Chain Brand Diversity Opens New Marketing Opportunities for Independent Hotels.
By Neil Salerno
Monday, 14th August 2006
Has the wide diversity of hotel brands created new opportunities for independent hotels? It seems that an argument can be made that there are now so many different brands that even the most experienced traveler has a difficult time discerning the differences among them. The explosion of new and resurrected brands in recent years has out-paced the industry's ability to define them to the public.

Companies like Holiday Inn, Quality Inn, Hilton, Sheraton, and others spent many years defining their core brand hotels to the traveling public, resulting in great successes. Their core brands became household names; independent hotels were mostly invisible in the marketplace unless they had the marketing resources to compete with the giants. Well, that's in the past.

Beginning in the 80's, many new limited-service brands exploded onto the scene designed to serve specific segments of business in secondary and tertiary markets. This re-vitalized a waning industry when we needed it the most, but the sheer number of them has overwhelmed the marketplace. Most experienced hoteliers would have a difficult time defining the differences among them; some would have a difficult time even naming them all.

The result has been that brand attributes are fuzzier and less defined than ever before. This is good news for independent hotels.

Brand Loyalty is More Elusive

Making loyalty choices was much less complicated years ago. Loyalty decisions were based upon the public's perception of the brand's rate value, facilities, and service standards. Today, traveler choice is more focused on location then ever before.

Brand loyalty reward programs, which were steeped in controversy just a dozen years ago, are now the remaining positive link which ties brands together within franchises. Although reward programs have been proven successful among frequent travelers, the jury is still out to decide their overall cost-effectiveness with all the products within a franchise.

If this is anything more than just speculation on my part, it's really good news for independent hotels. The sheer diversity of hotels can place independent hotels on an equal footing with the brands within their own markets. With the advent of the Internet, every hotel, franchise or independent, has the ability to promote their property within their own market location.

The Search Dominated Internet

More-over, the search-dominated Internet favors individual hotels versus brands. A clear majority of hotel searches on the Internet are generic searches by location and not by brand name. Hotels, with search optimized web sites, have a clear advantage. The biggest obstacle for independent hotels has been that many of them have been slow to optimize their web sites to conform to evolving search engine requirements and are of poor or out-dated design.

A few years ago, several franchises began to exercise their dominance over their members by forbidding their members to have their own hotel web sites. This was obviously driven by their fear of losing control over Internet production and thereby weakening franchise originated reservations. After-all, the ability of the franchise to generate incremental business is the principle reason to have a franchise.

This may sound harsh because franchises do offer additional services which are beneficial to their members, but I believe that several of the franchises over-reacted to the incursion of the third-party suppliers' dominance of the Internet. If they had given the situation more rational thought, as did some franchises, allowing members to create their own web sites actually contributes to the brand's exposure and popularity. Brand web sites are not focused on location.

Independent Hotels Find a Way to Compete

Many independent hotels have begun to flex their marketing muscle by using techniques borrowed from successful franchises. One such independent hotel in Sarasota, Florida, the Hibiscus Suites Inn is a great example. Open for only a little more than a year, Bob Brilliant, the hotel's owner, modeled much of his hotel's upscale design, its operating standards, and its marketing program after his favorite franchises.

His first steps were gigantic steps for a small independent hotel. He immediately commissioned a functional web site to be developed and created a comprehensive link and Internet marketing program to support his web site, which currently produces more than 50% of his total business. His site can be seen at www.hibiscussuites.com.

His next step was to create a connection to the GDS to promote travel agent and airline bookings; and teamed with, instead of complained about, third-party Internet suppliers. In addition, he set up a search engine pay-per-click program which has generated an 800% return on his investment.

He also borrowed some marketing techniques from larger hotels which include electronic mailings to past hotel guests to promote repeat visits. He developed a strong presence on local third-party web sites, such as AAA, CVB, Chamber of Commerce, and local booking portals and he even used his knowledge of the local market to shape the hotel's amenities package.

Instead of simply sitting back and waiting for business, he closely examined the competition, learned their strengths and weaknesses, and created programs to take advantage of those weaknesses.

This all combined to make his hotel a dominant factor in the Siesta Key Beach marketplace in a very short time. The hotel's RevPar continues to dominate its entire competition-set.

Independent hotels can distinguish themselves on the Internet by creating a presence and dominance of their local market. Take advantage of the majority of travelers who don't have a brand preference and find your hotel by its location, the most popular search. Location is still the principle factor in hotel selection; you can dominate your local market.

Neil Salerno, CHME, CHA
Hotel Marketing Coach


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