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Hospitality Executive Interview

How are progressive small luxury hotels starting to take their marketing to a higher level?

Ritesh Gupta  Apr 14, 2011

Hotels must find a balance between friendly, informative messages and sales messages. Resource allocation is a major issue for small- and mid-sized hotels owing to a vast array of new media and channels and increasingly limited budgets.

Every hotel, according to target="_blank">Madigan Pratt, MD, Madigan Pratt & Associates, has to combat its own individual challenges and opportunities.

Considering this, Pratt recommends nine areas to contemplate:

Online Travel Agencies
Hotels needs a presence on the OTAs to build awareness and bookings. The general consensus - and we concur - is OTAs should represent between 12-20 percent of total bookings. If a hotel is either below or above that range, steps need to be taken to bring it in line. Commissions paid to OTAs, often hidden from hotels, can be staggering and take away from budgets hotels could use to develop CRM/eCRM programs that drive more profitable direct business.

Hotels should do a cost/benefit analysis of investing in CRM. At first glance it might seem expensive, but the rewards can be staggering. We know of one small luxury hotel that was able to track US$1.5 million in direct business to just the email portion of its marketing budget.

Being able to quantify the ROI on various marketing activities has never been more important for hotels. Invest in the tools you need to accurately measure performance so you can stop spending money on activities producing sub-optimal results.

With all the changes taking place recently with Google, there has never been a more important time to make sure your website is fully search engine optimized. If the hotel’s website is over two years old, you might consider having an independent web audit done to see what changes, if any, are needed to maximize visibility.

Mobile Site
With smart phones projected to outpace PC sales this year, having an optimized mobile web site is no longer an option - it's a necessity. Luckily, developing a mobile site is far less than a traditional website and will also help with search.

A keyword-rich and well-maintained/updated blog can help increase visibility, as well as enhance the visitor experience. Many hotels have blogs, but unfortunately high percentages are not updated on a regular basis.

Continue to maintain an active Facebook Page. Monitor those posts that produce the most comments and interaction. Incorporate a booking engine, conduct surveys, launch promotions, and request feedback. Be as involved as you would like your "fans" to be.

If your budget allows, consider adding pay-per-click marketing, but set up goals and monitor its effectiveness relative to other media you are using. Measure ROI.

While new media like Facebook, Twitter, Foursquare, and SCVNGR are "free," in truth there are real costs involved with implementing them - manpower costs which can add up. If you have the resources, feel free to experiment with new media. But be sure to develop specific objectives from the start to help evaluate program effectiveness. Do it right if you have sufficient resources or don't bother. Hotels are better off doing fewer things well than many things poorly.

Pratt, who is scheduled to speak at the forthcoming target="_blank">Online Marketing Strategies for Travel 2011 Conference, to be held in Miami (June 7-8), spoke to EyeforTravel’s Ritesh Gupta about the latest marketing trends and the usage of all the customer touch points including social media and mobile to engage customers. Excerpts:

Can you highlight some of the latest trends featuring small luxury hotels and their marketing initiatives? Has there been any path-breaking work in terms of planning and execution of campaigns over the last six months or so?

MADIGAN PRATT: There are four major trends I have noticed recently showing that more aggressive and progressive small luxury hotels are starting to take their marketing to a higher level. These include:

Embracing CRM
There are a number of solutions on the market today that make customer relationship marketing possible for small luxury hotels. These solutions tie into a hotel's PMS and provide hoteliers with a sophisticated marketing database once only affordable to larger hotels and chains.

In addition to licensing the software, hotels are also hiring the marketing expertise required to segment the database and develop strategies to take full advantage of CRM/eCRM. The main reason hoteliers are embracing CRM is to build stronger relationships with customers and drive more profitable direct business.

Hoteliers are demanding that their marketing efforts provide a positive return on investment (ROI). We are seeing more properties incorporate call tracking mechanisms into all their communications including traditional advertising, public relations, and Internet marketing efforts.

With increasingly constrained budgets, hoteliers need to know what works and what does not. Spending money on marketing efforts or in media that is not producing is no longer an option.

With the ability to better measure marketing performance, has come an increase in marketing testing. The more progressive hoteliers really do want to know what media, market segments, offers, and messages will produce the most profitable return.

Social Media
Like hotels everywhere, small luxury hotels are working on ways to make sense of social media and integrate it into their marketing programs. Constrained by budget and manpower resources, hotels are working on separating the opportunity from the hype while trying to measure ROI.

Facebook, blogs, and Twitter are proliferating with varying degrees of success. There are small hotels with over 10,000 “fans,” while others are struggling to reach 500. A relatively few small Caribbean hotels have begun incorporating an online booking engine onto Facebook.

More and more hotels have begun adding blogs to their sites to keep visitors abreast of news at the property and destination. Advanced bloggers are taking the time to make sure posts are keyword rich for better search engine visibility.

How can one use all the customer touch points including social media and mobile to engage customers? What, according to you, are the major challenges in doing the same?

MADIGAN PRATT: Hotel marketing now has more channels to effectively communicate with customers before, during, and after their stay. Different media are more appropriate at different points in time, but whatever a hotel chooses to do, they must be able to deliver the same high-quality experience the hotel provides when a guest is actually on property. Email marketing can truly help a guest make the most of their stay by encouraging planning key elements of their itinerary before they arrive on property.

Engaging content across channels is critical. Hotels need to recognize that the end goal is an emotional relationship that holds up over time. Hotels can stay in touch with news and photos and be thought of as one's "favorite hotel" even though it may be years between actual visits.

One challenge is determining the optimal frequency of communication for different market segments and messages. Hotels must find a balance between friendly, informative messages and sales messages. Too much outright sales emphasis can be a turn-off.

A second challenge is integrating messages across the different media. The messages are not the same but must reinforce the core brand messaging and work together as part of a cohesive, actionable plan that can be measured. Managing the communication plan is a responsibility that should be assigned to a key staff member or a lead agency if a hotel is using a variety of different communications organisations to deliver its message (Internet companies, public relations firms, and advertising agencies).

target="_blank">Madigan Pratt, MD, Madigan Pratt & Associates is scheduled to speak at the forthcoming target="_blank">Online Marketing Strategies for Travel 2011 Conference, to be held in Miami (June 7-8). The event program can be found target="_blank">here or contact: Gina Baillie, GM, EyeforTravel, E: , T: UK +44 (0)207 375 7197, US Toll Free: 1 800 814 3459 ext. 7197

How are progressive small luxury hotels starting to take their marketing to a higher level?
Madigan Pratt / Image via


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