Fundamental Hotel Marketing Mistakes

Much is said about how hotel sales and marketing have changed over recent years. About how technology has transformed the hotel distribution landscape, and how Revenue Management has revolutionised virtually everything about the way hotels are managed.

The fact that everything has changed and become more sophisticated is often used as an excuse to justify what are sometimes rather underwhelming results.

Yet, ultimately, the essence of hotel sales and distribution has not changed over the past 20 years—only the way it is done has. As a result, little is said about the mistakes we sometimes make when marketing our rooms without even realising it.

Many years ago, a highly successful hotel entrepreneur shared three powerful statements with me, which have stayed with me ever since I was 20:

1. The secret of hospitality is simply to attract and retain guests.
2. To attract guests, I need to know which guests I do not have and want to have.
3. Some people sell; others lower their prices.

But of course, if we focus our strategy on understanding the guests we already have rather than those we want to have, it is to be expected that something will go wrong in the development of our future strategy. Those guests may not correspond to the target guests we have defined, or perhaps we are already, from the outset, overlooking guests who are willing to pay more for our service and who may offer a greater degree of recognition.

Should we set our price scales based on what our current guests currently pay? The answer is simple and clear: If we want to improve, definitely NOT. Likewise, we must rethink our standards and procedures in pursuit of higher quality and greater recognition.

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There is no point in keeping our current guests happy if we are unable to attract a greater number of guests—and more valuable ones. Remaining at that level leads to the stagnation many hotels have been suffering for some time, placing their progress in the hands of fate and intermediaries. In short, they have lost the ability to influence their results.

Revenue Management is now standard practice in hotels and, to a greater or lesser extent, they have all discovered its benefits and apply certain tactics. We use Yield as a means of maximising revenue, with a clear focus on transactions across different distribution channels. We stimulate demand through offers and promotions during periods of low occupancy, and benefit from periods of high demand by increasing our rates.

We rarely have a clear view of CRM and its non-technological implications. We know that guest relationships must be managed, but we mistakenly tend to think that the ultimate outcome of CRM is disintermediation.

The Business Intelligence (data analytics) tools we use—if we use them—primarily draw information from our Property Management System (PMS), guest history records, sales reports, and so on.

So, what do we base our strategies on?

• The price paid.
• The service type or room type booked.
• Booking and stay dates, as well as booking lead time.
• The guest’s city and country of origin.
• The distribution channel used to make the transaction.
• With basic segmentation, we probably also know whether the guest is travelling for leisure or business.

In short, we design our strategies based on guests who have already stayed at our hotel. However, there are many other things we do not know about them.

We know that users research the destination and the product online before making a purchase. We know that throughout this research, users are exposed to hundreds of different touchpoints: reviews on websites, social media, advertising, expert or guest reviews, marketing campaigns, email marketing, forums, videos, photographs, and so on.

Are we aware of what motivated a guest to book our hotel? What convinced them?

We always conclude that price is the decisive factor in a purchase, but there will always be the question of whether a particular guest might have been willing to pay more to stay at our hotel. It all depends on the emotions they receive and their own emotions. In short, things we do not know.

On the other hand, we should also take into account those guests we do not know because they have not stayed at our hotel, and who, during their research, chose to book another hotel.

What have we done wrong in this case? What has failed?

The blame is often placed on SEO, SEM, the Revenue Manager, the sales team or the poor person managing social media, but...

1. We may have put our rooms on sale at prices that were too high, but they may also have been too low.
2. Our message may have failed to communicate what the guest truly needs.
3. Perhaps, beyond price, our perceived quality in the eyes of our target guest is not ideal.
4. It is likely that one of the 4Ps of our marketing (Product, Price, Promotion, Placement) is not properly focused.
5. Then again, it is not only a matter of timing, format and price; perhaps we have simply focused on the wrong channel or guest segment, in which case we would need to reconsider our segmentation or our standards.

Undoubtedly, a wide range of possibilities becomes available to us when we start to consider why, beyond price and ratings, we are unable to sell our rooms while other hotels can. It is up to us to decide whether we want to act on those possibilities in order to manage them and improve our positioning, or simply leave things as they are and continue missing opportunities to sell without doing anything about it.

If we choose the latter, unfortunately, all that remains is to keep lowering our prices while other hotels benefit from our mistake.