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“Price Is What You Pay; Value Is What You Get...”

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By Amanda Dennis
January 25, 2011

Warren Buffet’s words from a 2008 shareholder’s report have never rung more true. It’s encouraging to read all of the positive statistics reflecting an improving economy and consumers who are traveling once again. But this isn’t the same consumer who was buying in 2007. This is a consumer who has been labeled “frugal,” a consumer who has made shopping for the best deal a competitive sport, a consumer who has ditched the idea of brand loyalty quicker than Sandra Bullock dumped Jesse James. Though the trading down trend seems to have abated, travelers continue to push the envelope on what they expect their dollar to buy before they open up their wallets.

Despite the lessons in indiscriminate discounting we learned in 2001, rate wars proliferated in many cities once market share started dropping. As a result of this dramatic and, in some cases, unrealistic rate discounting, the consumers’ perceptions about pricing have changed. They have a new yardstick for measuring worth, they are much more aware of rate increases than rate decreases and they are resistant to paying more. How do we get ourselves out of this mess?    

The key word today is “value.”  And one of the oldest tools in our toolbox has proven to be one of the most successful:  packages. Not just any package, mind you. Today’s resourceful traveler---armed with   meta-search sites, social networking sites, hotel review sites and many other complementary applications---has much higher expectations. Packages are attractive because they save the traveler time (one stop shopping) and money (more bang for the buck) while delivering value. For leisure travelers especially, packages can provide a reason for travel, convenience and a planned itinerary for an area they may know very little about.

Perplexed about packaging? It’s going to take more than throwing together a room, a meal and a name like “Bed and Breakfast” to be an attention-getter. A package must intrigue consumers, contain a value proposition and give them an incentive to purchase. Here are five suggestions:

1. Develop packages that include items travelers feel are valuable, the things they need or want. Avoid focusing on price alone and advertise the significance of the package itself. Breakfast, parking and wireless internet are some of the most common items but their importance or benefit may vary by market segment. It’s not a one-size-fits-all world anymore. Dust off the sales skills you use with groups and craft a compelling presentation with feature/benefit statements.

2. Avoid packages that are indistinguishable from your competitors. I recently spoke about packaging to a group of seasoned hoteliers. We played a hospitality version of Family Feud…you know, where 100 people are surveyed and the Top 5 answers revealed. The challenge: name the top 5 items in a Romance/Honeymoon/Valentine’s Day package. The results should come as no surprise. Everyone in the room had practically the same package. Same goes for their Girlfriend Get-away and their Road Warrior packages. Sometimes when designing packages, the most important consideration is how easy it will be for us to handle it operationally. Step back for a moment and do an honest assessment of the packages that you have available. Take the challenge and modify your “regular” packages to reflect more imagination. Check out Beaver Creek’s “Fairytale in February” packages. They took the omnipresent “buy one, get one” and repackaged it with panache. A hotel in Wisconsin created a “Cuddle Up” package that included a “cuddle up throw” to take home.

3. Develop original packages that are destination based. For leisure travelers, the destination itself is the first decision.  Very few people wake up one morning with an epiphany: “Let’s get away this weekend so we can stay in a hotel.”  Only destination resorts are that lucky. Compile a list of the attractions or events that have the most overnight potential for your area, develop an inspired package that provides convenience and the perception of added value, then use blogs, social networking and partnerships with tourism bureau and visitor information websites for marketing opportunities. One hotel had great success with a Pumpkin Patch package. And imagine my surprise when I walked into the local Whole Foods on January 8th and an Elvis birthday party was in full swing.

4. Group meeting packages are more important than ever. In a recent survey by Ypartnership, 41% of corporate meeting planners surveyed expect to book more off-site meetings in 2011 than in 2009; 21% of association meeting planners said the same. Though budgets for meetings may be growing, there is still significant pressure to plan an affordable event. Meeting packages offer a straightforward method of pricing that bundle the most requested components of an event into one, all-inclusive price per person. Packages take some of the pressure off the planner, simplifying the planning process and streamlining the booking process.  And best of all, there are no unpleasant surprises when the bill is presented.  The most effective packages offer several options and are flexible enough for the planner to incorporate any special requirements.

5. Don’t forget the marketing part. Many times we come up with great packages but we forget to market them.  With the popularity of social networks, this usually expensive part of the process is now affordable for everyone.  The Chicago Tribune published an article last October that emphasized the power of social networks to promote business and attract visitors with travel deals, itineraries and tips from travelers themselves.  More and more organizations are discovering the impact of blogging.  The content is enormously beneficial to the traveler and with blogging, you really get the local’s view on what to see and do. Personalized Facebook business pages give you the creative license that might not be available through your website. Unique landing pages are also ways to drive business to your site. Your goal: exposure as well as conversions. And remember to insert your booking engine next to your call to action.

Need an assist with your strategic planning? Not sure how to use social media effectively? Amanda Dennis has over 30 years of success in advising and supporting all types of hotels and hospitality organizations. Want to know more? Visit her at www.ajdassoc.com for a complete list of the services offered by her firm, Amanda J. Dennis & Associates. Like what you read here? Click “like” on Facebook for more. Favor Twitter? Click “follow” for instant gratification. Prefer a more traditional approach? Call (720) 379-3058 or e-mail amanda.dennis@ajdassoc.com.       

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Contact:

Amanda Dennis
amanda.dennis@ajdassoc.com
www.ajdassoc.com
720-379-3058

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