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Through What Lens Do Traditional Hospitality Providers View Their Businesses?

To compete with or embrace homesharing is key question that often reverberates around the C-suite at major hospitality providers these days.

According to a recent Skift article, many hotel CEOs are still on the fence about embracing this new business paradigm, especially when looking at the short-term track record of efforts like Onefinestay and Oasis.  

Rather than embracing homesharing, many hospitality providers are trying out new tactics, which include everything from mood lighting to “name-your-rate” pricing. The latter would allow guests to ask for a lower rate at checkout if they feel that they stay did not align with their expectations.

In addition, some believe that automated, tech-driven micro-hotels will be the answer to competitive homesharing offerings. Hilton is dipping its toes into these waters with its Motto brand, which will offer smaller, customizable rooms that only appear in urban locations and have more affordable rates.

This all begs a bigger question, which is what lens do traditional hospitality view their business models?  It is always critical to remember that hotels are essentially places to sleep – meaning a facility/property/building with guest rooms.

With this in mind, building a dynamic brand overall is no small challenge, let alone trying to get into the homesharing business.  As such, it’s always important to remember that a hotel is essentially a concrete box in the sky where people sleep.

Time will tell if hotel leaders further embrace homesharing. However, with operational challenges – from outsourcing maid services and property management – this means completely breaking away from the traditional hotel business model.

Based on the recent Skift article, it seems that the jury is still out, and it may be best to stick with what hospitality leaders know best – selling and marketing their current properties by providing the best guest experiences.

Can Hotels Foster Loyalty When They Own Too Many Brands?

With more than 1,000 hotel brands in operation and the biggest hospitality providers expanding their ever-growing portfolios, a recent Skift article asks the question: can hotel companies have too many brands?

The publication used its Skift Forum Europe event as the sounding board for this question to a number of top hotel leaders. The resounding response was “no.” As one participant said, “it’s like being too skinny or too rich.”

Though, in the age of property acquisition to expand their footprints, many leading hospitality providers may find that owning too many brands can create a major challenge – maintaining guest loyalty when there’s just too much to manage.

As highlighted in the article, Radisson is actually taking a different road by focusing on a “less is more strategy.” This approach makes it easier to communicate with consumers and to build brand loyalty by keeping the number of brands relatively small in any one portfolio.

Having the right resources to manage only one brand can be challenging for any major company, especially in an era where guest loyalty can be achieved or lost very rapidly. Further compounding this is the fact that all hotels brands are chasing long-term guest loyalty, which can be too difficult to achieve when the main goal is to grow their portfolios.

Large hospitality providers should consider developing a brand strategy like Toyota. The automotive manufacturer aims to have “life-time” customers who grow and mature with the brand.

For example, a recent college graduate can start with a more cost-effective Scion, then eventually be a driver of a Lexus as their career progresses. Through the entire growth path, Toyota is there with the right vehicle that matches where the consumer is in their life. Many large hoteliers also own multiple brands that can fit into the lifecycle of a traveler as they work their way up the corporate ladder.

Overall, balancing business expansion with brand nurturing efforts can be very challenging. There is no magic bullet for creating and maintaining brand loyalty. The best option is to not forget to invest in the right innovations and talent that help propel a brand into the future.


Big Hotel Brands Taking Guest Loyalty to the Next Level

With an expanded focus on the guest experience, Marriott International recently announced that it is offering one set of unified benefits across Marriott Rewards, The Ritz-Carlton Rewards and Starwood Preferred Guest (SPG).

According to Marriott’s press release, members will now have access to book stays and earn or redeem points among 29 participating global brands comprising 6,500 hotels in 127 countries and territories.

However, the big part of this news is the expansion of the Moments experiential platform, which offers more than 110,000 experiences in 1,000 destinations. As highlighted in this recent SKift article, this move will allow Marriott to grow from a hotel brand to a lifestyle brand — something that Airbnb has already done with its own Experiences platform.

The guest experience moments will include such activities as classes with master chefs, backstage tours at concerts, or even — potentially — the chance to throw out the first pitch at a World Series game, according to this recent Business Insider article.

By taking this approach, Marriott is effectively aiming to provide a level of loyalty and guest experiences that are unparalleled. The goal is to provide guests with the right experience to the right guest at the right time. The challenge will be effectively using the guests’ personalized data to achieve this – and avoid sending very bespoke offerings to Courtyard by Marriott travelers.

As the Skift article points out, this new offering can re-define the role of the concierge. While many believe that it will be “the end of the concierge,” Marriott believes that Moments will augment these services by giving concierges “immense and extraordinary local knowledge”.

The goal of this shift at Marriott is to redefine the relationship with the traveler. With the unified loyalty offering, combined with rich guest experiences, it seems that the global travel brand is shaking up the industry – and the guest will ultimately benefit in the end.


The Evolution of the Front Desk: Take a Page from Innkeepers

“Treating a traveler as nothing more than a walking, talking, grab bag of preferences, attributes, and emotional buttons to be exploited for upselling will backfire on hoteliers.”

With the convergence of technology and data in the hotel arena creating new ways to please guests, the quote above from a recent Skift article reinforces that it’s not all about the data. Today’s hoteliers need to do much more than rely on a “grab bag” of preferences when fostering guest relationships at the front desk.

Guest preferences should be used to create deeper relationships and focus on serving, not upselling. All of the guest data in the world cannot overcome the need to please guests on an emotional level, which needs to happen at the front desk. Relationships can be gained or lost at this initial point of contact. For example, asking a loyal/returning traveler if they have stayed at your property before, can set the relationship back to “ground zero.”

In addition, as this article highlights, savvy guests worry that personalization is only being used to take money out of their pockets. Smart consumers in general know when they are being sold to, and over-selling can create a dynamic that greatly minimizes loyalty.

As such, larger hotel brands should take a page from innkeepers and independent property owners. Many of these smaller players do not have large “big data” systems from which to leverage and design new ways of selling. They rely on the simple face-to-face communications at the front-desk that starts with a conversation.

Smaller property owners are also savvy about pleasing returning guests. If a guest returns, and they know, for instance, that this traveler previously visited the area to visit wineries, the innkeeper will generally ask about this. “Will you be visiting the wineries again?” “May I recommend a more off-the-beaten path winery that I think you will enjoy?” The list of engaging questions and personalized recommendations goes on and on …

Gaining true emotional intelligence when interacting with guests at the front desk is paramount. With competition continuing to increase in the hotel arena, and many large brands aiming to “out tech” each other, much can be gained by actually establishing a face-to-face relationship with travelers.

All of the data in the world will serve no purpose unless it’s being used to in ways to go beyond upselling.



Can Hotel Brands Be Like Facebook and Amazon?

One of the core strengths of Facebook and Amazon is that they are continually connected with the customer. The ability to interface with customers on a highly frequent basis is a model that many other industries, such as hospitality, want to emulate.

During a CEO panel at the recent International Hotel Investment Forum, a number of hotel leaders discussed this exact strategy: the need to interact more frequently with guests, which typically is only a couple of times a year.

While many brands are aiming to achieve this goal by offering a wide-range of services through a dedicated mobile app, the reality is that being connected with customers in the vein of Facebook and Amazon is not feasible.

This could be an example of hoteliers trying to be all things to all people, which can result in losing focus of their core businesses. Hoteliers often forget that the product they are offering is renting beds to guests. It is said that the rest is just “noise.”

Rather than focusing on being the next Facebook or Amazon, hotel leaders should focus on knowing their guests better, which helps in achieving the goal of deeper relationships.

For example, having true guest personas, and building programs around them, is a critical first start to reach this goal. This takes the concept of loyalty to a higher-level and allows hotel brands to enhance the customer experience by being truly guest focused.

The hospitality sector is undergoing a time of tremendous change with many external threats from AirBNB and OTAs – both potentially cutting into profit margins. As a result, many hotel leaders are looking for ways to have frequent and deep relationships with guests, and often turn to other innovation leaders to emulate their business models.

They key to achieving this is focusing on the core part of your business, and avoid being drawn into strategies that will only create more noise in the marketplace.


Guest Customization is King for Luxury Travel in 2018

As a more robust travel economy has taken hold over the past several years, the luxury sector has been leading the way with guest personalization and empowering hotel employees to provide the best service possible.

According to a recent Skift article, luxury hotels will continue this evolution in 2018 – with guest customization continuing to rise to the top.

“Customization is the next big innovation in luxury travel,” said Chinmai Sharma, chief revenue officer of Taj Hotels Resorts Palaces and Safaris, in the Skift article. “Every traveler has his or her own requirements. Companies that differentiate themselves will treat each customer as his or her own segment.”

The article also highlights how Marriott will be at the forefront of the customization trend when it launches its new loyalty program that combines Marriott Rewards, Starwood Preferred Guest and Ritz-Carlton Rewards. Part of this vision is to have guest-facing apps that serve as a central repository for everything from controlling room temperature to unlocking rooms to incorporating guests’ music playlists.

However, per the article, there is one elephant in the room – the ability to use innovation to bring this customization vision to life. In addition, many hotel CTOs are tired of launching technology for the sake of technology – meaning that new innovations must be tied to overall strategic imperatives.

This will require a balance between providing innovation and “human warmth” that comes from providing top service for guests. Many hotel leaders believe that luxury travelers have a “millennial mindset,” and are seeking out the right experiences, which will not be fully grounded in just technology.

Moving into 2018, it is clear that guest customization will be king for the luxury hotel arena. The challenge will continue to be how to bring the vision to life in ways that mix innovation and old-fashioned service to be truly personalized for each guest.


How to Best Measure Hotel Guest Loyalty

For the past several years, the term ‘loyalty’ has risen to become a major industry buzzword in the hotel arena. As a result, many hoteliers have launched customized loyalty programs, and implemented new innovations to attract and retain guests.

This is especially timely because the competition from OTAs, other hotel brands and AirBNB has become increasingly more intensified. With this in mind, it begs the question: are hotel guests truly loyal and how do we measure it?

According to a recent McKinsey podcast about the ‘consumer decision journey,’ only three categories out of 30 are loyalty driven. While this may not be good news for hoteliers, the data provides an opportunity for hotel brands to develop the right programs to create loyalty.

The best way to do this is to ask the right questions to your guests. Many large brands rely on Net Promoter Scores (NPS) to gauge loyalty, which at first glance seems like a viable program to implement. However, NPS scores rely on asking “how likely would a guest recommend a hotel to a friend or family member.”

Although this seems like a powerful point of data, loyalty is much deeper that just recommending a product or a service. Instead, hoteliers should ask these two questions:

  1. What one thing delighted you about your stay at our property?
  2. Is there anything about your stay that could have been improved?

These two questions tackle both the positives and the negatives of a stay. This two-sides-of-the-coin approach will allow a hotelier to learn about what is working well, and what needs to be improved. From there, they can make the organizational changes required to address these issues, and enhance upon what is already working well.

The McKinsey podcast may offer sobering news for hotel brands about the state of consumer loyalty but by asking the right questions, tailoring day-to-day operations, and developing loyalty programs accordingly, it is possible to crack the code for delighting all guests in ways that they will always want to return.


Taking the Next Step on Digital Engagement With Hotel Guests

A new study has found that hotel brands that engage with guests digitally are three times more likely to see them return to the property. The report also highlighted how guest loyalty will be 19 times greater if a hotelier responds to a guest social media post within 30 minutes.

While these takeaways are not a huge surprise, it reinforces how guests see a tremendous value in interacting with hotel brands. In today’s social media realm, the number of “likes” and “comments” serve as a validation for many people, and a response from a brand – or even a celebrity – is cause for celebration.

On the surface, this is a great thing for hotel brands. However, perhaps it’s time for hoteliers to take this idea of guest responsiveness to the next level. Rather than just offering a kind comment on an Instagram post of a guest enjoying the pool and other amenities, provide comments that have context to the guests wants and needs.

For example, arm yourself with data on the guests previous travel habits (i.e., did they enjoy the on-site restaurant, did they use the pool, etc), and offer a comment on another one of their travel-related posts. For example, if a guest puts up an Instagram post about a recent trip – not related to your property or area – provide a highly positive comment about how great that that trips looks, and that you “hope to see them at your property’s pool in the summer of 2018.”

Of course, there is a fine line when it comes to mining guest data and turning guests off. A comment about how you hope they will return to your property and enjoy another steak dinner could raise concerns about hotels knowing too much about a guest. “Wow, they tracked how I had a steak last time I stayed there … that’s a bit creepy – what else do they know?”

The most savvy hotel brands certainly understand this challenge. But, when done right, it is possible to further digitally engage with guests in ways that create long-term loyalty.

An Emerging Digital Divide in the Hospitality Arena?

For the past several years, many major hotel brands have been focusing much of their PR efforts on showcasing the latest innovations – from smart guest rooms that leverage the Internet of Things (IoT) to robotic butlers and beyond.

Several brands have also been developing new incubator locations to help fast track the latest innovations into the marketplace. This cross-section of cutting-edge design and new technologies will certainly pave the way for the hospitality industry to be on the forefront.

However, when it comes to bringing these innovations to life, will we see this tech adoption only at key properties in major cities on the U.S. coasts? These are typically the locations that ideally serve as the test markets for the new innovations – further supported by the tech talent, companies and early adopters who tend to live and operate in these regions.

But what may occur is that only properties in these regions will have the latest innovations, with many others in the middle of the country lagging behind. This could result in a new hotel digital divide, which could rapidly widen based on how quickly new innovations are adopted.

Of course, since this is a new frontier, larger hotel brands hopefully will be developing tech expansion plans that could stretch across the entire country. Although effectively implementing this expansion could be a costly proposition for any hotelier. And once this goal is achieved, a new batch of technologies could quickly emerge, which would require even further investment for another round of expansion. And, so the cycle continues …

If hotel brands are challenged with making this investment cycle, this digital divide may continue to grow, and since this is a new frontier … nobody really knows how it will all play out.

Hospitality Loyalty Program to Learn from the Decline of “Daily Deal Mania”

As our economy climbed its way out of the “great recession” of 2008, companies like Groupon and LivingSocial quickly emerged by providing much needed daily deals to consumers.

For a period, these types of companies performed well, but since they were built on only providing short-term loyalty to brands, they did not translate into long-term revenue opportunities. The consumer took advantage of one discount opportunity, them moved onto other things – without remaining loyal to the business that offered them the “latest deal.”

Fast-forward to today, and Travelzoo, a newsletter-focused daily travel deals, is finding itself in a similar situation. According to this recent Skift article, many of the company’s challenges come down to “daily deal mania” declining due to a stronger economy where consumers are no longer seeking short-term travel deals. In other words, consumer confidence is high right now, and seeking deals is not a priority when many have extra money for leisure travel.

For hoteliers, perhaps this could be a lesson in how to best maximize their loyalty programs?

Rather than focusing on providing last-minute deals, it might be a good time to shift the strategy to target the buyer with the goal of helping them to plan a trip out in the future – based on their previous purchasing patterns and personas.

As we have highlighted before, this approach looks not only at the persona, behaviors and experience ratings of the guest, but also takes into consideration the same data points gathered from guests with similar personas. It can also create an intelligent query for the guest’s persona that can be triggered on demand.

It’s not a huge surprise that companies like Travelzoo are experiencing some challenges right now, which could certainly turn around when/if the economy takes a downturn.

The key right now is to take these business lessons learned and develop loyalty programs that are specialized, leverage data, and are designed to create lasting guest loyalty.