10 Strategies to Build Market Share

As soon as the word “recession” spreads, hotels look to cut advertising, marketing and public relations campaigns and budgets. In reality, this is the best time to gain market share — as your competition cuts away.

The hospitality industry is being hit by the rising cost of gas and airfare and room rates are starting to rise. Surprisingly, luxury hotels seem to be the most recession-proof. Even though most have boosted rates by six percent, according to Smith Travel Research, they have maintained occupancy levels at 71 percent. Upscale hotels have raised rates by four percent, but guests seem more resistant to these hikes.

Brand equity may tolerate price increases, but add-ons are what attract customers during difficult times. Pundits suggest hotels are more likely to increase direct-marketing efforts during a recession, while abandoning the brand or image advertising.

In the “what-do-we-do-now” scenario, hotels with courage will gain market share by focusing on the customer and keeping advertising budgets strong. Some may even spend more. Eliminate marketing that is not working and be aggressive with value-added offers that differentiate your property from the competition. These efforts will capture travelers who are likely to stay with you in the future when the market improves.

Keep track of what consumers do while staying at your hotel. Send offers to those who have frequented amenities such as the spa, golf course or wine bar. Most hotels don't do enough to capture data on their customers. Knowing who your guests are allows for one-on-one communication, which can increase loyalty and return on marketing investment.

At its best, all advertising should be direct. Every ad placement should have a compelling offer and a strong call to action. Every ad should be traceable all the way to converted business.

According to the recent MarketingSherpa Special Report, only four percent of hotels surveyed are increasing budgets for print advertising as more companies shift money to direct mail, e-mail, Web 2.0 and other direct-response mediums. An interesting trend is spending for online display ads is shrinking by 26 percent as businesses realize many click-throughs aren't translating into conversions as compared with pay-per-click campaigns.

Increasing direct marketing spending makes the most sense during a recession because offer-based initiatives with a strong call to action will increase brand awareness, while getting the phone to ring.

Communicate offers via direct mail and e-mail to guests 30 days before their stay and then re-engage them with a thank-you offer 30 days after their stay. Make it easy for them to return to the golf, spa or dining they enjoyed.

During a recession, it's no surprise that attracting consumers is harder than attracting meeting planners who are looking for good deals on conferences, meetings and exhibits with resort amenities. Re-evaluate your feeder markets and industries. Companies that meet nationally or internationally during boom times may shift their focus to regional or local hotels during a recession. This localized focus proved successful during the 9-11 and post-dot-com downturns for both business and consumer strategies.

Here are 10 strategies to build market share during difficult times:

  1. Reallocate marketing budgets from branding to direct-target marketing for a higher return on investment.

  2. Know your customer. Build a marketing database designed to gain insights into customer value, vulnerability and potential.

  3. Get smart about your customer data. Hotel sales and marketing teams should profile their best customers on highest value and target others that look like those best customers. Hotels attracting conventions or meetings need to prioritize prospects into A-B-C lists and provide value-added incentives for A-list prospects, focusing the majority of the budget on those.

  4. Leverage new customer insights on customer value, vulnerability and potential into campaigns that maximize ROI.

  5. Test creative and offers to measure and redeploy what works best.

  6. Track and report campaign response and conversion effectiveness.

  7. Grow relationships with current customers. Use social media and electronic communications to increase loyalty and reasons to communicate with customers.

  8. Update website analytics. Focus on visitor engagement: Examples include signing up for an e-newsletter or other value-added content like videos from your golf pro, spa director or chef. Data capture should occur on the site as much as possible and should include name, address, e-mail and phone number. Analytics can track traffic and site utilization, which can offer ideas for improvements that drive customers to sections of most interest to them.

    Communicating incentives to book a stay once they arrive in their area of interest will drive business when you need it most. In addition, great data can be gleaned on where customers are coming from and who is ultimately converting. This intelligence can drive future partnerships and online linking strategies to increase site traffic and conversion.

  9. Launch programs that allow existing customers to consolidate their business with you. Give existing and new customers the chance and benefit for one-stop shopping.

  10. Focus on trends such as marketing to baby boomers. Make websites attractive to boomers without being condescending. This is one of the most influential groups with the most buying power.

David Ralls , vice president of AIR Marketing, holds an executive MBA from the WP Carey School of Business at Arizona State University. He can be reached at dralls@airmarketing.com. For more information visit www.airmarketing.com.

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