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Neil L. Salerno, CHME, CHA

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"What the Heck is Hotel Revenue Management, Anyway?"


Does Anyone Remember When A Suit Came With Two Pair Of Pants?

Isn't That Like A Hotel Offering 3 Nights For The Price of 2?

 By: Neil Salerno – Hotel Marketing Coach™

For those too young to remember, there was a day when tailors actually sold suits which came with two pair of pants. It seems that the perceived-value concept to consumers is really nothing new; smart tailors preferred this over reducing the price of each suit. That was their way of presenting a better value while preserving price integrity. These days many haberdashers still offer extra value.


The value-added concept is really very simple. People don't buy price, they buy perceived value. Value-added is all around us; if you are really bored, just watch the next infomercial selling products for $19.95 but "act now and get two for the same price". Many years ago, some hotels included breakfast, and created  a value-added program, which is still used today.


There are a couple of very different approaches to marketing hotels today. There are some hoteliers who still believe that reducing rates will boost lagging room sales, while others stand firm that value-added promotions and robust marketing will turn the tide. The problem with reducing rates is that it simply doesn't work. When the economy recovers, these hotels will find it very difficult to get their rates back to normal.


Using The Internet To Promote, Not Just Present, Your Hotel


Some hotels ignore the Internet entirely; others embrace it, but are unsure of how much time and financial investment they need to devote to Internet marketing, and still others have improved their websites, but are not using their sites to promote new business; they let their site just let there.


There is no doubt that most hoteliers now recognize the many benefits offered by the Internet; the controversy lies in the approach and the actual use of their site. The net is evolving and changing; site design is more important than ever before, search engines are more sophisticated than ever, and social media, with its user-generated content, is making  a huge impact on hotel selection.


Understanding the importance of using the Internet, there are still many hoteliers reluctant to using it fully. Your website is similar to a media-ad and is exposed to thousands of people each month; why not use that opportunity to promote value-added offers on your site? Savvy hoteliers are using their sites to promote packages and destination-oriented offers.


We see hotels very involved in using social media, yet they have websites which are dysfunctional and have terribly conceived, poorly-written, sales text. And, these  hoteliers can't seem to find the time or investment to upgrade their sites to make them more effective.


Many hoteliers appear focused on FaceBook and Twitter with little concern or activity with TripAdvisor. When did we get more concerned about numbers of fans and followers than on using comments made by actual past guests? It's fine if you have the time to work on all three, but if you don't, at least work on travel social media and do it right.


Privately-Owned Websites For Franchised Hotels


One often discussed controversy , is the question of  whether or not franchised hotels should have  their own, privately-owned proprietary websites in addition to the pages they get on their franchise site. Of course, I realize that, merely introducing this suggestion is tantamount to heresy to franchisors, yet, those hotels with proprietary sites are seeing great results.


Many hoteliers with franchised hotels have discovered that, having their own proprietary website, provides additional hotel find-ability on search engines and vastly increased control of their product's sales message, because they can easy and quickly update the information on their own site, often within hours.


In spite of all the evidence, some franchises still frown upon the very idea of allowing their franchisees to have and maintain their own websites. I have honestly tried to understand their resistance; you would think franchises would enjoy the additional exposure and increased reservations. After all, their proprietary site will use the same booking engine.  Hopefully, more franchises will recognize this in the future.


Internet Proficiency Varies By Franchise


While researching information for this article, it quickly occurred to me that the amount of proficiency in Internet marketing varies greatly from franchise to franchise. Honestly, there are several franchises which "get it" while some others don't. Which side is your franchise on?


Due to the proficiency factor, it just doesn't make good common sense to leave your entire Internet marketing effort solely in the hands of your franchise. They are into brand-building, you should be into business-building. Besides, the Internet could represent 40% or more of your total business.


Website Development Cost


Failing to understand how and why consumers choose a hotel on the Internet is the primary reason why many website designs fail to produce acceptable results. However, every website project must meet your financial requirements to produce a good return-on-investment.


Your website design, or re-design, plans should be able to withstand the same financial scrutiny as any other capital expenditure for your hotel. This payback is highly influenced by how well the site is designed for search and sales.


In summary, develop value-added packages and use your website to promote, not just present, your hotel. Search engine optimization and website optimization will get more visitors to your site, but visitors mean nothing unless your site, through its text and promotional content, drives those visitors to your booking page.

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