How Can Your Property Emerge as a Winner In 2021?
By Max Starkov, Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
STR just released another set of disturbing hospitality industry data: due to the pandemic, in 2020 hoteliers slashed their marketing spending by 51.5% compared to 2019 (STR, 2021). Sales and Marketing Labor Costs decreased by similar percentage, which indicated an even bigger calamity: not only the property's marketing presence diminished by more than half, but the institutional marketing knowledge and expertise was decimated.
This year hoteliers must make the hard choice between:
- Abandoning the property's marketing efforts and relying solely on the OTAs and other intermediaries to help with the acute occupancy needs, or
- Balancing the property's distribution mix by investing smartly in digital marketing and utilizing the third-party channels.
The first choice is the easy though detrimental approach to distribution and revenue management that leads to irreversible OTA dependency, loss of brand equity, and a guaranteed downward spiral toward insolvency.
The second choice allows you to maintain a healthy distribution mix of direct and intermediary channels by utilizing your intimate knowledge of your property's product, your destination, your short-haul and drive-from feeder markets, and your knowledge of your past guests. This expert knowledge, plus your adequate investments in technology and digital marketing, will help you improve occupancies and the bottom line, outshine the competition and reap long-term benefits.
Let's face it: In these difficult times with lower occupancies, catastrophic ADRs and RevPARs and staff operating often on a skeleton-crew fashion, launching elaborate and expensive performance marketing campaigns to acquire new guests are out of the question. Therefore, your 2021 marketing strategy's objectives should be to achieve maximum returns with minimum budget.
How can you achieve that?
Make past guests a top priority
Focusing on your past guests and repeat business should become a top priority vs chasing new customers. Past guests and loyalty members are already familiar with the property, its location and product; the only thing now is to convince them that the property is safe to stay at. Past guests and repeat business will rule the next 24 months!
Independent hoteliers should focus on bringing back their past guests and creating a guest recognition program to reward any repeat guest. A simple program based on giving free nights based on X number of roomnights stayed can go a long way today. Hotels.com has 50 million members in its simple, but very effective reward program, which gives one free night with every 10 nights stayed at any hotel. Independents should also strongly consider implementing a cloud CRM technology and create a CRM program to increase repeat business, engage last and current guests and turn them into future guests.
Own your short-haul feeder markets
STR just released data about the severely shrinking booking windows: Over 60% of guests book their hotel within 7 days and 80% - within 14 days of arrival. These guests are not arriving to your New York City Hotel from Europe, Australia or China, they are coming from your short-haul and drive-from feeder markets.
In the post-pandemic world, any hotelier should "own" their short-haul, drive-from and main domestic fly-from feeder markets, and "delegate" to the intermediaries only the long-haul foreign feeder markets. How do you do that? You do that by employing solid revenue management practices and RMS technology; enforcing strict rate parity, implementing CRM program and technology to engage and retain your repeat customers, investing in digital marketing initiatives in your short-haul and drive-from feeder markets.
Communicate with your customers
Communications with your customers means spending on content marketing! If you cut or pause your marketing budget, how are you going to communicate with your customers about your cleanliness protocols, contactless guest experience, new or newly opened amenities and services, latest promotions, packages and special offers? Not communicating with your past guests, loyal customers, group planners, tour operators, distribution partners, etc. is a huge mistake. You should continue to communicate to and with these customers, provide clarity and information about the property's and destination's current situation, inform them how you are using this down time (are you?) for employee training and professional development via online courses and collaboration tools, and assure them that the property is ready and able to welcome guests and clients and keep them safe.
Relearn how to sell on value vs price alone
I believe selling on value vs selling on price alone can to a great extent compensate for the budget limitations and online dominance by the OTAs. Hoteliers must remember and relearn how to sell on value vs price alone! The OTAs are the masters of selling on price, hoteliers have no chance outwitting or outspending them in their marketing efforts. But selling on value? This is where hoteliers can truly outwit the OTAs and provide real value to their customers. Do you have cooking classes, weekend specials, coronavirus de-stressing packages, spa packages, family packages, activity packages, special occasion packages, wine tastings, F&B packages and promotions, work-from-hotel packages, etc. that you can use to target your local, short-haul and drive-in feeder markets?
Develop an "anti-Airbnb" strategy
In 2020 Airbnb increased its market share at the expense of hotels and captured 18% of the lodging market in the U.S. and together with Vrbo accounted for 29% of total lodging revenue. Your property can offer a range of very powerful counter arguments and enticing benefits to sway the travel consumers away from Airbnb. You should focus on and promote features and amenities that Airbnb properties lack, thus presenting property's unique value proposition to the traveling public.
To start with, spend time on researching Airbnb to identify the rental properties in your neighborhood, and what their typical amenities and features are. Identify your property's value proposition and create a list of all of your property's amenities, services and attributes that, in your view, are better than the average Airbnb in your area. Then review and update the property descriptions on the hotel website, social media profiles, CRS and WBE descriptions, directory listings, GMB, and promotional materials.
Read my article on the subject: How can hoteliers win the booking war with Airbnb?
Reach out to the new digital converts
The pandemic subjected millions to a very rigorous "online planning and purchasing education", which created millions of converts and believers in online services, which will inevitably affect how they research, plan and book travel in the future. How can you benefit from this "forced" conversion from offline to online? By continuing to invest in digital marketing, cloud technology and applications and "reach out" to these newbie online travelers vs shutting down your marketing and technology budgets.
What are some of the concrete digital marketing initiatives that will help you achieve many of your objectives within your sharply reduced marketing budget?
Your Property Website:
Review your property website. Does it have mobile-first design? Mobile-friendly content? With nearly 70% of website visitors now viewing your website on mobile devices, a mobile-first website design and mobile-friendly content are a must. No ifs or buts. Google now punishes websites with slow download speeds. According to Google, 53% of website visits are abandoned if a mobile site takes longer than three seconds to load. In addition, slow download speeds inevitably affect conversion rates on the hotel website.
Review your website SEO: Google has frequently stated that it is using more than 200 major ranking "signals" with many thousands of sub-signals and variations. Finally, make sure your agency can deliver Google-specific ongoing SEO services, and can handle very complex Google-specific technical SEO requirements including schema.org, Google AMP, Google Sitemap XML, Google Search Console dashboard management, and more.
Content marketing is neither new nor free and has always been an integral part of the digital marketer's toolbox. Its role has been highly elevated by the current crisis. Naturally, content marketing, when done well, could be much cheaper than performance marketing: search, metasearch, display and paid media.
You have to budget for content marketing since all segments of content marketing cost marketing dollars as someone has to create the content and creative, set up and manage the campaigns, monitor analytics and prepare reports.
Content marketing initiatives include: brand positioning announcements (ex. Green Hotel Certification), SEO, website content, social media posts, B2B marketing initiatives via LinkedIn aiming to engage corporate travel and group planners, PR, blog articles and posts, white papers, webinars, case studies, influencer marketing, expert knowledge marketing (spa and wellness-related posts, chef recipes, wedding tips, etc.), award announcements, new services and amenities announcements, etc.
Content marketing engages and entices the travel consumer in the Dreaming and Planning Phases and creates ready-to-book customers for the Booking Phase of the digital customer journey.
Google My Business (GMB):
GMB, the property local business listing on Google not only allows you to enhance your property's Internet presence via imagery and descriptions of amenities and services, business hours, cleanliness protocols, etc., but to monitor and respond to customer reviews. Google has more hotel customer reviews than all of the review and OTA websites combined (excluding Booking.com). GMB directly influences travelers in the Planning Phase and creates powerful word-of-mouth effect in the Sharing Phase.
Google Hotel Ads (GHA):
Make GHA - Google's metasearch program, part of your must-have Google marketing initiatives by joining the free hotel listings program Google introduced recently, or by investing in the sponsored listings program via pay-per-stay GHA program, where Google collects a moderate commission only when the guest stays at the property.
Google Ads (GA):
Launch a small-budget, hotel-branded keyword terms campaign via GA to target past guests in the short-haul and drive-in feeder markets. These past guests already know your hotel brand name, they know your hotel product, all you need to do now is to convince them that your property is safe to stay at and that you have packages and promotions that address their current needs.
Google Display Network (GDN):
Launch a small-budget GDN Retargeting campaign. This will help communicate your property's value proposition to users who have visited your website and are already familiar with your product, offerings and location.
Omni-Channel Marketing Campaigns:
Invest in omni-channel seasonal or holiday-inspired marketing campaigns. You can do that by employing simultaneously all inexpensive digital marketing channels: promotions on your website, social media posts, email marketing, content marketing and PR, expert marketing, small GA and GDN retargeting campaigns, and of course, the OTAs. Travel consumers are shopping around, and omni-channel marketing gives the hotel an equal to the OTAs chance to engage the travelers throughout the Digital Customer Journey and its five phases (Dreaming, Planning, Booking, Experiencing and Sharing Phases), and eventually acquire and retain them.
Book Direct Incentives:
Use marketing creative with "It Pays to Book Direct" messaging and offer perks or value ads to close the deal, such as "Book Direct and Get Free Wi-Fi" (or free breakfast, free parking, and et cetera).
Maintain Rate Parity:
Continue to maintain rate parity. All discounts or promotions you provide to the OTAs should also be promoted in the direct channel: Hotel website, content marketing, SEM, online media, social media, CRM and loyalty marketing.
And Lastly, Don't Discount!
Remember the narrowing booking window data just released by STR? No last-minute discounts! With over 60% booking within 7 days and 80% - within 14 days of arrival, last minute discounting is a super lazy and rookie approach to revenue management and a sure downward spiral to hotel insolvency. Last minute discounts on HotelTonight.com? Forget it!