Hotel Marketing and Revenue Management Are Not Substitutes for Innovation

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July 07, 2017
HSMAI
Vikram Singh

©2017 Hospitality Upgrade
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Technology is improving our lives one upgrade at a time. Hotel leaders are heading into another year of events and conferences showcasing the latest and the greatest in technology innovations. But before shopping for new technology, I want my colleagues in the hotel business to take a moment to think about what you can do to truly innovate and upgrade your core offering. 

Marketing hype about your hotel, shared on the web through social media platforms, is often pushed out without much thought as to whether your physical asset and level of service can live up to it. Can you really match the level of “modern-ness” and innovation your online campaigns are selling?
 
At the same time, revenue management is becoming a pricing tool rather than a disciplined look at overall value and profitability. The best software can’t save you when your revenue goals do not match the product and service you are offering.
 
True innovation supercharges your marketing and revenue management strategy. It requires time, effort and money from the hotel’s ownership and management teams. You have to develop a new story to tell, one that allows you to reconnect with your guests in a meaningful way. Your internet marketing agency and revenue management software vendor can’t deliver this to you, but they can amplify your message.
 
Likewise, software is not a substitute for product innovation; it never will be. Instead of scouring the web for internet marketing and revenue management fads, focus on increasing the value of your product and service offering. Here are some interesting ways to jump-start your innovation process.
 
 
Looking Beyond the Platforms
 
 When it comes to social media marketing, you have to understand that Facebook, Twitter, Pinterest, etc., are platforms controlled by billion dollar companies that have a clear common goal: to sell advertising. They are in no way interested in “innovating” your marketing or offering. 
 
Mass-produced hyper marketing on these platforms is generating unprecedented FOMO (fear of missing out) and forcing owners and managers to continuously chase the next big thing. Hiring agencies to generate social media content that can’t be backed by your offering will not deliver the right audiences. These campaigns will generate clicks but not conversions. If they do generate conversions and the product does not match the marketing hype, you are going to be in a world of hurt on review websites. Guest experiences not matching expectations is a very common theme in bad reviews on TripAdvisor. In the long term, negative reviews will decrease your revenue and profits, and your ability to set competitive rates. 
 
Similarly, playing moneyball with your revenue management platform will only deliver short-term returns. Unless you integrate your revenue and marketing teams under one clear strategy, you are just playing the pricing game. This is a small part of what revenue management is meant to do for your hotel.
 
Innovating in Real Life
 
Innovation comes in many forms for hotels and lodging operations. Keeping your product and business models relevant and up-to-date can have a massive positive impact on your revenue. Here are some examples of innovations that provide added value to your guests:
 
Free fast Wi-Fi. You do not have an excuse anymore. Think of this amenity like indoor plumbing. There is absolutely no reason to charge extra for internet access. And for those who think this comment is irrelevant in 2017: I just paid $14 for 24 hours of 2.5mbps internet connection last week!
 
Mobile everything. If it can be done on a phone, don't make your customers wait. This includes everything from booking the room, to checking in/out, and contacting you when there is an issue. All on-site communications with the guest need to be made available on mobile devices. 
 
Better quality coffee and tea. I have often said, “It’s very hard to complain about a hotel when there is a Nespresso machine in the room.” High-quality caffeinating of your guests need to be a priority for your hotel. Better tea and coffee can bring about a major positive change in your guest happiness index.
 
New product and/or service. Other than a clean room and bed, what else can you offer? This is where the operations folks need to send in their inputs. What are guests in your hotel always looking for? What do they want that they’re not getting? Is it a product or a service? How can you provide it?
 
Support/customer service. Okay, this one is 100 percent about people. Is your front desk just slinging keys? Is your concierge doing nothing more than putting circles on maps? Is your GM sitting in his office all day in meetings and answering emails? Training people to be better at customer service and to enhance your guests’ experience is a much better investment in innovation than buying a fancy software program.
 
Innovation is not Optional
 
Of course, providing a clean, safe room and environment is the ultimate top priority for a hotel. However, the traditional idea of “this is all we need to offer” is not a sustainable strategy for long-term profit. Innovation is the name of the game. Some new player is always going to raise the bar by providing a more convenient, efficient, enjoyable or cost-effective service or product. 
 
Thanks to Airbnb, anyone with a clean bed is now in the lodging business. You can’t afford to stick with the status quo. Hotels have to up their game in order to show the advantages they offer compared with the new kinds of lodging options that will keep popping up. Major hotel brands worldwide are struggling to catch up with the reality of today’s travel market. At the same time, niche players are working on innovating and becoming a part of the overall travel experience, even before guests book their room or arrive at the property. For example, Airbnb hosts are providing personalized welcome gifts and local recommendations; they are giving their guests a personal connection to the destination they are visiting. 
 
For all marketing channels, diminishing returns are inevitable. Time and money spent on improving your product will never be wasted. Improvements to your guests’ experience will always empower your revenue management game and help you shift from pricing wars to selling value.
 
Conclusion
 
The travel industry as a whole has seen tremendous innovation over the past 10 years. Many more exciting upgrades are just on the horizon. But marketing and revenue management, no matter how hard you push, cannot make up for lack of innovation at the property level. Hotels that are expecting marketing and revenue management algorithms to magically make them look good are seeing revenues stagnate and fall. What can you do today to innovate your product?
 
Vikram Singh is an industry expert in the fields of revenue management and marketing. He also writes regularly on a blog entitled, Words of Vikram.


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