Hospitality Marketing Blog

Social media is becoming increasingly important in the hospitality industry. All the thought leaders in Internet marketing are pushing it and hotels are scrambling to adapt to the new social reality. Hoteliers need to step up social media efforts to master at least the key media – Facebook, Twitter, YouTube and now Google+.

But if you listen real closely the most influential social media professionals are delivering two very important messages:

1. “Social media is a customer engagement channel and not a distribution channel in hospitality” – Max Starkov, Smart Hotelier’s 2012 Top Ten Digital Marketing Resolutions

2. “What’s the ROI of social media? That’s the million-dollar question that every marketer and brand manager would like to answer — and yet, we still can’t do it.” – Erica Swallow, Mashable 11/15/11, Measuring Social Media ROI: 3 Things to Consider

As chronicled extensively, social media helps hotels engage and build relationships with guests and potential guests. But if it’s not a distribution channel and you can’t measure ROI (at least not all that well today) what can you do if your hotel’s primary objective is to generate sales?

There is an alternative; a medium where you can engage customers, build relationships and generate sales. It has proven to return as much as $33 for every $1 spent. A small luxury hotel committed to using best practices and spending $60,000 in this medium could see a return of over $1,500,000 in revenue.

You are using this medium today, but how effective have you been? Find out by answering these 12 questions: Be honest!

Score 1 point for every question answered “Yes.”  Post your score: __________

Your answer to every question should be “YES.” How did you do?

What is this magic media? It is the most powerful yet misunderstood media in hospitality marketing today. If you guessed email you are only half right. It is email wrapped up in the real science direct marketing.

There is a fundamental problem with the majority of hotel email marketing programs today. The people who are writing the copy and creating the images, approving the email and pushing “Send” have never really been schooled in the science of direct marketing.

Direct marketing is a science for getting people to take action, to pick up the phone or click through to your website. It is not creative writing in the classic or advertising sense. It is different – very different and only a few hoteliers understand this. It is not a broadcast medium where you can blast out messages, but one when properly crafted and segmented can deliver highly motivating and relevant messages that get people to act.

It is also a medium that can help you create a dialog and build a relationship with customers – just like social media. And when used properly it can generate a significant amount of sales revenue with a proven ROI.

If you are serious about sales and scored less than 10 on the quiz then you should seriously rethink your your approach to marketing and sales. Continue to pursue your social media efforts, but commit your hotel to following direct marketing best practices  – a discipline with a proven ROI. Commit yourself to being able to answer a resounding “Yes!” to the questions above.

Hospitality Marketing Blog has numerous articles on how hotels can improve their direct and email marketing efforts. It’s a good resource for starting your journey toward best practices and higher sales.

We have managed hotel email marketing programs, steeped in the science of direct marketing that delivered $33 for every $1 spent. And the majority of the bookings came direct from the consumer to the hotel. Put in hotel sales terms, that’s the equivalent of paying a 3% commission on a direct booking. Best of all you are building a relationship with guests and prospects not giving it up to a third party.

What you think?

Madigan Pratt

Tags: customer relationship marketing, database marketing, Direct Marketing, Email Marketing, email marketing for hotels, hospitality roi, luxury hotel marketing, small luxury hotel marketing, social media, successful marketing

Last month my blog post – “Can Your Hotel Afford to Ignore Google+?”  speculated that it was only a matter of time before Google started incorporating Google+ social signals into website rankings.

That time arrived quicker than I thought. Starting now smart hoteliers need to begin embracing Google+ as a major component of their Search Engine Optimization (SEO). Those who move quickly will have a significant competitive advantage over the laggards.

Rand Fishkin at SEOMoz provides a short video of things to come in search and addresses how important having a significant presence on Google+ will be to increasing your hotel’s SEO and visibility on the web. This may be the most informative and productive 12 minutes you spend on the web this week.

Click to view short video on Google+ and SEO

It will no doubt make you rethink your Internet, social web and SEO strategy. How will you address this new reality and be more relevant to guests, potential guests and to Google? After pursuing Facebook fans for years how much should you now be emphasizing Google+?

The visibility of your hotel in search results depends on the decisions you make right now. Think about your social media strategies now and make the right choices.

So, “Can your hotel really afford to ignore Google+?” After watching the video I think you will agree…the answer is a resounding NO!

Madigan Pratt

PS – Once you set up your Google+ account and start building your social circles, please send me an invitation to join.

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Tags: Facebook, Google, search engine optimization, SEO, social web

“Today, the U.S.P. is perhaps the most misused series of letters in advertising. It has been picked up by hundreds of agencies and has spread across the country. It is now applied, loosely and without understanding, to slogans, slick phrases, strange pictures, mere headlines – in fact, to almost anything which some writers consider slightly different from what they find in competing advertisements.”

I didn’t write this. Rosser Reeves, Chairman of the Board of Ted Bates wrote it over 50 years ago in his seminal book, Reality in Advertising. The intervening years, and decades for that matter, haven’t added much clarity to the situation as the U.S.P continues to be one of the most misunderstood terms in marketing today.

So what exactly is a U.S.P.? In reality it is a way to get leverage for your hotel over competition and to let targeted consumers know you represent the superior choice. A strong and clearly articulated U.S.P. well executed throughout all aspects of marketing and communications will lead to above average occupancy and revenue.

The U.S.P. or Unique Selling Proposition is best defined by describing each of its three parts starting from the back:

1. Proposition – Each brand must make a proposition to the consumer. In essence that proposition must say, “Buy this product and get this benefit.”

2. Selling – The proposition being made or the benefit being offered must be one your target market wants to buy.

3. Unique – The proposition must be one the competition either cannot, or does not, offer. It must be unique – either a uniqueness of your resort or through a claim not otherwise made.

While on the surface it may appear to be easy, developing a marketing concept that is truly unique, actually sells your hotel and is benefit oriented is no simple matter. That’s especially true in today’s hyper competitive hotel industry.

But it is possible to develop a U.S.P. – something that goes beyond mere puffery, something that is true and can be supported by facts and something that actually sets your hotel not only apart from, but above competition. Here are examples of three of our hotels, each with a strong U.S.P.

• The Reefs, Bermuda – The Reefs is one of numerous luxury hotels in Bermuda. Over the years it has consistently delivered a superior product and excellent service. Consequently it has received accolades from all the top travel media including Conde Nast Traveler and Travel+Leisure. Oftentimes it is the only Bermuda hotel to make the list of their annual reader surveys. As such, The Reefs can legitimately claim to be, “Widely recognized as Bermuda’s best hotel.”

• Nisbet Plantation Beach Club, Nevis – Why do people travel to the Caribbean? There are a myriad of reasons including to stay at one of the regions historic plantation inns. Much more important on the list of what people want in a Caribbean vacation is to sit on the beach. While every other plantation inn was built in the mountains where it was cooler before air conditioning, Nisbet Plantation is, “The Caribbean’s only historic plantation inn on the beach.”

• Bolongo Bay Beach Resort, St. Thomas – Another benefit highly sought after in a beach vacation is to just have fun. That is something Bolongo Bay has specialized in for years. Family run, this resort offers free non-motorized water sports, a weekly snorkel booze hunt and Iggies, one of the top beach bars in the Caribbean. So Bolongo is, “The Caribbean’s most entertaining beach resort.”

Each of these resorts possess something few of their competitors have – a strong and motivating U.S.P. If a traveler wants to stay in Bermuda’s best hotel, there is only one choice. If they would like to stay in a historic plantation inn, but also want to be on the beach, there is only one choice. If they just want to have fun there are many hotels to choose from, but one that will always be at the top of the list.

It’s not easy developing a strong U.S.P. There’s much more to consider than meets the eye and oftentimes it takes someone from the outside, someone with a fresh perspective on your hotel and competition to identify what is truly unique about your hotel. But the effort can be worth it for once you have a U.S.P. you will have a sustainable competitive advantage.

There’s a lot more to advertising these days than just having a U.S.P. But the U.S.P. is still the foundation upon which all your marketing messaging should be built. And without that strong foundation all the benefits you are trying to communicate about your hotel will be lost in a tidal wave of advertising clutter. You’ll be invisible.

So, what is your U.S.P.? Does it really fit all three criteria outlined above? Do you offer a real benefit? Is it something people are looking for and hopefully willing to pay a premium for? Is it really unique, or is it just puffery? Your answer does have a significant impact on your bottom line.

What do you think? Madigan Pratt

Tags: advertising, marketing small luxury hotels, U.S.P., Unique Selling Proposition, USP

Earlier this summer when Google launched Google+, its social networking site, it was only open to individuals. Last month Google+ announced it was available to businesses and brands are beginning to embrace it.

Why? Right now it appears as though it is primarily a defensive move. Google won’t promise that Google+ will improve a company’s search rankings, but smart marketers are betting on it. They believe it is only a matter of time before Google starts incorporating social signals into website rankings. Having both social and search represents a significant advantage over Facebook. If you were running Google, what would you do?

Google has hundreds of criteria it uses to rank a company’s website. The more emphasis it places on Google+, the number and size of its circles and the interactions and sharing of information the faster it will grow and the more important it will become. And when YouTube videos (another Google enterprise) are shared widely through Google+ who knows what will eventually happen?

A search of hotels and resorts on Google+ shows that there are few early adopters and those that are, are simply re-purposing Facebook posts and not embracing the full power of the social network. That’s OK for now – it’s a start, but more time and effort will be needed going forward.

Several marketers I’ve talked to (outside of hospitality) believe that only a few companies in each category will really embrace Google+ and create a meaningful presence. They believe their efforts will pay off in the long run with higher search rankings leaving competition to play catch-up and rely more on paid search to drive visitors to their sites.

So the question is clear, “Can your hotel really afford to ignore Google+?”

And if your hotel is planning on embracing Google+, please share your thoughts with readers and leave a comment.

For more information on the topic read, “Is Your Hotel Prepared for Google+”

Safe travels – Madigan Pratt

Tags: Google, search engine optimization, SEO, social media

WILLIAMSBURG, Va. – Madigan Pratt & Associates, a digital marketing and advertising agency, has extended its website expertise to Forest Hill, Maryland-based Werner Travel. The well-established travel agency selected Madigan Pratt & Associates to design a new website, which launched December 10.

“I am thrilled with the new website,” states Janet Werner, owner at Werner Travel. “It exceeds my expectations and I continue to receive positive feedback from my clients about it.”

WernerTravel.com is the fourth website that the agency has designed and launched this year. Each site is unique in its design and structure, and never based on a template. The websites are created to reflect the brand of the organization, provide an engaging online user experience and ensure current and prospective customers can find the organization with the latest search engine optimization techniques.

“What sets us apart from other website design firms is that our foundation begins with marketing strategy,” says Madigan Pratt, Managing Director at Madigan Pratt & Associates. “We understand each client business, their customers and goals, and create a site that increases visibility and drives sales.”

Werner Travel joins a distinguished list of luxury travel clients, representing some of the world’s top resorts, at Madigan Pratt & Associates.

About Madigan Pratt & Associates, Inc.

Madigan Pratt & Associates is an award-winning digital marketing and advertising agency that helps organizations attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world’s largest advertising and direct marketing companies lead the agency’s team of marketing, creative, public relations, Internet and social media professionals. The agency relocated from New York to Williamsburg in 2006. For more information, visit http://www.MadiganPratt.com.

Tags: travel agency, web design, website

Rosalie Bay Resort on Dominica retains Madigan Pratt & Associates for expertise in marketing luxury Caribbean hotels and resorts. The digital marketing agency will design a new SEO-optimized website and launch a fully integrated marketing program for the 28-room eco-luxe and wellness resort.

WILLIAMSBURG, Va. – Madigan Pratt & Associates, specialists in hotel marketing, has been retained by the new eco-luxe Rosalie Bay Resort in Dominica for digital marketing, advertising and public relations efforts in North America.

Opened in November 2010, Rosalie Bay Resort is a 28-room eco-luxe wellness resort on the nature island of Dominica in the Caribbean. Named to the 2011 Condé Nast Traveler “Hot List” of new hotels, Rosalie Bay Resort sits at the foothills of the Morne Trois Pitons between the Rosalie River and the black sand beach of the renowned turtle nesting spot of Rosalie Bay.

The Williamsburg, Virginia digital marketing agency will begin by developing a new search engine-optimized website using the most up-to-date best practices in SEO. “With nearly 80 percent of people not going past the first page of an Internet search, the importance of a hotel appearing on the first page for top keywords has never been more important,” says Madigan Pratt, Managing Director at Madigan Pratt & Associates.

“The new rules of SEO make websites that are just a few years old obsolete. So it is critical for organizations, especially small, independent hotels like Rosalie Bay, to overhaul their site so that future guests can find and then, book them online.”

Under the agreement, Madigan Pratt & Associates will also create an integrated marketing program using online and database marketing, public relations, advertising, social media and promotion to generate awareness of the one-year-old Caribbean resort, build customer loyalty and drive revenue.

“In addition to MP&A’s track record of performance for other luxury hotels we are impressed that all of our marketing needs can be handled in one agency,” said Oscar Lora, general manager of Rosalie Bay Resort. “I’m convinced we will have tighter integration of messages across all media and I’ll save time briefing different agencies. In the end Rosalie Bay be the beneficiary.”

Rosalie Bay Resort joins a distinguished portfolio of luxury clients, representing some of the world’s top resorts, at Madigan Pratt & Associates.

About Madigan Pratt & Associates, Inc.

Madigan Pratt & Associates is an award-winning digital marketing and advertising agency that helps organizations attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world’s largest advertising and direct marketing companies lead the agency’s team of marketing, creative, public relations, Internet and social media professionals. The agency relocated from New York to Williamsburg in 2006. For more information, visit http://www.MadiganPratt.com.

Tags: CRM, customer relationship marketing, hotel marketing, Internet marketing, search engine optimization, SEO, social media

You have probably read countless blogs, attended numerous conferences and listened to endless sales pitches where Deal Sites explain their business models and the benefits they offer hotels. I have too. So what’s the bottom line – what’s the deal?

That’s exactly what I was thinking as I read a recent New York Times article which should be required reading for every hotelier thinking of using a Deal Site. The title says it all – “Coupon Sites Are a Great Deal, But Not Always For The Merchant.”

While the article focuses more on the retail industry many of the observations apply to hotels. This can be boiled down into two “Pros” and three “Con’s”

Pros

1. Deal Sites Do Increase Brand Awareness – Yes, putting a deeply discounted rate up on a Deal Site and blasting it out to millions of their emails subscribers is bound to increase awareness. Yes it will create awareness, but what is the real message consumers are receiving about your hotel?
2. Deal Sites Do Drive Business – Yes indeed, but it comes at a steep cost. Deal Sites return between 25¢ and 50¢ on the dollar based on the best rate a hotel offers on its own site. If your hotel’s best rate on your site is 30% off rack then the Deal Site will deliver between 17¢ and 35¢ of your rack rate.

   I was debating whether or not to include this under the “Pros” or “Cons” and wanted to be fair. But any hotel that can turn a profit charging 17¢ and 35¢ of its rack rate perhaps needs to revisit its pricing policy.

Cons

1. There Really Is Very Little Loyalty – The article does say “some consumers” do come back and pay full price. Maybe in a relatively inexpensive retail environment but not when you’re talking hundreds or even thousands of dollars for a hotel room or vacation. Why would someone ever pay you full price again? It defies logic.

   People taking advantage of Deal Sites are looking for deep discounts and they shop the deal sites. As soon as your hotel doesn’t have one they move on to one that does.

2. The Popularity of Deal Sites Feed a Relentless Bargain-Hunting Mentality Among Customers – This even applies to people who don’t use Deal Sites. Need proof? Talk to your reservation agents. Ask what percentage of people call looking for “a deal” or maybe “a steal?” Consumers will always look for a good deal. It is incumbent on the hotel to give them a good value – not a steal.

   Isn’t this why hotels have a “Specials” page on their website? And you can advertise Specials and promote them in PR and online and build awareness for your brand while promoting value – not just a deeply discounted rate.

3. Deal Sites Can Ruin Your Reputation – According to a Boston College and Harvard University Study fans of daily deals are hard to please. They actually pull down the average YELP score by half a point.  Imagine what they could do for your TripAdvisor scores. How would you like to go from a 4.5 to 4.0 in TripAdvisor?

   Here’s a good example of a TripAdvisor review where someone got a very good rate and then complained about it. At the same time they are telling anyone who reads this that even at a Groupon rate the property isn’t worth it. OUCH!
   
   Even if you limit using Deal Sites to “specific need periods” the results could be disastrous to your reputation and your bottom line.

So there you have it – two fairly weak reasons why a hotel might participate in Deal Sites and three pretty strong reasons why it should not.

Just for the record, Deal Sites are not necessarily here to stay. They will only be around as long as hoteliers are willing to give them inventory and are willing to get peanuts in return.

What do you think?

Tags: brand building, Deal Sites, Groupon getaways with Expedia, hotel customer loyalty, Internet marketing, TripAdvisor reviews

The Interactive Advertising Bureau has released the results of First Half 2011 industry performance report for the US market. The research was conducted by PwC. I’d like to share some highlights.

First Half Industry highlights:

• Internet advertising in the US increased 23% in the First Half 2011 vs. 2010 and totaled $14.9 billion. FYI – the 2002 total was less than $3 billion.
• 72% of all Internet advertising revenue is concentrated in just 10 companies. Where do you think Google fits in? (hint – see next bullet)
• Search remains the #1 advertising format and accounts for 49% of all revenue – up from 47% last year.
• Retail advertisers are the biggest spenders and account for nearly one-quarter (23%) of all Internet ad spending.
• Performance based pricing (PPC) grew from 61% of all advertising to 64% in First Half 2011. Impressions based pricing (CPM) declined from 35% to 31%.
• Here are the percentage increases for the top spending industries vs. First Half 2010:
  • Retail +40%
  • Telecom +24%
  • Financial +27%
  • Automotive +27%
  • Computing + 25%
  • Leisure Travel +43%
  • Package Goods -12%
  • Entertainment +1%
  • Media +25%
  • Health Care +1%

First Half Leisure Travel highlights:

• Leisure Travel (including airfare, hotels and resorts) accounts for 8% of all Internet ad spending – up from 7% last year.
• Leisure Travel spending increased a whopping 43% – nearly double the rate of the industry as a whole.
• Leisure Travel breached the $1 billion mark in the first half, jumping from $841 million in 2010 to $1.2 billion in 2011.

Implications for Hotels

• With marketing budgets remaining relatively flat it is obvious Leisure Travel companies are continuing to divert funds from traditional advertising to the Internet.
• Marketers are increasingly interested in measuring the performance of their advertising and the Internet does this better than traditional advertising.
• Internet marketing (advertising, social media, SEO, etc.) is becoming an increasingly important and complex marketing environment. Hotels need access to state-of-the art Internet thinking to succeed in this ever changing marketplace.

How has the allocation of funds between traditional and Internet advertising changed in your marketing budget? What are you planning for next year?

Hoteliers can receive a copy of the Interactive Advertising Bureau research report by sending an email to me with full signature/contact information.

Safe travels – Madigan Pratt

Tags: advertising performance, hospitality roi, hotel research, Internet marketing

Who in travel hasn’t said, “I’ve got to write a book.” This is usually followed by, “It’ll be hilarious, but nobody will believe any of it is true.”

I just finished reading the funniest article in Travel Weekly, of all places. “Group Deals Soar Amid Online Debate” is a report on a recent Traveltech conference session about travel deal and group buying sites. And I just had to share it with all the hoteliers who regularly read Hospitality Marketing Blog.

According to this article:

• Sam Yip, senior research manager a Telsyte told the audience that the popularity of the deals was, “due to the interactive format of the deal rather that the value.”

What a comic!  If group buying sites let hotels offer 10% discounts instead of 30 – 50% would people still flock to these sites because they are interactive or “because they like the channel?” Stop it, you’re hurting me.

• According to the article, “Dean McEvoy, founder of group buying website Spreets, told a panel discussion that consumers are driven not by rates but a “great experience.”

I’m bending over in laughter. So hoteliers could double their rates and just make sure they offer “a great experience.” Be sure to make the buying process a great experience too.

• Mr. McEvoy goes on to say that additional components such as meals and outings are “key” to the deal’s success.

Stop the presses! The same things that make a hotel’s own promotions work also work when you’re giving away rooms at 50% off. Knock me over with a feather! I never would have guessed.

• One of the panelists put forth the proposition that his partners (that means you, if you’re a hotelier), “have to convert the group-buying customers, turning them into loyal customers.”

Insanely funny! After a guest gets an outlandish discount the hotelier is tasked with turning them into a loyal repeat guest. The only loyalty that guest will have will be to the Deal Site. See the world…at a discount. Why would they ever pay full price, or even a reasonable price again?

While all of these arguments are insanely funny there is, unfortunately, a very sad ending to this story.  The truth is, hoteliers are complicit in helping train travelers to only buy when there is a deeply discounted deal.

Plenty of research points to the Perils of Marketing on Price .  Good reading next time you’re thinking about doing it.

Participating in Deal Sites and offering deep discounts is easy, but it doesn’t build your business. Read the research. Hotels that maintained rate or increased it were the ones that most likely increased RevPAR over the past two years.

• They are the ones that provided the highest degree of perceived value.
• They are the ones that did the hard work and followed best marketing practices.
• They didn’t compete on price.
• And they are the ones that reaped the rewards.

I’ve got to write a book!

What do you think?

Tags: customer retention, hospitality marketing, marketing small luxury hotels, Travel deal sites

As the Great Recession lingers and talk about a double dip intensifies, it seems appropriate to focus this fourth anniversary issue of Hospitality Marketing Blog on the perils of marketing on price.

It is a topic discussed many times over the past four years and continues to be a hot topic today. A recent article by Robert Mandelbaum from PKF made me think it’s a good time to take a look at a couple of the independent studies that both individually and collectively indicate hotels should not be marketing on price.

1. PKF Hospitality Research – Robert Mandelbaum, Director of Research Information Services, wrote:
   • “The driving force behind revenue growth in 2011 is clearly price positioning.  The higher the room rate, the greater the projected growth in ADR and, consequently, RevPAR.”
   • The relationship between price positioning and profits appears to be as strong. In general, hotels in the highest room rate categories achieved the greatest increases in net operating income in 2010. Conversely, properties in the lowest rate categories either achieved minor increases in profit, or suffered their third consecutive year of declines on the bottom line.
2. Love Hate Relationship: Occupancy vs. Price – In an article a little over a year ago Stephen R. Hennis, Director of STR Analytics, used the company’s research to point out:
   • In 2009, hotels with the steepest discounts suffered the least amount of occupancy erosion.
   • However, the research went on to say, “The more properties dropped rates, the worse their RevPAR index change was, indicating that the upside in occupancy performance did not compensate for the sacrifice in rate.”
3. Cornell University Center for Hospitality Research – In an article entitled, “Successful Tactics for Surviving an Economic Downturn,” an analysis of 980 hotels around the world conducted between December 2009 and February 2010 concluded:
   • Discounting was the number one tactic used to offset the effects of the Great Recession of 2008–2009. At the same time, most respondents who cut their prices agreed that discounting was not particularly successful in maintaining revenue levels.
4. Time is Running Out On Kerzner and Atlantis – Hospitality Business News last week ran this article citing a Bloomberg Media report that Kerzner International Holdings is in talks to extend repayment of $2.78 billion in loans coming due next month. The article goes on to point out that in recent months Atlantis on Paradise Island, has started to offer rooms at $99 per night.  They only need to sell 28 million room nights at that rate to cover the loans.

Conclusion

The research studies cited are pretty emphatic on the perils of marketing on price – the more you give away on rate the less you get in return. Sounds like a recipe for going out of business.

With price determined not to be a key profit driver, the focus for hoteliers needs to be more on the other three Ps in Marketing – Product, Promotion and Place or distribution to bolster the bottom line.

• Product – Ensure your property offers excellent value for money. Value is a much stronger long-term proposition than simply offering the cheapest rate.

• Promotion – Clearly position your hotel vs. other hotel options. Highlight those benefits in all marketing efforts that provide your hotel with a clear competitive advantage.

• Place – Be sure your hotel is easy to purchase whenever and wherever the customer is inclined to book.

Small luxury hotels should have a distinct advantage over other properties when if comes to differentiating product and creating a clear competitive advantage.

What do you think?

Madigan Pratt

Tags: advertising in a recession, hospitality marketing, hotel marketing, luxury hotel marketing, marketing in a recession, small luxury hotel