Demographics Positioning, or Shifting: Who to Partner with to Achieve Your Goals

September 29, 2015

Co-authored by Steven Rubin, Vice President and General Manager for Travelzoo’s Most Loved Hotels program

Revenue Management definition: To sell the right product to the right customer at the right time for the right price via the right channel.

But how do you get there? We all know the leaders of data production – Smith Travel Research produces daily, weekly, and monthly reports on your hotels performance vs the competitive set. Travelclick supplies you with more intelligence on rate shops and Travel Agent production through hotelligence and more. According to STR and TravelClick during the HSMAI ROC conference this past June, Transient Travel is increasing however group travel is declining between 2-4%. Furthermore TravelClick statistics show that Leisure travel has increased and is forecasted to continue growth.

This is great information but it still doesn’t answer the question how do I reach the right customer at the right time and what channel are they using? So who is providing you with demographic information? What does it mean and how can it help you create stronger strategies?

Let us together identify the proper partnerships to help you get there. From online travel agents (the big 4 but not limited to – Travelocity, Expedia, Priceline, Orbitz), consortias, traditional brick and mortar travel agencies, media publishers – online and print that help you drive direct, and your Metamediaries (Google, Bing, Facebook, Twitter, Amazon, TripAdvisor and the like). Ask the tough questions of each:

  • Is this distribution partnership helping me grow in rate or occupancy?
  • What is the cost of this distribution option?
  • What reach do they offer? Have they grown or changed their reach in the last year?
  • What makes them so special that a customer books with them? Do you want this customer?
  • Does this partnership create difficulties by controlling your distribution? Do they give you the flexibility you need to diversify your channels or are you putting your eggs all in one basket?
  • Does this partner have many no-shows or cancellations? How about fake reservations that you are liable for?
  • Does this partnership help your social foot print?
  • How do you actively track your marketing campaigns?
  • What criteria do you have to identify your most valuable customers
  • Are you adjusting your marketing spend to reach these demographics?

When you look at your distribution partnerships are you analyzing what each brings to the table or is it a necessary evil for heads in beds? The consortia’s, OTA’s, media partners and the like, are they a true partnership? Do they care about your goals and are they helping you achieve them? Do they restrict how you can distribute your inventory? Distribution partnerships should take into account your P&L statement and help push as much revenue to the bottom line as possible. If during your peak periods, you find yourself not being able to shift market share and segmentation to direct bookings for a lower cost of distribution, then you take into account how much this cost of distribution is costing you. How do they help you in low demand periods? Are they creative in finding ways to drive traffic to you? Let’s identify what each one has to offer and cost:

  • Can they reach your feeder markets?
  • What about expanding your feeder markets, can they help you be recognized in markets that you do not have a strong presence?
  • Do they allow you to own the guest?
  • Can you market to the guest directly to build your CRM? Do they work with you or against you in SEO and SEM?
  • How do they display you?
  • Would you select your own hotel on each of these distribution channels, not because you work there, but because you are displayed favorably?
  • Are they offering you a true partnership or is everything at such a deep cost that your bottom line suffers?
  • Do you take into account how much is for the partnership and how much is for the guest?
  • Do you find yourself constantly negotiating with this partnership to drive more business to you?

Wow that was a lot of questions. So how do you feel about that? Did they begin to make you look at all your distribution options and start questioning? The idea of this exercise here is to get you to truly evaluate what each partnership brings to the table.

When you create a marketing campaign online, print, or IVR, are you tracking it? How are you determining that this channel is where your most valuable customers are coming from? Where is your current social foot print and how is this partnership helping you grow in a positive way? How does this affect your P&L? Are you using the data that the Metamediaries provide you to learn about your demographics and what is attracted to your digital footprint?

Now that we have you asking the questions of each distribution channel, are you able to determine how much a guest should cost you and how much they should make for you? That will help you determine your positioning for the demographic your product can attract.

So now you have done your homework and studied each partnership in depth. You have decided who can help you get there and who can help you keep your costs down. My personal opinion is to keep those partners that are true partners and have your relationship and goals in mind. Partners that can help you drive direct, either on a flat fee model or low commission and provide you the ability to own the customer are the ones who allow you the most control. Those that dictate how you should run your business do not value you and your hotel as a true partnership. Recommendations however, are suggestions to help you sell. You should have a choice to take them.

Who recommends? Certainly those of us in the marketplace always have opinions and sure it’s great to survey us. Are your distribution channels educating the customer you want with the proper information? Or are they just changing behavior and therefore telling you what the customer is buying? Your partnerships should not be a dependency, but rather an opportunity to drive traffic. Remember to let the distribution channels know that you want your integrity to be kept intact. It’s the way to begin to shift your demographics.

Talking about integrity, in our digital age, who is controlling your footprint? Do you just accept the control the Metamediaries have or are you proactively communicating in the social sphere to demonstrate your quality and your target audience? How have you used your digital footprint to position yourself to help that demographic shift you are looking for? Is this handled in house with your voice, or have you outsourced it? Is that entity a true partner?

Do not miss opportunities with your partnerships. They are a marketing arm as well as distribution channel. In the advertising world, you hear that a consumer must see and hear something at least 7 times to remember it. To become loyal to it, they need interactions. Consider it the social spine of your hotel. Your message to the consumer spreads from here. This is the message you want everyone at your hotel and your partnerships to share so you attract the proper demographics.

We covered many questions on the traditional partnerships of media, on line travel agencies and the like, however, you should not forget that there are many other partnerships that you can forge to get you where you need to be. Your CVB or Tourist Board, local industry associations, travel blogs and bloggers, other social entities that are not necessarily linked to your brand or are travel specific but link to your demographic. Nick Vivion mentions in this in his April 11th blog – “A clear understanding of the desired customer’s habits, influences and hobbies is key – that’s how a brand can get to the heart of the most valuable influencers”. Have you reviewed this concept and how are you using this to attract your demographic of choice?

There are so many ways to inspire and attract the desired demographic. As you analyze each partnership, look at their loyalty base. As Glen Harvell put it at ROC, it is all about content, community and connectivity. Now how can they help you shift their loyalty base to book you? What makes a guest loyal to a particular channel? Ease of booking, they trust the booking channel to do all the research for them, they have brand loyalty, they like their mascot, point junkies, amenities, we could go on… however at the end of the day it’s how special the guest feels when they are at their home away from home and who brought them there.

Every hotel needs partnerships that market to the demographics of the product they have and they should be a way to help them drive directly or at a low cost of distribution. Keep your partnerships simple, honest, accurate and most of all profitable. That bottom line number of the P&L is what you take home. Let the demographics shifting begin in helping increase those budget numbers.

Reprinted from the Hotel Business Review with permission from www.hotelexecutive.com.