The hotel industry is more commoditized than ever before. Here are six ways to fight back and make your brand stand out.
The dirtiest word in the hotel industry is “commoditization.” The dirtiest acronym? “OTA.”
The two go hand in hand, argue many hoteliers. The price-driven peddling of online travel agencies like Expedia, Priceline and Travelocity made the booking process all about rate. Guests are less likely to seek out specific brand and hotel chains than ever before, favoring instead basement-bottom bargains and deals.
That’s causing a lot of anxiety in hotel company boardrooms, said Peter Yesawich, chairman and CEO of Ypartnership.
As it should. The rate erosion spurred by the Great Recession created what STR’s Mark Lomanno called an “aura of commoditization.”
“All your branding measures are trying to create differentiation, but secondarily the message consumers get is really about price,” said the research company’s president during a recent panel at the AH&LA Hospitality Leadership Forum.
Hotel guests are learning to associate properties through the distribution channel through which it was booked.
“People say, ‘I didn’t stay at a Marriott or Holiday Inn, I stayed at an Expedia hotel,’” said STR co-founder Randy Smith during the keynote address at this year’s Cornell Hospitality Research Summit.
But all is not lost. Brands still play an important role in influencing traveler booking behavior. Fifty-eight percent of surveyed American leisure travelers said brand names still are an “extremely” or “very influential” part of the hotel selection process, according to Ypartnership’s 2010 Portrait of American Travelers survey.
While differentiating your hotel brand is harder than it’s ever been before, here are six ways to get started:
1. Identify what you can bring to the table.
This is make-or-break for some hotel brands. Some concepts simply won’t succeed because, quite frankly, there was never a need for them in the first place, said Bill Tucker, CEO of Agency212, a firm that conducts brand marketing for Loews Hotels and other chains.
“When you’re in the early process of developing an idea and then building a brand, the worst thing you can do is not have a very, very, very clear rationale for why you’re doing this and how you’re going to differentiate it.”
Ask yourself, “What does my brand or hotel chain bring to the table? What are the unique selling points that set me apart from my competition?”
Tucker calls those points of differentiation Reasons to Believe—or RTBs. They’re the reasons customers would choose your brand over a competitors. Identify them, leverage them and work them throughout the five remaining steps.
2. Offer more than price.
Nothing agitates STR’s Lomanno more than irresponsible pricing policies. If you base your entire selling proposal on price—or in the case of the recent downturn, how low you can set that price compared to your competitors—then you’re sending consumers mixed signals about the importance of your unique selling points.
“From an online standpoint, everything has been so ROI-driven and so transactional-driven that everyone cares about the booking that the brand side of this has kind of gotten lost a little bit,” said Dave Pavelko, Google’s head of travel, during a panel at the Cornell Dean’s Leadership Series last month.
Go back to those RTBs. Once you’ve identified them, show them off. Brand differentiation is about what makes you unique—not who can set the lowest rate.
3. Deliver on your promises.
A RTB is a promise. By leveraging your unique selling points, you’re literally telling guests, “Here’s why we’re different. Here’s why you should believe in us. Here’s why you should stay with us.”
Break those promises and you lose the guest forever, Tucker said.
“It is so performance driven,” he said. “We can all claim whatever it is we want to claim and come up with the core values we want to communicate to the consumers ... but the problem is if we don’t walk the walk—especially in this day and age—we won’t last long. There’s no fooling anybody in this industry.
“It is very, very, very hard to differentiate one property from the other if you don’t perform,” he added.
4. Satisfy with service.
You might not have the best facilities on the block. Your carpets might be worn and your amenities might be limited. But you should do your damnedest to please.
“The way to differentiate yourself is on service,” said Sherri Kimes, a professor at Cornell’s School of Hotel Administration.
Speaking during the Cornell Dean’s Leadership Series last month, she briefed attendees on findings of a spring study she conducted. During the downturn, Kimes reported, one of the largest points of differentiation between brands was service.
If you don’t give customers the service they think they’re going to get, they’ll go elsewhere, she said.
5. Clearly communicate your identity.
It’s one thing to understand your brand, to know the DNA to its very core, to identify those RTBs—but if you can’t articulate those things to your consumer, you have nothing, Tucker said.
A good example of a brand that clearly communicated who it was and how it was different was Holiday Inn and Holiday Inn Express, Google’s Pavelko said.
Parent company InterContinental Hotels Group did a good job marketing the brand’s relaunch, he said.
“Consumers knew what the refresh was about, what was new and what was different,” Pavelko said. “The hospitality industry needs to think of what’s next over the next five years and what they need to do to bring their brand to the forefront.”
6. If all else fails, reinvent yourself.
One of the reasons there are so many new brands entering the market, sources argued, is that it’s so hard to reinvent the brands that exist today.
“The challenge with brands is, once you have a brand image well established … then it becomes very difficult to amend that,” Yesawich said.
That doesn’t mean it can’t be done.
Westin, for example, famously reinvented itself on the soft, feathery foundation of its Heavenly Bed. Through the Heavenly Shower and the Heavenly Bath, what once was a stodgy old brand reserved for the 50-plus business crowd became young and new.
“All of those things contributed significantly to the altered perception of Westin,” Yesawich said.