00:00

With the planning season approaching, the hunt for new strategic initiatives is in full swing; ways to better revenue and market position undoubtedly at the top of the list. Taking stock from a few of my clients, here are five tenets that have proven successful, and may be applicable to your own programs. 1. Embrace Your Local Constituency Built on a verdant 220-acre property just outside of Los Angeles, Ojai Valley Inn & Spa is dedicated to being a community leader. Their ‘Arts & Leisure’ program includes special events throughout the year, which emphasize the wellness-lifestyle standards of a five-diamond resort as well as a strong neighborhood orientation. The itinerary includes guest speaker luncheons with authors and film actors, tea tastings, movie screenings, art classes, and vintner dinners with guest chefs and wine tastings. In this way, the Inn helps bring together both guests and locals to events which may not have otherwise come to this small Californian town. On top of all this, profits from the events are donated to local charities. 2. Create an Event to Increase Property Profile The Cranberry Resort is a lakefront vacation destination north of Toronto with an interesting predicament. One of their goals is to attract the business crowd, but there’s a nearby conference center many times their size. Moreover, none of the participating small to midsized companies can afford high caliber speakers on their own; they have to cluster at a large venue. The solution is differentiation. The resort organizes yearly leadership symposiums for groups of companies, giving them full access to the resort’s amenities, F&B and golf course. Not only does this event yield modest profits, but it is quite literally the ultimate ‘sampling’ amongst key decision makers, and augers well for further corporate business. 3. Turbo-Charge an Existing Event The Westminster Kennel Club Dog Show is one of the longest running sporting events in the world. Held each year at Madison Square Garden in Manhattan, the show attracts over two thousand dogs along with their trainers and handlers, as well as tens of thousands of fans. And located directly across the street from all this excitement is New York’s Hotel Pennsylvania. Everyone at the hotel eagerly anticipates the event, and management has reciprocated their love with welcome dog treats, an onsite spa for dogs (Spaw!) and even a Doggie Concierge. With this sort of pampering and a location that can’t be beat, why would a dog and its owner want to stay anywhere else? As for the regular guests? They love the dogs, too! Every year, the hotel’s efforts turn into a bigger and bigger success. So ask yourself, are there any local events that your hotel could better cater to? 4. Segment Planning: Going Beyond FIT to ES The recent global slowdown has hit the FIT segment hard, particularly in resort destinations. Windtower Lodge & Suites in Canmore, Alberta, solved this challenge admirably by reassessing their room inventory. Many of their suites include a full kitchen, living area and laundry facilities, so they concluded that the property was well-suited for long-term guests. Using their web site as a primary marketing tool, Windtower repositioned itself as able to handle both FIT and extended stays. Still in its infancy, the results from this new segmentation have already been exceptional. 5. Extending Your Brand Into All That You Do COMO Hotels and Resorts operate eight luxury hotels throughout the world; locations ranging from downtown Bangkok and Parrot Cay in Turks & Caicos to the remote Himalayan Kingdom of Bhutan. All properties exude an aura of well-being and COMO applies this core philosophy to all facets of the organization, bringing a unique sense of balance to their business approach. For their guests, this is palpable upon entry. And the same oasis of calm one feels while at one of their destinations is translated with perfection to their social media, electronic newsletters and printed material. It is this marriage of outstanding guest services with the subtler qualities of their marketing efforts, which bolster exceptional repeat stays and strong sales conversion rates. Conclusion Notice that these programs were creative solutions and they did not rely on a price discount to achieve success. Furthermore, each activity builds the property’s brand reputation; something especially important to help fight the commoditization of the hotel industry. In looking at your own marketing program, examine your property’s situation and features. See what guest benefits can be derived from talking about your key points of distinction in fresh, new ways. Then start talking about them. Now that’s marketing! (Article by Larry Mogelonsky, published on eHotelier on February 2, 2012)

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Did You Share The Love On Valentine’s Day?

LMA Admin — 2012-02-14T19:37+00:00

Valentine’s Day is one of those commercial holidays you don’t find on any government-issued calendar. And yet… Do I even need to state its inherent value for hotels around this time of year? A ‘blip’ on the winter cash flow radar, Valentine’s Day 2012 is right around the corner. Every precocious marketer has no doubt initiated a plan months ago to guarantee room and restaurant sellouts. But, do you have the necessary measurements in place so you can learn and enhance the 2013 experience? This article serves to identify some important steps to take to maximize next year’s fiscal return. 1. Learn. Learn. Learn. What activities did you undertake for 2012? What was successful? What can you quantify? What did your competitive set promote and how did their performance for the week compare? Examine F&B results: what were the top sellers? What was the typical bottle price range for wine sales? What anecdotal information can you glean from serving staff, concierge, front desk and any other managers who interacted with guests? 2. Database. Capture and create a list of your Valentine’s Day customers from 2012 (and 2011 if you can access this). Strategically consider this list for a special exclusive offer in 2013. The same applies for restaurant-only guests. Add to this database every bride and groom that has celebrated wedding day with you. The key is to pinpoint specific groups within this collection of data and then market according to what they already might want in a Valentine’s Day promotion. 3. Plan Based Upon the Day of the Week. Is a property more successful if Valentine’s Day falls on the Saturday night? From my experience, it doesn’t matter! The customer will choose to celebrate on the day that is most convenient to their schedule. What is important to your property is to ensure that you do not put up roadblocks that prevent your customers from celebrating on the day they want. In other words, plan your Valentine’s Day for the weekend, week or even the entire month. The most successful Valentine’s Day I’ve experienced was when the day fell on a Wednesday, as two weekends along with midday jaunts were all supported on an equal basis. 4. Be Real. Establish realistic goals and build the Valentine’s Day program around your property’s unique advantages. Review 2011 and 2012 then set an appropriate growth target for occupancy and rate. To maximize success, look at what your property has to offer based upon location, amenities, and F&B. Build packages that include lavish spa treatments along with food and beverage. If it can be arranged, a babysitting option is also worthwhile. 5. Themed Months. While it may sound corny, this is one time where romance and romantic themes prevail. Just make sure that whatever you are promoting, it is consistent with your branding and target audience. 6. Promotional Period. Define a temporal spending program based upon specific revenue targets. This is a straightforward financial exercise arising from your fiscal goals, margins and returns. Define the expenditures and give your agency ample time to prepare a marketing campaign. Building blocks for the media program should include: public relations, local print media, Google Adwords, website promotions, in-room flyers, restaurant check stuffers. Consider a tie-in with a local radio station to add reach and exposure. 7. Loyalty Bonus. Whatever the promotional offer, provide a little extra for return guests. Send an electronic note to past guests 2-3 weeks in advance of the promotional announcement. Offer to giftwrap a card of announcement. Create value-added extras, rather than focus on price reduction. Then, when your loyal members come on site, surprise them again with chocolates, wine, flowers or a delicious appetizer for two. 8. Don’t Forget Your Staff. Create an environment of romance that transcends the front-end displays. Roses in the accounting office; chocolates in the staff lunch room. Be equal in your presentation to everyone, from housekeeping to your sales staff and managers. Any gratitude you give your team will spill over into the exuberance with which they interact with the guests. Remember, Valentine’s Day comes every year, so keep track of everything this coming year, so you’ll be more than ready to do even better 12 months from now. (Article by Larry Mogelonsky, published on eHotelieron February 14, 2012)

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