January 26, 2012

The challenges of marketing independent hotels

We all have truly amazing memories of independent hotel in which we stayed at, with warm welcome, that had an intimacy that made us feel special, and staffs highly focused on details. Every organization has a ‘culture’ of values or ‘how things are done’.

Because of their price positioning and market environment, independent hotel properties do not have the budget in the market to recruit and retain good line employees. Budgeting and forecasting can be a nightmare if accurate historical data of the previous years are not kept. Benchmarking performance in the market is difficult due to lack of access to benchmarking tools (STR, Benchmarking Alliance...).

Overhead (Full Time Employees, visa, staff accommodation) and expenses (Rent, Electricity, Water, Gas, Food Cost...) can run high when the market dictates rate ceilings. The PMS systems available to independent hotels often lack the sophistication of those available to franchise properties, lacking on the customer identification and market segmentation statistics. Inventory management is critical to maximize revenues in independent properties and the available tools often reside in the hotel manager's brain.

If this scares you off then you should doing something else. The independent hotels market in Gulf countries are highly focused on Front Offce and Guest Relations staffing. The rewards are the opportunity to create a guest experience based upon hospitality rather than efficiency, to implement customer service that makes memories rather than horror stories, to truly be in touch with guests rather than seeking to avoid them because a guest contact usually indicates a problem.

Marketing an independent hotel requires a certain "art" and accountability due to the restrictions of size and budgets. As there is no franchise driven marketing program and its accompanying contribution to occupancy by virtue of a GDS system and 0 800 numbers, nor is there a frequent loyalty guest program, the marketing plan has to be developed and executed with precise accuracy to reach the potential guest with a genuine appreciation of an independent hotel and the ability to pay the price for this level of service and intimacy.

Here are several key factors to make a successful marketing plan for independent hotels:
1) Begin by developing a client profile for each market segment by season
- Only when you have a clear picture of your guest can you target both sales and marketing efforts and media placement,
- Enhance the 4 segments industry (Retail, Corporate, Leisure and Groups) to allow sub segments that will tell you more about your clients,
- Track their production so you can review performance and make adjustments in your selection if necessary,

2) Use e-distribution channels
- Have a easy to navigate website that enable your clients to book online (Submit form button is still seen for 25% of hotels in UAE),
- Work your content for business or leisure clientele,
- Ensure that your revenue manager or e-distribution executive has you entered in the search engines by key words that appeal to your guest profile and pay for them to regularly refresh your web site positioning with the search engines.
- Review and use email data collection for the right promotion,
- Subscribe for a channel manager access, for faster control of extranets or limits your extranet to the Top 5 OTA room nights contribution,

3) Develop your own CRM program
- Collect as much as information about your guest,
- Don't collect their name and address only, but the kind of food (breakfast, amenities) they like, the kind of events / fairs that they booked through the hotel, the places they like to go in town,
- 5 years ago I was a Director of Revenue with The Shangri-La in Dubai when the company was still small that Mr. Bernhard Haechler would come and sit in your office and ask how things were going. The reservation, guest relations and front office team had a total focus on customer relationship management program that was state of the art. We knew the answer to the fruit amenities question and if guest preferred Evian or San Pellegrino. These things were done prior to the guest checking in.

4) Develop cost effective targeted mailing
- If your F&B outlet is sponsoring a wine festival or a beer festival, search the CRM for the information and mail your promotional piece to them,
- If your hotel is developing an offer for Eid Holidays, look in your CRM who stayed the previous years at your hotel during that period,
- If you drop your surcharge rate during a convention in the city, choose first to communicate with your top producing accounts,

The next nine to twelve months could be challenging for independent hotels. As many of them do not have a big margin, let's hope that we don't loose too many to franchising (Holiday Inn, Mercure, Ramada, Hilton...). It is these qualities and the experiences that they enhance that make the contribution of independent hotels to the industry so good. And who said an independent hotel cannot compete with a leading hotel brand? Do things, do them right.

Romain Saada @ RSVP Hospitality

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