{468x60.media}
Mr. Grossman

Social Media & Relationship Marketing

Effective Ways of Providing Value Through Effective Packaging

By Lanny Grossman, President, EM50 Communications

Each of us as a consumer at one point or another has uttered the phrase "Ok, it's worth it." We have evaluated a situation that required the expenditure of either personal or financial capital and made a judgment call as to the value of what was being spent versus what is being received. When booking hotel or travel packages, travel agents and consumers alike go through that very process.

The most common and basic "package" offering in a hotel is simply Bed and Breakfast. Although I would argue this is not really a package per se, it does get hotel operators thinking about assembling a bulk offering that ultimately translates into a savings for the guest. That said, the goal of packaging is to of course drive reservations, but to also generate media coverage and consumer interest by offering something new and exciting, and most importantly, of value. Those components will organically then deliver the desired business goals.

Strategically Use What You Already Offer

In order to go above and beyond the typical Bed and Breakfast offering, hotels must use all of their resources. The first step is to strategically use what you already offer. Similar to the cable companies that offer bundled services, take the services and amenities you already offer, whether complimentary, or for a fee, and put them into a package that makes sense. For example, for a package targeting business travelers take your Wi-Fi, breakfast, parking, business center, access to the gym and other relevant components and turn it into a special package that speaks to them. Sure you offer most or all of the components anyway, but when the guest sees a variety of services and amenities all listed together it not only gives them a grand sense of the hotel but gives them an opportunity to feel that they are getting more for their money. Hopefully, items that come at little or no cost to the hotel, but normally carry a retail rate for guests, can act as newly created added-value illustrating a savings. Alternatively, even if many of those services are already complimentary, there is a sense of perceived value for receiving so much at once. From the travel trade side of things, travel agents will often search the GDS using the code for 'special packages' first. In that scenario, even if your rates wind up being the same or similar, the special package will display before room-only rates during their search.

Form Partnerships to Create a Mutually Beneficial Relationship

Although bundling services that are already offered or easily accessed is a good start, more is required to meet the goal of offering great value and creating interest from guests, as well as the media. In order to include interesting added-value, form partnerships to create a mutually beneficial relationship. For example, if you would like to create a holiday shopping package, having a close proximity to great stores is not good enough. Instead, reach out to a few retailers and create a partnership that will benefit both the hotel and store. For the holiday shopping package, maybe there is a clothing store that is willing to provide $25 gift cards to include in each package. The store knows most of their items are well above $25 and it will bring extra traffic into their store. While the hotel has now built an extra $25 worth of value into the package price at a zero wholesale cost, allowing more of the package price to go directly to the room rate. This can also be achieved by negotiating wholesale rates with local vendors. For example, if brunch at a local restaurant is normally $50 per person, try to make a deal to pay $30 and include it in the package giving you an extra $20 in value and added cushion to the bottom line. It helps to first identify a theme and then search for partners that fit the theme and are attractive to the desired target audience. If offering a Mother's Day package, perhaps work with a florist or chocolatier to create the appropriate added value; Girls Getaway maybe a spa or salon etc etc.

Figure Uut the Lowest Possible Room Rate

Depending on the nature of your property, the room may just be the way to attract guests to have them spend incremental dollars on other services or amenities. Besides the out of the box offerings that inspire and excite, rate based packages are some of the most attention getting. Figure out the lowest possible room rate you can take and allow the package to be rate driven. Or if the extra amenities or meals you offer have a lower cost basis, absorb those into the rate. We see this in Las Vegas a lot, as well as full service resorts. The room rate will be quite low, coupled with a resort credit or some meals. In the case of Vegas, they want people to gamble. In other cases, if you offer a $50 credit to the spa during the off season and all treatments start at over $100, the attractive rate has gotten the guest to your property and will put them in a more free-spending mindset once on property.

Imperative the Rate Assigned to the Package is 20-30% Less

In order to make sure the value of the package is recognized, it is imperative the rate assigned to the package is 20-30% less than the retail value of all of the components. With the Internet, it is very easy for consumers to shop, compare and analyze. The last thing you want is for a potential guest to discover that the package is actually a worse deal! Be aware of the room-only promotional rates and be sure to always have rack rates listed on your booking engine to further reinforce the value proposition.

In the current economy there is value to be had across all sectors; from real estate to clothing to electronics and travel. Consumers are smart and know hotels have become more aggressive with room rates compared to a short time ago. Packaging is not the answer to all problems but it creates an opportunity for the consumer to look at it and say "It's definitely worth it" or "I wasn't planning on getting any spa treatments but with the package it is completely worth it." If done correctly and effectively, packaging can, and will, create an extra interest in your property from both the consumer and the media. Travelers have become more sophisticated in this era of comparative shopping and are very in tune to what rates include and most importantly what are they getting for their money. Make it interesting, different, experiential and full of value. The sophisticated consumer will do the rest.

Lanny Grossman specializrs in PR, luxury lifestyle marketing and consumer outreach. He began working with notable hotel properties such as the Waldorf=Astoria in New York and Le Byblos in Saint-Tropez, after which he became the Director of Public Relations for two of America’s famous restaurants, Tavern on the Green and the Russian Tea Room. More recently, Mr. Grossman was Director of Brand Communications for Small Luxury Hotels of the World, an international hotel consortium whose portfolio boasts over 450 of the finest hotels in more than 70 countries. Mr. Grossman can be contacted at 646 861 2801 or lanny@em50.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.

Receive our daily newsletter with the latest breaking news and hotel management best practices.
Hotel Business Review on Facebook
RESOURCE CENTER - SEARCH ARCHIVES
General Search:

JUNE: Sales & Marketing: The Rise of the Millennials

Laurence Bernstein

Fundamentally, the difference between a “Good Brand” and a “Great Brand” is the ability of the organization, through its products, people and communications to engage on an emotional level. “Good Brands”, and most successful brands are good brands, deliver promised services consistently and achieve high satisfaction ratings. “Great Brands” do exactly the same thing, but achieve off-the-charts satisfaction ratings because they have connected at a deeper level. On a more prosaic level, a visit to the marketing and revenue management teams “Good Brand Inc.” is an immersion into complaints about OTAs and commodity pricing pressures (discounts); a visit to the same group at “Great Brand Inc.” is an eye opening exposure to sustained margins, direct bookings, and eye-watering occupancy figures! READ MORE

Kevin   Fliess

Hotels have spent the last decade trying to come to terms with a changing technology landscape that upended not only their sales and marketing strategies, but their operational processes, too. Now they face an even greater shift - one that will change their sales and marketing culture for years to come - the rise of the Millennial generation, and with that, the emergence of Millennial meeting and event planners. In parallel with a rapid increase in Millennial leisure travelers, this new generation of young adults increasingly comprises the largest age group attending meetings & events, which are very often planned by a Millennial. READ MORE

Dorothy Dowling

Today’s millennial traveler is dominating the way that hospitality marketing professionals showcase their products to the consumer. Many of the changes and innovations being seen in the hospitality industry today feature a distinct focus on the millennial. And it’s no wonder – millennials comprise a vast segment of the traveling public and it’s expected that they will continue to use their discretionary income on travel experiences in the coming years. Best Western Hotels & Resorts is not unlike others in this regard, and we have implemented several strategies to ensure we are evaluating the evolving needs of millennials. READ MORE

Erich Zuri

In under a decade 50% of all travelers will be between the ages of 44 and 28. Travel for meetings, conferences, and knowledge sharing will undoubtedly play a role. Millennials will also be front and center in planning and hosting business gatherings, and Gen X and Boomers will also continue to be strongly in the mix. This generational mash-up, and the intersecting meteoric rise in technology, poses new and interesting challenges and opportunities for marketing hotels globally. Hotels need to create forward looking, fresh ways to engage with planners -- especially online -- tipping tradition on its head and straddling generations more creatively. READ MORE

Coming Up In The July Online Hotel Business Review


{300x250.media}
Feature Focus
Hotel Spa: Front and Center
The Spa/Wellness movement that exploded a few years back continues to reverberate and expand. Once considered to be an "add on" (which was often relegated to an unused space in the hotel basement), spas are now front and center within the hospitality industry, and hotel management is realizing just how much a luxurious spa can contribute to the bottom line. Room rates are higher. Bar tabs are higher. Food checks are higher. In addition, guests now frequently choose a hotel based on its available spa services, so having a spa within the facility can provide significant financial returns. Plus, guests are using those services in new and novel ways. Some guests are requesting treatments upon arrival (as a way to counter jetlag or to kickstart productivity) and they are often booking their sessions through a hotel app. Some hotels are even offering free massages upon check-in as an inducement to stay. Still other guests are building their entire travel and vacation plans around exotic spa and wellness experiences and of those, thermal hot springs are currently very popular. More and more people are seeking out thermal hot springs as an affordable, social and naturally therapeutic spa experience. Honeymooning couples are seeking out spa packages designed just for them. Couples massages, aromatherapy treatments and nutritious cooking classes make for a romantic and healthy honeymoon they can both enjoy together. Other leading spas are offering stress management courses, classes in meditation and yoga, anti-aging treatments, and spa services designed specifically for men. The July issue of the Hotel Business Review will report on all these trends and developments and examine how hotel spas are integrating them into their operations.