2 industry ironies you need to avoid – Quick!
By Jeremiah Magone, Marketing Director at Hospitality Copywriting
As a copywriter, I'm privileged to work with some of the top companies in our industry. They take me behind the curtain and I have the chance to learn about everything they're doing, to help them promote their solutions.
To get better at what I do, I've also taken a deep dive into the community. Last year I was lucky enough to attend HSMAI leadership, ROCET revenue management training, and I went to at least 7 trade shows to talk with hotel owners and vendors.
I'm telling you all this because, after several years, I've started to notice some big ironies in our industry that are, potentially, putting a bottleneck on your hotel's revenues, and your career.
This article is my way of helping you address these ironies so you can rise above the competition and experience a rich and rewarding future in hospitality.
Two weeks ago, I went to the HEDNA conference in San Diego. And while I was there, I listened to an impassioned presentation by Michael Dominguez of MGM about the need for change in our industry.
Or rather, the inevitability of change and what it means to each one of us.
"40% of the people in this room will be irrelevant in 5 years… because you can't change," he warned us.
Now this, coming from someone who knows his business as well as Mr. Dominguez, points to a big problem in our industry, and an irony.
Because even though the hospitality industry is incredibly susceptible to mood swings in consumer confidence across the economy, we aren't very pro-active. We don't embrace change, and so competitors, like the OTAs in 2008… or Airbnb since 2014, make quick, disruptive inroads into our business – while we scratch our heads, wondering what we should do.
To me, that's ironic. That leaves us in a precarious position. And that, in my opinion, is the danger which Mr. Dominguez was warning us about.
What should we do about it?
There was an interesting thread running through Mr. Dominguez` presentation that I thought was also very instructive.
He wasn't using any examples from within the hospitality industry.
And after he told us a story about how The San Antonio Spurs are always asking their star players to move back, so new players can come on the team with 'fresh legs' and run offense, it seems that was the point.
We need to look outside.
That was the formula that's helped The Spurs make the playoffs for 19 straight seasons.
And that example was Mr. Dominguez' way of telling us that our old ways of doing things in the hospitality industry need to take a backseat to new ideas, or else we need to get out of the way completely and allow 'fresh blood' with new ideas to lead the offensive.
As good as we are at what we do, this is the 21st century, after all, and what happens in one industry can have massive implications in another. So, if we want to stay relevant, we've always got to keep our eyes on the horizon.
"What industries should we be looking at?" you might ask.
If, just as Mr. Dominguez predicts, "40% of the people in this room are going to be irrelevant…," it also stands to reason that that 40% will be replaced by people from outside the industry.
That means, good people and good ideas are going to flood into the hospitality industry and, with them, they'll bring their best practices. They'll create synergies. And ,'yes', they'll create a lot of disruption… and lots of pressure and anxiety for those who can't change.
That might sound like a bad thing. That is, unless you decide to change your mind – this minute – and start looking at changes in the industry as a good thing; as an opportunity to be one of the innovators.
Best practices are called 'best' for a reason, right? i.e. They can be 'best' for your career, as well!
If you want to produce break-through results…
I'm a big advocate for looking at other industries and borrowing their best practices to help clients produce break-through results.
That's why I recommend you take a good long look at what the OTAs are doing, right now. Focus in on how they're pushing innovation… how they're growing their operations… how they're interacting with their customers... You know, 'walk a mile in their shoes'.
Because when you do that, you'll realize that they took their best practices from the e-commerce industry and, if you follow that thread just a little farther, you'll see the e-commerce industry took their best practices from the direct response industry.
This isn't just coincidence. It's ROI. It's the methodology of producing the best ROI for your time and effort.
Which is: Businesses need to be able to track results in order to test… in order to find the best approach to the market.
Because if you can't test, you can't improve. And if you can't improve, you'll always be at the mercy of those who can. (And you'll always be wasting time and energy on low value activities!)
That's why your hotel needs to constantly test and improve your marketing to meet the demands of the future economy. You don't want to go the way of the flightless dodo bird, do you? You don't want to be at the mercy of those who can adapt to a changing environment and eat your lunch, right?
Unfortunately, many hotels have a hard time getting a handle on this critical point.
The process of evolution starts by getting absolute clarity on your current return on ad spend (ROAS); the bottom-line revenue earned for every dollar you spend on marketing.
For example, if you have 20 Pay-Per-Click ads out, you might know how many visits you get to your booking engine, but that's it. You're not 100% sure which ads are actually producing reservations… or the exact value of those reservations. So you don't have a real understanding of your customer acquisition costs.
But the OTAs do. In fact, they understand their costs down-to-the-penny. They would look pretty silly spending millions – even billions – on PPC ads every year if they didn't, right!
So if you want to understand your costs… to take your hotel and your career to the next level… you'd be wise to follow their example:
- Figure out how you can start using their best practices on your website…
- Add trackability to all your organic and paid marketing activities…
- And constantly test and refine your approach to the market, just like they do…
Let your old ideas of hospitality play defense while new ideas with 'fresh legs' run point!
If you're willing to change…
So if you're willing to change, and you see how our old industry ironies are killing your bottom line, realize that the OTAs aren't just your competitors or partners in distribution… they're leaders in the online conversion game.
And, after you pick up on that point, you should realize that all you have to do to be successful in the future is think about how they grow their businesses online, adopt those best practices, and then beat them at their own game.
Once you've got the right players on your team, it shouldn't be hard. After all, you've got the home court advantage.
For more ideas on how you can create measurable results in your marketing, check out 2 of my newest videos: