The hotel industry can learn from outside trades and apply those lessons for operational success.
by Alicia Hoisington
Many industries look to hospitality and draw lessons to apply them to their own operations. From health care to residential real estate to banking, it seems outside industries are constantly looking to hotels to teach them great customer service, revenue management, communication lessons and much more.
But, that doesn’t mean the hotel industry can’t learn from others, too. Whether it’s drawing from retailers’ ability to differentiate from the competition, online travel agencies’ focus on the customer or the design industry’s keen eye for creativity and collaboration, there are plenty of takeaways hoteliers can implement into their operations for continued success.
Retail’s differentiation strategy
It’s no secret that many facets of retail are struggling, but even within the industry there are bright spots, and hoteliers should take note, according to Tim Peter of Tim Peter and Associates, a digital marketing and e-commerce consultancy.
For instance, Peter points to independent bookstores. Once in the crosshairs thanks to the likes of e-commerce retailers such as Amazon, these retailers have learned to reinvent themselves and have grown 50 percent in the last five to eight years, Peter says.
“They look at how they can differentiate. They say, ‘We’re not just another bookstore. We are special.’ That’s something hotels can do a better job at,” he says.
While Peter says many independent hotels already do a good job with differentiation, flagged properties can take notice. For one, independent bookstores make themselves community hubs by sponsoring local authors and hosting events.
“How can you become more tied to your community? Think about Hospitality 101, and sell the destination first to become a special place, something really distinct and interesting that is focused on the overall experience,” Peter says.
Select-service hotels, in particular, can learn from these bookstores. For instance, hoteliers can look to local restaurants for inspiration.
“You’ve probably walked into a select-service hotel and someone has slid the pizza delivery menu under the door. That’s not a great experience,” Peter says. “There’s got to be some cool local place that delivers, somewhere you can say, ‘I know you’re checking in and it’s late. Let me tell you what food is available.’”
It can be as simple as providing guests with a curated list of special local places to eat, one that perhaps includes a vegetarian place, a pie shop, or the like, and one that anticipates and accommodates guests’ needs.
Another example of the industry’s success comes in how retailers bring people into their stores, Peter says.
“Most of the retailers that are doing well understand the showroom, or using the space as a way to get people to buy regardless of channel,” Peter says.
He points to smaller companies that sell through Amazon as one of their channels. When customers purchase a product via that channel, extra details about the company are included in packages. Those details might outline about how the company is a local business trying to make a difference in its community. The note encourages customers to buy direct next time, specifying how the direct experience will be better than the Amazon experience.
“We should do the same thing,” Peter says. It’s akin to online travel agency (OTA) customers, who often aren’t treated as well as guests who booked direct.
“Sometimes we stick them in a small room next to the elevator,” he says. “We don’t want to make their experience terrible because that’s what they will remember. We want to give them the correct experience and help them understand why booking direct is even better still.
“Don’t punish the customer for making a choice. Make sure on their second stay they understand why direct is better,” Peter says.
OTAs’ customer-centric focus
Although the war between hotels and OTAs doesn’t seem as if it will end anytime soon, sources say there is a lot hoteliers can learn from the “frenemy.”
First, OTAs always put the customer first, according to Gino Engels, chief commercial officer and co-founder of OTA Insight.
“Everything they do is centered around serving the customer who goes onto their channel. In order to do that, they have tried to optimize the user experience,” he says.
Today’s customers want to be treated right and have the best experience at the lowest price, he says. OTAs have that in mind and address those points in their business model. But how can hotels emulate that?
Engels says it starts with offering a reasonable price with the least amount of friction possible. For instance, hotels can offer free cancellation to make bookings with as few pain points as possible. They can also offer certain amenities that will appeal to their target guests.
“Sometimes hotels think too much about revenue that creates barriers that scare guests away,” Engels says.
For example, OTAs are all about flexibility because they realize people don’t always plan trips in advance. Sometimes consumers don’t make a decision until the day of arrival, and OTAs capitalize on those last-minute bookings, Engels says. There is also no friction because, unlike many hotels, there is no fee to cancel a booking should consumers change their minds after booking.
Peter agrees that OTAs are focusing on the customer, as these intermediaries are beginning to realize that organic growth is coming to an end. Instead, OTAs are growing by connecting with customers at several other touch points.
“OTAs are looking to connect directly with guests and get more data around the guest experience on the value chain. We’re seeing moves into the on-property experience, largely from mobile,” Peter says. “There’s value in connecting with customers at those steps, and OTAs recognize that.”
Additionally, Engels says OTAs build their business models on transparency, always showing full reviews and pricing information. He says hotels should always strive to be more transparent in order to build trust and encourage consumers to book.
Personalization is also a key lesson from OTAs, Engels says. Many of these third parties are implementing membership schemes and offering guests something they specifically want that tailors to their needs and interests.
“The hotels are more still thinking of traditional segments,” he says. “That’s another big learning point from OTAs; they know those traditional segments don’t exist anymore. It’s not always business, leisure, corporate or group. One person could be traveling during the week as a corporate guest but staying overnight as a leisure guest.”
Finally, Peter says OTAs recognize that content is king, and they are investing heavily in it.
“They understand how important content is to answering guest questions,” he says. “We need to do a better job with content marketing and how we support the guest throughout the journey with the right content.”
Peter says when it comes to content, it’s important to work with the brand and then put a supplemental plan in place.
“It’s not an ‘us versus them’ mentality. It’s how you supplement, because the brands will struggle with content down to the local level,” he says, adding that hoteliers should think about what types of content they can provide about restaurants, events, concerts and the like in their markets.
“Put content in front of guests at different touch points that sells your value proposition more effectively,” Peter says. That might include triggered email campaigns, which might rely on the brand to help get those emails to certain segments of guests.
“Can you work with your chain and its data to create a more targeted offering?” he says.
Not only is content important for targeted marketing efforts, but it’s also critical for appearing in online search results, Peter adds.
“If you don’t have any content, people won’t find you. It’s critical for how you tell your story and how to get guests to tell your story,” he says. “There’s a reason why you’re important, even as a chain property.”
Design’s collaborative creativity
Design is an integral part of the hotel industry, yet hoteliers can learn a lot from a designer’s process that can translate into ownership and operational success.
Daniel Welborn, principal of strategy and design at The Gettys Group, says hoteliers can take away some key insights from a designer’s research process.
“We rely on research as a basis for everything we do. That includes really getting to know the existing building or piece of property being developed, its history and place within the context to the region or state,” he says.
Welborn says designers look at the competitive set through two lenses: both the economic and design aspects. It’s important for hoteliers not to just get caught up in the economic side of the comp set, he adds.
“If I’m a hotel that is maybe going for boutique status, I might not have any true competitors in market. I might have hotels selling for the same price, but they might not be competing for same target market,” he says. “I may want to look at an aspirational comp set in different markets, and discover how they have become leaders in other markers and how I can become a leader in my market.”
Welborn says research extends to what type of guest hoteliers are serving so that they can ensure they are targeting the right consumers.
“Look at target guest. If you don’t know who you’re serving, you’re not going to serve well,” he says. “If you don’t understand who your target is, you’re going to operate to the lowest common denominator.”
Additionally, Welborn says collaboration is vital to the design industry, and it’s something he encourages hoteliers to adopt in their operations.
“We run a series of workshops when we design and do branding. The workshop is about bringing all stakeholders around the table, working through problems and talking through things,” he says. “That’s something hoteliers should do. They should bring people into the process, get ideas and apply them.”
He says it’s important to note that collaboration doesn’t automatically happen when stakeholders gather around a table, however. Workshops need to be facilitated in order to be successful. Welborn says his team works through an exercise called “How Might We” during workshops. The conversation might be focused on the hotel restaurant, for example, and everyone will be tasked with writing down how they might best create a host experience or how they might create the food experience. Ideas will then be listed on the big board with top ideas receiving stars from the group, which then warrants further discussion.
“It allows us to have a facilitated process. It gets people engaged, and it gets people’s ideas out in variety of ways,” Welborn says. “Sometimes the smartest person in the room is the shyest or thinks their opinion doesn’t matter. You want that person just as engaged as the sales and marketing person or the CEO with the loudest voice who might dominate the conversation. You want everyone on a level playing field.”
Finally, Welborn says hotel owners and operators can learn from designers’ creativity, which is important for differentiation no matter the business.
“Just going by the manual of what you’ve been doing for 20 years isn’t going to win market share or help you differentiate,” Welborn says. “In the big picture, creativity is key in everything you do when you’re thinking about assets or operations.”
He cites lots of great ideas in the hotel industry that were born from creative minds, such as Kimpton Hotels & Restaurants’ wine hours. The event was created as a solution to the problem of guests leaving the hotel for other experiences.
“It was about how can they keep people there so that they may go to the hotel restaurant or some other place, or how can they keep guests there an hour to show they are appreciated and hopefully (hoteliers) can capture some business?” Welborn says.
In design’s creative process, teams work through issues in an interactive environment, which allows for new ideas that go beyond the old way of doing things. Working the problem forces creativity to happen instead of relying on the same solution to the same problems, he says.
“That can get stale. You can never get stale in this business,” Welborn says. ■