News for the Hospitality Executive
Solid Sales and Marketing Fundamentals Can
Improve Hotel Performance in Tough Times
|By John Davies, April 2009
OK, things are looking pretty bleak and we are all searching for some light at the end of the tunnel. Just when we think there can’t be any more bad news, here it comes. The blogs are full of doomsday scenarios including an extended depression is right around the corner. Recent data is indicating the ongoing decline of the U.S. Lodging Industry will be worse than previously anticipated, and nationally RevPAR could drop in excess of 13% in 2009. Even for those seasoned sales and marketing professionals who have survived previous recessionary downturns, they are now experiencing unprecedented resistance and negative impact on their daily business activity. For others who have not weathered an extended economic recession, they may feel like a deer in the headlights and are caught without the experience and necessary skill set to weather the storm and be effective. This may be more prevalent in some smaller or independent hotels and resorts, particularly those without established brand recognition or a comprehensive infrastructure of corporate sales and marketing support and guidance.
Yet, there is some good news in all of this, we will hit bottom, the recovery will commence and a rebound in your P&L will follow. For those of us in the hotel business, our barometer will be increased RevPAR through more rooms occupied, higher rates paid, increased ancillary spending throughout the property, and an improved and much healthier bottom-line.
The road to less grim times and increased prosperity will be paved with obstacles and challenges that we have yet to experience. However, these are also the times when you can ensure you have a solid foundation to your sales and marketing plans, strategies, and initiatives. From adversity can rise opportunity to not just retain your market share but to out hustle and out maneuver your competition and gain some competitive edge and market share. Even in these dismal and depreciating times, the goal needs to be growth in your RevPAR Index; not just RevPAR. As sluggish and restrained as leisure travel, business travel, and the meetings industry is right now, there are still leisure travelers, corporate business travelers, and meetings being held every day. This can definitely be an opportunity to grab a bigger slice of the travel pie by not necessarily working harder, but working a little smarter.
As we transition through this economic downturn, we can also anticipate there will be some degree of a domestic travel” hangover”. It will be reflected in when, how, where, and under what circumstances people travel once we emerge from this recession. For example, all of the recent attention and media criticism for the extravagant spending for some corporate meetings and events could lead to restraint on future meetings, including where meetings are held. The result could bode well for some secondary destinations as meeting planners search out less conspicuous and high-profile locations and hotels where meeting budgets will stretch and be less circumspect. One of the requirements that will likely evolve from this downturn will be the need to offer and provide a new era of value-add for meeting professionals. Instead of the hosted reception or discounted golf tournament, planners will be looking for more substantive value, such as an educational session or sponsored guest speaker that is relative to their business. With increased accountability for “productive meetings”, planners may look for value-add that validates and underscores the business aspect of the meeting. The leisure traveler will also require unique and special attention in your efforts to stay connected and retain their loyalty. On the heels of the last three recessions we witnessed a much more savvy and discerning leisure traveler emerge. You will need to provide meaningful communication, creative and value oriented offers, packages, and promotions. Although they may be currently traveling less often and staying for shorter periods, leisure travels are experiencing unprecedented price value. Moving forward, reduced price point expectations for the consumer will have been established and it will take a diligent, crafted, and consistent marketing program to justify the necessary rate growth and to create a commensurate value proposition and perception in the future. Guest retention and relationships will be more important than ever, and it will be extremely important to communicate with your guests more creatively and timely; not just when you need them to fill a void.
As we continue to move forward, there will be no single solution or silver bullet that will resolve all of your revenue shortfalls and challenges. It is unlikely that there is one program, project, or marketing initiative that will “fix” the issue and drive your rate and occupancy, or fill dining facilities and spa appointment schedules. Just keep in mind, the road to sales and marketing to success is not an event, but an ongoing process of doing a series of fundamental integrated applications consistently well. You will not be successful and stay competitive in these challenging times with a flurry of desperation marketing passes downfield, but rather with the sound fundamentals of sales and marketing blocking and tackling.
Here are some observations and a few of those core sales and marketing applications and basics you might want to consider, evaluate, and address as you move forward in during this round of business adversity:
Leadership. These are the times when the leader of the sales and marketing team needs to set the example. Not only is the entire sales and marketing department or division looking for someone to set the tone and provide an attitude of optimism and perseverance, many of the associates throughout the entire operation are looking for sales and marketing to lead them out of the abyss. As tough as it is and challenging as it can get, someone has to keep a focus on the horizon and set the example of hope and optimism. Nothing can break the morale of the sales and marketing effort more than if they feel you have lost confidence in your ability to persevere and succeed. Make sure they have your ear, the communication lines are open, and they have the tools necessary to be competitive and effective. Take supreme care of your top sales performers, inspire and coach those who struggle, and cut loose those that are just not committed or capable of meeting sales performance goals and objectives. Create a productive and rewarding work environment, and don’t forget to have fun and enjoy the journey with your team. Also, keep aligned with your revenue management department and stay in touch with the reservation sales agents, as they are your first line of communication with your guests. They are sales people too and need a pat on the back and plenty of encouragement. More importantly, your confidence and how you carry yourself around all associates can be extremely contagious. Set the example, lead the charge, be the mentor, and provide the vision. Remember that if your employees are motivated and inspired, it will translate into better service for your guests. Help transition all of your associates who come in contact with your guests into sales and marketing ambassadors. It will pay dividends today and help pave the way for better times and prosperity in the future.
Market Positioning. Chances are you are working diligently and applying your best effort to the sales and marketing of your property, but the results are falling short of expectations. Under these market conditions, it might be time to validate your desired position in the marketplace and ensure your marketing message is effective and on target at underscoring what makes you stand out from the pack. Where do you fit against your competition and what truly separates you from them? Is your sales and marketing communication setting you apart and making your product stand out? Does it communicate where you want to be or where you have been? Are you talking to the right desired guest and prospective guest? When is the last time you stepped back and evaluated your positioning and your marketing message and medium? Now might be a good time to invest in a comprehensive positioning evaluation and validate you are on a solid footing and effective with your marketing communication. With declining marketing budgets and a depreciating customer base, it could not be more important that you are properly aligned against your competition and achieving maximum return from your precious marketing investment.
Guests. As previously mentioned, the ability to retain your existing guests and leverage new guests could not be more imperative than right now. This applies to leisure, group, corporate travelers, third party alliances, travel professionals, and any other source of your guests. In this type of competitive environment, you cannot take any customer relationship for granted. One misstep, failure to communicate, or lack of relationship selling, will only give your competition an entrée to gain a customer. More importantly, is the need to really know who your desired guest is and what motivates them to travel. Not just where they live and the demographics, but who they are and what their lifestyle interests are. Are you using your guest history to its fullest potential for demographic and psychographic mining and modeling? At the core of any effective hotel marketing effort is the consistent focus on who your desired guest is and the ongoing plan to find many more just like them. Similarly, your strategy and plan to develop new group business is just as critical. Make sure the prospecting effort is on those industries, companies, and organizations that fare better in recessionary periods, such as health care, pharmaceuticals, energy, and emerging segments tied to “green” development and environmental production and resources. Focus on those that have a propensity to succeed and maintain a relationship-driven sales program. Build rooted and valued relationships, find out who else in the company or organization plans meetings, get to know the decision makers, know the company, understand their needs, help them find rewarding solutions to their meeting needs. Maintain an aggressive sales philosophy and mission that by helping your clients achieve their objectives; you will achieve your goal of booking more group business. Stay abreast of what groups are booking your competition and make it the mission of your sales team to try and build relationships with these clients and sell the value of your hotel or resort. If you don’t know who your top 25 travel industry producers and you are not in regular communication with them, you can bet someone else is trying to gain their allegiance and loyalty. Be sure you have a travel professional oriented and friendly hotel or resort. Build those relationships and get an army of guest and client ambassadors helping you to sell and market all the features, benefits, and revenue streams of your property. Finally, as difficult as it might seem during these dismal times, maintain a long-term perspective on the value of meaningful and trusted relationships with all of your guests, customers, and clients. Today it’s clearly a buyer’s market driven mostly by price-point and the best “deal”. Someday we will once again transition out of the preoccupation with rate as the core business model, and we will need to emphasize more meaningful and creative value propositions; not just who has the best room rate or a 3rd night free. Long term customer relationships and loyalty are built on trust, integrity, and consistency. Don’t get caught flat-footed with customer relationships. Stay in regular communication with your valued customers and guests, keep negative surprises to a minimum, and make it your sales and marketing mission to let them know that you genuinely do care about them.
Websites, Online Marketing and Distribution. There has never been a better time to make sure that your online visibility, presence, and distribution is aggressively being optimized. If there is one element of your marketing investment that you should seriously reconsider before trimming too much, it would be the commitment to maximizing every aspect of electronic distribution channels. Communication and technology are making advances almost quicker than we can keep up, but they also provide key marketing components that can assist with the critical need for incremental and measurable returns. Keep a keen eye on your core online marketing and e-commerce channels and don’t leave anything to chance. To be competitive and successful at gaining market share, it is imperative you are maximizing your visibility and every opportunity to drive traffic to your booking platform. Since some industry experts are projecting that bookings from online travel distribution channels may continue to reflect growth in 2009, it really makes sense to ensure you develop strong relationships with OTA market managers and a solid SEO strategy to achieve preferred rankings and positioning against your competition. Although you want to be sure and maximize your return from the OTA’s, the ultimate goal is to drive as much direct traffic to your proprietary website and booking engine as possible. Monitor and manage the expectations and the balance between these two sources. Too much long-term emphasis and reliance on the OTA’s can make it more challenging to rebound and regain your rate integrity and profitability once the recovery does begin. It is also important to carefully evaluate your website. Is the design and navigation of your site user friendly, engaging, and fresh, or is it tired and in need of content and image updating? Even if you have the most dynamic and aesthetically appealing website around, the ultimate goal is to drive traffic to the booking engine, or to have the viewer pick up the phone and call your reservation center. Is your Search Engine Optimization fresh, effective, and working? What is your SEO analytics telling you about what is driving your traffic and where it is originating from? Are you positioned near the top of the first page in random organic key-word and phrase searches on Google? Strategic reciprocal linking partnerships and alliances can also greatly stretch your exposure and merit exploration. To enhance your position and visibility, a well planned and ongoing strategic PPC advertising program or targeted display advertising with attention grabbing banners can also provide a measurable ROI. As previously mentioned, at the core to your ongoing marketing initiatives should be consistently scheduled communication not only to existing guests, but to targeted prospective guests as well. To accomplish this, you will need an assertive and effective opt-in e-mail address capture program. Give viewers of your website the opportunity to sign up for ongoing news, offers, and promotions. Build the relationship with these potential guests with dynamic marketing vehicles such as timely e-mail bulletins or more elaborate and informative e-news briefs. For even more impressive e-marketing applications, implement the use of a link to flash video for greater advertising impact. In addition to your internet marketing activity and applications, it is extremely important to confirm that other distribution channels are working to your maximum advantage. For example, is your GDS platform and booking engine yielding to your expectations? Is the information effective; are your HOD descriptions, rate and package plans, current and more thorough than your competition? Is there easy access and not a lot of unnecessary steps with screen displays and sequencing? Is all desired connectivity and availability displayed appropriately? Have you taken the time recently to confirm that you are optimizing your visibility and presence through one of your trusted travel partners? If you have consortia relationships, are you taking advantage of their e-newsletters, or other special advertising communication the member agents? On a daily basis, are you capitalizing on informative and strategic analytic reporting such Hotelligence to your maximum advantage? Finally, there is a lot of ongoing discussion and debate about the merits of hotel marketing on social media sites such as MySpace, Facebook, and Twitter. Although there is no question as to the growth and popularity of these social networks and other emerging blog formats, you should not look to these resources as any type of cornerstone to your core marketing effort. Unless it is a relatively free opportunity that emerges, and it takes very little time from your primary sales and marketing effort to participate, it might be best to not spend too much time on the social networks to help you improve the revenue performance of your hotel.
Marketing Tools. Even in the face of the most difficult business environment and depreciating marketing budgets, it is important that you have effective marketing tools to stay competitive. As you and others scrutinize how your marketing dollars are being allocated and trim expenses, there still may be some opportunity to reduce costs while improving effectiveness. It is not necessarily an issue of having more marketing resources, but capitalizing on those that are providing results and exploring other options. Just as it is important to streamline and maximize the performing aspects of your direct sales effort, it is equally imperative to confirm that you have the necessary and effective marketing resources to produce results. As previously noted, if you have validated the positioning of your hotel or resort you will want to make sure it is the cornerstone of your key marketing collateral, advertising, e-commerce, and other communication. A good place to start is the visual appeal, images, and photography being utilized. In this competitive buyers market, your marketing material needs to engage the reader quickly while separating your property from the competition. Make sure your “signature” photography strongly communicates your position and is complemented with impactful headings, phrases, and taglines. Use copy sparingly and don’t try and tell a story, but rather create an impression. Multi-page leisure and group brochures certainly can be effective in the right situation, but they can also be extremely expensive with volume distribution, and many end up collecting dust in a drawer or in the recycle bin. There is a place and appropriate time for high profile collateral, but also have a quality, yet simple one-piece “brochure” with a compelling visual on one side and the highlights and features of the hotel on the reverse. This is a great tool that can be used in the place of your more expensive multi-page brochures in high volume distribution situations, such as trade shows, lobby and concierge hand-outs, bulk mailings, some brochure fulfillment, etc. Also, have as many of your leisure brochures, group meeting and catering portfolios, dining menus, spa and golf information, maps, fact sheets, and other collateral in downloadable pdf formats. They should be strategically located on your website and also available for follow-up distribution directly from your reservation, catering, and group sales people. Many guests, meeting planners, and travel professionals will prefer this option as opposed to print material. In addition, it is much easier to update, revise, and change photography as well. With printing and postage rates on the rise, the savings and efficiency of increased utilization of electronic brochures can have a significant impact with your production, printing, and postage investment. E-brochures are not designed to replace your quality print material, but to complement the overall effort. Equally important as it is to have a group of electronic brochures in use, is the need for an arsenal of e-mail flyers for targeted and timely distribution. By having a series of communiqués for consumers, meeting planners, vacation rentals, special events, restaurants, recreation, and other amenities , you are in a much better position to have a well planned and assertive e-mail direct marketing program. Keep them simple with the flexibility to change out the promotion or value proposition quickly. By taking this approach, you will find yourself in a less reactive posture and more aligned to out maneuver your competition with timely and consistent communication to targeted guests, clients, and prospects.
Public Relations . Often during these challenging times and when marketing budgets are being scaled back to the most basic needs and applications, the commitment to Public Relations is trimmed or sometimes eliminated. In some situations, there is no alternative and other important sales and marketing resources take precedent. If your PR person or agency representative is not providing a viable and measurable contribution, it’s hard to justify retention. On the other hand, there could not be a more critical time and need for the impactful visibility that quality and aggressive PR can generate. It’s during these times that you want to try and make your hotel or resort stand out from the pack with creative, unique story angles, packages, promotions, and other on- property activity. If you have picked up any travel related consumer or trade publication recently, you probably noticed how much the commitment to paid advertising has been scaled back. In addition, some of the limited advertising dollars have been redirected to online advertising platforms such as PPC, Kayak, or TripAdvisor. Even with the decline in the higher profile mainstream advertising, these travel publications are still on the lookout for stories, insights, promotions, creative packaging, editorial copy, and simple tidbits on what is happening in our industry. If you are creating and driving a business environment that is dynamic, innovative, and fun, then you need to have someone aggressively pitching your story to the media! If you have the luxury of a PR professional on your marketing team, you are probably all over it. If you don’t have the benefit of having PR in-house, there are plenty of PR resources available, including independent PR consultants and seasoned freelance professionals. Many of these very experienced and highly connected PR professionals have been the victim of cut-backs and downsizing and are very eager to maintain and active working relationship with their extensive media contacts. Solid PR people love what they do and hunger for the excitement of pitching an exciting story angle and seeing it through to fruition in print. There are some outstanding PR professionals sitting at home who are eager to get to work. Even if you can’t afford a full-time PR professional or a high-profile agency on retainer, you can obtain some much needed media exposure with some perseverance, ingenuity, and creativity. And if you think because we are in a recession the travel media has less interest in what we are doing, you might be pleasantly surprised. Like everyone else, they are on the lookout for signs of life, energy, and excitement in the hospitality business, and that’s where a solid PR effort can help you stay out in front of your competition.
Summary. These are just a few observations and suggestions you may want to consider, there are many more opportunities that can be missed or overlooked everyday if you lose sight of the basics. To be competitive and gain market share in a depreciating economy is difficult, but it can be done. It’s all about perseverance and focusing on your core sales and marketing applications, programs, and plans. This economy will recover just as it has after previous recessions. It’s always painful and never easy, but we will survive and the sun will once again shine on the hospitality industry. Just remember that the road back to prosperity will be paved with opportunity, but you will need to have a fundamentally sound sales and marketing effort if you want to take advantage of the journey.
About the author
John Davies, CHA