By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
We all aspire to make our places of work as prestigious and
renowned as possible so they can attract those high-net-worth international
guests. Plus, it doesn’t hurt in times of crisis to be able to draw from a
diverse range of feeder territories to keep a healthy bottom line. But there is
a fallacy in trying to overreach beyond what your hotel is capable of.
This is particularly true as the pandemic continues to stymie
the international travel industry. The longer it continues to plague hotel
owners’ wallets through an inability for foreign guests to visit your locale
(or through a media-driven fear of journeying abroad), the more new behaviors
will permanently change people’s outlook on travel.
Even before the crippling shutdowns in March 2020, the
danger was that if you tried to push broad awareness across too many regions
and too many different countries, you would inevitably end up compromising on
how well you reached and serviced those guests arriving from your core markets.
Coming from the advertising world before formally entering hospitality and
starting a consultancy, I can firmly state that your key feeder markets became
as there are because your teams reinforced a great onsite experience with
consistent marketing efforts. Let the advertising slide and those guests may
soon forget to choose your hotel for their upcoming corporate meeting or
special occasion.
With the prospects for fully open borders now a far-off
dream for many hotels and resorts, how does a property’s senior brass accept
that most of their revenues will be locally driven for years to come? How do
you know when your resort has only regional appeal and will be hard-pressed to
ever again reenter the international marketplace? (As an aside, I say resort
here to emphasize the rural nature of all this, but similar points can be drawn
for urban properties.)
Regional State of Mind
Whether it’s a lack of direct air routes from desired markets that have allowed
travel in a post-Covid world, being situated a great distance from major
airports, a lack of iconic nearby attractions, currently incongruent product
positioning for where you want to target, too little capex to win any design
awards or a slew of other factors, there are often many things beyond your
control that hinder your awareness outside of the territories where you are
already known.
From experience, the first step is oftentimes to accept that
it’s entirely okay not to be an internationally exalted, bucket list-worthy
property – one that people will go through all the Covid-related hoopla to
visit from afar. Once you get to the senior planning level, though, what is
within your control is to honestly analyze the current situation as to what territories
you will realistically be able to attract then develop a plan with reasonable
expectations for growth.
In more ways than one, what I’m addressing here is how the
college textbooks are doing a disservice to the term ‘market penetration’
because what’s taught in classroom terms does not echo the reality of balancing
a budget down to the penny. I hear this term thrown around like it’s nothing,
and yet extending your awareness into any new demographic niche is a truly
dogged affair. Particularly in a time when marketing allocations are threadbare
and many guests are too afraid to leave their own houses, a hotel organization
must be exceedingly scrupulous in how it selects new territories to target
while also sustaining market share amongst the core audience and factoring in
the demands of ownership.
A Canadian Example
From an assignment early this year working as an asset manager for an
independent resort in British Columbia, I can offer several less-abstract tips
to aid in your understanding. Not located within driving range of the primary
international hub of Vancouver nor within the ski destination mecca of Whistler
meant that building a following outside of the local area was extremely hard to
get off the ground.
So, how did we initiate growth out of this niche? As a
start, we had to give guests an unforgettable reason for visiting. As a
mountaintop resort, the jaw-dropping views were enough to merit a one-night
stay but increasing LOS and return guests meant we needed another pillar to
hang our hat. The decision was to become a food destination with exquisite
cuisine to make every meal incredible and an extraordinary wine cellar focused
on the best of the province. Let me just say that this wasn’t easy!
Next, collaboration was essential. Our public relations arm
worked closely with the DMO to develop stories highlighting the best of the
area paired with our resort, all with the broad goal of developing awareness
nationwide and into the lucrative West Coast states of Washington, Oregon and
California. We also joined an international loyalty association to help gain
some notice in Western Europe.
While this was definitely a more indirect play for revenue,
it helped to diversify our guest origin percentages in order to not be entirely
dependent on the local feeder market. Plus, these visitors were hardly ever
short lead; they also had a significantly longer LOS than hyper-local
staycations and more often than not reserved our upper-tier room products. For
a small resort like this one, we’re not talking about a ton of rooms here, but
enough to still make the whole endeavor profitable – a small win is still a
win.
Thirdly, with these two projects tackled, assigning budget
for breaching new markets became a much more focused discussion. Beyond
campaigns to inform the local market about what’s new on property and periodic
promotions to sustain their interest, we set our sites on Vancouver as the
nearest metropolis with high wage-earners and mostly through digital channels
so we could stay nimble, have transparent data on how the audience interacts
and work within a tight budget. Concurrent to this, we engaged qualified media
representatives to experience the resort so they could write for our target
demographic of middle-aged vacationers or wealthier retirees.
All told, this niche extension was two years in the making
to both align all of our underlying operations so that we had an impactful
reason to visit and to understand this target demographic for maximum appeal.
Needless to say, it paid off once the coronavirus hit and the property suddenly
became top of mind for British Columbians who could no longer fly anywhere
across the Pacific. Obviously, some details are lost in the summary, but I
applaud any hotelier who has had similar success in making an unwaveringly
regional resort into something more than what it was destined to be.
While regional resorts experienced booming occupancies
during the summer of Covid when everyone was thinking local, it’s nevertheless
important to continually refine your hotel’s raison d’être in order to sustain
return visits and regional interest long after borders reopen.
About Larry Mogelsonsky
Larry Mogelsonsky
One of the world’s most published writers in hospitality, Larry Mogelonsky
is the principal of Hotel
Mogel Consulting Limited, a Toronto-based consulting practice. His
experience encompasses hotel properties around the world, both branded and independent,
and ranging from luxury and boutique to select-service. Larry is also on
several boards for companies focused on hotel technology. His work includes
five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013),
“Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel” (2018).
You can reach Larry at larry@hotelmogel.com to discuss hotel business
challenges or to book speaking engagements.
Media Contact:
Larry Mogelonsky
Email: larry@hotelmogel.com
Website: http://hotelmogel.com/
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