Mobile Geo-Targeting Makes "Just in Time" a Reality for the Hotel Industry

By Jared Simon Chief Operating Officer, HotelTonight | January 01, 2017

In the 1960s and 1970s, Toyota revolutionized supply chain management when it perfected the just-in-time (JIT) model. Now more widely known as “lean manufacturing,” the JIT model reduces costs and waste because manufacturers only order supplies as customers place orders. Before JIT, manufacturers would stockpile the goods they needed to make cars at the expense of ordering it in bulk up front and finding places to house it.

JIT proved revolutionary at the time not only because of the savings and efficiencies it generated, but also because its successful execution meant seamless coordination between customers, manufacturers, and suppliers. It took nearly fifteen years to perfect, but once Toyota was able to prove its effectiveness, companies across the globe started to adopt it as the standard.

Because of static supply, hoteliers haven’t had the opportunities to generate those same kinds of lean efficiencies. It would be nice to scale rooms up and down to exactly match unpredictable demand, but without bending the laws of physics, that’s out of the picture. While hoteliers have explored different pricing and placement models to fill vacancies, the average hotel occupancy rate still hovers near 65%—even with the proliferation of more easily accessible sales through online travel agents (OTAs).

Today, the widespread use of mobile applications and the effectiveness of mobile targeting is giving hoteliers the chance to generate their own lean efficiencies and more effectively pair demand with supply. By layering clever and forward-thinking marketing tactics on top of mobile targeting, enterprising hoteliers can better reach customers to fill last-minute vacancies without cannibalizing their best bookers or cutting into their rate strategy and diminishing overall ADRs.

If it’s done right, this just might be the hotel industry’s own revolutionary JIT moment.

What is Mobile Geo-Targeting and Why Does it Matter?

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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.