Industry Update
Opinion Article 7 July 2015

Shift Your Marketing Focus From Price to Value

By Vikram Singh, Global Hospitality & Travel Strategist

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It's amazing how much time and energy gets poured into deciding the price of a hotel room. There are STR reports, RMS Reports, and booking engine reports, to go along with the hundreds of tools that are solely focused on how much you are charging for your room. There are stacks of reports on top of other reports all showing pricing data – past, present and future. You want to know anything to do with pricing? There's a report for that.


Now, where is the value report? You see, identifying your competition based on the size of your bed and the bathroom sink is an idea that is past its prime.

Boutique hotels (a term that needs to be retired) are a good example of how to look beyond pricing and instead put forth a unique personality and guest experience. They took the time to define who they were. Many were able to create a unique identity and following.

Any hotel can do this if they make the effort (unless a brand is calling the shots). Here are some suggestions on how to shift your focus toward providing value to guests.

Don't Get Dragged Into the Price War

A lot of the traditional independent hotels under pressure from stakeholders have turned to price-level competition. When your biggest USP is your price, then that is all that you will be judged on. A lower room rate becomes your only significant offering. But the guest you are targeting has a goal: to keep searching the internet for an ever lower rate.

Pricing is a shortsighted play. If you are looking for long-term profitability, you need to look at the value your are providing to your guests. Taking the time to educate your guests can make all the difference in value perception, allowing you to charge more for your rooms.

Better Perception = Better Price = Better Profits.

Be Yourself

Just last week I saw an email from the Director of Sales for a small, no-name hotel asset in the middle of nowhere. He wanted his website to look like that of the Four Seasons or Jumeriah Hotels – both super high-end luxury products. This kind of reality/website mismatch often happens often when decision-makers start to view their hotel's website as an extension of their own ego. But take note: a fancier website won't make your hotel better (or make you better either).

Your value as a hotel is in being who you really are. There are independent hotels with their own unique offerings, and there are cookie-cutter brand hotels. Every time a property tries to be something it's not, it ends badly: with disappointed guests, bad reviews, and falling revenue numbers. Lying about your value is actually worse than not showing any value. So please keep it real and check your ego at the door.

Step up and embrace who you are. If your value is authentic, it will be your best competitive edge, and won't be easily replicated.

Segment or Go Home

The first step to segmentation is accepting that your hotel/lodging product is not a good fit for everyone, and that it's OK. The next step is knowing which guests are a good fit. Before embarking on an expensive capital expenditure, or shelling out marketing dollars on a "branding" agency, ask yourself who your target audience should be. No one should be better qualified to answer this question than you.

I am not just talking about who is checking into your hotel today. Who will be checking into your hotel in the next 10-15 years? Who do you want them to be? Are those the people you are targeting? You can't relate well to anyone unless you narrow down your focus. Pretending to be all things to all people is impossible. That's when things gets complicated and you start to use price as a flotation device.

Leverage Your Location and Story

Simple test. Get your friends to walk up to your hotel's front desk and ask, "Why should I be staying at this hotel"? What they hear might surprise you. Many times what they hear from your own staff has never been mentioned on your website or in your value pitch.

What's your frequency, Kenneth? Do you have a story to tell? Does your hotel's location (city, neighborhood, building) have a story? This is what you should be telling your guests online and in person.

A good story helps with value perception and is generally reflected in your online reviews. Start training your guests to leave the reviews that you want them to. Don't wait until after the fact; you have a first-mover advantage that you need to hit. Show your guests – from their first interaction with your website through their last interaction with your staff – what makes you unique. Sometimes your company history can be an important part of your story: why you are in the hospitality business and what your philosophy is. Whatever your story is, keep it consistent and keep it coming.

You also have to own your location. Be the expert on your surrounding area. Know where your guests should dine nearby, and what attractions they should visit. Answer as many questions about your location as you can on your website. Let them know before they even book how to get there from the airport and how long it will take. Where they can find the nearest playground or opera house or monument. How far ahead they need to book their theater tickets. Make yourself the local expert, and guests will want to stay with you.

I know everyone has a smartphone, but your guests are still looking for a human touch (cue in Bruce Springsteen).

Have Confidence in Your Product and Rate

If the only way you can highlight your product is by lowering your price, then you will always be struggling to compete. Anytime a hotel resorts to selling rooms for $7, the value lost is irreplaceable.

When you get your guests to the booking stage and are about to get money in your account, do it with conviction. Matching your price to your value is a cycle that needs to take place on every page of your website and lead all the way into the booking engine.

Highlight your property's features and what you bring to the table. One Golden Rule is not to speak poorly about the competition. The minute you spend any time discussing the competition, you have already lost the sale.

Emphasize Your Human Touch

One way you market your product is to mention the high thread count sheets, fancy toiletries, fast WiFi, and other bells and whistles. But everyone has sheets and shampoo. Your competition is providing some variation of the same amenities. Even though their version of linens or WiFi might be a few levels above or below you, this is hard for your guests to understand and truly differentiate. And, in the end, it probably won't be the thing that makes their stay exceptional. Guests who write the best TripAdvisor reviews talk about how well they were treated, how welcome they felt, or how a hotel staffer saved the day when some misfortune happened.

The example I like to give is of two Starbucks at opposite ends of the street. Everyone has a favorite location. Even though the product is the same, it's the people that makes the difference.

People prefer to give their business to someone who cares about them. This is where your human workforce comes into play. It's your greatest differentiating factor, and you should use it at every opportunity.


Running any form of a lodging operation means:

  1. You are competing globally with people who can outspend and outmarket you
  2. Your business is going to be seasonal.

Your guests are willing to pay more for a product they think has a special or significant value. If you present your product to them in just the right way, the revenue is yours to take. Pricing is short-term; it will let you win a few battles. Establishing value, on the other hand, is the only way to win the war.


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