Hospitality marketing: Things to think about in ‘04

January 14, 2004 |

Our biggest concerns with these online travel agencies have been rate pressure and the sense of "losing our identity." Or so we thought.

by Leora Lanz

We have all just survived three years of a rapidly changing (hospitality) business environment. We thought it prudent to raise a few issues as a way to start the new year and consider how to more effectively market our hotels from this point on.

As we know, the online travel sites, Priceline.com or Travelocity.com, have become important players to many of us in hotel marketing. Our biggest concerns with these online travel agencies have been rate pressure and the sense of “losing our identity.” Or so we thought. The major brands have been working diligently to gain back rate integrity as well as their customers. To guarantee the best available rates through your own websites - this is a step in the right direction.

Additionally, many of the major flags are ceasing to offer their frequent travel benefits from their loyalty programs to customers who book through the third-party sites. This is a way to compensate for revenue loss. However, this may not necessarily be a solution. The customer may in fact consider this a punishment.

And thanks to these online travel sites, our customers are now doing business with us differently. The travel policies of many of our corporate customers are in a period of transition. Companies are allowing their employees to stay at hotels, other than the negotiated properties with which they already conduct business, as long as they can find a rate online that does not exceed that negotiated rate. Other companies are even resorting to a per diem model. Hotel stays have now, more than ever, become a commodity thanks to the Internet.

What should we be doing about all this? We know that our corporate customers have always had traveling employees who do not comply with corporate travel policy. Companies have managed to control these renegades to an extent. But today, the electronic travel sites have proven themselves to be even more of a cost saver than the negotiated rates arranged by the travel purchasers and decision makers. As business travelers make their decision to take a trip within an ever shorter lead time, they have learned to take advantage of the savings benefits available online. And so, the travel directors at large companies may be taking a cue from these renegades.

Over the past fifteen years, our sales managers have been negotiating with corporate travel directors or procurement/purchasing departments based upon potential production within a given year. This method of securing room nights now needs to change. But how? Do we offer rates to companies based upon city per diems, the way we do with the government segment?

Branding. Excellent service. Comfortable accommodations (within the price point). Hospitality. These are part of the solution. Many travelers searching for the most competitive rates online will be drawn to a brand that consistently provides a good night’s sleep, clean rooms, good service, and a good location.

For example, Starwood figured this out when they launched the “heavenly bed” at Westin. A good night’s sleep is what a hotel should provide and that message is constantly promoted through the media and throughout the Westin brand. Will the promise of a good night’s sleep on a heavenly bed motivate someone to pick a Westin? We think the answer is a resounding yes. No doubt Starwood believes it. In 2003 they launched “Sweet Dreams” at Sheraton Hotels. We’re sure the result will be comparable.

We believe that the challenge for the smaller hotel chains and independent hotels is to understand what you have to do to survive in our ever-changing business climate. Our advertising and public relations message need to change. Smaller operators need to think of themselves as a brand. The number of people in your sales department may even change, as well as their job descriptions. You may want to consider enhancing the service experience of your guests by having additional staff at the front desk. While a sales manager speaks with a company’s corporate managers in the headquarter offices, it is the person who checks into our hotels who is the ultimate decision maker. He or she has a greater say as to how well our hotels will do in the future, simply by clicking a mouse.

Leora Halpern Lanz is Director of HVS Marketing Communications, and Senior Manager