A Hotel Checklist for the Leisure Market / Jil Larson / June 2010

by Jil Larson, June 28, 2010

Back in golden times, I frequently took spontaneous trips to recharge my batteries, even if only for the weekend. My favourite spots were Las Vegas, Aruba, or cruising the Caribbean. I did all three at least once every year between 2000 and 2008. I�ve done none of them since.

This isn�t for lack of marketing efforts from the destinations and cruise companies. I�m blasted with email and even snail mail solicitations daily, all with genuinely fantastic deals if I�d just pick up the phone or click the �commit� button online. There was a time when I would have been all over these, but like most of us, I�m more cautious with the indulgences today. I may occasionally see an offer I can�t refuse and jump on it, but I no longer make the effort to search for specific dates or a destination. If you want my business, you�re going to have to come and find me for it.

Based on what I�ve witnessed in the hotel industry, my change in leisure buying habits reflects that of the general population. It isn�t enough to put together a great offer and trust that it will be found on the hotel�s website. To attract today�s leisure traveler, you have to put together compelling offers (note the plural), and spoon feed them to prospective buyers using any and all means necessary. You can have by far the best deal in your marketplace. It won�t do anything if you expect the buyers to find it on their own. They no longer have to bother actively searching for the deals.

If your hotel has found itself struggling in the war for leisure business, consider the following strategies organized by timeframe of impact.

Always and Forever: It doesn�t matter what the market conditions are, independent hotels must remain focused on the following at all times.

Search Engine Optimization (SEO): Independent hotels need to have their marketing teams all over this. There is a wide array of services available to assist and if starting from zero, any number of online classes to get you going. Attracting leisure travel is a wired game, print ads and promotions with a limited audience will get you limited results.
Website Optimization: Where are your compelling offers so enticing I absolutely must check into them? Maximizing SEO may get buyers to your site, but you have only seconds to grab their attention and keep them there. If your marketing platform has been built on understated elegance, you may want to consider an overhaul. Spoon feed your audience. Make it as easy as possible for leisure travel to see the offers you have available.
Direct Booking Incentives: Wish your leisure business would book directly with the hotel instead of through expensive OTAs or other channels? Of course! Have an offer in place to incent buyers to book directly on your website? Maybe. Telling anyone about it? Something front and center on your website highlighting why buyers should book directly on your site rather than checking other channels is critical to reducing your distribution costs over time and building customer loyalty. At the very least, if the rates on your website are as good or better than you are offering through any other public channel, say so! Just because you know you guarantee the best rates doesn�t mean Joe Vacationer is aware he doesn�t need to waste time checking around. If you are able to toss in an added perk that can�t be attained through booking the same rate on another website, do so. Hotels may not have the marketing dollars of the big OTAs, but you can still educate the customers that they can�t go wrong by booking directly on your site.
Take Another Look: Is your hotel pet friendly? Check out participation on the major pet friendly hotel websites. And don�t forget to include any relevant information (e.g. required deposits) on your HOD and all OTA descriptions. Are you targeting gay travel? Try joining the International Gay and Lesbian Travel Association (IGLTA) which not only gives you marketing opportunities but also exposure on the gay destination pages of major OTAs. In short, keeping your hotel information up to date through existing channels is just as critical as locating new ones.

Budgeting Timeframe: If your market is expecting big gains within the next 12 � 18 months, skip this section. It will take up to six months before you see measurable returns and by that time you may not need it.

Wholesale: They�re baaaack. They never actually left, but you may have forgotten about them during the good times or decided they weren�t the effort. This channel is not limited to senior travellers, and moreover has specialized to the point where you can target specific markets and find wholesalers that can help you gain share in a hurry. There are still the drawbacks of block allocations and largely manual reservations processes, but the big wholesalers that dominate the majority of the share are well worth talking to.
Consortia: In the past ten years many hotels opted out of giving discounted rates to consortia, but you may want to snoop around within your comp set to see if anyone has begun wooing back consortia business. An easy place to start is the Radius Travel website. Go to http://www.radiushotels.com/DVLogin.asp, enter any company name you like, enter your location and you will find a list of all hotels in the marketplace participating in Radius� Global Hotel Program along with the rates they contracted for the current year. Bear in mind your competitors may revise their offers within the year to come in below their contracted agreement. If you subscribe to Travelclick�s Hotelligence report, you can get a quick idea of how much business the various consortia are putting into your market.
Loyalty Rewards Program: If your branded competitors are buying your business with their popular loyalty rewards programs, you may now be able to fight back. Stash Hotel Rewards was launched in May and is quickly enrolling an impressive portfolio of luxury independent hotels who are working together to provide independent travelers with a competitive points program. Developed by self-described �OTA refugees�, Stash�s objective is to steal share back from OTAs by issuing loyalty rewards in a manner similar to the big brands, but those points aren�t available if the room is purchased through an OTA. Check out www.stashrewards.com for more info.
Premium Room Types: I know, I know, your front desk is all over it and you�ve never lost the opportunity to upsell at check-in. But have you done the analysis to ensure your premium room categories are achieving the same or higher RevPAR than your base categories? Often they aren�t, because they run at significantly lower occupancy or frequently end up being used for free upgrades instead of revenue generating upsells. One solution is NOR1 and its E-standby Upgrade Program (http://www.nor1.com/?page=upgrade) that offers guests the option to pre-purchase an upgrade at a discounted rate if the room category is available at check in. Similar products are in development, check with your distribution provider to see if they have a standby upgrade program in the works before making any commitments.

Short Term Fixes: These may boost revenues for the immediate future but should not be tackled without long term plans in place to ensure you don�t become dependent on them forever. These are �give a man a fish� strategies. They can definitely help but are not going to be your long term solution.

Private Sales: Checked out jetsetter.com or vacationist.com lately? I have. And so have millions of other buyers in that demographic we all drool over. Just because they�re high income doesn�t mean they�ll buy your rack rate without a thought. The best way to introduce your product to a huge base of wealthy travelers in a hurry is participation in a private sale.
OTAs: Discussed to death? Sure. But when it comes to marketing, they have it all over their product suppliers. Because of their costly margins and high maintenance requirements, they shouldn�t be your first choice but they are certainly the fastest fix if emergency measures are required to increase share. You may want to work with your OTA market managers to maximize sales through promotions while working on your longer term solutions. Once you�re firing on all cylinders, you�ll be able to trim back the promos and get the majority of your share gains from other sources.

Bottom Line: The days of building it and they will come are over, at least for now. Although leisure travel is beginning to rebound, the buying habits have changed. Focus at least as much attention to how you�re going to get the offer in front of the buyer as to what you�re putting in it.

Jil Larson is a twenty-five year veteran of the hotel industry with revenue management leadership experience within the Starwood, Marriott, Intercontinental, and Fairmont organizations as well as that of several independent hotels.