What hospitality marketing professional hasn’t been caught up to some degree in Twitter Mania?  Let’s sell some rooms!  So & So just sold 400 room nights through a promotion on Twitter.  We should be out there.

I’ve read the same articles you have about a hotel that unloaded gobs of rooms through Twitter (usually at a steep discount).  But what I haven’t read yet is an authoritative Twitter Case Study showing the manpower investment actually provided an acceptable ROI.

Sometimes it’s best to step back and see what others are doing.

I did read an interesting story in Brand Week saying major marketers are somewhat underwhelmed with Twitter. According to the article:

• Hyundai, which was named “Marketer of The Year” by Advertising Age is ready to write the microblogging service off.  Joel Ewanick, group VP of Marketing says he finds Facebook, which has copied most of Twitter’s best features, to be a superior platform.
• Procter & Gamble execs recently told venture capitalists that they didn’t think Twitter was “particularly relevant to what they’re doing on the brand-building and advertising side.”
• Verizon, a company that spent more than $1 billion on advertising in 2009, has around 5,000 followers. Coca-Cola has 15,000.
• Apple’s not even on Twitter.
• Some corporate Twitter accounts suffer from prolonged neglect. Delta Airlines’ Twitter page went from June 17 to December 22 last year without a single Tweet.

One Twitter success story cited in the article comes from Dell Computer which traces $6.5 million in 2009 revenue to its outlet store as a result of Twitter – an asterisk in the balance sheet for a company with $50 billion in sales last year.

The article does point out that companies like Dell, Comcast and Best Buy are using Twitter successfully for customer service.  And others like Dell are using it to promote specials.

It’s true the number of followers for celebrities like Ashton Kutcher or Oprah Winfrey have helped create Twitter Mania. Someecards which has 1.7 million followers vs. Hallmark’s 2,000 shows how a small company can use Twitter to outflank an older, bigger rival. But Someecards has a “voice,” a definitive edge to its Tweets that few hospitality marketers might find appropriate for their properties. You’ll have to read the article for more on this.

Now I’m not saying Twitter can’t find a place in your overall hotel marketing program.  But remember – it’s a marketing tool.  Evaluate it like you would any other tool.  Set objectives.  Determine how it will impact your customers. Decide what resources are required.  The service may be free, but the manpower requirements to create and manage a successful program are not.  How will you measure success?  What’s an acceptable ROI?

Safe Travels – Madigan Pratt

PS – If you know of a great Twitter Success Story – one with proven ROI, please let me know.  I will be glad to feature it in a future post.

Speaking before a conference of luxury Italian companies, luxury hotel operator Rocco Forte offered a stunningly concise summary of the toxic hospitality marketing strategies used by far too many hotels in these recessionary times.

“What happens in a hotel cycle [during a recession] is always exactly the same.  Revenue dissipates, occupancies go down, hoteliers then sacrifice rates, discounting to boost occupancy.  As they discount rates, they also decrease services and they cut back on every item of expense.  Rates continue to fall as occupancy rises.” [Bloomberg Report]

Despite research from Cornell University, Smith Travel Research, PKF Consulting and others stressing that this is absolutely the wrong approach, hospitality marketing professionals continue to follow the same tired, brand destroying marketing strategies every time a recession comes along.

While travelers are looking to save money, they still expect a quality experience – especially luxury travelers.  The experience is what most hotels advertised before the recession and what they built their brands upon.  But is it being delivered now?  With fewer staff to take care of their needs, reduced amenities, and more hidden charges, the quality of the experience is waning.  Also waning, no doubt, is guest loyalty.

The Price of a Poor Experience

On the Harvard Business Publishing Blog author Peter Bregman recently wrote a great article entitled, “The Price of a Poor Experience.”  In it Mr. Bregman presents interesting findings from research among hundreds of non-profit organizations and their successes and challenges to retaining members during the current economic downturn.

This is pretty much the same challenge luxury hoteliers face.  They want to retain customers, encourage repeat visits and generate positive word-of-mouth – the most powerful form of advertising.

Here’s what the research showed:

1. There is no correlation between membership and price increases.  In other words, customers didn’t leave simply because an organization raised its prices.
2.  There is a direct correlation between membership and how likely a customer is to recommend the organization to a friend.  This is known as the net promoter score – think of it as your word-of-mouth score.

If customers like an organization’s products or services enough to recommend them to others, then that organization could raise prices, even in a down economy, without losing customers.  But if the organization downgraded the customer experience, then even lower prices would not prevent customers from abandoning it.

One could argue hospitality is drastically different, but human nature is the same across all categories.  In the highly competitive hotel industry, people may be looking to pay less today but still expect to receive good value.  Cutting rates while diminishing the guest experience will decrease a hotel’s “net promoter score” and brand value, which makes it more difficult to recover when the recession subsides.

Following a toxic hospitality marketing strategy can prove fatal.  Cornell University, Smith Travel Research and PKF Consulting have written extensively on the topic recently.

Stay tuned to next post to learn what hospitality marketing strategies are successful in a recession and helped a small luxury hotel prosper in difficult times.

An article in today’s New York Times details how magazines are suffering as a result of a collapse in luxury spending.

• While the year started out well, the bottom fell out in October.  According to MasterCard’s SpendingPulse, luxury spending dropped 20.1 percent in October alone.

• More than half of affluent consumers have cut their spending on luxury products compared with a year ago, according to a study by Unity Marketing.

• Ad pages at the top luxury magazines fell 22 percent year over year for the December issues, according to Media Industry Newsletter.

As an owner of a small luxury hotel what can you take away from the article?

• You already know it is rough out there.
• While not placing large ad budgets in Conde Nast Traveler you should know most media will offer steep discounts – if you are a good negotiator.
• While magazines rates will certainly drop, concentrate your marketing in media that will produce the greatest ROI.  Focus on your best customers and prospects.  Expand email and direct marketing relationship building programs.  Keep your web site current and optimized and your database in good shape.

We specialize in customer relationship marketing, so if you have a question, contact me (see About Us).  Safe Travels – Madigan Pratt

An article in today’s New York Times details how magazines are suffering as a result of a collapse in luxury spending.

• While the year started out well, the bottom fell out in October.  According to MasterCard’s SpendingPulse, luxury spending dropped 20.1 percent in October alone.

• More than half of affluent consumers have cut their spending on luxury products compared with a year ago, according to a study by Unity Marketing.

• Ad pages at the top luxury magazines fell 22 percent year over year for the December issues, according to Media Industry Newsletter.

As an owner of a small luxury hotel what can you take away from the article?

• You already know it is rough out there.
• While not placing large ad budgets in Conde Nast Traveler you should know most media will offer steep discounts – if you are a good negotiator.
• While magazines rates will certainly drop, concentrate your marketing in media that will produce the greatest ROI.  Focus on your best customers and prospects.  Expand email and direct marketing relationship building programs.  Keep your web site current and optimized and your database in good shape.

We specialize in customer relationship marketing, so if you have a question, contact me (see About Us).  Safe Travels – Madigan Pratt

Advertising Age Magazine has a great article on the changing demographics of American households that every hospitality marketer should read – it titled “The Changing Face of the American Consumer.”

In addition to outlining how demographics are changing the article adds insights in marketing tactics and messages to use and to avoid when talking to different demographic segments.

Did you know the average U.S. head of household is now nearly 50 years old (49.5, to be precise)?   Did you know that using the trite expression “60 is the new 40″ is not an approach you should use when marketing older demos?

There is good news and there’s bad news for the small luxury hotel marketer as the demographics of Americans evolve.  Knowing how to exploit the good news to build occupancy and revenue will be key in the years ahead.

While not a definitive read on the subject the article provides valuable insights on what you should be doing (or at least planning for) now.  Well worth a read.

Let me know what you think.  Safe travels – Madigan Pratt

New information published in April by Jupiter Research confirms that the ranking of your web site on Google is critical to being seen. Search Engine Optimization has never been so important!

Today nearly 30% of web searchers confine their searches to the first page – only. This is up from 15% in in 2002.

There are two possible explanations:

• People are more impatient than ever before
• Search is producing better results and people don’t have to look much beyond the first couple of pages

The truth most likely is a combination of the two.

As a small luxury hotelier make sure your site is being updated and optimized on a regular basis – the search engines are continuously adjusting their algorithms.

If your site does not come up on the first page for key words like “luxury hotel” in your destination, the chances are you’re at a severe disadvantage vis-a-vis your competition.

The Goal – Page #1 for keywords.

What do you think? Safe travels, Madigan Pratt

In a recent article entitled, “Fairness and Channel Coordination,” two Wharton marketing professors and one from the University of Minnesota summarize their research by saying:

A manufacturer and a retailer can both end up making more money if they are fair minded, setting prices with an eye to achieving an equitable outcome in their joint marketing channel as opposed to merely maximizing their individual profits.

Our experience working with small luxury hotels and wholesalers would indicate there is much truth to the professor’s findings.

Hotel bookings are generally higher with those wholesalers where a better relationship exists. And the best relationships are those where both parties feel they are being treated fairly.

What do you think?  Safe travels – Madigan Pratt