Forward-Looking Marketing: Becoming the Oracle of Delphi

By Michael Waddell Managing Director, INTEGRITYOne Partners | September 02, 2010

The links between hospitality marketing promotions and guest satisfaction are often tenuous, leading to strained discussions between marketers and hospitality property and executive managers. Marketers focus on top-line results, sometimes to the detriment of guest relationships, while managers might be more skeptical about pursuing potential revenue spikes that could reduce guest satisfaction. And despite well-intentioned ingenuity, marketing programs don't always deliver as expected.

This is the quandary. Promotions are often a great way to fill otherwise empty rooms, introduce new guests to a property, and/or diminish seasonal and even weekly periods of reduced occupancy. On the other hand, promotions are not always successful, that is, they can cost more than the additional revenue they ultimately generate no matter how many rooms they fill. And even when successful, promotions can have a negative impact on guest satisfaction over the long term by changing guests' expectations. For example, offering free weekend breakfasts to fill in-town rooms with the summer drop in business travel could create the expectation that free breakfast should always be served on weekends. Unfulfilled expectations such as this can lower guest satisfaction over time.

But what if, like the oracle of Delphi, a hospitality company could look into the future, predicting which marketing programs would yield the best results while not decreasing guest satisfaction. The oracle would likely receive gratitude in the form of improved metrics, satisfied guests, and happy senior managers or owners.

The truth is, ensuring greater success of marketing promotions and maintaining guest satisfaction levels can both be achieved by maintaining an ongoing guest satisfaction program [see recent article "Taking 'Welcome' to the Next Level: Guest Experience Requires Solid Measurement and Reporting Structure") and using this program to guide planned marketing promotions toward positive revenue and guest satisfaction results.

Understanding the Metrics

Hotels continuously look for ways to make operations and revenue management more effective and less costly. They do this by working to drive occupancy up, increase revenue per available room (RevPAR), and drive the yield index ratio up (revenue share/supply share). In addition, they look for programs that drive interest and the intent to repurchase or return.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.