Competititon Or a Valuable Marketing Partner?
|By: Neil Salerno, August 2003
This promises to be an interesting few months for budgeting and creating your marketing plan building for 2004. These are uncertain times. The general consensus anticipates a gradual recovery starting this fall, but how gradual and to what degree are still areas of speculation.
Since the end of 2001, many hotels changed their primary sales focus from rate heavy corporate travel to deep discount group business. In many cases, this helped falling occupancies, but created a new era of discounting. “Book it at any rate” was heard far and wide around the World. It spawned a new generation of sales people who never learned that negotiating a better “deal” for the hotel is an important part of their sales responsibilities.
We need to return to the belief that our target is profitable sales and not just room nights. To borrow a phrase from the past, “profit is not a dirty word”. Include an investment for sales training in your budget. Training for your producers is guaranteed to result in a great ROI.
According to The Center for Hospitality Research, by 2005, an estimated 1 in 5 hotel bookings will be made online, up from 1 in 12 in 2002. Experts agree that a large portion of this growth will come from third-party wholesalers like Expedia, Hotels.com, etc. and the remainder from hotel sites.
The thing that disturbs me is that there is so much talk about treating third-party wholesalers like the competition instead of valuable marketing partners. Thanks to eWholesalers, your hotel information is accessible all over the Web. Companies like Hotels.com are spending $millions in search engine placement and advertising to get your hotels seen and booked. Many of these hotels would have no presence within this emerging eMarket and others would have to solely depend on their own Web Sites to be found at all. From the condition of many hotel sites and a distinct lack of eMarketing, that would be a losing proposition indeed.
Third-party eWholesalers are not the enemy. To find the enemy, we need only find the nearest mirror and pick the first person we see. Many individual hotels still don’t have a Web strategy; rates and rooms are being given to eWholesalers without any strategic intent; and, in many cases, without much consideration for their after-affect on the hotel’s entire rate structure.
History tends to repeat itself. For those of you who were in the Caribbean in the 70’s, at that time, we were concerned that many bookings went through wholesalers at 20% commission simply because consumers and travel agents couldn’t get seats on the limited number of flights to our destination. Flights were sold-out fast because wholesalers were smart enough to buy blocks of seats in advance. But, these same wholesalers invested $Millions in advertising to make the Caribbean a desirable destination and our hotels popular. Instead of competing, we wrapped our programs around their efforts, learned from them, and everyone benefited from the experience.
Before you begin the budgeting and market planning process, develop a rate and room allotment strategy, which includes third party wholesaler production. Consider the Internet as a growing feeder market and eWholesalers as valuable travel partners. They are driving millions of people to use the Internet for travel.
If hotels are not getting a fair share of Internet reservations, it’s because we have not devoted the resources or energy necessary to manage our Web Sites and their resulting rates/offers. I will applaud any hotel, which actually budgets for Web eMarketing in 2004.
Back in the good ‘ole days of heavy media advertising budgets, those of us with large enough budgets immediately sought a hotel-experienced advertising agency to professionally design and place our ads. Doesn’t it make sense to get professional marketing assistance for your Web Site? The wonderful part is that the Internet is still one of the least expensive media available today.
The 2004 budget and its accompanied marketing plan will shape your future. Before you do the “same old, same old” programs and tasks, create a new vision.
Neil L. Salerno, CHME
Hotel & Internet Marketing Solutions
1369 South Wembley Circle
Port Orange, Florida 32128
|Also See:||How Often Have You Heard, 'I could have gotten a better rate but the client saw our rates on the Internet' ? It’s Time To Get Back To Selling Location, Facilities, and Services / Neil L. Salerno / August 2003|
|Before You Begin that Marketing Plan Challenge Your Sales Team; Expect More and Get More / Neil L. Salerno / July 2003|
|Jump Up and Shout Yes - Delivering Best Online Customer Experience, Nice Job Vividence! / Neil L. Salerno / July 2003|
|Is The Internet Delivering On Its Promise? Well, It Depends on How you Look at It / Neil L. Salerno / June 2003|
|Coaching and Mentoring, Sometimes A New Paradigm Can Go A Long Way / Neil L. Salerno / June 2003|
|Sales Training Works Well, But Sales Mentoring Makes It More Effective; Mentoring Lasts a Lifetime / Neil L. Salerno / May 2003|
|Is It Time For A Sales Tune-up? How Healthy Was Your Last Forecast? / Neil L. Salerno / May 2003|
|Hotel Web Sites; Want it Creative or Effective? / Neil L. Salerno / May 2003|
|If You Always Do What You Have Always Done.... You’ll Always Get What You Always Got! Hotelier’s Mantra... Thinking Outside The Box / Neil L. Salerno / April 2003|
|Good Sales Planning - The Basics Still Work / Neil L. Salerno / April 2003|