Hotel Business Models: How to Build Market Influence

Reality is stubborn, as the saying goes, and its stubbornness shows that it is becoming increasingly important to have the best possible information about our markets, segments and even companies. Lisa Gansky says in her book, The Mesh, that the raw material of companies, whatever their sector, is information; and while this may be evident in many cases, in the hotel sector it is vital. And we are not referring only to information about our customers—although that matters too—but also to information about our own organisation, our structural and business model, and our ability to respond to new realities or generate alternative revenue streams. One of the most interesting tools to emerge for conducting this type of analysis is Alexander Osterwalder’s business model canvas. The canvas is a fully visual tool, heavily influenced by design thinking, that provides a complete view of our organisation as well as the relationships generated between its different departments. The canvas allows us to identify where our structural and business-model strengths lie, and where we may find weaknesses that could undermine our market position. The tool revolves around the value proposition we offer to the market. From there, it is divided into three areas. On the right, it shows how we take that value proposition to market, which segments we target, what type of relationship we have with them, and which distribution, sales and communication channels we use. On the left, we define our internal actions to create that value proposition, showing which key resources and activities are needed to deliver it, and which partners are essential—those without whom that value proposition would be impossible. Finally, the entire canvas rests on two fundamental elements: revenue streams and cost structure. Once we have defined our business model—that is, once we have completed the sections—it is useful to observe how they relate to one another and the degree of influence they have in determining the strengths and weaknesses of our organisation. Making good use of the business model canvas will provide us with extremely valuable information and help us improve our management capabilities, our value proposition, and our ability to create alternative and/or complementary revenue streams for our business. And let us not forget the possibility of analysing our competitors by studying the extent to which our offering is differentiated and can be perceived by our markets as distinct.