Hoteliers take a wild guess and generalize why people stay in their hotels. The main reason to know more about why the guest chose a particular hotel is to understand better how to spend marketing dollars. A lot of marketing is a massive waste of money, so knowing if the marketing did any good is vital for the future success of a hotel. Hotels tend to be managed by intuition and experience rather than data and science. Many hotels are still reasonably successful, so is this by chance, luck, or hard work?
Pure luck if there is no other explanation
Booking used to have a feature where a hotel could see which hotels the guest looked at before booking. Hotels then knew who they competed with for the guests. Still, the hotel never got the information why the guest finally decided to book this specific hotel among all the available choices. If the reason is unknown, it is pure luck that the hotel was present in the distribution channel where the guest decided to book.
Fishing in the OTA lake
Let's increase our luck and sign up for a distribution channel, such as Booking or Expedia, and hope that we will catch some reservations. It is like fishing. You through something shiny in the water, hoping to catch a fish. Hotels receive reservations and happily pay the commissions.
Email blasts might catch guests
The mega-chains frequently send email blasts to millions of people about their unique offerings. Some will book. Again, pure luck. If it was not luck, why not only send it to those who actually had the intention to book?
Adjust the rate
Many hotels believe that the rate is of the utmost importance to get the booking, so they update their rates with the help of revenue management or pricing systems several times every hour. This is like fishing using the rate as the bate. Pure luck if you catch a booking since you do not know if it was the adjusted rate that tipped over and made the guest book your hotel.
The weather is terrible once in a while, so many flights are canceled. The passengers need to spend the night close to the airport and therefore need accommodation at nearby hotels. Lousy weather is pure luck for those hotels.
Social media fishing
Let's also be present on social media. For example, someone might see the hotel and make a reservation.
The list can go on and on. But unfortunately, too many hotels are lazy and only make sure they are available to book and then sit and wait on becoming lucky.
Hard work leads to success
Hotels that do not trust luck have created a well-thought-out strategy to lead them toward long-term success. Their priority is to work hard to attract the right guests actively. Here is a list of actions that improves the chances of success.
Understand the demand
Hotels that understand the demand patterns for the destination do not waste marketing dollars when the chances are very slim that marketing has any effect. With a better understanding of when the demand is the highest, high, low, and the lowest, hotels can plan campaigns better.
Find the right segments
A better understanding of the demand also includes insights into different segments and their behavior. If you try to please everyone, you’ll please no one. It is better to carefully select a few market segments and offer them something superior to the competition. If the offering is so much better, the rate is less critical. Apple's Tim Cook said, "Price is rarely the most important thing. A cheap product might sell some units. Somebody gets it home, and they feel great when they pay the money, but then they get it home and use it, and the joy is gone." The same thing happens in a hotel. Guests book a cheap room and feel great when they get a good bargain, but they arrive and end up in that cheap room; the joy is gone. The hotel will get a bad review and never see the guest again. It is much harder to find the right guests and make their guest experience remarkable.
Lower marketing costs
Once you know your target audience, marketing becomes more manageable. For example, the hotel can send marketing messages to the target group in channels where they like to be. The return on investments in marketing will increase, which means that the guest acquisition cost will go down.
Sales vital to future success
Proactive sales in hotels require skills and knowledge. It is hard work to close those negotiated agreements with many promised room nights. All hotels need clever salespeople to build a solid base and ensure they are in the game when the travelers start to book. Implementing the agreement is another effort that pays off in fulfilling the contract or even a bit above.
Reactive sales require skills and speed. The incoming inquiries should be answered with suitable offerings and rates within hours to compete for the business. This is all about a well-designed process that ensures a high win rate.
The guest experience
Hotels that try harder to create their future never leave the guest experience to chance. They have designed the guest experience based on the needs of their target audience. These hotels want their guests to rave about the hotel to their friends and colleagues and return many times in the future.
A final reflection
Before the pandemic, the travel industry had an annual growth rate of 4-7 % for at least ten years. The guests just kept coming, and it was not very difficult to become a successful hotelier. During the pandemic, it wasn't easy to succeed. Some hotels did much better than others and have recovered faster than the market. Hotels that wait for the luck to return will continue to wait while the hotels that invest in hard work will succeed.