Search Engine Marketing Basics for Hospitality

Whether you search online for sushi or a penthouse suite in Las Vegas, you’ll see them: a line-up of small ads populating the shaded areas above or to the right of your search results. They don’t look like much, but if done well, these minimalist ads can entice consumers to your website and hopefully, to make a purchase. For the hospitality marketer, this tool—called search engine marketing (SEM)—should be an essential part of your digital marketing toolkit.Read More

Brand Sites: Critical Mistakes

From accepting bookings to projecting your unique brand promise, your brand site is crucial to the success of your property. Yet our faculty and affiliated experts in the field find properties making critical mistakes on their sites every day that are preventing them from maximizing revenue and reach.

We’ve done an audit of some of the most common brand site crimes being committed today. Many of them come to life in this tool built by Cornell School of Hospitality Administration Associate Professor Rob Kwortnik and Senior Lecturer Bill Carroll. It provides four static landing-page designs for a fictional property, all with unique flaws. You can explore and identify those flaws yourself before comparing your findings against the faculty’s.Read More

Manage Hotel Customer Service with Facebook Recommendations

According to L2, more than 46% of hotels with Facebook accounts receive posts that deal with customer service.  Past and future guests are taking their customer service woes to the web and are posting about problems that they experience at your hotel. Therefore, it is imperative that you stay on top of posts to your Facebook page with comprehensive real-time monitoring.

While most customer service posts will appear directly on your timeline, more and more posts are appearing in the ‘Recommendations’ section, which is visible to both people that like your Page and those that don’t.

The “Recommendations” section allows page visitors – regardless of whether they have “Liked” the page or not – to post a short review or provide feedback about your hotel. The “recommendations” title of the section is a bit of a misnomer, however, as users are free to leave any kind of feedback, whether it is positive or negative. This section lives prominently near the top of your property’s Page and is enabled only for Facebook Pages that have physical addresses. (In other words, users cannot write recommendations on pages for brands unless the page owners provide an exact address in the pages’ About sections.) But, we encourage you to complete your address as Facebook’s recent rollout of Graph Search favors pages that have fully-completed About sections.

While Facebook Page owners may worry about prominent negative feedback, we urge you to trust in the power of your fans. For most hotels, your loyal guests will be more than willing to share a tip or a compliment on their own volition. But, if there is a concerning piece of feedback that shows up in this section, address it directly as you would any negative review and you can neutralize any bad feedback by showing that you pay close attention to guest feedback.  Also, you will often see that loyal guests will come to your defense to refute the criticism. That’s when the user-generated content system is really working! But, if you believe the feedback was unruly or irrelevant, you do have the option of reporting it to Facebook as spam by clicking the ‘report’ button.

If you want to increase the number of recommendations on your Facebook page, all you have to do is ask. Post a status message encouraging your friends and fans to tell the world with a tip or recommendation. Pin this message to the top of the page for a week and see how much engagement it drives.

By paying close attention to feedback on your page as well as proactively monitoring and encouraging new recommendations, your hotel will be taking full advantage of Facebook’s customer service features.

 

Customer Engagement Touchpoints

This week’s theme on the Hospitality Blog is customer engagement. Here is a section taken directly from my eCornell course Hospitality Demand Management with New Media Marketing. Using the customer consumption stages, we can identify eight touchpoints where the supplier can interact with the customer along each of those stages. Be sure to download the complete guide on Engagement Touchpoints after reading this introduction. 

Unlike many goods and services, hospitality is co-created between the producer and the consumer. Hospitality is jointly produced and experienced when suppliers like hotels, attractions, and restaurants individually or working together co-produce experiences with their guests. This means that innovation can occur at virtually every point when the customer engages with the brand. The key is identifying where value can be delivered by enhancing the guest experience.

The Customer Engagement Cycle

What if we consider customers with regard to these consumption stages? That is, how can we map new media innovation onto the customers’ hospitality consumption process? What should be the main focus of this innovation? The answer is relatively simple. It’s about engagement. That is, how can we create more and better opportunities to involve customers in the process of producing value through their hospitality experiences?

If you take the hospitality consumption process, the dreaming, planning, executing, and reflecting, and think of it more as a cycle as opposed to a linear process with a beginning and end, so that the reflecting stage may actually be considered the beginning part of a new dreaming stage, we get the Customer Engagement Cycle.

Engagement Touchpoints

Now let’s think of how we can map touchpoints where the supplier and the customer interact at the level of the brand. I’m going to discuss eight of these touchpoints. For more detail as far as what these touchpoints are and for examples of recent innovations that new media companies have used, there is a downloadable PDF file associated with this topic.

Dreaming: Targeting

Let’s start off first at the dreaming stage. There’s where suppliers can think about how to target customers either by placing, for example, advertisements on Web sites or by using new media to attract customers and to create a kind of virtual experience, such as with lifestyle videos.

Dreaming: Conversing

Also at the dreaming stage, there’s the chance to converse with customers and have a live discussion. This might be on review sites or even by having a link on a Web site where potential customers can have a conversation with representatives of the brand.

Planning: Socializing

Moving from the dreaming onto the planning stage, there is the socializing touchpoint. This is where customers can look at a Web site, and by examining pictures or videos of other guests they can get a sense through live or vicarious education of what that experience is going to be like and become socialized into it.

Executing: Producing

Moving further along the planning stage, there’s the producing or the execution touchpoint. And this is where new media innovations can be used for customers to help produce, and specifically co-produce new service processes. So, for example, using their mobile phones as a way to expedite the check-in process.

Executing: Co-Creation

As we move further along into the executing stage, we have opportunities for touchpoints through experiences where customers can help to co-create the experience for themselves with the supplier. Apps such as a digital concierge where guests can contribute information about their favorite attractions and dining in the area can provide an excellent opportunity for guests to co-create their experiences.

Executing: Responding

As the consumption process continues, there’s the responding touchpoint. And this is where the supplier, the brand marketer, or even the operations personnel can interact with customers such as through tweeting or even through some kind of satisfaction discussion, so that the customers can use their own voice and talk about their experience.

Reflecting: Promoting

As we move from execution into the reflecting stage, here’s where we try to enlist our customers as advocates for the brand. So we encourage them to promote the brand by communicating with others on their social network.

Reflecting: Relating

And finally, the very end of the stage as we go from reflecting back into dreaming again is where we look at relating as a touchpoint. And that is connecting with customers through specific brand communities, such as creating Facebook fan pages where customers–hundreds, thousands, or even millions of customers–can become a part of that brand family and continue their relationship with the company.

Segmentation and Psychographic Profiles in the New Media “Continuum”

Segmentation and segmentation strategy in the hospitality industry vary widely. Even as you identify psychographic profiles and segments for your target customers, keep in mind that there are often sub-segments within larger segments. It’s pretty complex, but Professor Bill Carroll recommends viewing segmentation as taking place within a “continuum”.

Here, Professor Bill Carroll from Cornell’s School of Hotel Administration discusses market segmentation in depth. This video is part of eCornell’s free online course Marketing the Hospitality Brand through New Media: Social, Mobile & Search. This course is your virtual toolkit for driving revenue through new media. It’s 100% free. 100% online.

The Cheapest and Best Approach to Overbooking

This week’s theme on the Hospitality Blog is overbooking. Here’s an exercise taken directly from my eCornell course Overbooking Practices in Hotel Revenue Management. The overbooking-ratio method is a very, very popular and successful method that many hotels use for their overbooking policy. When you’ve completed this exercise, be sure to download this free step-by-step guide to overbooking

Now, sometimes people talk about overbooking as being evil. Why would anyone ever overbook, because that’s not fair to the customer? Let’s think about this. If you never overbook—you say that I’m a good and pure person, and I would never, ever do anything like that—what happens if you have a 5% no-show rate?

You have those rooms sitting there empty—it actually might end up costing you more than if you overbook just a little bit. And so when we try to look at overbooking, we try to come up with the least expensive overbooking policy, realizing that whatever we do with this, we’re still going to be making a guess. It’s kind of like gambling—we’re going to come up with a forecast of how many no-shows, and come up with our best bet on what the overbooking policy should be. So, when we look at coming up with an overbooking policy, there are more than several factors to consider.

Read More

Revenue Management Strategy: Demand-Control Charts

No matter what size hotel you work in, all successful revenue management strategies are based on the ability to forecast demand accurately and, therefore, predict the optimal rate based on that demand. This is where a demand-control chart can come in handy to help determine when to change your rate based on demand, separating the “hot” zones (high reservations-on-hand) from the “cold” zones (low reservations-on-hand). Knowing how and when to use a demand-control chart can enable you to plan your room rates for top revenue every time.

Demand-Control Charts

The major use of a demand-control chart is to help determine when to change your rate based on demand. When your forecast, or estimated demand, is above a certain level, you will close (or raise) room rates. When the forecast is below a certain level, you will open up (or lower) room rates. Similar to most approaches to setting rates, this one has advantages and disadvantages.

Advantages

  • easy to use and implement (a simple spreadsheet will do)
  • can be applied to other parts of the business (ballrooms, restaurants, etc.)

Disadvantages

  • does not consider length of stay
  • lumps all demand together even though different market segments might have different demand

Steps in Creating a Demand-Control Chart

To develop a demand-control chart, we develop the forecast, determine trigger points, and then determine the minimum rates to quote.

1. Develop the Forecast

The best way to develop your forecast is based on past experience. Take a look at your reservations from the last several years. What was your demand? What was your actual occupancy? Using historical data, you can make a pretty good prediction, or forecast, for what the demand will be for the future.

For example, you may calculate the forecast for each day for the next few months based on the same days for the past five years. The demand-control chart to the left shows the forecast for a 250-room hotel for part of the month of June, in both numbers and percentages.

2. Determine the Trigger Points

Trigger points signal the opening or closing of a rate class—the hot and cold periods. If the forecast predicts that demand will be above a trigger point (a hot period), close (raise) the appropriate rate classes; if predicted demand is below a trigger point (a cold period), open (lower) the appropriate rate classes. Your firm may have multiple trigger points. For our example hotel, our trigger points are:

  • Cold Period: 70% occupancy or below
  • Hot Period: 100% occupancy or above

3. Determine the Minimum Rate

Determine the minimum rate to quote based on the forecast and trigger points. In this chart we have two trigger points: 70% and 100% (which makes 71%-99% occupancy our Warm Period). For each hot, warm, and cold period, you will want to determine your minimum rate.

  • If our forecast is under 70%, it’s cold and we set the minimum rate at €250.
  • If the forecast is hot, the minimum rate is €425.
  • If the forecast is between 70% and 100%, it is a warm period, and our minimum rate is €325.

Develop Your Own Demand-Control Chart

Try your own hand at developing a demand chart for your hotel to get a better understanding of how you can easily and simply predict demand and determine the best pricing strategy for you. Click the thumbnail to the right to download the Demand-Control Chart used in Dr. Chris Anderson’s eCornell course Price and Inventory Control. It has already been filled in with example data to get you started, but you can easily plug in your hotel’s forecast, determine your own trigger points, and set your minimum rates depending on your hot and cold periods.

Note: The demand-control chart is a spreadsheet in .xls format and opens best in Microsoft Excel or OpenOffice Calc.

The Dos and Don’ts of Length of Stay

How far in advance can you predict demand for your hotel? In hotel management, we continually stress the importance of creating demand, rather than simply responding to it. How to do it?

Well, proper use of length of stay controls during high-demand periods enables you to control customer demand, plan for the future, and maximize revenue.

Minimum Length of Stay

When to use

Minimum length of stay can be used at any hotel where there will be a period of high demand (a string of busy nights) followed by a period of low demand. Some example scenarios are: a resort hotel over a winter holiday or any hotel in the vicinity of a major national festival or conference.

What to do

Implement a rule to accept longer-duration reservations and reject shorter-duration reservations for arrival during a hot period. That way you can fine-tune demand during hot times to increase occupancy during the slow period that follows.

Potential problems

You may not have anybody who wants to stay longer than the minimum you have in mind. Also, your guests may decide to leave early.

Requirements

Be sure you have sufficient demand for longer lengths of stay. Otherwise, use of this control could have a detrimental effect on RevPAR instead of improving it.

Maximum Length of Stay

When to use

This control is used when you are expecting to be able to sell out your rooms at higher rates. Using maximum length of stay, you can limit the number of rooms sold at large discounts during the high rate time period by limiting the (discounted) multi-night stays extending into that time period.

What to do

Do not accept reservations at specific discounted rates for multiple-night stays extending into the sold-out period. To do this, use the start of the sold-out period as a guide to determine the maximum length of stay allowable for discount customers. To accommodate guests who would like to stay at the hotel longer than the maximum length, it is possible to charge two rates: the discount rate for nights up to the maximum and the rack rate for subsequent nights.

Potential problems

Your guests may decide to stay longer. By law, you can’t force them out of their rooms.

Requirements

Be sure you have high demand. Otherwise, you could decrease RevPAR instead of improving it.

Closed to Arrival

When to use

This control can be used to restrict arrivals during a time when you expect to reach maximum occupancy through guests staying on at the hotel for multiple nights (through “stayovers” as opposed to through new arrivals). Using this control would only make sense if you believed you would achieve higher occupancy by selecting a particular set of guests (i.e. those arriving before the closed-to-arrival date).

What to do

Do not accept reservations for arrivals on the day in question. Allow guests staying through from previous nights only.

Potential problems

Be very, very careful with this control, because using it will have an impact on the day you’ve closed to arrivals, and the day after, and the day after that. You may end up improving revenue on some days, but decreasing it on others.

Requirements

Be sure you have extremely high demand.

Fill Your Hotel

To better understand how length of stay controls actually work, we suggest you try your hand with the interactive activity, Fill Your Hotel, used in eCornell’s course, “Forecasting and Availability Controls in Hotel Revenue Management,” taught by Dr. Sheryl Kimes. This activity simulates a length-of-stay tool as it relates to variable demand and overall occupancy rate. Learn how you can not only predict, but control for your hotel’s demand.

100% Occupancy? Let’s See If You Can Achieve It

Price and duration, or length of stay, are the two fundamental levers for revenue management. Successfully striking a balance between the two by managing length of stay is how you get your hotel closer to full occupancy.

See if you can achieve 100% occupancy in our Fill Your Hotel simulation by clicking the game below.

There are several different types of length-of-stay controls. One thing you might want to use during a busy period is called a “minimum length of stay.” Let’s say you have four busy nights and that you’re going to have some slow periods. You’re trying to decide which reservations to accept at the beginning of those four busy nights. If you have people who are willing to stay four nights, you’re going to be a lot more open to having them at your hotel than someone who’s only willing to stay one or even two nights.

Of course, leveraging length-of-stay controls is a delicate proposition: The last thing you want to do is turn away demand to the point where you end up with empty rooms.

To better understand how length-of-stay controls actually work, we suggest you try your hand with the Fill Your Hotel simulation, used in eCornell’s course, “Forecasting and Availability Controls in Hotel Revenue Management, taught by Dr. Sheryl Kimes. This activity simulates a length-of-stay tool as it relates to variable demand and overall occupancy rate.

 

The Crystal Clear Benefit of an Opaque Selling Strategy

Opaque online travel agents, which we call opaque OTAs, have recently become an integral part of many hotel properties’ distribution strategy. To clear excess inventory, hotels sell rooms at reduced rates via OTAs, hoping to reach price sensitive customers, while simultaneously selling rooms at “normal” rates to regular brand loyal customers via their traditional channels, including their own websites.

In this report we outline a simple model for setting multiple prices and booking limits at Priceline. Learn how an opaque selling strategy can increase your bottom line through the same advanced revenue management strategies as taught in Dr. Anderson’s eCornell series called Advanced Hospitality Revenue Management: Pricing and Demand Strategies.