Saturday, 7 January 2012

If you control the cloud on the horizon ... is it still a cloud?

Photo by: Photograph by Arco Images/Alamy; 

In a recent article for Business First Online, Howard Hastings, MD of Hastings Hotels, identified 3 clouds onthe horizon in 2012 for the NI hospitality industry.  The first two - energy and food costs - are broadly outside the control of a hospitality business, no matter how sustainable and self sufficient they try to be.  The third, however, was “the increasing dominance of commission hungry Online Travel Agencies (OTAs), which extract a significant proportion of room rates that have already been trimmed in the face of weak demand.” This strikes me as rather an odd complaint. The hotel has complete control of where and for how much it sells its rooms so why let these OTA’s be a cloud?

Is it because they have greater distribution than your business? They may have; however, guests do shop around and visit various websites in their buying process, frequently including the hotels own. There is an argument that you use 3rd party sites for what is termed the “Billboard Effect” that is to let potential guests know you are there, however, rates and availability should be carefully managed. You also need to have a strategy to convert the guests likely to return to booking through your own website in the future.
See Cornell Center for Hospitality Research report for more info on the billboard effect-

Is it because customers always go for the cheapest price? Well most hotels operate Best Price Guarantee on their own site. After all you are better off being equal or slightly lower on your own site rather than loose 10-30% in commission.

Is it because the OTAs offer a better shopping experience on their site? Better bundling with other travel goods? More local information? Honest reviews – the good, the bad and the ugly? Genuine user photos rather than airbrushed promo shots? Better confirmation, pre and post stay communication? It has to be said that this is more likely (though Hastings are generally excellent at all this stuff due to the input of Niall McKeown and theteam at ION Online Marketing)

The question is; if businesses spent a fraction of what they lose to Online Travel Agents on creating a compelling brand proposition aimed at a market willing to pay for that proposition; then invested in creating an integrated on and offline marketing campaign communicating that brand proposition utilising relevant social media; and finally their website, online booking process, pre visit, visit and post visit experiences reflect the proposition ... there would be one less cloud on the horizon.

The problem is that to do so you need upfront spend whereas the money lost on commission is either taken off room rates or paid at a later date. Saving on marketing and losing on room rate and commissions may look attractive in a budget but looks less attractive in operation.

Invest in your brand proposition and its online experience. If you want to take control of your own weather it is an investment worth making.

Sunday, 20 November 2011

Reputation Management; How to deal with Tripadvisor, Yelp et al.

I have deliberately not used Online as part of the title.  Your business reputation is never an online only matter.  My theory is that if you handled complaints well offline you will handle them well online.

A prime example of offline affecting online is Ballymascanlon Hotel, where they are in the process of suing Google due to the auto-complete function suggesting “Ballymascanlon Hotel Receivership” as a search term.  The issue is that if people were not searching for that term already due to offline gossip and rumours then Google would never suggest it as a term.

With regards to online review sites ... you should handle them exactly the same way you would handle the same situation offline.  Translating the online to an offline scenario just requires a little thought.

Scene 1: Direct Complaint
An immediate review complaining about a perceived failing = guest standing at counter complaining loudly.

In the offline example you would address the customer professionally apologising that they feel that way and asking them to a quiet part of the premise to go over their issues.  Online you do the same, deal with it professionally and get them on e-mail or even back to the premises to discuss.  You would not get into a shouting match at the counter so why would you online?

Scene 2: Hearsay
A Review appearing days later alleging anything from slow service to food poisoning = someone telling you at a networking event, or coming in to the business and saying “A friend of mine was in last week and he says he had a really bad experience.”

Offline you would have said something along the lines of “I am sorry to hear that, do you know if he let us know at the time?  Either way would you like to get your friend to contact me and we can discuss it with him and see what we can do to solve the problem.”  Do the same.  “I am sorry you/they did not let us know at time.  Please contact us at your convenience so that we can discuss the circumstances

The golden rule is that as long as you handle the complaint professionally if the reviewer then keeps on going on about it, they look foolish and the business gains the kudos.

The important point is to handle the complaint well.  My personal preference is always to get the guest back and make sure they have a great experience.  Again if they refuse this then it is them that look unreasonable.  I would never (read very, very rarely) give money off.  If you do that they go away and say I had a bad experience and got my money back.  Whereas if you get them back then they say I had a great experience but they got me back and it was great.  Please do not do what some people do and invite them back with so many restrictions and caveats that you end up souring the invite.

Scenario 3 – The False Review
The situation where a competitor (or disgruntled member of staff) posts a review about your business alleging a bad experience or about their own business reciting a glowing experience. = Competitors or ex staff bad mouthing your business in the pub.

Despite the fact it is easier to hide your identity online, I am convinced that these will come out eventually and online as offline it is the person spreading the rumours that looks foolish.  Most of these sort of reviews can be handled by the procedures above.  With the added response of ...  “I am very sorry; however, we do not appear to have a record of your visit?  Please accept our apologies and contact us directly so that we can address your concerns.” This would be an obvious indication to most readers that the review is dubious.

Scenario 4 – The Positive Negative Review!
A family complain about the provision for children in a predominantly couples and business focused hotel.  This situation could apply online or offline, however, in this case it can re-enforce your brand.

The key here is that the family is not your target market.  As long as the complaint is about the children’s facilities and you handle it professionally, this will actually re-enforce to business people and couples that you are the right place for them to go to and you really do not cater for children. 

The main question you have to ask yourself is how did the family come to stay with you in the first place?  If it turns out to be because of necessity, e.g. you were last room available and they had to travel those dates, that is fine.  If there is something in your marketing material that could be construed the wrong way then change it.

Businesses get far too hung up on the perceived secrecy of online reviews, the fact that they are visible to so many people and in seeing all negative reviews as bad.  The truth is that if you keep site of your core markets and handle complaints well offline ... you will handle them well online (and vice versa).  Just because it is the web the rules do not change.

Friday, 11 November 2011

Sun Tzu: Art of Hospitality - Earth

The third of Sun Tzu's factors affecting hospitality (sorry warfare) that needs to be "evaluated comparatively" and  it's "true nature" sought out is earth ...

"Earth encompasses far or near, difficult or easy, expansive or confined, fatal or tenable terrain."

This is really about how you market your services.  The main issue with tourism, hospitality and leisure is that it is very difficult to communicate the whole experience that you offer (product, service, ambiance, atmosphere, feeling) at a distance so you have to be creative in your communication and the decisions around where you communicate and who you communicate to.  The old 'place' of the marketing p's.

Far or Near: Domestic or International? Or even the difference between marketing (off property) and merchandising (on property)?

Difficult or Easy: Be unique and different or latch on to others doing similar things?  Go it alone or be part of a brand?  Just look at the "money" side of "value for money" or try and create real "value" in a cost effective manner?

Expansive or Confined: Focus on a niche or go after a wide market? An inch wide and a mile deep or a mile wide and an inch deep? High volume / low margin v Low volume / high margin?

Fatal or Tenable Terrain: I would argue that getting into a price war is fatal terrain.  However, more importantly I think that a business can move into fatal terrain without noticing.  This brings into play another favourite quote of mine.

"Sometimes we stare so long at a door that is closing that we see too late the one that is open."
Alexander Graham Bell

Business are so invested in a dying market that they do not see opportunities to move into a more tenable market.  The prime example of this at the minute is pubs throughout the UK and Ireland.

These decisions all need to made by looking at the company, its market, its history, the aims and objectives of the owner and a number of other factors ~ often with the help of an outside set of eyes.

Sunday, 6 November 2011

Sun Tzu: Art of Hospitality - Heaven

The second of five factors that need to be "evaluated comparatively and through estimations" is Heaven.  This concept is familiar to anybody in the hospitality, tourism and leisure industries.

"Heaven encompasses yin and yang, cold and heat, and the constraints of the seasons."

There are two areas of hospitality we can relate to 'Heaven' and the 'constraints of the seasons'.

Business Patterns
Most sectors of the industry have their patterns, daily, weekly monthly and yearly, that could be described as "the constraints of the seasons".  However at the current time, most people I talk to are saying that these patterns are harder to predict.  Enquiry/Booking/Consumption windows are all much shorter.  Quite often it appears that the patterns, and the reasons behind them were taken for granted.  As patterns change every effort should be made to understand why.  Records should be kept from previous years so that you can compare notes and ideally weather comments as well as any events taking place in the local area.  As you begin to understand the reasons for the patterns in your business you can respond quicker when you see things happening that you know effect you.

Seasonal Purchasing
The other application of this factor is in menu planning, and other areas of resource utilisation.  The more you can keep it local, keep it seasonally appropriate, use natural energy, the more you harness the seasons as a way of reducing costs the more you will actually contribute to the local environment and economy and the better your end product will be!