5 common obstacles of online sales growth for independent hotels and resorts
In the past ten years, I worked with a large number of independent hotel and resort teams. Some were successful, some not but I learned from each experience and realized that failing teams have very similar issues. In this article, I am going to share five of the most common ones.
Lack of macro vision
Having and executing a macro vision is the single most important differentiating factor between successful and average hotel brands. What is a macro vision and why is it important? Simply put, having a macro vision is having a clear idea of what role a company wants to have in its macro environment. Having a macro vision suggests that your company has clearly defined goals that need to be achieved, no matter what.
Macro goals need to be created to enable a long term, sustainable financial growth for the company. Such goals and visions need to be designed to fit the given economical environment, taking tourism trends, competitors and potential future competition into consideration.
Such macro goals for independent hotel business can be:
- To become a recognized, popular brand
- Maximize REVPAR by embracing a direct-first sales strategy
- Offer the very best customer experience in the region
- To be an always-evolving property embracing the latest trends
- To become a landmark / attraction
It is easy to understand why companies without a macro vision fail, or remain average in the best case.
Lack of qualified leadership
The hospitality industry as a whole, especially the independent sector is a late adopter of technology and modern marketing practices. Recognized hospitality schools are not teaching up to date hotel marketing management. Even if modern marketing would be part of the university curriculum, by the time graduates could grow into a leadership position, technology will change. Aging hotel and resort leaders are hesitant to employ marketing experts from other industries, and similarly hesitant to accept the suggestions of young marketing professionals.
Typically, sales and marketing directors are knowledgeable in contracting and handling traditional distribution channels, such as tour operators and wholesalers, but they lack knowledge and experience in today’s digital marketing environment.
Since the early 2010s, hotel and travel marketing are mostly done online. The new generation of sales and marketing professionals have serious advantages over the previous ones, considering the technology and digital marketing skills they picked up naturally during their career.
Lack of motivated talents
In the hospitality industry, motivated new joiners typically imagine their careers with international chain hotel companies, such as IGH, Minor or Marriott. Given the higher salary, career opportunities and an environment to thrive in. High-performers and talents typically find it difficult to resist from joining a chain brand.
Talented individuals will not stay with independent hotel companies for too long. But even if they stay, they will not be able to bring the latest best practices to the company, because of their lack of experience. Top employees will find it limiting to work for an independent brand unless their compensation is considerably higher compared to what they would get in an international hotel company.
Unfortunately, it is very common that high-performing talents get discouraged by the lack of support, lack of qualified leadership and other limitations they face in small companies — so they leave independent hotels for international brands.
Lack of support from top management
Despite the best efforts and intentions of the higher management, digital marketing and social media professionals often feel the lack of support or lack of direction they would need to maximize online performance. Typical factors that limit growth and overall digital performance are:
- Insufficient ad and digital marketing budget
- Management requests to override proven and working strategies
- Refusing to hire people with relevant skills
- Refusing to involve 3rd party experts when in-house skills are not sufficient
- Refusing to acquire or sign up for new marketing technology and software tools
- Refusing to implement automation where it would be beneficial
- Pushing for ridiculous solutions like social media content recorded with mobile phones
- Changing marketing communications concepts
- Unrealistic expectations
- “How can we do it free” approach
Pressure from contracted sales partners
Complaints from key sales and distribution partners are among the most common reasons why a hotel business would slow down its online marketing efforts. This mostly happens if the hotel chooses to compete by aggressive discounting, or creating unfair circumstances for contracted partners to gain an advantage in getting direct booking.
Discounting in general, especially undercutting partners should not be a part of a growth strategy. This might be considered as a short term risk management tactic but not as a growth strategy.
Building a better brand, based on accurate positioning, clear marketing communications, great brand experience and beautiful product presentation will benefit sales on all channels. These improvements will also make it easier for sales and distribution partners to generate more sales.
Naturally, there will be a point when the website and direct booking experience will become so good, that people will not need to consider booking with agents. In that case, the hotel will enjoy such an increased demand that competing with prices will not be necessary any more — so attracting direct bookings will be achieved with fair competition.
Originally published at http://danieldiosi.com on October 14, 2020.