By Leora Lanz and Jenna Berry
With the age of technology in full swing and the use of social media at an all-time high, digital marketing is not only recommended, but also necessary. The following list of recommendations will ensure that an independent restaurant’s online marketing presence will survive and thrive in the competitive nature of today’s world.
GOOGLE: According to Andrew Gazdecki, Founder of Bizness Apps and Member of the Forbes Technology Council, over half of “near me” searches result in a store visit. With mobile searches for restaurants rising, google presence is extremely important. Through organic content, paid advertising, and Google My Business, an independent restaurant can easily stay in line with its competitors.
- Organic Strategies: According to Digital Marketing Specialist at Net Affinity, Sophie Tremblay, Search Engine Optimization (SEO) is “the strategy…used to increase the authority, visibility and presence of a website organically in search engine results” (HSMAI, 2017). She further explains that three aspects of a business must be in check to achieve successful SEO: the website’s structure, content, and relative authority. In order to monitor and enhance SEO, there are several online tools that analyze a website’s ranking, including Google Search Console, SEO Profiler, Moz Bar, and Screaming Frog. Utilizing these services will help drastically improve organic rankings for single-unit restaurants that do not have a strong corporate funding background.
Additionally, reviews are essential for organically improving rankings. Restaurants with better ratings and more reviews are naturally placed higher in Google results (Next Restaurants, 2016). Therefore, it is important to encourage guests to leave reviews after a positive dining experience. Independents that utilize signage and messaging in the restaurant to generate reviews will encourage guests for more reviews, affirming that the restaurant takes pride in its business — that it is confident most reviews will be positive. Volume and quality are both important here.
In a mobile search, organic listings will not usually be visible until the user scrolls at least once or twice. “The likelihood of a single-unit restaurant appearing in the top five or ten listings for anything other than brand terms (ie; the restaurant’s name) is negligible,” shares Principle of Boston-based C77 Consulting Seth Cargiuolo. “Unless the restaurant has significant buzz, perhaps gleaned through earned media or mentions in prominent local food scene outlets – or if the chef has gained fame or notoriety – relying on organic presence is not an effective strategy. Paid advertising, aggressive push for positive reviews, and maintaining a strong Google My Business listing are essential.”
- Paid Strategies: As soon as budget can be allocated, a paid advertising presence is essential; unless digital marketing talent exists within the business already, securing expert help from an agency geared toward smaller-budget, local small businesses is highly advised. Gazdecki emphasizes the importance of keeping tabs on competitors, and he explains that one of the most effective ways to do this is to study the competition’s keywords and know their target audience. Once the competition has been analyzed, a single-unit restaurant can purchase keywords on Google Ads. Knowing which words are relevant will help a restaurateur gain insight on which specific keywords are necessary to purchase.
- Google My Business: Claiming a “Google My Business” page is an essential step for enhancing a restaurant’s presence on Google. This feature allows a restaurant to create a small profile that will appear on the right side of Google after the restaurant is searched. The profile includes a map of the restaurant’s location, the address, hours, contact information, user reviews, and even directions to the restaurant. According to editors at Essential Marketer, Google My Business is vital as it allows users to search in their local area with ease, and lays out all of the information in a clean, readable way. Follow the link to https://www.google.com/business/ for step by step support in creating a Google My Business profile. After the profile is complete, potential diners will be able to find an independent restaurant’s information in a pleasant, user-friendly manner.
WEBSITE: In research shared by editors at Restaurant Engine, approximately 80% of people have searched for a restaurant on a mobile device. This proves that the efficiency of mobile layout for a single-unit restaurant, as well as the security of this restaurant’s website, is crucial. As the Senior Marketing Consultant at Southcoast Marketing Group, Todd Philie stresses the importance of mobile website format. If a restaurant does not have quick mobile speed or attractive mobile layout, it will deter customers that could have been easily attained. Some tactics that will help improve mobile performance include:
- Menu Revisions: According to Brad Shorr at Food NewsFeed, designing a mobile-first menu is necessary. Most consumers searching for food on the go do not want to look at a PDF menu because it is small, difficult to read, and slows down mobile speed. For this reason, the creation of a list menu will be sure to attract more customers.
- Attractiveness/User Friendliness: Knowing that the majority of users will view a website on a mobile device, it is essential to structure content in an easy to read, easy to understand format. “Keep copy simple, clean and direct,” adds C77’s Cargiuolo. “Know your audience and consider the user experience before all other factors. Ensure that the most important information for your desired customer is prioritized and easy to find.” For example, if the restaurant has a superior cocktail menu, craft beer selection or wine list, and the desired customer truly appreciates that offering, make sure it is continually updated and featured prominently on the site. Or if the focus is locally sourced ingredients, find a way to highlight the mission and the farms or ranches involved. Or if the restaurant caters to vegan-friendly or gluten-free customers, ensure that information is highly visible, easily found. Investing in professional photography is key to increasing a restaurant’s visual appeal.
- Format: According to editors at Bentobox, two of the main categories that are most important to consumers when deciding where to eat are menus and location. As mentioned above, the menu should always be in list format and never PDF. In regards to location, there should not only be a section designated for contact information, but the address and phone number should also be anchored at the top or bottom of the website.
- Action Steps: Adding the ability for a customer to take the next step is imperative. A clear call to action for the desired action is recommended. Open Table is great for reservations and a variety of tools exist to enable online and SMS (text message) based ordering for take-out and delivery. A statement as simple as “reservations recommended” next to the phone number can serve as an action step.
- Food Delivery and Additional Online Presence: Particularly in urban areas, more and more customer want the restaurant to come to them. UberEats, DoorDash, GrubHub and Eat24 make it easy for restaurants at any price point and also enhance the digital visibility for the restaurant.
- Generate New Revenue Channels: “Online Ordering and To Go catering are tremendous areas of opportunity for independent restaurants, and the mobile site needs to make this seamless and easy to execute,” shares Roger Drake, Principal of Drake Public Relations and Marketing. “The infrastructure of Online Ordering and To Go business generates another 15-25% in revenue for many independents; having operational procedures in place to insure the order is correct at the point of purchase, as well as a follow up “thank you” goes a long way in building business and competing with chains who generally will not take the time to do this.”
In addition to mobile features, the security of a website is vital to a single-unit restaurant’s online marketing presence. Editors at Restaurant Engine define a Secure Sockets Layer (SSL) as having a padlock and introductory https:// before a website address. It has been proven that secure restaurant sites are better ranked on Google, because Google naturally pushes these sites higher. In addition, it is increasingly important to secure a website to prevent personal information from being stolen. This especially pertains to restaurants that take online orders, because names and credit card information can be easily stolen with no SSL. In conclusion, it is not only important, but also necessary to secure a restaurant website to ensure safety and security.
INSTAGRAM: Staying current and consistent across all social media platforms is important as social media is a dominant force in today’s society. According to the Mediakix team, Instagram began as a photo sharing platform but has evolved into a “bona fide recommendation engine.” Additionally, Lisa Flores, Director of Sales and Marketing for Boston’s Columbus Hospitality Group and founder of the Society for Event Planner Restaurant Venues (SERV) emphasizes the importance of Instagram as she states, “Food and restaurants are so visual and social media allows people to form a personal connection to the restaurant.”
“And finding the employee who can set up lighting and mood in executing photos on Instagram, especially with food, will increase their reviews and recommendations as well,” adds Drake. Implementing the following Instagram recommendations will increase overall awareness of a single-unit restaurant.
- Hashtags: Creating a unique hashtag allows a restaurant to tell a story through its Instagram posts. This will thus drive more traffic through the Instagram page and allow potential customers to envision their future experience at the restaurant.
- Influencers: Catarina Chang, co-owner of the premier Korean restaurant Koy, located at Boston’s Faneuil Hall Marketplace, explains, “Working with multiple food bloggers and influencers gives us a lot of exposure to their audiences and, in exchange, we have the opportunity to build our own audience.” Influencers are individuals who are able to control consumer’s buying habits through social media as they are perceived as an expert in their industry. It is important that single-unit restaurant owners reach out directly to local influencers to ask for a post on their page in return for a free meal at the restaurant. This is a low-cost tactic that will generate a significant return on investment.
- Promoted Ads: Instagram allows business accounts to pay money to promote their posts. These ads place an independent restaurant’s Instagram on the feed of individuals who do not already follow the account. The ads have the potential to reach hundreds of thousands of users depending on the budget and settings that are chosen. Follow the link to https://business.instagram.com/advertising/ for a step by step explanation of creating promoted Instagram ads.
- Stories: The “Stories” feature on Instagram allows brands to post highly engaging picture and video content that disappears after 24 hours. “Users are accustomed to sharing and consuming less-staged and more authentic life moments in this format and thus the requirements for high-cost photography and videography from a brand are lessened,” shares Cargiuolo. “Brands, including many chefs and restaurateurs, use this feature to bring customers behind the scenes, sharing scenes from the kitchen and working with staff or suppliers. This allows viewers to experience the preparation of the food and beverage as well as the human side of the brand.” Stories are also an excellent way to tease or announce special food and drink offerings or events. Customers who like to be “in the know” can take advantage of limited-time offerings and will want to follow the brand.
- User Generated Content (UGC): Leveraging UGC is an excellent way to build awareness and recognition. A memorable Instagram handle can help when a guest posts a photo of their meal or experience; it assists with brand recognition and opens the door for a “share-ability” with customers’ friends and networks. Clearly display on menu boards, cocktail napkins and get the name out.
- Contest: One of the most effective ways to increase overall brand awareness for a single-unit restaurant is through the use of social media campaigns. According to SEO and Content Marketer Gordon Donnelly, running a contest on Instagram will increase follower counts and overall interest in the restaurant. Contests that encourage the use of user-generated content are a natural fit for the restaurant business. Setting a $50 minimum as a benchmark for gift cards and giveaways will be sure to boost participation (Wordstream, 2018).
While these tactics are all important for maintaining a popular Instagram page, the use of a scheduling tool is equally as critical. According to Colby Hutchinson of Best Western Hotels and Resorts, determining a rollout strategy is necessary to achieve and maintain a successful social media presence (Hotel Management, 2018). It is important to determine who will respond to and manage replies to comments, and who will prioritize this in addition to their other daily work. Once this has been determined, the frequency of the posts will be set in stone and lead to a more efficiently-run social media page.
FOOD FOR THOUGHT: Restaurant staffing is a challenge and an intern will help take the pressure off of other employees. Hiring an intern is beneficial when there is not another person who can take on the responsibility of online digital marketing. An intern could assist with social media posts, menu revisions, and keyword research, among other things. This would allow full-time restaurant employees to focus on their jobs and relieve stress for everyone involved. Or perhaps, hire an hourly employee part time (10-15 hours per month) just to focus on social strategy and execution. This will be money well spent.
Along with an intern, there are multiple outside professional services that can and should be utilized for independent restaurants. We are not here to advocate for these specific tools, but rather suggest them as helpful outside resources. Peter Venti, Director of Operations for Cambridge, Massachusetts-based Real Food Consulting, encourages small restaurant owners to “Invest in a sales and marketing tool that truly fits the strategy and capabilities of the restaurant, because focus and alignment can help overcome a small budget and level the digital playing field.”
Yext, for example, is one online platform with a mission to “give companies control over their brand experiences across the digital universe of maps, apps, search engines, voice assistants, and other intelligent services.” Used by major brands like Taco Bell and Rite Aid, Yext offers a variety of products and services that will boost a restaurant website’s ranking. In addition to Yext, Whitespark is a similar online platform that promises to “improve rankings, drive business, and fast-track your success in local search.” Among its services are a data aggregator, local search audit, and citation building tool. These services will help enhance a restaurant website and identify opportunities for optimization and increased visibility.
Whether an intern or an outside service, there are several options for creating a powerful online presence. Hospitality marketing constantly evolves and is dynamic, and therefore marketing for independent restaurants must always be maintained. It is key to understand consumer trends, competitor habits, and the needs and wants of a specific restaurant audience. Single-unit restaurants that prioritize online marketing will be successful and prosperous in the long run.
Allen, Ben. “Getting Your Restaurant’s Website To The Top Of Google.” Next Restaurants. 12 December 2016.
“Does My Website Need To Be Secure?” Restaurant Engine. 16 October 2018.
Donnelly, Gordon. “7 Proven Hacks to Turn Any Restaurant into an Instagram Powerhouse.” Wordstream. 1 November 2018.
Gazdecki, Andrew. “How To Create A Big Online Presence For Your Small Business.” Forbes. 20 April 2018.
“Google My Business – How Important Is It?” Essential Marketer. 17 April 2018.
“How Instagram Has Fueled The Success Of Restaurants And Bars.” Mediakix. 30 June 2017.
“How Many Customers Use Mobile Devices to Find Restaurants?” Restaurant Engine. 8 August 2018.
Hutchinson, Colby. “5 steps for leading your social-engagement plan.” Hotel Management. 21 December 2018.
Shorr, Brad. “How to Make a Restaurant Website a Better Marketing Tool.” Food NewsFeed. December 2017.
“The 5 Most Important Pages for Any Restaurant Website.” Bentobox. 30 May 2018.
Tremblay, Sophie. “SEO for Independent Hotels: What, Why and How.” Hospitality Sales and Marketing Association International. 18 April 2017.
Leora Halpern Lanz, ISHC, is principal of LHL Communications, a hospitality-focused marketing communications, branding, and media relations advisory. She is also a full-time faculty member at Boston University’s School of Hospitality Administration (SHA), teaching advanced strategic marketing and digital marketing for hospitality at the undergraduate and graduate levels. She was named among the Top 25 Minds in Hotel Marketing for 2016 by the Hospitality Sales & Marketing Association International and was named 2017 Professor of the Year by the student government of SHA.
Jenna Berry is a student at Boston University in the School of Hospitality Administration (SHA May ‘19). She worked in the event sales department of five-star Hotel Café Royal while studying abroad in London, and her current internship at the Boston Convention Marketing Center continues to further her interest in the event sales industry. She is the Vice President of the Boston University chapter of the Eta Sigma Delta, the International Hospitality Management Honor Society.
Airbnb and the Hotel Industry: The Past, Present, and Future of Sales, Marketing, Branding, and Revenue Management
By Makarand Mody and Monica Gomez
For a long time, the hotel industry did not consider Airbnb a threat. Both the industry and Airbnb claimed they were serving different markets and had different underlying business models. Over the years, as Airbnb become more successful and grown to being larger than the companies in the hotel industry, the rhetoric has changed. The hotel industry began to realize they had something to worry about.
A stage of denial was followed by the American Hotel & Lodging Association (AH&LA) attacking Airbnb by sponsoring research to demonstrate its negative impacts on the economy and lobbying governments to impose taxes and regulations on homesharing. The association is arguing for a level playing field between homesharing and hotels (and rightly so). The next stage of this battle involves competition and integration. Not only are hotels looking to add homesharing-like attributes and experiences to their properties, to more effectively compete with Airbnb, but are also looking to tap into the platform-based business model that underlies Airbnb’s success.
The Past: How does Airbnb impact the hotel industry?
Airbnb’s disruption of the hotel industry is significant, both existentially and economically. A recent study by Dogru, Mody, and Suess (2018) found that a 1% growth in Airbnb supply across 10 key hotel markets in the U.S. between 2008 and 2017 caused hotel RevPAR to decease 0.02% across all segments. While these numbers may not appear substantial at first, given that Airbnb supply grew by over 100% year-on-year over this ten year period means that the “real” decrease in RevPAR was 2%, across hotel segments. Surprisingly, it was not just the economy but also the luxury hotel segment that was hard hit by Airbnb supply increases, experiencing a 4% real decline in RevPAR. The impact of Airbnb on ADR and occupancy was less severe. In Boston, RevPAR has decreased 2.5%, on average, over the last ten years due to Airbnb supply increases. In 2016 alone, this 2.5% decrease in RevPAR amounted to $5.8 million in revenue lost by hotels to Airbnb. Brands that felt the impact the most were those in the midscale and luxury segments, with a decrease in RevPAR of 4.3% and 2.3% respectively. These supply increases are also fueling Airbnb taking an increasing share of the accommodation market pie. For example, in New York City, Airbnb comprised 9.7% of accommodation demand, equaling approximately 8,000 rooms per night in Q1 2016 (Lane & Woodworth, 2016). As a whole, Airbnb’s accommodated demand made up nearly 3% of all traditional hotel demand in Q12016.
Buoyed by a growth rate of over 100% year on year, Airbnb now has over 4 million listings, with the U.S. being its largest market. The company also has significant room to grow in other countries, particularly emerging markets in Africa and India. The company has run into some competition in China, with local rivals Tujia and Xiaozhu. Also, within the U.S., the good news is that Airbnb will not grow at 100% indefinitely and will eventually plateau as it reaches a saturation point (Ting, 2017a). In view of this, the company has turned to alternative strategies to continue to increase supply. It is now targeting property developers to turn entire buildings into potential Airbnb units, through its newest hotel-like brand, Niido. Currently, there are two Airbnb branded Niido buildings in Nashville, TN and Orlando, FL with over 300 units each and Airbnb plans to have as many as 14 home-sharing properties by 2020 (Zaleski, 2018). Niido works by encouraging tenants to list their units on Airbnb, with Airbnb and Niido taking 25% of the revenue generated. Airbnb has also clearly evolved from its original premise of “targeting a different market” to attracting segments traditionally targeted by hotels, such as the leisure family market, business travelers, and the upscale traveler, as evidenced through its latest offering, Airbnb Plus. These homes have been verified for quality, comfort, design, maintenance, and the amenities they offer. They also have easy check in, premium internet access, and fully equipped kitchens. Their hosts are typically rated 4.8+, and go above and beyond for their guests. Through Airbnb Experiences, travelers can partake in everything from the great outdoors—hiking and surfing—to “hidden” concerts and food and wine tours. In addition to these products, Airbnb has also “created” its own segments of travelers: novelty and experience seekers who are looking for unique and unconventional accommodation like yurts, treehouses, and boats, all things that a traditional hotel company cannot provide.
The Present: Understanding what consumers want lies at the heart of the battle between hotels and Airbnb
There are larger societal trends that are impacting what consumers seek travel, and we think this has implications for the Airbnb and hotel dynamic. These trends include:
- A shift to a “new luxury”—seeking out unique, authentic experiences that serve as a launchpad for self-actualization—fueled by an increased wealth gap in the United States.
- An increased mobility, particularly among previously under-represented groups in the United States (the black travel movement, for example) and the global traveler (more Indian and Chinese international travelers than ever before).
- The changing nature of brand loyalty: from long-term relationships to consumers’ needs for instant gratification and personalization.
- Changing nature of “ownership”: In a post-consumerist society, the emphasis on “access-based consumption” has put a spotlight on wellness and well-being, beyond materialism.
- A co-everything world where work, play, and life blend into one seamless mosaic: Technology has changed the way we live our lives, and how we are connected to work, to each other and to the things that drive us. An upcoming 5G world and the IOT is only likely to accelerate the pace of change. Take LiveZoku (https://livezoku.com/), for example: is it a residence? A hotel? A WeWork? A space for the local community? A thriving food and beverage destination? It’s all of these things.
What do these trends mean? They require marketers and experience designers to re-think what the travel experience means to the customer. The notion of the experience economy was created by Pine and Gilmore in 1998, and included four dimensions: escapism, education, entertainment, and esthetic. Leveraging one, or ideally, more of these dimensions creates memorable experiences for customers, which in turn results in brand loyalty. This dynamic has been fairly well-established in the academic literature. However, Airbnb has changed the game for the experience economy by emphasizing the sharing lifestyle and a sense of community, cleverly incorporating the above highlighted trends into its communications with customers. Because of Airbnb popularity and success, six new dimensions have been incorporated into the experience economy, in the context of the travel experience: personalization, communitas, localness, hospitableness, serendipity, and ethical consumerism, as was presented by Mody in 2016.
Interestingly, in a recent study by Mody and colleagues (Mody, Suess, & Lehto, 2017), the researchers found that Airbnb outperformed hotels on all the dimensions of this new, expanded, accommodation experiencescape. Airbnb outperforms hotels in the personalization dimension because of its wide array of homes and locations, enabling genuine micro-segmentation and the “perfect match” between guest and host (Dolnicar, 2018). Moreover, no one home is similar to another, giving customers a unique experience every time, enhancing the serendipity associated with an Airbnb stay. Airbnb elevates the sense of community that consumers seek, particularly when sharing space with other travelers and/or with the host, and allows consumers unparalleled access to “the local”—that café or cute little store that only locals know about. However, there are areas where hotels hold their own. For example, the pathways between these dimensions and memorability were just as strong for hotels as for Airbnb, emphasizing the need for hotels to engage customers by leveraging the “right” dimensions for the brand—dimensions that align with the brand’s mission, story, and personality.
One such dimension where hotels perform just as well as Airbnb is hospitableness, as confirmed in a study by Mody, Suess, and Lehto (2018). More “investor units” on the Airbnb platform means that the host is often not present when guests arrive to the home; moreover, all communication is done electronically and with someone who “manages” the Airbnb unit and doesn’t necessarily own or live in it. In turn, hotels that leverage the human factor—the welcome of a friendly check-in agent, the helpfulness of the concierge, the warm greeting and genuine interaction between guest and food and beverage staff—create more positive emotions, which subsequently lead to higher brand loyalty. It is imperative that hotel brands really think about the high-tech, high touch experience they are looking to provide, particularly in the golden age of brand proliferation that we live in.
From a non-experience standpoint, regulation is another bone of contention that merits close inspection. After years of denying that Airbnb was a competitor, in 2016, the American Hotel & Lodging Association first began an extensive lobbying effort for the imposition of taxes and regulations on Airbnb that level the playing field. Over the last couple of years, the voices of the hotel lobby and other community groups have translated into governments taking some action, in the U.S. and abroad. However, in a study of regulation across 12 European and American cities, Nieuwland and van Melik (2018) found that governments have been fairly lenient towards short-term rentals with little to no (meaningful) regulations thus far. Moreover, regulations have been designed to alleviate the negative externalities of Airbnb on neighborhoods and communities rather than to level the playing field between Airbnb and hotels. Another challenge with regulating the peer to peer economy has been enforcement. In New York City, under the Multiple Dwelling law, it is illegal for a unit to be rented out for less than 30 days unless the owner is present in the unit at the time the guest is renting. However, it is still possible to find “entire homes” on Airbnb in New York City, even though, in principle, these typically include homes where the host is not present during the guest’s stay. Moreover, Nieuwland and van Melik (2018) and Hajibaba and Dolnicar (2017) have found that regulations tend to be very similar across cities, without accounting for the specificities of a particular location, which makes the process perfunctory and superficial. There also remains the danger of over-regulating Airbnb, given that there is still very little knowledge about effective ways of regulating these innovations in the sharing economy, thus stifling their potential. Avoid over-regulation is critical, since Airbnb has significant welfare effects in the economy. In addition to stimulating travel to previously inaccessible markets, Airbnb also creates customer surplus (Farronato & Fradkin, 2018), an important economic value measure. Moreover, other research has suggested that the average resident is not as negative towards the Airbnb as media rhetoric might suggest (Mody, Suess, & Dogru, 2018). The need for a data-driven approach to Airbnb regulation remains paramount.
The Future: Competing with the sharing economy requires re-thinking the brand and the experience
While regulation is outside the control of the hotel industry, the brand and the customer experience are not. We contend that these are the areas where hotel companies’ efforts need to be focused. Hotels need to re-think the brand promise, both for the parent brand as well as individual brands in the portfolio, and how it defines and shapes the guest experience. Recent research by Mody and Hanks (2018) indicates that while Airbnb leverages the authenticity of the travel experience—by enabling local experiences that provide a sense of self and sense of place, hotel brands that are perceived as being authentic—original, genuine, and sincere—can generate higher brand loyalty. Thus, while it’s hard to compete with homesharing in terms of experiential authenticity, brand authenticity is a pillar on which hotels can build a strong foundation for loyal brand relationships. This is particularly important because while Airbnb promotes experiential authenticity as a key reason to use the brand, most travelers tend to stay with the brand for much more functional requirements, such as space and price (Chen & Xie, 2017; Dogru & Pekin, 2017)
There is no one definition for or manifestation of an “authentic” brand. It’s a perception, a feeling that consumers have about what you stand for. An authentic brand has at its core the brand promise, an authentic value proposition that gives consumers a raison d’etre for associating with the brand. However, what an authentic brand does require is effective storytelling. A brand is perceived to be authentic, if it has an authentic story that feeds it. Brand stories can come from many sources: a brand’s values, personality, heritage, uniqueness, or its quest and purpose. What is important is telling compelling and coherent stories across the brand’s various touchpoints to engage consumers at a visceral, emotional level. Taking off industry blinders, and looking for inspiration outside the hotel industry, is critical. Tom’s Shoes is an excellent example of leveraging its quest—One for One—in creating a compelling brand story. As another example, in an industry typically focused on the in-store, “physical” experience, Burberry has set the gold standard for authentic, digitally-led and emotive storytelling, by looking within and leveraging over 150 years of history (Watch the YouTube Video here). In this vein, we think that Fairfield Inn and Suites’ return to “where it all began”—the Marriott family’s Fairfield Farm in the Blue Ridge Mountains of Virginia— to craft the brand experience of the future, from a design and communications standpoint, is an excellent example of leveraging authenticity and crafting a compelling brand promise (Ting, 2017b).
Another idea that lies at the heat of the brand promise is what we call the experiential value proposition, or EVP. For the longest time, hotel marketers have relied on the guest room as the primary source of value for the guest. But think about the last time you traveled. Was it the prospect of the hotel room that got you excited about your trip? Or was it everything that the hotel enables you to do – the experience outside the guestroom? From experiencing art and music in the lobby to its proximity to the must-do craft beer garden, hotel marketers must realize that it’s the complete package—what’s inside and outside the room—that customers use as cues for making their decision to choose an accommodation. We call this proposition offered by the hotel—what’s inside and outside the guest room, enclosed within an experience of hospitableness and a connection to humanity—its EVP. We present the EVP in Figure 1. The EVP mirrors the value paradigm of the modern traveler, something that must be reflected in the hotel brand’s sales, marketing and pricing and revenue management efforts. Thinking about a brand through the lens of the EVP paradigm has the power to re-orient the customer’s mindset from one of price-shopping to experience-shopping.
Figure 1. The Experiential Value Proposition Framework
How does a hotel marketer apply the EVP paradigm? Its application can open up many avenues. Hotels can start by rethinking the design of their primary digital channels, led by the website by adding more rich, vivid content that goes beyond the guestroom, in order to better integrate aspects of the wider hotel and local experience. The Standard Hotels serves as an excellent example (http://www.standardhotels.com/) Its website feels more like a local lifestyle and culture magazine than a digital media property “selling” a hotel room. The website’s rich images and stories draw the visitor into wanting to learn more about what the brand has to offer. While not every hotel can or would want to go the Standard way, since the brand has its own distinct voice and personality, there is a case to be made for going beyond static images of beds in guestrooms, which tend to blend into one indistinguishable whole after a point, particularly on OTA websites. When was the last time the image of a hotel bed excited you to want to stay there? Yet, when you look at the imagery put out by most hotels, this is what marketers still focus on.
Placing an emphasis on humanity and providing a sense of hospitableness can also enhance a brand’s EVP. Instead of technology replacing the human connection, the industry needs to look for ways in which technology can actually free up employees so that they can spend their time crafting more personal and unique experiences, delighting guests instead of performing routine transactions. Moreover, if the human connection is what people seek out when traveling with Airbnb, why is it that hotel confirmation emails still get sent out by automated systems that highlight the “facelessness” of the hotel entity. Why not use that as an opportunity to truly welcome the guest; a simple touch such as a welcome letter from the GM with his/her photo, or that of an employee who is “assigned” as “your personal host” during your stay can go a long way in emulating the human connection that the sharing economy enables.
The design of the hotel’s public spaces can be used to enhance the guest’s experience of “communitas”. Ian Schrager would agree (Schaal, 2017). After all, with much of Airbnb’s supply being dominated by investor units that provide little or no host contact, what better an opportunity for hotel brands to show that they are the original connectors of human beings? Sheraton has been wise in incorporating some of these communal elements into its brand makeover by introducing productivity tables and studio spaces and a day-time coffee bar that transforms into a bar at night. In terms of another design element, Airbnb’s attractiveness to family and group travelers can be offset by offering connecting and/or multiple rooms for one price, with other experience value-adds thrown in (as with the Marriott family room connecting rooms package.
Finally, the role of the loyalty program cannot be emphasized enough. Loyalty programs must move beyond programmatic levels to being able to leverage data from guest history, social media, and other marketing data sources, powered by predictive analytics, to personalize and individualize the guest experience of the brand. In an age of instant gratification, the loyalty program has to be gamified to unlock value-adds and offer creative bundling.
At the level of the hotel company, beyond the individual brand, the hotel industry has started participating in the home sharing business and is increasingly looking to integrate these platform business models. For example, while Accor purchased Onefinestay, Marriott has teamed up with Hostmaker to create Tribute Portfolio Homes, a partnership that was recently expanded to four European cities (Fox, 2018). From an organic brand development standpoint, Accor’s newest Jo & Joe brand mimics the sharing economy within the confines of a traditional hotel space. Other, more innovative and bold ways of integrating the sharing economy ethos into a hotel could include offering an “Airbnb floor”, an antithesis to the club floor, one that would not offer housekeeping and other hotel services and thus be offered at a lower price. With hotel brands becoming “branded marketplaces” for accommodation and not just hotel rooms, perhaps there is merit in listing hotel rooms on alternative accommodation platforms. HomeAway is already adding hotels to its platform through the Expedia Affiliate Network, while Airbnb is making a push for bed-and-breakfasts and boutique hotels. Homesharing providers hope that by adding these options to their listings, they will fulfill their goal of being “for everyone”, while allowing independent and boutique hotels to reap the benefits of branded distribution at a lower cost than traditional OTA brands.
In sum, hotels must adopt a sales, marketing, and revenue management approach that is both strategic and tactical.
At a strategic level, hotel brands need to re-think their story, and how they portray and fulfill their authenticity and brand promises. At a tactical level, it’s the experience and value beyond the guestroom that must be factored into what is presented to current and potential guests, what they are charged for it, and how it is leverage to create “memorable memories” that lead to higher net promotor scores and brand loyalty. We present a graphical summary of the past, present, and future of Airbnb vs. hotels in Figure 2.
Figure 2. Summarizing the past, present and future of Airbnb vs. hotels
Chen, Y., & Xie, K. (2017). Consumer valuation of Airbnb listings: a hedonic pricing approach. International Journal of Contemporary Hospitality Management, 29(9), 2405–2424. http://doi.org/10.1108/IJCHM-10-2016-0606
Dogru, T., Mody, M., & Suess, C. (2018). Adding evidence to the debate: Quantifying Airbnb’s disruptive impact on ten key hotel markets.
Dogru, T., & Pekin, O. (2017). What do guests value most in Airbnb accommodations? An application of the hedonic pricing approach. Boston Hospitality Review.
Dolnicar, S. (2018). Unique Features of Peer-to-Peer Accommodation Networks. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 1–14). Oxford: Goodfellow Publishers Ltd.
Farronato, C., & Fradkin, A. (2018). The Welfare Effects of Peer Entry in the Accommodation Market: The Case of Airbnb.
Fox, J. (2018). Marriott expands homesharing program in Europe. Hotel Management. Retrieved from https://www.hotelmanagement.net/own/marriott-expands-homesharing-program-to-3-european-cities
Hajibaba, H., & Dolnicar, S. (2017). Regulatory Reactions Around the World. In S. Dolnicar (Ed.), Peer-to-Peer Accommodation Networks: Pushing the boundaries (pp. 120–136). Oxford: Goodfellow Publishers Ltd.
Lane, J., & Woodworth, M. (2016). The Sharing Economy Checks In: An Analysis of Airbnb in the United States. Retrieved from http://www.cbrehotels.com/EN/Research/Pages/An-Analysis-of-Airbnb-in-the-United-States.aspx
Mody, M. A., Suess, C., & Lehto, X. (2017). The accommodation experiencescape: a comparative assessment of hotels and Airbnb. International Journal of Contemporary Hospitality Management, 29(9), 2377–2404. http://doi.org/10.1108/IJCHM-09-2016-0501
Mody, M., & Hanks, L. (2018). Parallel pathways to brand loyalty: Mapping the consequences of authentic consumption experiences for hotels and Airbnb.
Mody, M., Suess, C., & Dogru, T. (2018). Not in my backyard? Is the anti-Airbnb discourse truly warranted? Annals of Tourism Research. http://doi.org/10.1016/j.annals.2018.05.004
Mody, M., Suess, C., & Lehto, X. (2018). Going back to its roots : Can hospitableness provide hotels competitive advantage over the sharing economy ? International Journal of Hospitality Management. http://doi.org/10.1016/j.ijhm.2018.05.017
Nieuwland, S., & van Melik, R. (2018). Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals. Current Issues in Tourism, 0(0), 1–15. http://doi.org/10.1080/13683500.2018.1504899
Schaal, D. (2017). Ian Schrager Calls Out Hotel Industry’s Airbnb Strategy as Misguided. Skift. Retrieved from https://skift.com/2017/12/08/ian-schrager-calls-out-hotel-industrys-airbnb-strategy-as-misguided/
Ting, D. (2017a). Airbnb Growth Story Has a Plot Twist — A Saturation Point. Skift. Retrieved from https://skift.com/2017/11/15/airbnb-growth-story-has-a-plot-twist-a-saturation-point/
Ting, D. (2017b). Marriott and Choice Take Varied Approaches to Reviving Classic Midscale Brands. Skift.
Zaleski, O. (2018). Airbnb and Niido to Open as Many as 14 Home-Sharing Apartment Complexes by 2020. Retrieved from https://www.bloomberg.com/news/articles/2018-08-14/airbnb-and-niido-to-open-as-many-as-14-home-sharing-apartment-complexes-by-2020
Makarand Mody, Ph.D. has a varied industry background. He has worked with Hyatt Hotels Corporation in Mumbai as a Trainer and as a Quality Analyst with India’s erstwhile premier airline, Kingfisher Airlines. His most recent experience has been in the market research industry, where he worked as a qualitative research specialist with India’s leading provider of market research and insights, IMRB International. Makarand’s research is based on different aspects of marketing and consumer behavior within the hospitality and tourism industries. He is published in leading journals in the field, including the International Journal of Contemporary Hospitality Management, Tourism Management Perspectives, Tourism Analysis and the International Journal of Tourism Anthropology. His work involves the extensive use of inter and cross-disciplinary perspectives to understand hospitality and tourism phenomena. Makarand also serves as reviewer for several leading journals in the field. In fall 2015, he joined the faculty at the Boston University School of Hospitality Administration (SHA). He received his Ph.D. in Hospitality Management from Purdue University, and also holds a Master’s degree from the University of Strathclyde in Scotland.
Monica Gomez is a graduate student in the School of Hospitality Administration at Boston University. She received her Bachelor's degree in Tourism, Recreation, and Sport Management from the University of Florida and has held previous internship positions in hotel operations and event management. She is a member of the Hospitality Sales and Marketing International Association and is interested in hotel revenue management.
A Case Study of Student Projects for Industry Clients
By Michael Oshins and Joel Brown
On the first day of Boston University’s School of Hospitality Administration’s (SHA) introductory hospitality course, Dr. Christopher Muller opens the class with the question, ”How do you teach hospitality?” In his 2016 BHR article on the topic, Muller offers an amalgamated model, including several learning concepts that addresses the “learning, knowing and doing” of hospitality industry education and curriculum. One educational approach that has proven to be successful in bridging the gap between theory and practice is experiential learning. Experiential learning expert, David A Kolb, provides historical context for the growth of this learning model in his 1984 seminal book, in which he highlights authorities he recognizes as the Foundational Scholars in the field, including Dewey, Lewin and Piaget. Kolb, who builds on these educational giants with new insights on the topic (2015), is credited for establishing a name for this approach of study, known as Experiential Learning Theory or ELT.
Kolb defines experiential learning as “the process whereby knowledge is created through the transformation of experience. Knowledge results from the combination of grasping experience and transforming it.” Given the hands-on nature of the hospitality industry, many hospitality curricula embrace ELT to complement the classroom environment (Lee). Yan and Cheung identify a plethora of experiential learning instruments based on work by Groenewald and other literature employed by university hospitality programs, including role-playing, laboratory activities, project-based learning, guest speakers, case studies, externships and apprenticeships, internships, field trips, simulations and work experience.
Maier and Thomas (2013) reference Kolb who: “introduced the experiential learning model and articulated the key structural elements and delivery sequences of experiential learning as follows: (a) concrete experience, (b) reflective observation, (c) abstract conceptualization, and (d) active experimentation.” They continue: “hospitality studies surrounding experiential learning have indicated that students who participate in experiential learning activities outside the classroom report higher perceptions of learning outcomes and attain higher levels of aptitude toward industry job placement and expected performance.” (Lee, 2008; Nasr, 2004). Maier and Thomas, relying on Lee’s research, further report that (2008), students who engaged in ELT also demonstrated “an increased understanding of how organizations function, an increased ability to view career expectations realistically, an increased network of professional contacts, increased leadership skills, and increased financial management skills.”
Boston University is taking a big step, leading the way integration of ELT on the college level, by transforming the university’s general education requirements. The new capacity-based model steers students away from specific general education class requirements and instead engages them in developing key skills that will better enable them to “thrive in an interconnected world.”
The BU Hub is Boston University’s university-wide general education program that emphasizes working across disciplines to prepare for a complex and diverse world. The Hub helps students develop six essential capacities—knowledge, skills, and habits of mind—that will equip them to thrive in their personal, professional, and civic lives: Philosophical, Aesthetic, and Historical Interpretation; Scientific and Social Inquiry; Quantitative Reasoning; Diversity, Civic Engagement, and Global Citizenship; Communication; and the Intellectual Toolkit (BU site).
The Hub’s signature elective course is the cross college challenge (XCC) that “is at the crossroads of theory and practice.” This course is centered on a client-based project: “students…use the project as a learning opportunity to address a substantial problem and produce a tangible project over the course of one semester” (BU).
SHA’s curriculum has a strong focus on ELT with most courses leveraging the effectiveness of experiential activities to reinforce learning goals. One of the best examples is SHA’s Advanced marketing course, that has an approach similar to the Hub’s XCC. Advanced marketing course, designed for juniors and seniors who will be in entering the workforce in the next year or two, pairs teams of students with hospitality businesses that have brought forward real challenges for which they seek consultation and advice to solve. Over the course of the semester students serve as consultants to their assigned company to develop deliverable action plans that they present to their clients.
School of Hospitality Administration’s faculty member Leora Lanz works with hospitality companies large and small to articulate marketing challenges. Entrepreneurs, owners and company senior leadership ask students in the Hospitality Strategic Marketing class to suggest new messaging, advertising, outreach, and online approaches for their organizations. Why? “Fresh ideas,” says Lanz , an SHA lecturer. Smart businesses value new perspectives from young, digital-generation minds.
This January, a team of executives from the Massachusetts Convention Center Authority (MCCA), including Caryn Izhar, vice president of convention center marketing, came to Lanz’s class to outline what they wanted to communicate, especially to meeting planners: the restaurant-quality food on offer to convention-goers at the Boston Convention and Exhibition Center (BCEC) amid a hot foodie scene in Boston, and especially in the Seaport District. With hotels offering fewer dining options, says MCCA executive director David Gibbons, the best meal you get might just be at the convention center.
“Starting the project was daunting because our scope seemed so broad,” says team member Julie MacKay. The five-student team started with on-site research, touring the two-million-square-foot venue with Milt Herbert, executive director of the MCCA’s Boston Convention Marketing Center, and following the center’s executive sous chef, Tim Elderkin of Levy Restaurants, on a tour of the small culinary city. Then they were off on their own research and development, looking at competitor sites, analyzing data, and synthesizing recommendations.
As the students practiced for their presentation in April, Lanz cautioned them to be tactful when they showed a word cloud that featured a few insulting verdicts on the center’s food (“sucks”) from Yelp reviewers. As it turned out, the executives approved of the students’ candor. And they were won over by a presentation that included a two-minute video of Chef Tim talking about the kitchens’ work on sustainability, including composting waste and donating unused food to anti-hunger groups. Filmed just the day before the presentation, it was intended as a template for a series showing authentic stories behind the center’s food. The students also recommended a variety of changes to the center’s website, including a virtual tour, multimedia outreach to meeting planners, and a new tagline: “UnConventional food experiences.”
“Students like this come from very different backgrounds than we come from, and when they do their work and observations, they bring to the table stuff we won’t hear from anybody else,” says Herbert. “They allow us to internalize that and do something with it.”
Team member Sabrina Avila says she found the presentation a bit intimidating. “Knowing that these are people who report to the governor and that they would show up in suits didn’t help the nerves,” she says. But the students felt more confident since they’d worn business attire, and “we would catch the occasional nod of approval from Milt Herbert and he’d jot down a couple of words that resonated with him, and that threw it over the roof for me.”
The MCCA was, in fact, a return customer. They had come to Lanz’s class the previous year looking for ways to bolster their relationship with local hotels and restaurants, and the students suggested something basic: Say thanks for their role in the success of the local convention business. So the MCCA did, successfully hosting events for hoteliers and the local food industry.
“I want these kids to think strategically,” Lanz says. “It’s thinking like an entrepreneur, it’s thinking like an owner.”
In addition to her faculty role (she’s been at SHA since 2015), Lanz is principal of LHL Communications, which offers marketing, branding, and media relations to the hospitality industry. She knows the power of class projects—she’d done one for the Greater Boston Convention & Visitors Bureau as a College of Communication student and walked straight into her first marketing job there after graduating.
Lanz says she recruits Boston businesses with marketing needs to put a little trust in her students. Other clients for this year’s class included the Mandarin Oriental Hotel, Mamma Mia’s Restaurant, the Unwind & Dine Personal chef service, and the Boston Hotel Buckminster and its Fenmore Grill restaurant. She thinks that at least one is likely to hire a student from the class.
And while emphasizing a physical presence sounds counterintuitive in the social media era, Lanz says she was most excited this semester by the projects that called for event marketing, pop-ups, and the like.
“This generation of millennial consumer really does photograph just about everything,” she says, “so if something is in front of them and they’re physically interacting with it, that becomes a visual experience and memorable and shareable—that’s the market we live in today.”
This video showcases student projects and presentations in Lanz's course.
Physical presence was definitely a factor for a client on the smaller end of the scale, Shed’s Barbecue, which has served “real Texas-style” brisket, ribs, and hot links in a 50-seat venue at 32 Bromfield Street, near Downtown Crossing, since 2017. Cofounders, Texas natives, and sister and brother Shawn and Edward Wilson have pride in their grandmother’s recipes. “We are really in need of some good marketing ideas, because the awareness part is what we are struggling with,” Shawn Wilson told the students. In this case, Shed’s students had the advantage of sampling the client’s fare. They also hit the sidewalks off Washington Street to ask the man or woman on the street questions about their restaurant choices, eventually gathering 60 responses.
“It was an awful day outside, cold and kind of rainy,” recalls Maite Erana Salmeron. “I was there for roughly two hours and had a lot of no’s at first, but little by little I figured out how to connect with people and engage in conversation that helped me gather the data I needed.”
In April, the students pitched a marketing plan to the Wilsons that included strategies for making their Instagram feed more interactive. They also recommended a food cart for handing out samples, holding catering events, and a “Cowboys and Concierges” program for costumed delivery of marketing collateral to local hotels that would be hard to forget.
“They’re very creative,” says Edward Wilson. “Since they’re younger and more in tune with the Instagram and Facebook and whatever these young kids are doing, they really know what’s going on. We’re kind of medium on social media.”
“‘Cowboys and Concierges’ was great. And they gave us a plan that’s very easy to execute,” says Shawn Wilson. “I was really impressed.”
The students seem to think they got the better end of the deal.
“This project definitely made me more confident about entering the job market,” MacKay says. “It was great to have a meeting-style presentation with real clients and receive that feedback rather than standing in front of a screen and presenting to a professor.”
“Over the summer, I will be working with a company in Madrid,” says Salmeron, “and when I was doing my interview, I discovered that I had a lot more to bring to the table, given this project. I had more terminology and I had an experience to talk about that showed I had truly immersed myself in a business to help it be more successful.”
The advanced marketing course led by Leora Lanz uses ELT by assigning teams of students to serve consultants to hospitality company clients seeking assistance on real challenges. This course takes students through all four elements of Kolb’s model of a concrete experience, reflective observation, abstract conceptualization, and active experimentation relying on client meetings, field trips, primary market research, brainstorming sessions, rehearsals, feedback, final presentations, oral and written reflection exercises, etc. Through their work, students have the opportunity to strengthen a large range of skills (see below) that will better enable them to succeed when they enter the workforce after graduation. Particularly in courses of study such as hospitality administration that prepare students to enter into specific professions, ELT provides a critical bridge enabling students to move seamlessly from theory to practice and therefore enter their chosen fields with the skills and confidence to succeed.
HF460 Experiential Learning Project skills
- Integrating marketing communication
- Applying experiential marketing techniques
- "crowd culture" and the residual impacts of social media
- Creating brand values and proposition, brand identity, and brand communications strategies
- Influencer marketing
- Leveraging the power of market research
- Clarifying of the marketing challenge, identification of the target personas, awareness and tactical strategies to connect with the personas
- Conducting competitive analysis, comparative analysis, SWOTs
- Creativity, structure, and application of marketing communications tools
- Mastering presentation skills to clearly communicate the marketing approach
- Successfully applying digital marketing applications
This article previously appeared in an earlier version by Joel Brown in BU today on 5/08/2018 titled SHA Students Get the Message Out by Video, Instagram—and Cowboy.
Michael Oshins is Associate Professor of the Practice of Leadership in the School of Hospitality Administration at Boston University. He is former Vice President of Integer Dynamics, a hospitality consulting firm focused on operational productivity and technology. He holds a doctorate in human resource education from Boston University and a master’s degree in hotel administration from Cornell University. Email firstname.lastname@example.org
Joel Brown has been a staff writer at BU Today and Bostonia magazine since 2015. Before coming to BU, he was a Boston Globe correspondent for 10 years, and previously worked for the Boston Herald and the Greenfield Recorder. He graduated from the University of New Hampshire, where he majored in pinball and the student newspaper. He is a Massachusetts native, a lifelong Red Sox fan and a North Shore resident.
Boston University website. Retrieved from: http://www.bu.edu/hub/what-is-the-hub/
Brown, J. (2018). SHA Students Get the Message Out by Video, Instagram—and Cowboy. BU Today. Retrieved from: https://www.bu.edu/today/2018/hospitality-marketing-students-help-real-world-clients/
Clark, D.R. (2004). Kolb's Learning Styles and Experiential Learning Model. Retrieved from http://www.nwlink.com/~donclark/hrd/styles/kolb.html
Kolb, D. (2015). Experiential Learning: Experience as the Source of Learning and Development. Upper Saddle River, NJ: Pearson.
Lee, S. (2008) Increasing Student Learning: A Comparison of Students' Perceptions of Learning in the Classroom Environment and their Industry-Based Experiential Learning Assignments, Journal of Teaching in Travel & Tourism, 7:4, 37-54, DOI: 10.1080/15313220802033310
Maier, T., and Thomas, N. (February 1, 2013). Hospitality Leadership Course Design and Delivery: A Blended-Experiential Learning Model. Journal of Hospitality & Tourism Education, 25: 11–21, 2013
Muller, C. (2016). Hospitality Management: Learning, Doing, Knowing. Boston Hospitality Review. Retrieved from: http://www.bu.edu/bhr/2016/02/02/hospitality-management-learning-doing-knowing/
Ruhanen, L. (2008) Bridging the Divide Between Theory and Practice, Journal of Teaching in Travel & Tourism, 5:4, 33-51, DOI: 10.1300/J172v05n04_03
Yan, H. & Cheung, C. (2013) What Types of Experiential Learning Activities Can Engage Hospitality Students in China?, Journal of Hospitality & Tourism Education, 24:2-3, 21-27, DOI: 10.1080/10963758.2012.10696666
By Leora Lanz and Namrata Sridhar
In the Winter 2018 edition of the Boston Hospitality Review, we brought forth suggestions for the 10 Best Practices for Organic Visibility —ways to improve search results through organic search, or do not cost the company a monetary investment. Rather, these rankings were based on elements such as keywords, location, and mobile friendliness. Suggestions for improving a company’s organic search include utilization of backlinks, hyperlinks between websites, and content enhancement in relation to local listings such as ensuring quick website load speed, high quality imagery, and conspicuous links to social media channels.
This second installation of a two-part series will speak to the subject of search engine functionalities as a result of paid queries. For independent or smaller companies, this brief but powerful set of tips obtained from industry experts can enable a business to become more “searchable” for optimal return on investment.
Search Engine Marketing (SEM) Best Practices:
1. Understand the Paid Media Landscape:
According to the Associate Director for Organic Search and Content Strategy at Boston-based Connelly Partners, Dan Hurley, the most important part of SEM is to comprehend the paid media landscape. It is critical to know who one’s competitors truly are and understand how they are marketing, from a tactical standpoint.1 It is also important to research the types of ad campaign structures that are surfacing in the category of interest, on both desktop and mobile devices. Then one must adopt those that appear effective and fit business goals appropriately. For restaurants and hotel-related queries, “this strategy is especially pertinent because these searches generally convert very quickly; mobile searchers will likely patronize a restaurant within a few hours.”
In order to be the most efficient with a company’s paid advertisements, Todd Philie, president of Southcoast Marketing Group in Wareham, MA, also encourages companies to discover how consumers are searching for them on the Internet. For example, “utilize the query search tool via the Google AdWords™ platform to discover what terms and phrases are used to reach your own site and then display your ads.”
Additionally, Kym Parker, associate search marketing director at Connelly Partners, emphasizes the importance of using the company’s brand to ensure a strong search presence. By utilizing paid search bids, a hotel or restaurant can be the first result a web surfer sees when conducting a search.2
“Sometimes, competitors will bid on your brand terms – which means that if someone searches for your company name, for example, the competitor could show up ahead of you in the search results,” Parker notes. “You can prevent this by ‘protecting’ your brand terms. Always be bidding on them, at least a little bit, to ensure that you have a better chance of staying on top of the results when someone searches your name and other brand terms.”
2: Use of Google AdWords™:
The major player in the world wide web is Google, which has created various platforms to optimize searching. Using keywords, Google users can pay to promote their advertisements for a set budget. This Google functionality allows a company (hotel or restaurant) to understand how it ranks in comparison to direct competitors.
Also keep ‘negative keywords’ in mind, adds Philie. “Negative terms generally means terms that you are not specifically telling AdWords™ that you do not want to appear in specific results for other searches. For example, suppose you are marketing a seafood restaurant that does not offer steak on its menu. You want to bid on the phrase ‘best restaurant in Boston’ but you do not want to waste money on clicks from customers who want steak. You might set ‘steak’ and ‘steakhouse’ as negative terms so that if someone searched ‘best steak restaurants in Boston” you do not show up in that search.
The Google AdWords™ functionality also offers companies the chance to enhance the listing. An incredibly important, yet often overlooked, input is the “click to call” functionality and its presence on a mobile site, also known as the call extension. “These additional factual details, known as “ad extensions” also include location, information from different pages on your website, and even testimonial reviews,” adds Seth Cargiuolo, director of communication strategy at Chestnut Hill, MA-based D50 Media. “Making use of ad extensions is essential because it helps the customer learn more about the business with a quick glance pre-click, and can help differentiate a hotel or restaurant (or any product) against its competitors.” Ad extensions also increase the visual footprint of an ad, which can push competitors’ ads and organic listings down the page and out of view, particularly on mobile devices.
For marketers just starting to utilize SEM and Search Engine Optimization (SEO), Google AdWords™ also offers free tutorials and trainings. Zachary Azar, D50 Media’s senior manager of paid search notes, “These tutorials provide clients with the opportunity to get the most out of the program and create effective campaigns.”
To properly manage an effective AdWords campaign, Google Analytics can be a helpful tool as it reveals which content on a website is most useful and interesting to customers. This will help in the creation of resonating ad copy and can also be a guide for aligning keyword selection and website copy to increase the “Quality Score” of an ad campaign.
However, Philie also cautions individuals not to be completely reliant on Google’s suggestions for keywords. “Often times, these keywords are pluralized and can cause companies to spend more or not be as effective.” He warns companies to choose how to put their key words “out there” when bidding. Companies must choose best matched keywords for their ads and choose between “exact match,” “phrase match,” “broad search” and “modified broad search” – all of which will yield varied returns. Campaigns should utilize a balance of all match types, but should “skew more heavily towards exact and phrase, utilizing broad match only for keyword prospecting and expansion opportunities.”
3. Always Start with Non-Paid Efforts or SEO
When optimizing a company’s searches, Cargiuolo and Azar suggest the first thing that the company should focus on is actually the SEO. First and foremost, it is important to ensure that a website is user- and mobile-friendly. Another important factor is a quick load speed. “Google has found that sites that take longer than three seconds to load lose 40% of their traffic, and for mobile traffic, that jumps to 53%,” reports Azar. This is important for paid search as well; Cargiuolo adds, “It’d be bad enough for a user to abandon your page when it’s an organic search – but now imagine if you’d paid for that click and those dollars were totally wasted.”
In order to reduce the load speed, it is important to not have “big” images—think kilobytes, not megabytes. Web copy should be concise and “bandwidth-hogging” scripts and plugins minimized. “Additionally, given that over half of web traffic is on mobile devices, ensure that pdfs (which you want to avoid anyway) look acceptable on a smart phone too,” Cargiuolo says.
Kristin Metzler, Print and Web Marketing Coordinator of Frasca Design Group, also echoes that mastery of SEO is the first step in a successful digital marketing campaign. Websites built with a strong attention to keywords and content will minimize spending on pay-per-click campaigns.
4. Don't Spend on Paid Search if You Can't Afford It
Hurley cautions that one need not spend money on advertising to get traffic. Because so much information is provided in the search results, there may not be any clicks on your page during the search process. Companies should never put any money into paid search, display advertising or paid social that the company cannot afford to lose.3
Cargiuolo emphasizes that when a company starts advertising, it should not expect an immediate return,4 which is oftentimes an assumption that businesses make. Initially, many may not be familiar with the bidding process; keywords; or how to build, optimize, and manage an effective campaign. Be cautious not to spend money needed for other resources. Start slow and spend time learning before committing big budgets.
One final word of caution: There are easily incurred expenses that can come from paid search marketing, such as additional costs from agencies that take a portion of a monthly budget. Being conscious of your daily budget is critical in avoiding overspending.
When taking the steps to build a search campaign, it is critical to do research and move slowly at the beginning. Understand how the market is reflected in consumer searches and what keywords are being utilized. Before jumping into methods that require payment, a company should ensure that its website is optimized for searches and never spend more than what can be budgeted, as it will take time to see a return on investment.
As Cargiuolo reminds, businesses must remember that Google serves the user first. Thus as the marketer, one must think as a user would when building a paid search campaign. People come to Google with questions. The marketer that best answers the user’s questions, both pre-click and post-click, is going to be one that is most successful.
1 Inc. Staff. “How to Conduct Competitive Research.” Inc. Magazine. May 2010
2 Ratcliff, Christopher. “What is PPC and Why Do You Need it?” Econsultancy. 13 November 2013.
3 Kumar, A.J. “SEO vs PPC: Knowing Which is Better for Your Website.” Entrepreneur. Editorial. 21 May 2012
4 Steimle, Josh. “How Long Does SEO Take to Start Working?” Editorial. Forbes. 7 February 2015.
Namrata Sridhar is a marketing communications coordinator at LHL Communications and a rising senior at Boston University’s School of Hospitality Administration (BU SHA). She has also previously worked in marketing communications capacities at RealFood Consulting where she helped design an internal marketing plan to rebrand their company. Namrata also serves as the President of the Student Government of BU SHA. She is an active member of the National Society of Minorities in Hospitality, the American Hotel and Lodging Association, and the Hospitality Sales and Marketing Association International.
Leora Halpern Lanz, ISHC, is principal of LHL Communications, a hospitality-focused marketing communications, branding, and media relations advisory. She is also a full time faculty member at Boston University’s School of Hospitality Administration (SHA), teaching advanced strategic marketing and digital marketing for hospitality at the undergraduate and graduate levels. She was named among the Top 25 Minds in Hotel Marketing for 2016 by the Hospitality Sales & Marketing Association International and was named 2017 Professor of the Year by the student government of SHA.
By Juan Lesmes and Leora Lanz
It wasn’t that long ago when digital marketing surfaced as indispensable practice for the hospitality industry. As time moved forward, hotel marketing departments established roles to manage the digital positioning and visibility of the property. Thus, we witnessed hospitality brands which were ‘present’ on social media outlets, adopting paid search as a permanent component of their marketing mix and abiding by well-known website best practices. We refer to this period as Phase I of the Hospitality Digital Marketing Revolution.
Phase II quickly blossomed, and hotels realized that the competition to penetrate the digital space was strong and arduous. Brands started focusing on and investing in the internet user-experience (UX), negotiating partnerships with online travel agencies (OTAs), understanding the landscape of search engine result pages (SERPs), separating high-value budgets exclusively for search engine marketing (SEM), and delving into the intricacies of search engine optimization (SEO) for their own websites. Social media served as a competitive advantage and quickly escalated as paramount for marketing, branding, reputation management, and organic visibility. Paid search, via Google AdWords platform, is not to be confused with the organic approaches detailed here.
As we delve into 2018, Phase III emerges clearly. OTAs dominate and in some instances monopolize Google searches with first page results. Consequently, hotels are realizing that digital marketing efforts should be shifted from a haphazard online presence to one that is strategic – one that capitalizes on each micro-moment of the guest travel planning journey (most of which, if not all, occurs on the web). As social media forces Instagram and Facebook solidify their roles as prominent search engines, paid ‘posts’ within users’ ‘feeds’ continue to convey the power of personalized sponsored content.
With a myriad of stakeholders now involved in the simple act of searching for hotel rooms, is it a battle worth fighting? The answer is absolutely. But before addressing the how, it is crucial to identify and differentiate the digital marketing scope of branded and non-branded hotels. Branded hotels, especially those flagged with hospitality powerhouses, benefit from a more powerful domain authority coming from the parent chain, making it easier for them to rank higher on the SERPs. Take Marriott.com/hotel vs. hotelname.com for example. Domain authority is the overall power of the domain name considering traffic size, popularity, and number of links to the site (backlinks). It is also a top ranking factor for Google.
Branded hotels also tend to have significant budgets to spend on Pay-Per-Click (PPC) and paid search, ensuring top first page visibility for valuable destination and branded queries. In addition, branded hotels have wider access to digital partnerships, including listings, local directories, event sponsorships, travel influencers, and online features – all of which provide authoritative backlinks to the hotel’s site, further contributing to its domain authority.
Because independent and small-scale hotels rarely benefit from domain authority, maintaining and monitoring digital marketing best practices to boost Google rankings should be a requirement, not merely a recommendation. Digital marketing practices command their own dedicated efforts. Yet online marketing should be well-equipped with its own strategy and utilize expertise in the nuances and intricacies of hotels, restaurants, leisure activities, and attractions – overall, hospitality.
The question then becomes, how can hotels strive for visibility in this Wild West of a digital landscape, particularly if they are competing against each other, the OTAs, and a powerful sharing economy?
1. Execute a Carefully Crafted Keyword Strategy
Optimizing for search queries, also known as keywords, is perhaps the core of any digital marketing tactic aiming to build visibility – both organic and paid. Identifying those keywords with the highest search volume, such as ‘Miami hotels,’ is the intuitive process. Presence on Google’s first page for high search-volume keywords requires a robust SEM budget, an ongoing and long-term SEO strategy, or both. This puts independent and small-scale properties, which often do not have the necessary budget and fundamental team, at a notable disadvantage.
However, niche keywords present a different scenario. These queries are typically ’long-tail’ meaning they contain more than four words. Though niche keywords do not have the highest search popularities, it is much easier to actually capture their search volume, which then results in higher click-through rates (CTR). Hotels can leverage niche keywords by identifying their unique amenities and value propositions, and turning them into valuable keywords. For example, ‘Miami hotels with a rooftop bar,’ ‘Miami hotels with free breakfast’ and ‘Miami hotels with nightclubs’ are terms to utilize as they leverage a more specific travel intention that easily turns into conversions (booked business). It is crucial to think as the customer would.
Some independent hotels, because of the virtue of their uniqueness and often niche-market, can have the upper hand in this situation. A property which positions itself as a resort for health and well-being could therefore pursue niche terms such as ‘wellness resorts’ and ‘fitness getaways.’ The key is to identify the brand’s top performing unique selling propositions (USPs) and translate them into humanized search queries, all while keeping the guests’ travel planning journeys in mind.
Finding a balanced mix of both high-search volume terms and niche queries secures strategic keywords. Nevertheless, actually optimizing for them by ensuring they are naturally or comfortably present throughout the website’s titles, content, metadata and bidding efforts also help secure a carefully crafted keyword strategy.
2. Optimize for Local Search
Our termed “Phase II” also put the spotlight on search engine business directories such as Google My Business and Bing Places for Business. In Phase III, hotel listings on these directories is no longer a recommendation, it is a necessity. Optimizing for local search entails driving the visibility of a property’s business listing via a two-part process:
- Ensure the listing’s content is precise and optimal. For a hotel’s listing to be effective, it needs to be correct. This means not only having a consistent name, address, and phone number (NAP) across the web, but also sharing additional business attributes such as business hours, property images, contact e-information, and business category. Because Google understands that local users are better served by businesses that outline all the information they need, it ranks complete, accurate, and consistent listings higher than those that are partial. If your hotel has a separate restaurant, spa, or in-house shop, each should have a separate online business listing.
- Utilize keywords with universal search integrations - Certain keywords tend to trigger significantly more universal search results, which includes a blended combination of Carousel, Local 3-Pack, Images, and Maps. (The former two are Google features found on search pages, displaying images and contact information to help users with specific searches). Because they are primarily location-based, they present yet another opportunity to drive the hotel’s local business listing. Keywords such as ‘Miami hotels near American Airlines Arena’ or ‘Downtown Miami hotels,’ for example, have powerful local search integrations since they allude to a local area within a larger market. As a result, incorporating these styles of keywords into the hotel’s website and local listings is a way to let Google know that the property is not only highly relevant to the query, but also a local business to be recognized.
3. Attain and Maintain a Star Rating on Google
One of the key components of local search results is the Star Rating associated with a business listing. In fact, star reviews on SERPs are an effective way for hotels to increase digital visibility by standing out from the competition. Star ratings help increase the site’s CTR and provide an influential benchmark for online reputation management (ORM). Once an exclusive attribute for paid results, star ratings now also appear on organic results through Google’s ‘Rich Snippets.’ These snippets are a form of structured data which Google extracts from multiple websites and presents it as a ‘preview’ in search results, also known as Google’s Knowledge Graph.
Therefore, obtaining and retaining star ratings involves safeguarding reviews on trusted and authoritative review sites. Google then aggregates this rating data and displays an average star rating. Hotels (restaurants, attractions, etc.) should encourage satisfied guests to submit reviews to their booking channel (i.e. Expedia) because they are by default ‘trusted’ sites. However, they should also encourage reviews for their own Google My Business listing in an attempt to increase the hotel’s chances of being featured on local search results.
It is important to clarify that there is a technical component to obtaining a Google star rating. Codes put onto the website to help search engines return more informative results to users. Hotels need to ensure that their web developers also include star rating information within the markup code.
4. Enhance Content on Local Listings
A hotel’s content for its local listings should be strategically optimized. Whether it is in Foursquare, CitySearch, or any other listing, valuable keywords should be incorporated throughout the copy – including local search ‘near’ queries such as ‘hotel in Miami near Brickell’. If the brand image is playful and tongue-in-cheek, the content on local listings should also reflect that. Some listings even allow for a featured message. Rather than a generic ‘Welcome!’ hotels can use this space to promote current offers or highlight special amenities (complimentary champagne, sunset yoga, free breakfast).
Other content elements such as images should be of the highest quality, showcasing provocative yet realistic visuals of the property’s exterior, interior, and overall ambiance. Links to all the property’s social media channels should be present in the listings, which allows the user to access other hotel assets including brand personality and online reputation.
5. Optimize for Voice Search
With increasing utilization of smart personal assistants such as Alexa and Google Home, voice search is a prime topic of conversion within the digital marketing realm. In order to be visible in results derived from these devices, hotels need to ensure they are optimizing their site and keyword strategy for voice search too. Since users are more likely to use longer natural queries via voice, employing niche, long-tail keywords is an effective method to optimize for this trend.
Long-tail keywords are fruitless without the relevant content on a hotel or restaurant’s website. Hotels need to have specific landing pages that parallel the niche keywords. If a hotel seeks ‘Hotels in Miami with rooftop pools’—a keyword likely used by the voice search user—it must appear in the relevant landing page.
Incorporating questions and answers within the site, perhaps via the ever-popular Frequently Asked Questions (FAQ) page, is another effective way to accommodate voice search. With this strategy, hotels can provide answers not only about the property itself, but also about their destination and local attractions as a result of quick detection by voice-activated devices.
It is important to note that recently, numerous hotel properties and companies have been contacted by law firms representing travel consumers with disabilities. These law firms report that websites are not abiding by accessibility guidelines in accordance with the Americans with Disabilities Act (ADA). If a guest is unable to use a hotel website to find information or make a reservation, hotels can in fact be fined. Today hotel websites must enable these assistive technologies to allow travel consumers with disabilities to get the information they need and complete any necessary transactions.
6. Adopt a ‘Mobile First’ Mantra
Much has been said about Google’s ‘mobile first’ index. This means Google will start to rank its search results based on the mobile version of the content, even in desktop search listings. If one thing is certain, websites need to be optimized to be mobile-friendly (responsive). Hotels need to ensure they launch a fully-responsive website that serves users of any device the same consistent content. The more ‘mobile-friendly’ a site’s user experience is, including factors such as typography, navigation map, and website design, the higher the site will rank on Google’s search.
7. Leverage Google Hotel Ads
Google Hotel Price Ads (HPA) showcases a hotel’s real-time (dynamic) rates on Google search across all devices. Users will see the hotel’s ad when they are actively looking to book a room in the area. However, the hotel only pays when the ad generates a click or a booking.
Google has recently introduced a unique call-to-action (CTA) button for booking hotels in its search results. A keyword can trigger a ‘BOOK A ROOM’ button to appear. Clicking this will activate a sub-menu to browse all enlisted HPAs for the hotel, which includes booking direct and via OTAs.
This feature, which also appears in Mobile and Maps, demonstrates Google’s determination to grow its Price Ads service. The increased exposure provides more incentive for hotels to capitalize on this form of pay-per-click in order to promote direct bookings.
8. Increase Backlinks, Actively
A backlink is as simple as a hyperlink to a website from another website. Yet, it carries a lot of weight when it comes to a hotel’s organic digital visibility. Each backlink tells the search engine that a hotel website has a ‘vote’ from another entity, which in return builds credibility and domain authority. Branded hotels have the upper hand here since the company usually has a corporate parent site that a plethora of other websites will link to (such as Marriott.com or IHG.com).
There are technicalities to backlinks, including the quality of the backlink determined by elements such as anchor text and link context. These technical factors play a role in the algorithm the search engine uses to determine the value of a backlink. In theory, the more quality backlinks a hotel website has, the more chances to rank higher on search engines.
Actively pursuing relevant backlinks should be imperative for hotels to obtain first page ‘real-estate’. Obtaining links from local directories, current hotel vendors, editorial publications, and .EDU and .GOV sites should be the gateway for enhancing the site’s link equity. However, to continuously grow the number of backlinks, hotels need to be generating quality, shareable content that interlinks with social media initiatives.
9. Remember Optimal Social Media = (Quality + Authenticity) x Engagement
Much has been contemplated about what comprises a successful social media strategy. Although there is no ultimate recipe for the perfect social media post, three factors that boost performance are quality, authenticity, and engagement. Optimal Social Media = (Quality + Authenticity) x Engagement. Each piece of content maximizes visibility, both organic and paid. When posts are authentic and of high quality, users are more likely to relate and validate them. When posts are authentic, of high quality, and facilitate some type of user engagement, the content becomes shareable.
When content generates more likes, followers, and overall visibility it establishes an influential ranking factor. Therefore, search engines tend to rank higher those brands that have a robust organic social media base (not paid or ‘spammy’ followers). This is why it is important for hotels to intertwine their social media strategy with their SEO efforts by creating quality, authentic, and engaging content that increases overall digital exposure.
10. Consider the Technicalities of SEO
Technical SEO is a science of its own and deserves its own team of specialists, budget, and time. Technical SEO means optimizing a website so search engines can successfully crawl and index its content. It lays a powerful foundation to give a hotel’s website the best chance it can to rank higher for relevant keywords. Technical factors include site speed, removing unnecessary tags, cleansing duplicate metadata, adding tags to images, and implementing proper redirects to maximize the site’s link equity. Whether there is a one-man team or a staff of professionals continually optimizing the website, there are tools to help provide the technical support.
Hotels, restaurants, museums, attractions, and leisure activities all need to assertively compete online to grab the attention of potential guests. Those who tend to the organic visibility have a notable competitive. This and integrated paid search campaigns that mutually support organic search strategies will help secure first page visibility. Overall, while the need to upkeep search engines’ potent algorithms and ranking methodologies will always remain, an understanding of the process will help smaller or independent hospitality businesses cut through the clutter in today’s complicated digital landscape.
Juan Lesmes is a digital marketing strategist specializing in SEO at HEBS Digital the leading hospitality technology, full-service digital marketing and website design firm. A 2017 graduate of Boston University’s School of Hospitality Administration (SHA), Juan’s previous experience includes work at hospitality marketing advisory LHL Communications, The Ritz London, and Lets Get Weddy in London. Since his time at SHA, Juan has been recognized as a thought leader in hospitality marketing, with active contributions to the Boston Hospitality Review, HotelOnline and HospitalityNet.
Leora Halpern Lanz, ISHC, is principal of LHL Communications, a hospitality-focused marketing communications, branding, and media relations advisory. She is also full time faculty at Boston University’s School of Hospitality Administration (SHA), teaching advanced strategic marketing and digital marketing for hospitality at the undergraduate and graduate levels. She was named among the Top 25 Minds in Hotel Marketing for 2016 by the Hospitality Sales & Marketing Association International and was named 2017 Professor of the Year by the student government of SHA.
Hotel Brand Websites, OTA’s, Meta Search and Wholesalers: A Distribution Dilemma Within The Industry
By Nick Cohen
The year is 2001, and the world is still recovering from the tragedy of September 11th. The travel industry is in a downward spiral as fears of flying and terrorism ripple across the United States and beyond, and hotels have lost significant occupancy due to a decrease in demand.
Simultaneously, a fledgling technology is emerging which will eventually take advantage of the internet explosion, as well as hotel management’s desperation to fill rooms. It will reshape our industry forever, and this platform now commonly referred to as Online Travel Agencies, or OTAs, will allow hotels to easily sell their rooms on the internet through new consumer facing websites such as Expedia, Travelocity and Orbitz.
Fast forward to 2017. The OTA’s have gained the majority of market share for online reservations, and digital platforms like Booking.com and Ctrip.com have loyal member volumes that far surpass brand websites. In many cases, the OTA companies are valued well beyond traditional hotel brands (as of May 2017, Priceline Group has a market capitalization of nearly USD 92 Billion). They have also helped to create a new concept as they grew in popularity and scale over the last number of years, and it was the precedent of transparency. Pricing that was once hidden to the everyday user, could now be exposed to the whole world, publicly, with a few clicks online. As OTA channels grew enormously with time, so did the access to real time rates and availability for virtually every hotel around the world.
With this concept in mind, from the OTA’s we have seen the rapid expansion of ‘meta search’ channels. These are one-stop price comparison platforms where a customer can view a price for a single hotel room across multiple websites (without having to browse those websites one-by-one). Sites within this category include Kayak, Trivago, TripAdvisor, Qunar and Google, and they are all working to simplify the travel research process for consumers.
With the OTA channels continuing to grow through massive marketing efforts and superior technology, and with meta search sites following their lead, a relatively new challenge has emerged for hoteliers. It represents a very complex dynamic between one of the most traditional ways to sell a hotel room, and one of the most modern ways to sell a hotel room. This once again all comes back to the concept of price transparency. Wholesale has been a core business driver in hotels for many years, helping properties build base business through private negotiated rates and partnerships. Historically, these wholesalers would sell their inventory offline to their own private networks of contacts. Even though the pricing would typically be lower than publicly available RACK rates, it was a reliable foundation of occupancy for hotels to build off of.
As technology has become more sophisticated with Application Programming Interfaces (APIs) readily available, we have seen the rapid growth of wholesale rates being sold publicly, online, through some of the powerful meta search channels mentioned above. This means that wholesalers are selling discounted rates, which directly undercut brand websites and OTAs, to anyone who has access to the internet. Beyond just meta search, some OTA websites are now even positioning themselves as ‘online marketplaces,’ where they too will sell wholesale inventory directly instead of the inventory provided by the hotels. To remain competitive and increase market share, online channels want to sell the lowest price possible, even if it means reducing their own margins by selling a cheaper room to the customer.
You would think that hoteliers would want to fix this problem immediately. Online wholesale business undercuts channels which are much more profitable such as their direct brand website. This issue however is multi-layered and is not easy to remedy for the following key reasons:
Hotels still want wholesale business!
Hotels still maintain strong relationships with a number of wholesale partners, big and small, and they rely on these partnerships to generate base business. Turning off these channels would potentially mean the loss of significant revenues, at least in the short term. Although wholesale channels can undercut other websites when sold online, they also still generate incremental business when sold offline through the traditional method
Finding the source of whole business online can be very difficult
When wholesale rates appears online, it’s generally very difficult to know which wholesaler specifically is providing that inventory. The wholesale partners themselves don’t generally sell rooms through their own websites, but sell their rates through wholesale aggregation channels such as Amoma.com. It’s channels like Amoma who then sell the rates online through their own interface, and promote their rates through larger meta search intermediaries such as Trivago and TripAdvisor. Generally the only way to find the true source is to make a test booking online, and then track how that reservation comes into the hotel’s central reservation system (each reservation is typically flagged with an inventory source). Many hotels are reluctant to do this since a booking requires use of a credit card and sometimes even pre-payment, and then cancellation of that test booking is not always easy to do. The test booking process is both cumbersome to manage at scale, and is also financially risky for a hotel if those booking cannot be cancelled.
Employee incentives are at stake
Within hotel sales departments, team members are still incentivized to drive wholesale volume, regardless of where that volume is being sold (offline or online). Wholesale partners generally don’t provide specifics on how they are selling their inventory, and as long as room allotments are sold, the responsible sales team members are satisfied. This is creating an unavoidable rift between the direction of some sales leaders with the revenue management and digital strategy teams.
So what’s next?
Hotel companies are dealing with this situation in a variety of ways. Some are cutting off wholesale altogether since they simply can’t control where their inventory is ending up. Others are maintaining the partnerships, but are working to move away from static room allotments and over to dynamic pricing and availability where the hotels have more control over the inventory they send to the wholesalers. This is a major problem facing the industry that very much remains unsolved.
If we take ourselves back to the 2001, price transparency was a challenge for hoteliers. Properties simply didn’t have direct access to a large enough segment of customers, therefore traditional partnerships like wholesale was an absolute necessity. With the growth of the OTAs though, and the emergence of new technologies such as meta search, that access is no longer an issue. The world is accessible for each hotel with a few quick key strokes on a computer. It is now only a matter of time until hoteliers make one of the following decisions:
- Utilize wholesalers purely as another online distribution channel, selling rates that are parity with every other website (brand.com and OTAs)
- Remove wholesale out of the channel mix altogether, realizing that room inventory can be be sold among the multitude of websites and digital platforms already available
Nick Cohen is based in Hong Kong and leads digital strategy for Hyatt Hotels in Asia Pacific. He oversees online marketing efforts for all Hyatt brands and properties across the region, and manages a variety of e-Commerce and digital platform projects to help increase online revenues for the company. Prior to joining Hyatt, Nick held senior e-Commerce and digital marketing roles at Langham Hospitality Group, Mandarin Oriental Hotel Group and Sabre Hospitality Solutions. Earlier in his career, working on-property for various hotels he developed extensive knowledge in operations, along with Sales & Marketing and Revenue Management expertise. Nick also holds a graduate diploma in Hotel and Tourism Business Management from Boston University.
By Alex Friedman
Since my time at Boston University—back when Facebook was still in its infancy—the world has spun uncontrollably into the vortex of our portable devices. They are, after all, the gateways to our thoughts, our exchanges, our friendships, and our digital libraries. We are seemingly unable to function without the familiar feel of a phone in our pocket—its comfort carefully tucked away yet always within reach, buzzing with waiting likes and messages. We feel engaged, but we’ve never been less so.
With access always at our fingertips, we tend to overlook just how quickly society transforms our definition of engagement and connection. We hurl ourselves toward the new, forgetting how enamored we were just moments ago. Remember Friendster? Myspace? How about AIM? All have gone the way of the dinosaurs. What about something more recent like Periscope or Foursquare? Inevitably, we chase the new so quickly that we don’t take the time to understand why it matters or why we want it. We don’t fully understand what it means.
Today’s hyper-connected world continuously redefines what we believe “engagement” to be. As an agency, my team uses the term to define metrics that we are challenged to gauge beyond quantitative data. We frequently meet brands that are insistent on chasing these new metrics of success—the quantitative likes, shares, tweets, or comments. “They were on the website for six minutes and clicked on four pages, leaving two shares and five comments!” It’s as instantly gratifying as it is completely superficial.
It can be difficult to convince brands that there is more to engagement. The common refrain is, “well, our competition is already there, so we feel like we are behind.” While they may indeed be behind, it’s often not for the reason they think. Engagement is more than just posting or cultivating likes on Facebook, Instagram, Snapchat, and Pinterest. Clients end up chasing the social distraction instead of focusing on the real mission: building and, more importantly, maintaining a relationship with their customer.
The brands that realize engagement involves slowly building a relationship with consumers are the ones winning—not those that are vying for your “like.”
So, how do we accomplish the holy grail of customer loyalty? How do we build a relationship?
- Go back to basics: Is your product/service right?
- Have a real conversation with your customer
- Offer customers something that isn’t transactional
- Build distinct, long-term loyalty
Go Back To Basics
Let’s start by examining this issue through the lens of a hospitality brand. It’s no secret that the competition in this industry is incredibly fierce and is showing no signs of slowing down. Most brands compete by growing as large as they can to more favorably leverage a volume approach. It’s really a simple formula: the more hotels and locations serviced creates more available rooms and possible stays. In this scenario, location usually plays first, price plays second, and brand, quality, reviews, etc. fall into a bucket of imprecise mush. This presents a problem and makes many hotels seem a dime a dozen, as location and price are creating an increasingly transactional experience. Brands think they can win quickly on these factors, only to find consumers that are easily won are also easily lost.
A major reason for this? We no longer go to Marriot.com or RitzCarlton.com—we go to Kayak and Expedia. We compare. Brands need to take a step back and evaluate what they’re actually offering customers. Is it something they want or need? Can they only get this from you? If it’s the lowest price for a double bed on a Tuesday, you’re going to lose in the long run. If, however, it’s a curated experience, it’ll be harder for customers to go elsewhere.
Have a Real Conversation
So, what is this “curated experience” customers are seeking? This may come as a surprise, but you have to actually ask them to find out—and I’m not talking about survey results or Google Analytics.
Consumers are frequently connected to the devices in their pockets and use social media without a second thought, which means you need to have a real conversation with real people about their wants and their needs. Someone may “like” your brand page for any number of reasons, which, looked at another way, suggests that whether a brand is “shared” or “endorsed” doesn’t matter in and of itself. Rather, you need to get to the why and what behind the brand, ensuring you identify whatever led to a good or bad experience.
Because keep in mind: even if you’re failing to talk to customers; they’re still talking to everyone they know. In our high-tech environment, to say word-of-mouth plays an essential part in today’s marketing strategies would be an understatement. In fact, 40% of millennials share details of a trip on social media while still traveling. The not-so-secret key to success, however, is giving them something worth talking about.
Offer Something That Isn’t Transactional
A comparing, transactional society always begins with the gateway. Kayak is a gateway, as is Google, Facebook, and many other touchpoints. When comparison happens before the sale, as on Kayak, the brand competes on a playing field dictated by the competition, price, etc. If, however, the comparison is based on a relationship or sense of loyalty, the brand dictates the basis of comparison.
Unfortunately, there may be no such thing as brand loyalty anymore. Like engagements on our devices, information moves too quickly to hold a great amount of higher meaning. In many cases, it has become algorithmic. St. Regis, a preferred hotel brand and one at which I’ve always enjoyed my stay, is disposable to me if the Ritz Carlton next door places a retargeting ad on Kayak offering me 10% off a lower rate. But not all hope is lost.
Let me paint you a picture of a successful, non-transactional differentiator I encountered. Not long ago I stayed at a Four Seasons. While there, I had a less-than-ideal dining experience, which wouldn’t have meant much on its own were it not for their response. On top of the recourse they provided at the time, the topic was again revisited the next day at checkout. The entire exchange had been more or less documented, which allowed the concierge to address and smooth over any remaining malcontent I may have had. It was a small gesture, but still an unexpected connection that has stayed with me.
Build Long-Term Loyalty
I hate to do it, but I have to go back to Facebook for a moment to really drive this point home. Facebook didn’t win quickly—it was slow, methodical, and calculated. It didn’t explode nationally, but rather expanded university by university. And by the time it got to your campus, you were begging to be included. We all meticulously curated our profiles, our pictures, and our stories. We added friends if they were real (at least at first) because our content was important and protected our self-image. We slowly added other aspects of our lives and invited others to make it more “complete.”
And now we’re stuck in a relationship. We’re not engaged – we’re married.
That portrayal may seem like a bleak version of the story, but it’s important for brands. Building long-term loyalty is about more than points and little perks. It’s about offering pleasant surprises and a personal touch. Facebook knows it’s your birthday and helps you (and all your friends) celebrate. It lets you know that the friend you’ve been meaning to call for ages finally got a dog.
Hospitality brands can take this approach to build long-term loyalty through customized offerings. If someone has previously stayed at a particular location, there’s potentially a wealth of information about things that went well or wrong on that stay. Make your next offering more personal. Maybe the customer requires an extended checkout time, or maybe you enhance their next dining experience. Either way, it’s more about the personalization than the points.
As attention fragmentation and consumer comparison continues, it’s going to become harder than ever to find your point of differentiation. But that doesn’t mean you can give up on looking – your business will depend on it.
Alex Friedman (SHA '06) is the president of Ruckus, a marketing, advertising, and technology agency located in Manhattan. In nearly a decade of advising clients, Alex has continually been at the forefront of developing technology – working with growing brands and Fortune clients alike. Alex is widely recognized as a thought leader in the field, with features in publications that include Forbes and Inc., among others. His expertise is often called upon to design mobile applications, implement programs that complement marketing campaigns, and advise on business strategy that impacts revenue.
“Hold on, I have to post this on Instagram”: Trends, Talk, and Transactions of the Experiential Consumer
By Steve Kent
“The universe is made of stories, not of atoms.”—Muriel Ruckeyser
Just a few years ago, consumers proudly showcased material purchases of the latest fashion accessory or technological gadget. Now they are more likely to post online about experiences, rather than the consumption of products. This ‘experiential economy’ and the consumers that characterize it are real phenomena and are showing up in travel trends, industry conversations, and even in transactions. Social media communications about where people stay, eat, and visit is the content that gets the most ‘likes,’ and it enables consumers to share experiences and stories with friends. By its very nature, hospitality is a natural beneficiary of these trends in consumption—but how can the industry target audiences to capitalize financially on experiences?
The concept of the ‘experiential consumer’ is a broad category characterized by the intangibility of experiences. Staying in a hotel room that faces the ocean, playing craps at a packed casino, or tasting new foods in an exotic locale cannot be replaced with technology or the purchase of a good or product online. Nevertheless, even within experiential consumption, there are different responses. Think about it—do you get more “likes” when you check into a restaurant, share a photo of your entrée, or post a photo of enjoying your dinner? Each one of these actions progressively captures the experience more fully. The photo in Figure 1 received a higher amount of likes because it showed full immersion. If an experience is vibrant and visible, hospitality leaders need to work on ways to encourage their patrons to engross themselves in the experience, fully share it, and create a circle of awareness.
While an experience may not be fully replaced with technology, disruptors that target the experiential consumer and economy do exist. For example, Airbnb’s website states: “Homes, experiences, and places—all in one app.” By announcing up-front that Airbnb is going to offer an experience, do they have an advantage over a hotel that just offers a room? Incumbent industry leaders like Hyatt have already targeted this local and experiential market with investments in OneFineStay.com. With its extensive inventory of vacation rentals and timeshares, Wyndham also has focused on this market for some time.
Experiential consumers are an arena in which incumbents and disruptors inevitably will face off, in part because the opportunity they represent is so significant. One of the examples of how the disruptors might be focusing on the experiential consumer more aggressively than incumbents is their social media interactions. While most leading hotels have active feeds, they tend to feature photos of their buildings, physical amenities, and employees. Conversely, on Airbnb’s social media, they tend to show photos of their consumers experiencing travel. Although is difficult to tell whether this focus is by design (and further, whether it leads to more interest and bookings), it illustrates Airbnb’s consumer focus on the experience. Such postings by the incumbents might also be a function of these larger branded hotel chains’ focus on corporate travel, where they feel compelled to showcase their physical product to meeting organizers rather than the firsthand interaction.
Table 1. Travel and leisure are two of the few areas gaining share of wallet.
Table 2. Shift toward leisure travel projected to continue.
Experiential consumer trends illustrate why leading hospitality companies need to more aggressively target this opportunity. Recent research by Goldman Sachs (Grambling, Prykull, Stone, & Singh, 2016) presented the preceding two charts to illustrate that “consumer spending preferences in the US appear to be taking the next evolution from good then services to more experiences.” The first chart is from the US Bureau of Economic Analysis, which measures nominal personal consumption expenditures on goods and services and provides a more detailed breakdown of where the dollars go. The chart shows that as a percentage of overall spending, leisure expenditure has gone from 2.4% of wallet in 1996 to 2.6% in 2016, and during the same period, travel has gone from 2.4% to 2.5%. As a percentage of wallet, these two categories have increased, while products like durable and non-durable goods have declined. Healthcare may be one of the only other services that has increased during this period. Table 2 was from the American Express Leisure Travel Survey 2015. As illustrated in the table, leisure travel and the pursuit of enriching life experiences is not just a US-centric theme: the tables shows that respondents in Mexico, China, and the UK all appear to have a higher desire for life experiences, and travel is part of that.
The shift toward more leisure and experiential travel has also been discussed in the IPO documents for Playa Resorts from September 27, 2016 (SEC Edgar/Playa Hotels, 2016). The text explains that global travel and tourism spending totaled $7.2 trillion in 2015. The United Nations World Travel Organization (UNTWO) further estimates that between 2006 and 2016, global travel and tourism spending grew by a compound annual growth rate of 3.6% and, per the World Travel & Tourism Council (WTTC), is expected to accelerate to a 7.2% compound annual growth rate over the next decade, outpacing the 6.2% compound annual growth rate projected for the global economy according to Oxford Economics.
Leisure travel and tourism spending in 2015 specifically accounted for 76.6% of total global travel and tourism according to the UNWTO. The WTTC anticipates that leisure travel and tourism spending will grow more quickly than business travel spending over the next ten years, thus benefitting those destinations with more resort- and/or leisure-oriented lodging options. Over the next decade, the compound annual growth rate for the leisure segment is projected to grow at 4.2%, compared to a 3.7% compound annual growth rate for the business travel segment. While low-cost airfares, greater disposable income, and easier access to credit might be factors, we would postulate that the experiential consumer trend is a key factor in this acceleration of spending (SEC Edgar/Playa Hotels, 2016).
Hotel data also suggests the importance of the experiential consumer to industry growth. In 2015, industry-wide RevPAR (revenue per available room) grew 6.2%, but resort-specific RevPAR grew 7.9%, and Orlando (a key leisure experiential destination) also grew 9.0%. In 2016, resorts appear to once again top the broader market with a RevPAR gain of 3.8%, versus 3.2% for the total industry (STR, 2016).
Affirmations of the rise of the experiential consumer are illustrated by commentary of industry leaders indicating how the trend has been a critical driver of recent successes. For example, when announcing that Cedar Fair, a leading amusement park company, saw record attendance and revenues through Labor Day this past summer, company CEO Matt Ouimet noted, “As consumers continue to prioritize experiences over possessions, we believe we are well positioned” (Cedar Fair, September 7, 2016). Other hospitality leaders have echoed this sentiment. Notably, Steve Holmes, CEO of Wyndham, told investors in his opening comments for third quarter 2016 earnings results that even though economic conditions may be soft, “people around the world are committed to spending time with loved ones. They're looking for unique experiences at all price points and we believe that our diverse portfolio of travel offerings can continue delivering on that growing demand” (Wyndham, October 26, 2016). Howard Schultz recently described the Roastery at Starbucks, their newest higher-end roasting and tasting outlet, as based in experience. He specifically suggested that the Roastery was not just about a great cup of coffee, but ultimately a full immersion, adding that “the primary thing we're learning is that the Reserve bar…where all the coffee is made in multiple brewing methods…has created excitement, interest, education, romance, theater, but it also has created the opportunity for us to provide our customers with a different coffee experience and, candidly, at a higher ticket” (Starbucks, November 3, 2016).
While trends and quotes illustrate the shift to the experiential economy, we are also seeing that “money talks.” In just the past three months, private equity firms have started to take a renewed interest in experiential travel opportunities, specifically resort locations as well as all-inclusives. On November 8, 2016, the private equity firm KSL Capital Partners announced they were acquiring Outrigger Hotels and Resorts, which operates or has under development 37 properties with approximately 6,500 rooms located in Hawaii (Oahu, Maui, Kauai, Hawaii Island), Guam, Fiji, Thailand, Mauritius, and the Maldives. Marty Newburger, partner at KSL, noted that “for nearly seven decades, the Outrigger team has been focused on providing authentic, localized experiences for guests in iconic resort destinations” (KSL, 2016).
On December 13 of the same year, two transactions—specifically, deals for Playa Hotel and Apple Leisure—illustrated investor interest in operations that target the experiential consumer. Playa Hotels & Resorts B.V. (“Playa”), a leading owner, operator, and developer of premier all-inclusive resorts, announced on this date that it had entered a definitive business combination agreement with Pace Holdings Corp., a special-purpose acquisition company sponsored by an affiliate of leading private equity firm TPG. Playa has 6,142 rooms across its 13 locations and owns and operates all-inclusive resorts located on prime beachfront properties in leading destinations like the Dominican Republic, Jamaica, and Mexico (Playa, 2016).
The very same day, KSL Capital Partners and KKR agreed to acquire Apple Leisure, “the nation’s top seller of all-inclusive vacation packages” (Apple Leisure, 2016). The company’s subsidiaries include “AMResorts (hotel management and marketing services), Amstar (the largest destination management company for Mexico and the Dominican Republic), a portfolio of travel distribution brands (Apple Vacations®, Travel Impressions®, CheapCaribbean.com®), and the exclusive Unlimited Vacation Club travel program” (Apple Leisure, 2016). The experiential consumer shift is not the only reason for these transactions. However, it illustrates an interest in dealmakers to target businesses that may appeal to people who are looking not just for room with a view, but also a room with activities, exotic food, cultural immersion—and maybe even partying. These are experiences and not things that can be duplicated or bought by somebody else; however, they can be shared and communicated through digital channels. If the experience exceeds expectations, then it could lead to greater brand awareness and likely greater demand.
The shift toward experiential spending versus consumption has been emerging for some time, and hospitality leaders appear to be welcoming this shift based on the trends, talk, and transactions. Over the next several years, we expect leaders to showcase not just the rooms but also the living—not just the price but also the promise of an adventure. Travel and leisure are natural beneficiaries of this evolution within the industry, and we challenge executives to work on ways to more aggressively embrace it rather than just experience it.
Steve Kent has over 25 years of experience as a senior financial analyst in a variety of business sectors, most recently as a managing director for Goldman Sachs specializing in the hospitality industry. Since 1998, he has been annually recognized for his work by Institutional Investor magazine. Additionally, the Wall Street Journal has recognized him eight times for successful stock picks. In 2005, he was awarded Volunteer of the Year by New Society of Analysts. He has also addressed senior management and leaders at Marriott International, Wyndham Hotels, World Travel and Tourism Council, and the American Gaming Association.Steve graduated magna cum laude from SUNY Stony Brook with a bachelor’s degree in economics. He took his first job in the Economic Research Department at Goldman Sachs. In 1990, he completed his MBA while working as a junior analyst for Donaldson Lufkin and Jenrette. After graduating, he returned to Goldman Sachs where he worked for over 25 years. He received his Chartered Financial Analyst designation in 1994. He lives in Long Island, New York with his wife and daughter.
Apple Leisure Group/KKR/KSL Capital Partners. (2016, December 13). Apple Leisure Group to Be Acquired by KKR and KSL Capital Partners [Press release]. Retrieved from http://www.kslcapital.com/press-room/apple-leisure-group-to-be-acquired-by-kkr-and-ksl-capital-partners.html
Bureau of Economic Analysis. (n.d.). Retrieved from https://www.bea.gov/iTable/iTable.cfm?reqid=12&step=1&acrdn=2#reqid=12&step=3&isuri=1&1203=2014
Cedar Fair Entertainment Company. (2016, September 7). Cedar Fair Announces Record Attendance and Revenues Through Labor Day [Press Release]. Retrieved from http://ir.cedarfair.com/newsroom/press-releases/news-release-details/2016/Cedar-Fair-Announces-Record-Attendance-And-Revenues-Through-Labor-Day/default.aspx
Grambling, S., CFA, Prykull, C., CFA, Stone, R., & Singh, N. (n.d.). Americas Lodging: Initiate at Neutral: Late cycle leaves us below consensus, valuation reflective; Buy MAR, Sell LQ (p. 20, Rep.). New York, NY: Goldman Sachs.
(2016, November 04). Starbucks (SBUX) Q4 2016 Results - Earnings Call Transcript. Retrieved from http://seekingalpha.com/article/4019416-starbucks-sbux-q4-2016-results-earnings-call-transcript?part=single
(2016, October 26). Wyndham Worldwide's (WYN) CEO Stephen Holmes on Q3 2016 Results - Earnings Call Transcript. Retrieved from http://seekingalpha.com/article/4015294-wyndham-worldwides-wyn-ceo-stephen-holmes-q3-2016-results-earnings-call-transcript?part=single
Outrigger Hotels and Resorts (Outrigger) /KSL Capital Partners, LLC. (2016, November 8). Outrigger Hotels and Resorts and an affiliate of KSL Capital Partners, LLC enter acquisition agreement [Press release]. Retrieved from http://www.kslcapital.com/press-room/outrigger-hotels-and-resorts-and-an-affiliate-of-ksl-capital-partners,-llc-enter-acquisition-agreement.html
Playa Hotels & Resorts B.V./Pace Holdings Corp. (2016, December 13). Playa Hotels & Resorts and Pace Holdings Corp. Announce Business Combination [Press release]. Retrieved from http://www.businesswire.com/news/home/20161213005637/en/Playa-Hotels-Resorts-Pace-Holdings-Corp.-Announce
United States, SEC. (2016, September 27). SEC/Edgar/S-1/Playa Hotels and Resorts, B.V. Retrieved from https://www.sec.gov/Archives/edgar/data/1618182/000119312516721736/d246339ds1.htm
Vacation Rentals, Homes, Experiences & Places. (n.d.). Retrieved from https://www.airbnb.com/?af=43720035&c=A_TC%3Dfmeb9dyr2w%26G_MT%3De%26G_CR%3D100808697856%26G_N%3Dg%26G_K%3Dairbnb%27%26G_P%3D%26G_D%3Dc&atlastest5=true&gclid=CKKSsuurldECFVtLDQodRGcHCg
The Exponential Growth in Both Hospitality Brands and the Millennial Audience Requires an Exponential Shift in Brand Portfolio Strategy
The past decade has seen exponential growth in hospitality brands making for an often confounding proliferation of options for travelers. According to Smith Travel Research, from hard to soft, boutique to lifestyle, consumers are looking at a choice of almost 1,000 hotel brands globally .
While the number of brand names has increased, the number of holding companies has decreased, the result of several significant mergers within the hospitality industry. The Marriott/Starwood merger is among the most recent example of holding companies combining assets to create larger brand families. According to the Marriott website, prior to merging with Starwood, it had “more than 4,400 properties in 87 countries and territories, with reported revenues of more than $14 billion in 2015.” In addition to 19 of its own hotel brands, Marriott stands to add 11 of Starwood’s brands to its portfolio upon the completion of the $12.2 billion merger. As another example, in late 2015, hotel companies AccorHotels and Fairmont announced their merger. As stated on the Fairmont website in December, 2015, “We [Fairmont] are excited to share the news that FRHI Hotels & Resorts and our three leading brands, Fairmont Hotels & Resorts, Raffles Hotels & Resorts, and Swissôtel Hotels & Resorts, will soon join the AccorHotels group. AccorHotels is a global leader in the travel industry with a diverse portfolio, located in 94 countries, with over 3,800 properties and 20 recognized luxury, mid-scale and economy brands including Sofitel, Pullman, MGallery, Grand Mercure, and Novotel.” The transaction, expected to close in mid-2016, was completed for a percentage of Starwood’s price tag, a comparably modest $2.9 billion, but resulted in an equally impressive unification of hotel industry power players. In a similar vein, Intercontinental Hotels Group and Kimpton merged in 2014, a $430 million deal, which added nine InterContinental brands to Kimpton’s 59 hotels in 30 U.S. cities.
In addition to this trifecta of hospitality’s large brand consolidations, boutique hotel groups Commune and Destination Hotels merged in the beginning of 2016, as well. As per Destination Hotels’ press release, “The combined company will manage over 90 hotels and resorts in seven countries with approximately $2 billion of total property revenues under management, and will look to opportunistically broaden the geographic reach of its brands both domestically and internationally in urban and resort markets”.
This combination of fewer holding companies, each with extra brand names in their portfolios, presents a challenge for consumers, not simply in terms of the myriad names, but the inability to distinguish the inherent differences in one brand from another. According to a 2015 article in Skift, “Vacationers once relied on big-name hotel brands to signal the kind of experience they could expect. People knew what Holiday Inn, Hilton, Hyatt or Marriott meant. Familiarity bred a sense of comfort. No longer. The world’s 10 largest hotel chains now offer a combined 113 brands at various price points, 31 of which didn’t exist a decade ago. And there’s no sign of this proliferation slowing down.” As companies assemble more and more brands under their corporate ‘umbrella’ organizing these brands in a clear, cohesive and compelling way in the new challenge facing these multi-brand hotel companies.
Traditionally, this proliferation of brands – the creation of an enormous brand portfolio - would be dealt with in two interrelated ways; consumer segmentation and brand architecture. By way of explanation, segmentation is an analytical tool that allows marketers to take a large, diverse population and organize it into manageable, homogeneous groups which makes it possible to more fully understand, prioritize and address the individual needs of these groups rather than trying to address an entire population. Segmentation is valuable because in its efforts to mean a lot to many people, a brand can easily begin to mean very little to very few. Segmentation allows brands to focus intimately on understanding the barriers, desires, needs, and aspirations of a specific group. Through segment identification, the brand can provide customized messages and products to fit the needs of the segment, focusing on those needs which both differentiate and unify the target segment.
Relative to segmentation and the hospitality industry, this might include breaking down hotels into unique segments of hotels, one that might offer limited service, another full service, and another luxury service. Further segmentation might then break these groupings into venues that are more appropriate to a business traveler, to a family traveling with children, or as a honeymoon destination. By way of example, within the IHG portfolio, brands are segmented by the need that they fulfill for the consumer, such as “Family Time,” “Romantic Getaway,” or “Rest and Go.” The brands are then further differentiated on a price point spectrum, from mid-scale to luxury. This allows IHG to better identify the target market—and the needs—in alignment with their various hotel brands.
Given the exponential growth of hotel brands, however, there are no longer enough stratas of segmentation to make this tool feasible. In one Bloomberg article, travel industry analyst Harvey Harteveldt, considering the differences between brands Element and Aloft, ironically notes, “I think one uses blue a little more in its color palette, and one uses green a little bit more,” a statement which perfectly nails the challenge. As Gary Leff writes on View From The Wing, “A consumer might know a brand, like a brand, and choose hotels flying that flag because the brand tells them just what they’re going to get – that consistent experience they’re comfortable and familiar with and feel favorably towards. But with too many brands, and brands that don’t clearly distinguish themselves, it’s hard for guests to ‘get’ the brand idea. With conversion brands, or brands whose story is that they’re unique to their locations, there’s not really even a clear brand idea to start with.”
Brand architecture, on the other hand, has been utilized to fine-tune the segmentation by way of focusing on a brand’s organization and the resulting branding strategy. Again, traditionally, architecture would become the platform for expansion and innovation within the brand portfolio, while providing direction for that growth. By way of explanation, there are generally four meaningful structures within brand architecture: master-branded, shared, endorsed, and no affiliation. Using Marriott as an example, “master-branded” would be simply Marriott; the name stands alone. Then, “shared,” would be Marriott Courtyard, whereby each name is given a fifty-fifty share of ownership in the consumer’s mind. “Endorsed” would be Courtyard by Marriott, giving Courtyard the majority ownership in the consumer’s mind, but giving consumers the assurance that it’s part of the Marriott family. “No affiliation” is just that. The hotel property gives no evidence of being anything but independently owned.
The old model of structuring a growing brand portfolio, using segmentation along with architecture to “scaffold” the segmentation, worked well for many years, especially in a world largely based on one-way communication wherein the brand was able to control the messages, if not always the experience. Now, however, traditional segmentation is no longer robust enough to handle the huge number of brands. There are simply not enough ways to slice and dice consumer segments by need, effectively or efficiently, and, equally important, in a way that is understandable to consumers. Even the most nuanced architectural overlay model is not sufficient to support the myriad brand names in the marketplace. There are too many brands for the required infrastructure.
The current scenario? Fewer hospitality holding companies and more brand names, few which are distinguished by any unique brand story. In the first chart below is the traditional segmentation approach, inclusive of the pruning and consolidation of properties; hotel names neatly divided and subdivided by target, occasion, price point or location. It is rigid in structure, components fixed in place based on conventional marketing segmentation strategies.
A segmentation based architecture paradigm is ineffective when the largest purchasing audience engages and consumes in radically different ways. For a target market—the millennials-- for whose new travel priorities include an increasing demand for authentic experience-based travel, a segmentation based brand architecture is inadequate, if not useless. There are eighty million millennials in the United States, alone, representing about one quarter of the population, with $200 billion in buying power. “Over the next five to ten years, millennials will become the biggest customer segment for hotels worldwide, and hotel brands are rushing to meet and exceed the needs of these travelers," said Signature Travel Network Vice President Ignacio Maza. In fact, by 2025, Gen Y will account for 75 percent of the workforce, according to a 2014 study by Deloitte.” Beyond sheer numbers, a study conducted by Goldman-Sachs states, “Millennials have come of age during a time of technological change, globalization and economic disruption. That’s given them a different set of behaviors and experiences than their parents.” No matter how luxe or legacy a brand, the millennial consumer is not impressed unless a brand differentiates itself and proves its worth and experiential value. For millennials, more often than not, it’s all about the experience—along with the resulting Instagram or Snapchat photo.
A study by Havas’s Hashtag Nation reported in Adweek noted that, “Today’s youth are significantly more apt than their elders to recognize—and value—the role brands play in their lives.” But this can be a tricky relationship to maintain, the study notes, as 40 percent of respondents ages 16-24 complain that brands don’t take them seriously enough. Brands also need to recognize that they’re now dealing with a generation of consumers who are much savvier than their parents were at that age,’ the study concluded. “Young people have an innate understanding of marketing and of their value as consumers. And they’re significantly more likely than older generations to believe they have the capacity to help a brand succeed or fail. And why would they think that? Virtually every day they see some evidence of the power of ordinary people to effect change, whether it’s using Twitter to foment a rebellion in the Middle East or using social media to compel a company to behave better.”
Before we unveil our new approach, we are finding there are three key millennial traits that must be taken into consideration as they move forward in their challenge to identify an effective brand portfolio model:
1.Millennials don’t fall into neat hospitality buckets. They can’t and won’t be segmented. They move fluidly from business to pleasure. They don’t compartmentalize their lives the ways in which their parents did. Recognizing this and providing the opportunities to do so is paramount to success according to a series of reports aggregated by consumer research firm Sprinklr, “Brands need to stop marketing to millennials in the same way they’ve marketed to previous generations… they’re looking for brands that embody them.”
2. Millennials seek unique experiences - and they love to share these experiences. Millennials don’t like big brands. They don’t want to wake up in a hotel room that looks the same whether it’s in Prague or Peoria. They want just the opposite. More than this, millennials are a generation that want to co-create the product and the brand with you. Companies that understand this and figure out ways to engage in this co-creation relationship millennials will have an edge. An example of a company that understands and has successfully tapped into this new paradigm, is American Express, with its Nextpedition campaign. As detailed in its 2011 press release, “[Nextpedition offers] a new way to travel targeted to travel enthusiasts in their 20s and 30s. Through Nextpedition, American Express Travel offers consumers the exciting opportunity to take a vacation where the destination and itinerary are unknown until the actual journey begins and is revealed day by day via a customized Smartphone. The "mystery trip" is customized to reflect the traveler's personality traits, providing an opportunity for him or her to explore the world in an unexpected and intuitive way.” In this synopsis of its campaign, American Express captures precisely the elements of the travel and hospitality experience that millennials crave. As noted in the same report by Sprinklr, “Research shows that millennials influence the shopping behavior of their parents, who are increasingly mimicking the demands of their children for a seamless customer experience.” A seamless experience may include elements such as customized offerings, including better, faster, more personalized service, a single, streamlined customer experience, and integrated IT platforms.
3. For millennials, technology and social media are part of their DNA. This is in good part what makes traditional architectural models ineffective. Millennials operate in a digital, transparent world. They can see everything and share everything. That a hotel brand is “shared” or “endorsed” doesn’t matter. They’ll get to the who and what behind a brand on their own, holding whomever is responsible, good or bad experience, accountable. That high-tech and word-of-mouth play an essential part in today’s marketing strategies is an understatement. In fact, 40% of millennials share details of a trip to social media while traveling. While traditional media may still have some role in building a brand, the old top-down, mass marketing dynamic is very quickly being replaced by the top-down, bottom-up approach – a conscious mix of your messaging and their The not-so-secret to success, however, is giving them something worth talking about.
This massive and incredibly influential consumer group is upsetting the whole framework which marketers have heretofore utilized to manage large portfolios, specifically being able to build on segmentation based brand architecture strategies. Given all of the above, this article proposes that a shift in thinking is required to succeed in hospitality branding, especially as brands pivot to reach and break through to millennials. More specifically, it proposes that what is needed is a fundamentally different brand portfolio model, tailored to meet the needs of millennials, not their parents.
The context for this shift in thinking can best be appreciated by looking at the accompanying chart representing a different systematic approach. The proposed model is created to take into account all of the aforementioned challenges, especially those presented by the millennial consumer.
Resembling more of a “solar system,” this model is organic, fluid, and dynamic with components moving in and out, taking on different values predicated on constantly changing consumer and market circumstances. At the core of this solar system is a membership-based loyalty program, not branded with a specific hotel name, but an entirely agnostic entity.
The ideal hospitality brand portfolio model must also take into account that there must be an organizing principle for all of the properties, along with a “gravitational force” that compels consumers to choose one hospitality group versus another. Ergo, the loyalty program at the core of this solar system model. However, rather than the traditional discount-based loyalty program which rewards multiple stays with an extra night or a room upgrade, to be effective, this proposed loyalty program must be based on what is relevant to millennials. Far beyond financial rewards, it should be perceived as a “brand experience enhancement program.” Rather than a conventional buy-one-get-one loyalty program, it must be a program built on surprising and delighting the user in, both, a personalized manner and a manner unique to each of the properties. Whether checking into property A, B, or C, the user experience should be customized in some meaningful way. According to a study by Loyalty One, personalization is a critical factor for these travelers, with 79% of millennials saying they would even pay for rewards that correspond to their specific needs. A program with “brand experience enhancement” at its core will allow smaller brands to retain their authentic and unique quality, and larger brands to acquire the associative status of being in the same program. As is their preference,users control the price-value equation relative to their need. Millennials, and their ilk, get to discover new experiences, calling the shots - and taking the shots - to share with others.
The nature of this proposed solar system model is elliptical in form, properties, some large, some small, moving in and out, back and forth, each having its own “value” based on the needs of the user at a given point in time. The orbits of these planets are not preordained. In this model, segmentation is irrelevant. Architecture is irrelevant. Marketing strategy and media budgets are used to support the core program, to ensure its message is differentiated in a way that is meaningful. By ensuring a powerful and compelling story for the core program, and by delivering on this story, you no longer have to look at which properties in the solar system get the biggest share of the media buy. By creating extraordinary experiences within the solar system, millennials will do the heavy lifting given their affinity for social media.
REBRANDING THE IHG REWARDS PROGRAM :
Kirk Kinsell, former President of the Americas for Intercontinental Hotels Group (IHG), led a session at the 2013 Cornell Hospitality Brand Management Roundtable by sharing IHG’s effort to restructure its’ brands around its loyalty program: PriorityClub Rewards. Noting that IHG had been an umbrella brand for only ten years, Kinsell shared a recent history that includes 30% growth through a relentless brand-building program and the industry’s first loyalty program. The most recognizable IHG brand is, of course, the Holiday Inn brand family, which enjoys broad recognition. As he put it, when employees go through customs and say they work for IHG they are often greeted with a blank stare. But if they then add that it means Holiday Inn they are given a warm “Welcome!”
The key to his brand portfolio management effort is the re-launch of the priority program and simplification of brand communications, which has included adopting orange as the signature brand color. Now called IHG Rewards Club, the program offers a range of amenities including free Internet access to club members at all properties. If you’re a club member near an IHG property, you need not even be an overnight guest to access the Internet in the facility. More broadly, IHG is focusing on using the rewards program to provide better guest recognition and leveraging the program to solve corporate challenges such as capturing a portion of the $2 billion cross-selling potential, and reducing the costs of using online travel agencies (OTAs) which cannot extend PriorityClub benefits to their customers.
In summary, our proposed new model for organizing hospitality brand portfolios is in direct response to the fact that the traditional approach is no longer relevant. While it used to be possible to place brands, targets, and target requirements into neat boxes and buckets, the world has become far too complex for this linear framework. This is especially true for those with a millennial mindset, be they millennials, themselves, or the growing number of audiences influenced by this mindset. Millennials simply can’t and won’t be segmented, and they don’t hew toward brands that represent the usual segments. They morph fluidly from business to pleasure and, at the same time, seek out unique experiences. To succeed, hospitality branding professionals need a model that can incorporate the growing number of small, idiosyncratic brands and the attitude toward these brands, inclusive of the desire for discovery and personalization.
Allen Adamson, founder and CEO of BrandSimple, was most recently Chairman, North America, of Landor Associates, a global brand consulting and design firm, where he was responsible for operations and overseeing branding efforts. Under his leadership, the company partnered with a wide array of iconic brands, including Accenture, GE, Johnson & Johnson, FedEx, HBO, Marriott, MetLife, and Verizon. Additionally, he provided guidance for non-profit organizations including the 9/11 Memorial & Museum, the Central Park Conservancy, the Council on Foreign Relations, and Iraq and Afghanistan Veterans of America (IAVA). He is the author of three books — The Edge: 50 Tips from Brands that Lead, BrandDigital, and BrandSimple, and writes a monthly column for Forbes.com about the impact of general business and cultural trends on branding. A sought-after industry commentator and has appeared on NBC’s Today Show, CNBC’s Squawk Box and Closing Bell, Fox Business Network, and has been quoted in The New York Times, the Wall Street Journal, Advertising Age, USA Today, the Washington Post, and Forbes.
Chekitan S. Dev is Associate Professor of Strategic Marketing and Brand Management in the School of Hotel Administration at Cornell University. His articles have appeared in numerous leading publications including Journal of Marketing and Harvard Business Review. He received the John Wiley & Sons Award for Lifetime Contribution to Hospitality and Tourism Research in 2002. Professor Dev holds a Ph.D. from Virginia Polytechnic Institute and State University, a master’s degree from the Institut de Management Hotelier International at ESSEC, and a bachelor’s degree from the University of Delhi. Email email@example.com
Philip Kotler and Gary Armstrong, Principles of Marketing, 2014, p. 381.
Kevin Lane Keller, Building, Measuring and Managing Brand Equity, 2013, p.359.
Goldman-Sachs, “Millennials: Coming of Age.” http://www.goldmansachs.com/our-thinking/pages/millennials Accessed August 14, 2016.
Hoffman, Melissa. Adweek. “Attention Brands: This Is How You Get Millennials to Like You: Looking at what resonates with most marketers' dream demo.” http://www.adweek.com/news/advertising-branding/attention-brands-how-you-get-millennials-you-160575 Accessed August 14, 2016
Sprinklr. “Marketing to Millennials: 6 Studies & Reports You Need to Read” <https://www.sprinklr.com/the-way/marketing-to millennials-studies-reports> August, 2016.
“Marketing to Millennials: 6 Studies & Reports You Need to Read” <https://www.sprinklr.com/the-way/marketing-to millennials-studies-reports> Accessed August 14, 2016.
Taken from Chekitan S. Dev (2013), “Challenges in Contemporary Hospitality Branding,” Cornell Hospitality Proceedings, 5(6), page 10.
An Insider’s Look at the 2016 Philadelphia Democratic National Convention: Hospitality and Inclusion at Work
By Erinn Tucker, Leora Halpern Lanz, & Juan Lesmes
There is a saying in events management, “If the event goes well, the client is congratulated. If the event goes wrong, blame the event planner.” This saying holds true when cities bid, plan and execute a spotlight event, such as the 2016 Democratic National Convention (DNC). The 2016 DNC was held in Philadelphia, Pennsylvania July 25th-30th with approximately 50,000 stakeholders who traveled to the city. These stakeholders were comprised of 6,000 delegates with families or constituents, 20,000 media and 24,000 guest, VIPs, dignitaries, donors and “Friends of the Party.”
What exactly is a spotlight event?
- The participants of spotlight events are either numerous, noteworthy, or both.
- It appeals to national or international audiences.
- It garners tremendous media coverage.
- The event automatically places its host city into the spotlight.
Cities are enticed to host such events because of the direct and indirect economic potential they bring. They also serve as a way for the city to reposition or rebrand its image within the country as a whole. Hosting a spotlight event such as a national political convention is a major feather in a city’s tourism cap.
With spotlight events, all segments of the tourism industry benefit from the offerings presented to the lodging, culinary, retail, and transportation sectors. During the recent DNC in Philadelphia, both hotel occupancy and hotel revenue increased by 10.3% and $16.3 million respectively as compared to the same period in 2015. RevPAR (Revenue Per Available Room) was 6.6% ahead it of what it was during the same time the prior year. It is predicted that the city generated approximately $200M from the DNC, pending a final report which will be released in late fall of 2016.
Hospitality Planning Used with a Spotlight Event
The Philadelphia 2016 DNC Host Committee and the Democratic National Convention Committee (DNCC), the two independent yet collaborative entities, worked together to ensure that diversity and inclusion were the primary themes of the event, and that hospitality was fully incorporated into the themes execution. A specific initiative called the Philly Ambassador Program was a substantial element in carrying out these themes.
The Philadelphia DNC Host Committee, a nonprofit organization, was responsible for raising funds and offering the city’s amenities. These funds help support and sustain the following: 
- Arena and Convention Center
- Delegate Experience
- Technology and Communications
- Digital and Social Media
- Housing and Hotels
- Diversity Business Outreach
- Neighborhood and Civic Relations
- Security and Transportation
- Volunteer Outreach
- Philadelphia Legacy
The Host Committee was comprised of leaders with varying backgrounds including professionals of the lodging, events, and restaurant industries. The committee assembled 10,000 volunteers to assist with all the needs before, during, and after the convention. A select 60 volunteers were selected to into the Philly Ambassador Program; which provided additional “concierge-like” services to visiting delegates. The selection process of these ambassadors was based on the volunteer’s knowledge of Philadelphia and the surrounding area, hospitality experience and the spirit to serve. The Host Committee used this best practice as a result of their previous experience during the 2000 RNC and then crafted four initiatives to ensure smooth hospitality and a welcoming ambiance:
Initiative #1. The “Donkey’s Around Town” was an installation of 57 fiberglass donkeys, each painted by a local artist, to represent a participating Convention delegation. They were placed in publicly accessible locations across the city and were also used to create a warm reception for delegates at their respective host hotels.
Initiative #2. The Pennsylvania State assembly passed a bill known as The Fiscal Code which allowed bars holding convention-related events to apply for special permits to stay open later than usual. This gesture acknowledged that the hospitality industry was a significant part of the Convention activities.
Initiative #3. Uber hosted a hospitality tent at the designated pick up and drop off areas at the Wells Fargo Center, the primary venue for the televised portion of the DNC. The tent included charging stations, Wi-Fi, bottled water, and light refreshments. During the last day of the convention, on Thursday, Uber provided ponchos and arranged for staff to escort riders from their Uber to the tent with umbrellas.
Initiative #4. The positive outreach from the Philly Ambassadors were supplemented by the equally positive welcome and friendliness of the local police. During the 2000 Republican National Convention, Philadelphia suffered scrutiny after the police arrested nearly 400 protesters resulting in numerous lawsuits. It is not unusual for activists to use a spotlight event to “spotlight” their own causes. However, for the 2016 DNC, Philadelphia designated specific, safe spaces for protesters and provided sensitivity training to both city police and all volunteers.
Diversity and Inclusion Planning Used with a Spotlight Event
The Democratic National Committee is the principal governing organization of the United States Democratic Party. In regards to this spotlight event, the Committee is therefore “the client” and worked closely with the local Host Committee in logistics planning and execution. The mission of the DNC is to present the Party’s nominee for President (Secretary Hilary Clinton) and share the Party’s platform to the delegates and the media during the Convention. This year the platform included civil rights, women’s rights, LGBT rights, rights of people with disabilities, and the protection of voting rights, placing diversity, inclusion and equality as the central theme.
This theme was also translated into the event itself. Inside the Wells Fargo Center were designated spaces for prayer, nursing, ADA services, recovery and wellness, a quiet room, and a first for the Convention, all-gender restrooms. The attention that was given to diversity and inclusion was paramount and notable.
Inclusion planning also considered guests with special needs via “convention troubleshooting” preparations. Delegates and attendees with special needs were provided with designated areas, and scheduled timelines were orchestrated to ensure that everyone was accommodated. For example, protesters inside the arena who supported Bernie Sanders were just as welcomed as Hillary Clinton supporters. In fact, unlike other political officials, Bernie Sanders was present at the DNC the entire week.
Outside of the Wells Fargo Center, protesters were given bottled water, EMT’s were stationed for health emergencies, and the city police was requested to not wear riot gear. This set an overall tone of a non-confrontational and inclusive environment.
Unfortunately, if something goes terribly wrong during a spotlight event, the city itself can be remembered with lasting negative images. As previously mentioned, Philadelphia was still remembered for the large number of protester arrest during the 2000 RNC. Chicago is still reminded of the images of the riot-plagued 1968 DNC convention, let alone Miami for the 1972 DNC in terms of a sheer fiasco, or even the 1868 DNC held in New York City whose slogan was “This is a white man's country, Let a white man rule”. The Convention has come a long way since these times as this change has been recorded and duly noted.
Therefore, with all of the bidding, planning and logistical needs of a spotlight event, the event overwhelmingly helps put a city on the map in terms of travel, tourism, and business environment. Further success is most often found when personalized hospitality is provided to all stakeholders. Even more, when themes like the 2016 DNC’s diversity and inclusion are genuinely felt throughout all aspects of the event, the city, organizing entities, and event are elevated into long-lasting positive spotlight moment.
Erinn Tucker, Ph.D. is an Assistant Professor in the School Tourism and Hospitality Management at Temple University. She has 20 years of corporate and academic experience. Her teaching and research is in the areas of event management and student engagement. She holds a bachelor's degree in business administration from Florida A&M University, a master's degree in sport administration from Florida State University and a Master’s in Business Administration (MBA) from Winthrop University and Ph.D. in Hospitality Administration from Oklahoma State University. Dr. Tucker served as a Philadelphia Host Volunteer Ambassador and was also on the Trouble Shooting Team during the 2016 Democratic National Convention. Email: firstname.lastname@example.org or Twitter @erinntucker
Leora Halpern Lanz is President of LHL Communications and a full time lecturer at Boston University’s School of Hospitality Administration. A graduate of Cornell University with a Masters from Boston University, Leora served for 15 years as Global Director of Marketing for HVS, one of the leading hospitality consultancies, 10 years as Director of Public Relations and Advertising for the ITT Sheraton Hotels of New York, and 5 years as the Director of Public Relations for the Greater Boston Convention & Visitors Bureau. During her Sheraton tenure, she actively facilitated the public relations, hospitality and logistical details at the 1992 DNC headquarter hotel, the Sheraton New York. Email: email@example.com or firstname.lastname@example.org Twitter @LeoraLanz2.
Juan Lesmes is a rising senior at Boston University’s School of Hospitality Administration (SHA). His studies and areas of interest include hospitality media relations and integrated marketing communications. Juan’s previous experience includes work at public relations firm DataMedia Communications Group and at digital marketing platform Let’s Get Weddy in London. He is currently working with LHL Communications and The Ritz London. Beyond his studies at SHA, he serves as co-founder and marketing coordinator of Boston University’s International Society. After graduation, Juan intends to continue his studies in hospitality marketing and communications.
 Philadelphia 2016 Host Committee Leadership, http://www.phldnc.com/committee/