4Hoteliers
SEARCH
ITB 2023 Special Reporting
SHARE THIS PAGE
NEWSLETTERS
CONTACT US
SUBMIT CONTENT
ADVERTISING
Toxic Hospitality Marketing Strategies.
By Madigan Pratt
Sunday, 25th October 2009
 
Speaking before a conference of luxury Italian companies, luxury hotel operator Rocco Forte offered a stunningly concise summary of the toxic hospitality marketing strategies used by far too many hotels in these recessionary times.

"What happens in a hotel cycle [during a recession] is always exactly the same. Revenue dissipates, occupancies go down, hoteliers then sacrifice rates, discounting to boost occupancy. As they discount rates, they also decrease services and they cut back on every item of expense. Rates continue to fall as occupancy rises." [Bloomberg Report]

Despite research from Cornell University, Smith Travel Research, PKF Consulting and others stressing that this is absolutely the wrong approach, hospitality marketing professionals continue to follow the same tired, brand destroying marketing strategies every time a recession comes along.

While travelers are looking to save money, they still expect a quality experience - especially luxury travelers. The experience is what most hotels advertised before the recession and what they built their brands upon. But is it being delivered now? With fewer staff to take care of their needs, reduced amenities, and more hidden charges, the quality of the experience is waning. Also waning, no doubt, is guest loyalty.

The Price of a Poor Experience

On the Harvard Business Publishing Blog author Peter Bregman recently wrote a great article entitled, "The Price of a Poor Experience." In it Mr. Bregman presents interesting findings from research among hundreds of non-profit organizations and their successes and challenges to retaining members during the current economic downturn.

This is pretty much the same challenge luxury hoteliers face. They want to retain customers, encourage repeat visits and generate positive word-of-mouth - the most powerful form of advertising.

Here's what the research showed:
  • There is no correlation between membership and price increases. In other words, customers didn't leave simply because an organization raised its prices.
  • There is a direct correlation between membership and how likely a customer is to recommend the organization to a friend. This is known as the net promoter score - think of it as your word-of-mouth score.
If customers like an organization's products or services enough to recommend them to others, then that organization could raise prices, even in a down economy, without losing customers. But if the organization downgraded the customer experience, then even lower prices would not prevent customers from abandoning it.

One could argue hospitality is drastically different, but human nature is the same across all categories. In the highly competitive hotel industry, people may be looking to pay less today but still expect to receive good value. Cutting rates while diminishing the guest experience will decrease a hotel's "net promoter score" and brand value, which makes it more difficult to recover when the recession subsides.

Following a toxic hospitality marketing strategy can prove fatal. Cornell University, Smith Travel Research and PKF Consulting have written extensively on the topic recently.

Stay tuned to next post to learn what hospitality marketing strategies are successful in a recession and helped a small luxury hotel prosper in difficult times.

Madigan Pratt is Managing Director of Madigan Pratt & Associates, Inc., an innovative CRM company dedicated to acquiring and retaining profitable customers for luxury hotels. Prior to founding MP&A in New York two decades ago he held senior management positions overseeing marketing communications for several Fortune 500 companies.

www.HospitalityMarketingBlog.com
Global Brand Awareness & Marketing Tools at 4Hoteliers.com ...[Click for More]
 Latest News  (Click title to read article)




 Latest Articles  (Click title to read)




 Most Read Articles  (Click title to read)




~ Important Notice ~
Articles appearing on 4Hoteliers contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.
© Copyright 4Hoteliers 2001-2023 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here
Use of this web site is subject to our
terms & conditions of service and privacy policy