What distribution tricks independent hotels use

National Report – Hotel Management in October hosted the first webinar of a three-part series called, “The Independent Voice.” The webinar, subtitled “Distribution Tips and Tricks,” discussed how independent hotels can develop effective distribution strategies to better compete against larger, more powerful chains.

The first panelist to present was Bryan Woodward, CMO for Horseshoe Bay Resort, in Horseshoe Bay, Texas. Woodward has been in charge of managing the hotel’s social media marketing and public relations strategies across all advertising mediums and media platforms since 2012. Woodward has led marketing and sales programs for other properties, including the Garland Resort in Michigan and New Mexico’s Turtleback Mountain.

Woodward said that imagery is a big part of the hotel’s marketing. The hotel is currently in its first year as an independent hotel after dropping its Marriott flag.

In terms of elevating consumer distribution pathways, Woodward said OTAs and digital advertising networks are allowing hotels to get their message across in more ways than ever possible before, and he emphasized the effectiveness of referral sites and social media.

IMAGE

Texas’ Horseshoe Bay Resort advertises its lake and golf courses to draw in travelers.

Texas’ Horseshoe Bay Resort advertises its lake and golf courses to draw in travelers.

Woodward elaborated that a property’s online imagery is extremely important in today’s digital market, and for a luxury hotel such as Horseshoe Bay it is paramount to its success. Just as hotels must offer high-end hospitality in person, they must look the part online, and not just on the hotel’s website. OTAs and third-party websites, Woodward said, should be policed regularly to ensure the images of your property are on par with what you expect your property to represent.

“The primary image should be impactful, and what you and your management or ownership thinks is impactful may not be what the consumer thinks [is impactful],” Woodward said. He stressed that conversion rates and website click-throughs are variables based on the primary image your hotel puts forward. For instance, Horseshoe Bay’s summer bookings are traditionally 95-percent family on the leisure side, and so online the hotel broadcasts images of families on the beach or enjoying a sunset cruise. During that time of year, according to Woodward, those images perform much better.

This is not an instantly understood process for every property, and Woodward said it must be tested multiple times throughout the year and may take some time to fully optimize a property’s online imagery.

PAY-PER-CLICK

Independent hotels also need to take advantage of pay-per-click (PPC) advertising to get their message across, and ahead of bigger brands. PPC can be effective both on OTAs and digital advertising networks, and Woodward hopes in the future customers will be able to compare rates and products directly. Woodward also said that ads should change frequently, especially seasonally, to reflect a hotel’s changing products throughout the year.

By determining a property’s long-term competitive advantages, hotel managers will have a better handle on their selling propositions, especially in highly competitive markets as an independent. Some advantageous amenities the Horseshoe Bay Resort was able to acknowledge include its access to a full-level lake in the middle of Texas, close proximity to a wine destination, the property’s several golf courses and outdoor activities such as tennis and water sports.

Independent hotels can compete against brands by offering niche, local experiences.

Independent hotels can compete against brands by offering niche, local experiences.

Woodward said the Horseshoe Bay Resort runs between five and 10 advertising campaigns at the same time each season, or approximately 40 to 60 campaigns a year. By testing performance and click-through rates, hotels can emphasize campaigns that work and cut back or reconfigure campaigns that don’t.

“Every property has their own burn rate…for money spent on digital advertising, especially for OTAs,” Woodward said. “You have to go out there and keep a constant look on what is working and what is not. As an independent… if you are willing to pay for a click and outbid the big brands, which I think is viable at certain times… you have to stay in tune on a daily, weekly basis, not a monthly one.”

CREATING REPEAT GUESTS

Woodward noted that customers who book through OTAs offer an opportunity to create repeat guests, as they often book based on brand as opposed to price, and therefore there is potential to win them over and create repeat customers. In order to promote direct bookings, ensure your hotel is the first result on Google. Woodward’s data show that 68 percent of leisure travelers begin their travel research online, and 60 percent begin through search engines, so having your hotel appear before an OTA in a search engine can help drive direct bookings.

Other elements that Woodward outlined included video engagement, which connects particularly well with Millennial travelers, and social media, which is most effective at reaching travelers who are on tablets and smartphones.

Woodward’s Horseshoe Bay Resort, a destination resort property, served as a contrast throughout the webinar to the more urban Iron Horse Hotel in Milwaukee, represented by  Michael Falkenstein, regional VP of hotel operations for Aparium Hotel Group, which operates the hotel.

Falkenstein has more than 16 years of experience in luxury and full-service hotels across multiple brands. In the past, Falkenstein managed a number of boutique and luxury hotels in major downtown markets, including the W Atlanta Buckhead, W New Orleans, W Chicago Lakeshore, W San Francisco and the Jewel Hotel in Dallas.

“Our overarching strategy is to provide a localized experience where locals want to come and enjoy our F&B, to potentially and often spend the night,” Falkenstein said. “And through that beehive-buzz effect, and an anchor in the community, it starts to attract outside customers as they come in for leisure or for business.”

TRANSLOCAL HOSPITALITY

The DNA of the Iron Horse is centered on ‘translocal hospitality,’ where spontaneous gatherings are encouraged to generate through the use of communal spaces and amenities such as complimentary Wi-Fi, pool tables and crafted cocktails. “We focus a huge amount of attention and resources on F&B because we truly believe people will come in to enjoy our offerings,” Falkenstein said. “To put it in perspective, our culinary program is headed by a Michelin-starred chef who sits in the corporate office and hires and trains and helps write menus.”

The Iron Horse Hotel draws guests in with its crafted social atmosphere and DIY ethics.

The Iron Horse Hotel draws guests in with its crafted social atmosphere and DIY ethics.

Part of this ethos is the creation of a social network, which helps lead toward long-term success. Falkenstein said size does matter, especially when it comes to loyalty numbers. TripAdvisor and social media spaces are just as important as word-of-mouth, and an independent hotel’s ability to communicate its authenticity is tied to creating these loyal customers.

Additionally, the hotel attempts to create a conversation with the guest before their stay begins and after it ends using pre- and post-stay messaging. This specific, conversational method finds its roots in the hotel’s hiring process, which emphasizes understanding the hotel and its tie to the location. This is because, as an independent hotel, creating brand loyalty can help a property escape from survival and into success.

“Without the loyalty, we would be forced to lean more heavily on different channels,” Falkenstein said. “We would have to rely on more visible marketing. We do very little paid advertising or marketing because we haven’t had to, which is a good thing. However, it’s a daily focus because without the loyalty, you have to start to buy your customer in a different space.”

PACKAGE OPPORTUNITIES

Part of what helps pull customers in is the hotel’s packages. These booking packages are found only on the hotel’s website and are promoted using local imagery, which keeps the hotel’s direct booking rates high. “Milwaukee is known for its beer, so advertising our packages, including a brewery tour, using beer imagery is highly relevant,” Falkenstein said. “You can only find this certain experience on our website, it keeps our customers booking where we want them to book.”

E-blast offers are also delivered to the community to offer value-add offers during slow periods. Like Woodward, Falkenstein’s hotel also aggressively welcomes travelers booking through OTAs, seeking to win them over as repeat guests through bounce-back offers. “It’s an act for them to come find us in our own space, and for that act we do give them a discount on that one-time booking,” he said.

Statistically, while the Iron Horse does not do print or radio advertising on a consistent basis, it still manages to book 25 percent of its rooms directly, while sales books 20 percent of the hotel’s rooms (the majority of which are related to group bookings). Another 20 percent of the hotel’s bookings come from global distribution systems, while booking engines account for 15 percent and call centers, third parties and miscellaneous bookings account for 20 percent (Internet third-party bookings are below 10 percent).

GENERATIONAL TRENDS

In regards to millennials and generational trends, Falkenstein has seen a large shift in recent years toward mobile bookings. After investing in upgrading The Iron Horse’s website to make it mobile compatible, the hotel saw a greater response from Millennial travelers. Similarly, Woodward noted that as much as 50 percent of the Horseshoe Bay Resort’s bookings come from mobile platforms, meaning optimization in those areas is unavoidable.

Speaking on advantages and disadvantages from working with larger brands and independent hotels, Woodward said OTA commissions were pre-negotiated during his time with Marriott, whereas now his team must work harder to strike deals across a variety of platforms. “The other side is the breadth of databases a brand has,” Woodward said. “Being able to broadcast our product to the five million rewards members Marriott has can be done with the click of a button. You miss that.”

One advantage to being an independent property, from Woodward’s perspective, is the sense of individuality. “The brand can do a lot of cluster marketing, where you are shown alongside four or five relevant properties to a rewards member or group, and so your uniqueness can get lost in translation under the brand.”

Falkenstein says brands are interested in volume as opposed to focusing on uniqueness. “Their toolbox is vast, they have many resources at their disposal, but I don’t miss that very much,” Falkenstein said. “It’s a little more challenging in the independent space, but when you do it right you get longer, higher sustained results due to the loyalty factor.”

As a piece of advice, Woodward said to be aggressive and constantly promote to compete against bigger brands. “It’s recognizing how your customer recognizes your messaging, and then go be an expert on it,” Woodward said.

Falkenstein said to use any channel you have, using your limited resources where they will be most impactful. “Telling your story is paramount to your success, and differentiation,” he said.

“As an independent property, we are our own brand,” Woodward said.

HEAR MORE ONLINE

Hear more from these presenters and many more at our website, where you can access this and all future webinars hosted by the magazine. Just visit www.hotelmanagement.net/research/webinars.

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