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Driving Rate by Building Image: A Primer

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by Michael G. Frenkel, February, 2005

At the recent Americas Lodging Industry Summit (ALIS) in Los Angeles, hoteliers offered a common refrain: “The market is back. People are traveling again and spending money. Now, it’s all about rate.”

With guests back at your doorstep, there’s no better time to be thinking about strategies for boosting rate at your property or in your portfolio.

Experienced professionals know that rate and image are two sides of a single coin – customers pay for the perceived value of the experience they expect to receive.

How do you build or enhance a property’s image?

It’s critical to start with a good product, and outstanding service. No amount of promotion or publicity can convince guests to pay premium prices, if you do not meet and exceed their expectations once they arrive. You may be able to fool a guest once, but if the experience does not deliver, it will turn out to be only once.

Then there’s the impact of your location: It is simply a fact that people will pay more for a stay in mid-town Manhattan or downtown San Francisco than in a small town in rural America.

Tips from the Trenches

Beyond product and location, there are some simple guidelines for distinguishing your property from the pack, building image in the service of justifying higher rates - whether you operate a small rural inn or a 500-room urban hotel.

Rule #1 is a common-sense adage from retailing: People pay premium prices for added value.

The good news is, every hotel offers dozens, even hundreds of opportunities for adding value to its guest experience. And most of them need not cost lots of money or time - you just need to think out of the box to find and package them.

For example, some years back a luxury boutique hotel issued a press release about its mini-bar. This was no ordinary mini-bar, offering candy bars, popcorn and the like. It was the ultimate mini-bar, boasting the finest Swiss chocolates, vintage wines and liqueurs, and (if you can imagine) Swedish peppermint foot massage oil. 

The press release was simple and to the point: It was entitled “Raising the Bar,” and it extolled the uniqueness of the guest offering, while also making clear that the premium offering justified a premium price from discriminating travelers.

The Wall Street Journal, among others, picked up on the story, and soon the hotel had received dozens calls and reservations – despite the fact that the hotel was still several months from opening! 

More Ways to Create Perceived Value

A small hotel in Cambridge, MA, identified women traveling on business as an important target market. At the same time, it was preparing a major renovation to re-introduce the one-time chain-hotel as a “cheap-chic” boutique.

We took a long walk around the neighborhood and noted the property’s proximity to a nature preserve called “Fresh Pond.”  We connected that with the desire of female travelers to feel, fresh, rejuvenated, even a bit “pampered” when they are on the road.

The result was the creation of a “Soap Bar” featuring fresh soaps, including varietals such as “Spring Sunshine” and “Winter Mint.” The soaps were created and manufactured by a local vendor, which saved on cost. A special package-rate allowed guests to choose the kind of soap they would prefer upon check-in, accompanied by a tour of the nature preserve, fresh pastries in the morning and herbal tea served the fireside at night. 

It was a “fresh experience” that conveyed the hotel’s new positioning perfectly – and helped drive rate at critical a time when the hotel had inventory out of commission due to the renovations.

Across the river in Boston, the historic Lenox Hotel found a way to drive rate and boost image in the treacherous days following the attacks of 9-11.

The hotel’s “Celebrate Historic America” package included a two-night stay in America’s most historic city, dinner at the oldest continuously-operating restaurant in the country, tickets to the Jacqueline Kennedy exhibit in nearby Dorchester, and a walking guide to exploring historic Boston.

The cost was minimal, involving little more than establishing partnerships with two local attractions and generating a desk-top map of Boston historic sites.

We targeted the package for publication in newspapers in drive markets, at a time when consumers were wary of air travel, and paid special attention to the tour market. And of course, we built a rate premium into the package.

The result was tens of thousands of dollars in business at a time when the Boston market was suffering terribly. Inquiries were received from dozens of bus tour operators, several of whom booked the package at market price. It was a key rate-driver, at a time when just getting heads in beds was a challenging task.

Summing Up

I could multiply the examples ad infinitum, but the lesson is clear: Your hotel has assets, natural and situational, that can be tapped to create the kind of awareness that not only builds traffic, but drives rate. 

You need to know where to look for the assets, and how to package them. Sell the package with a little promotional flair, and more revenues from higher rates are bound to follow. 


Michael G. Frenkel is an adjunct professor at New York University’s Tisch Center for Hospitality, Tourism & Sports Management. He is also President of MFC PR (www.mfcpr.com), a New York-based communications firm specializing in the hospitality industry, which has represented dozens of individual hotels and most of the major brands in the industry. Michael can be reached at michael@mfcpr.com.

Contact:

Michael G. Frenkel, President
MFC PR
www.mfcpr.com
michael@mfcpr.com


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