A Hotel's New Marketing Demographic - Thinking Outside the Comp Set
By Vanessa Horwell Founder & Chief Visibility Officer, ThinkInk & TravelInk'd | August 01, 2011
Let's face it: the travel industry is in serious trouble. Almost all hotels, motels and resorts are experiencing a huge decline in demand - which can be attributed to many factors, but at the top of the list is the ongoing recession, which has drastically changed the hospitality business landscape in every corner of the globe.
Some markets have deteriorated more than others over the past two years; many properties just can't compete on price or value, and have seen their target audience shrink too much, with not enough marketing or heads in beds to keep going. Some may find themselves in crowded competitive environments - the product of over-saturation during the boom years - and battling for every half-percent of market share. And others are stuck in the past, ignoring the growth of the online channel and only pricing their rates against their comp set. The comp set, or the Smith Travel Research Competitive Set analysis, is often used by hoteliers as the benchmark for their pricing or marketing strategy. But savvy hoteliers know that in today's marketplace, the comp set is no longer a robust or thorough marketing or revenue management measure. With the rise of the online channel, consumers are able to compare all rates for all hotels within their choice of destination with immediacy that was unheard of just 5 years ago. More importantly, consumers will pick a hotel based only its value offering - whether it's a five star with a full spa or a three star with a pool - rather than a brand or the amenities that it offers. Hotels that successfully market outside their comp set can expand their potential customer base, avoid a 'following' marketing and pricing scheme, improve the reach of their brand by exploring new markets, and position themselves to better compete in this challenging environment.
Marketing outside the competitive set is not rocket science; any hotel can learn to do it.
Need some help? First, hoteliers need to stop thinking like hoteliers and brand managers and instead, think like marketers wearing their customers' shoes. Then, by making small, incremental changes to the property's existing marketing strategy, hoteliers can increase both their bookings and revenues.
Think outside your existing sales channels
Of course, before a hotel can identify what strategy to eliminate and which to change, it needs to undertake a critical analysis of which sales channels are most effective. Are OTAs the primary reservation vehicle for the hotel, or the Global Distribution System (GDS)? Is the property part of a chain, with a centralized reservation system and a unified marketing plan? Or, does the internal reservations department and the property website account for the majority of sales? Once these questions are answered and the strongest sales channels identified, a hotel can work on improving those that it has neglected. Often the strongest channels are consistent across the comp set, so by improving the weaker channels, a hotel can attract new customers and bring in revenue from outside that comp set. This strategy - seeking out commonalities in marketing and distribution and then focusing efforts on the other areas - is a great one to ensure that a property's efforts are focused outside its comp set. The aims of competing hotels in the same market are inherently similar, after all; it is only by escaping the conventional wisdom propagated by comp sets that a property can truly differentiate itself. Hotels in a comp set target the same audience, operate in the same marketplace, share similar rate structures and service offerings and often share core values. The first step to marketing outside of this homogenous group is to stop thinking like a monolith, and start the process of reinventing the way the hotel presents itself to the public.