Forward-Looking Marketing: Becoming the Oracle of Delphi
By Michael Waddell Managing Director, INTEGRITYOne Partners | September 02, 2010
The links between hospitality marketing promotions and guest satisfaction are often tenuous, leading to strained discussions between marketers and hospitality property and executive managers. Marketers focus on top-line results, sometimes to the detriment of guest relationships, while managers might be more skeptical about pursuing potential revenue spikes that could reduce guest satisfaction. And despite well-intentioned ingenuity, marketing programs don't always deliver as expected.
This is the quandary. Promotions are often a great way to fill otherwise empty rooms, introduce new guests to a property, and/or diminish seasonal and even weekly periods of reduced occupancy. On the other hand, promotions are not always successful, that is, they can cost more than the additional revenue they ultimately generate no matter how many rooms they fill. And even when successful, promotions can have a negative impact on guest satisfaction over the long term by changing guests' expectations. For example, offering free weekend breakfasts to fill in-town rooms with the summer drop in business travel could create the expectation that free breakfast should always be served on weekends. Unfulfilled expectations such as this can lower guest satisfaction over time.
But what if, like the oracle of Delphi, a hospitality company could look into the future, predicting which marketing programs would yield the best results while not decreasing guest satisfaction. The oracle would likely receive gratitude in the form of improved metrics, satisfied guests, and happy senior managers or owners.
The truth is, ensuring greater success of marketing promotions and maintaining guest satisfaction levels can both be achieved by maintaining an ongoing guest satisfaction program [see recent article "Taking 'Welcome' to the Next Level: Guest Experience Requires Solid Measurement and Reporting Structure") and using this program to guide planned marketing promotions toward positive revenue and guest satisfaction results.
Understanding the Metrics
Hotels continuously look for ways to make operations and revenue management more effective and less costly. They do this by working to drive occupancy up, increase revenue per available room (RevPAR), and drive the yield index ratio up (revenue share/supply share). In addition, they look for programs that drive interest and the intent to repurchase or return.