Historically, guests sought out brands for their loyalty programs and the consistency they offered. These were important for years, when the hospitality field was dominated and defined by well-known names such as Marriott, Holiday Inn, Hilton, Hyatt, Starwood and the famous membership organization, Best Western. Those brands and the membership organization continue and remain powerful.
I must admit that I, too, sought out such brands in the 1990s as a road warrior eager to stack up their loyalty benefits for my personal travel.
With the growth of the Internet and third-party providers, however, the terrain began to shift; online transparency paved the way to what we now think of as soft brands, which broaden, complicate and sometimes blur the picture.
Could it be that the customer actually didn’t care as much about the consistency as their ability to predict the quality of their upcoming stay? Could it be they still care about obtaining some loyalty benefits? People can now easily see the hotel’s pictures, labeled and presented by both the hotel and the customer. People can easily see reviews posted by past guests. People can search and find a hotel based on reviews, pictures and amenities first – and name second.
In response to changing travel patterns and interactions between the guest and the hotel, the legacy brands have begun marketing their boutique brands, such as Starwood’s W and soft brands such as Choice’s Ascend or Marriott’s Autograph.
Keep in mind: Hotel collections such as Preferred Hotel Group, Leading Hotels, Chic Retreats and InnDependent Boutique Collection (IBC) have been doing this longer than many of the new soft brands. Why do they command so little attention when together they control more hotels than the historical brands and their newly minted soft brands?
How do collections differ from brands and soft brands? Are there different reasons motivating hotel owners to join a brand, soft brand or a collection? Are brands better or different from soft brands and collections? Why do the prices vary so widely between brands, soft brands and collections?
As hotel owners, members of the IBC team frequently ask ourselves this question; we are bombarded by sales and marketing literature, and our history suggests we should closely examine these options.
Technology should work, be flexible, and help hoteliers run their hotel while solving the need for maximizing total RevPAR. That means that net rates should be taken into account during revenue management as well as helping the hotel look favorable and enhance guest service and loyalty.
In my opinion, brands, soft brands and collections all offer much of the same thing: a technology platform with collection benefits. At the end of the day, as hotel owners, we all want robust technology, purchasing power, a loyalty program and unique revenue that doesn’t take away from our direct bookings. Now, sales and marketing literature will suggest otherwise – quite successfully. The Internet has certainly changed the way travel is booked, and fragmentation is ever greater.
There still are property management systems, but now some PMS are “smart” and can connect and function similar to relatively new market entrants Channel Management (CRS) and Revenue Management Systems (RMS). Some CRS And RMS share full guest information and some don’t. Sure, at check-in, we can collect the full guest information, but doing so adds one more friction point. As hotel owners, before we sign a brand, soft brand or collection contract, how often do we ask, “Do I get full information?” or “How powerful is your API connection?” or “How many unique visitors are you attracting or what channels do you connect with (besides the obvious OTAs and GDSes)?”
Another important question the hotelier should ask is whether the company is licensing the technology or owns and built it? Naturally, technological change is a concern. Why would a hotel want to sign a technology contract for anything other than month-to-month when the technology is moving at light speed? So many contracts are multiyear, a concern to hoteliers who don’t want to tie up their properties.
According to http://roadwarriorvoices.com/2015/03/27/boutique-hotels-missing-opportunity/, the loyalty program has always been a solid measure of the brand offering, but that is changing with InnDependent InnCentives, Stash and Voila. These programs available to independent and boutique hoteliers differ based on hotel location, amenities and desired cost structure. At press time, InnDependent InnCentives was the only loyalty program that includes 20,000 independent and boutique hoteliers and the least expensive.
An interesting reference was made in http://www.tnooz.com/article/billboard-effect-hotels/ regarding Lazy Man’s Approach. Back in 2011, HeBS Digital coined the expression, “Lazy Man’s Approach,” in referring to hotels relying on the billboard effect for their online distribution and thus justifying working closely with OTAs. The fact is, the billboard effect is only one element of a complex online distribution ecosystem that hoteliers and hospitality marketers ought to master in order to succeed and achieve their business objectives. Studies show the billboard effect may not be driving direct bookings after all. In our opinion, “Lazy Man’s Approach” also applies to hotels depending upon their brand and soft brand to drive direct reservations. How do you market your own hotel and independent brand message? Who is working for you to ensure you are driving direct bookings?
Nowadays, hotels must ask more questions of their brand/soft brand/collection/technology partners and embrace omnichannel marketing. That combines content marketing, traditional advertising and digital tactics across various platforms, social networks and devices. There are no silver bullets today – it’s competitive out there, but there are a handful of companies that can and do cost-effectively drive RevPAR for hoteliers.
Online bookings and distribution are evolving and becoming more complex, with new channel managers and partners as companies are constantly integrating and expanding. In this evolving landscape, Google is now a pure player, Amazon is getting serious about destination travel, TripAdvisor is morphing into a real OTA, Expedia is digesting Travelocity and Orbitz acquisitions made earlier in 2015 while Priceline is getting serious in the China travel distribution market.
With rate parity clauses under heavy fire in Europe, it’s only a matter of time until these changes come into play in North America and elsewhere across the globe. Of course, this is where the private channels and marketplaces are making a serious bid, providing an opportunity for hoteliers since private channels don’t break parity and they increase distribution and direct bookings. Discussion boards persist, asking how can hotels convince Internet users to book on their own website rather than on an OTA. Most don’t share their lucrative secret weapons and the most successful rely on power distribution and retargeting software with captured guest information.
Ensure you receive full guest information from your partners. If you don’t, start shopping for new partners. Having full guest information allows you to send out emails, newsletters and drive repeat guests at no acquisition cost.
Ensure you have a rewards program. If not, look into the three loyalty companies mentioned before (Stash, Voila and InnDependent InnCentives). Many will waive the sign-up fee and are as low as 4 percent of top-line revenue per reservation.
If you are dedicated to or locked in with your brand/soft brand and don’t have the capability to send out emails/newsletters, ask your brand/soft brand/collection to feature you and sponsor your specials for you. Sending out special offers or value-add promotions is always a good practice, especially when addressing your customer base. Let them know about your best rates, or perhaps even implement a refer-a-friend discount or promotion while you’re at it. Look into retargeting software if you haven’t done so already. Some collections will do this for you if don’t have the manpower or in-house knowledge. Then, at the first opportunity, start looking at hotel collections. The flexibility and cost savings might surprise you.— Pamela Barnhill
This article initially appeared in Hotel Business Review