Mr. Grossman

Social Media & PR

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:

JULY: Hotel Spa: The Expanding Wellness Movement

Lynne  McNees

According to the International SPA Association (ISPA) 2013 U.S. Spa Industry study conducted by PwC, 72 percent of American hotel and resort spas in 2012 offered 30-minute treatments. This figure shows how hotels are rapidly equipping themselves to cater to the spa needs of business guests. Business travelers are typified by little time and higher-than-average levels of stress – and spas need to adapt to their demands for short, simple, efficient and results-oriented treatments. Spa guests traveling on business are looking to find a balance they can squeeze into short breaks between meetings, presentations and travel time, and spas everywhere must learn to be flexible, customizable, succinct, connected, knowledgeable and memorable in order to attract and retain this increasingly important market. READ MORE

Peggy Borgman

When you think of “wellness,” what comes to mind? A “healthy” hotel room? A holistic spa treatment? Vegan offerings on your restaurant menu? A morning yoga class? The word “wellness” is ubiquitous. Marketers are spreading “wellness” as thick as organic hummus on a vast array of consumer products, services and experiences. But has this word lost its impact, and heaven forbid—its cachet for the traveler? Is wellness…”over”? READ MORE

Dale  Hipsh

Is anyone else nervous leaving their mobile phone behind, in a locker, all by itself, TURNED OFF, when having a spa treatment? I know I should not be, but I am. Spa goers have traditionally visited with the intent to disconnect, to unplug if you will. At Hard Rock our goal for the Rock Spa experience is meant to plug you in, amp you up and maybe even turn you on. We began our re-tool from this perceptive. Times have changed and many spa operators have not evolved as technology and hospitality brands have. To this end we went about seeking to discover a new way forward to enliven the senses, instill wellbeing and infuse the spirit of rock and roll into our newly envisioned experience. Our objective was stated to energize and excite – we want guests to leave our bespoke treatments ready to hit the dance floor and show the rest of the band how it’s done. Rock Spa is where Zen meets Zeppelin. READ MORE

Simon Hudson

An increasing number of hotels are responding to growing global demand for health and wellness and are catering to the physical and psychological needs of guests while promising enhanced wellbeing – benefits that visitors can take home when the holiday is over. A far cry from more traditional vacations spent lounging on a beach or poolside chair. Westin hotels, for example, recently launched a Well-Being Movement and even Las Vegas’s MGM Hotel has Stay-Well rooms. This article focuses on this trend and spotlights certain hotels around the world and the specific services they are providing for the growing number of health-conscious visitors. READ MORE

Coming Up In The August Online Hotel Business Review


Feature Focus
Food and Beverage: Investing to Keep Pace
After five harrowing years of recession and uncertain recovery, revenues in the hotel industry (including food and beverage) have finally surpassed the previous peak year of 2007. Profits are once again on the rise and are expected to advance for the foreseeable future. The consequence of this situation means that hotel operators now have the funds to invest in their food and beverage operations in order to keep pace with rapidly changing industry trends and the evolving tastes of their hotel guests. One of the most prominent recent trends is the “Locavore Movement” which relies heavily on local sources to supply products to the hotel restaurant. In addition to fresh produce, meats and herbs, some operators are engaging local craft breweries, distilleries, bakers, coffee roasters and more to enhance their food and beverage options, and to give their operation a local identity. This effort is designed to increasingly attract local patrons, as well as traveling hotel guests. Some hotels are also introducing menus that cater to both the calorie and the ingredient conscious. Gluten-free, low-cal and low-carb menu items prepared with fresh, seasonal ingredients are available to more fitness-minded guests. Another trend is placing greater emphasis on “comfort” and “street” foods which are being offered in more casual settings. The idea is to allow chefs to create their own versions of these classic recipes, with the understanding that the general public seems to be eschewing more formal dining options. Finally, because the hotel lobby is becoming the social epicenter of its operation – a space which both guests and locals can enjoy – more diverse and expanded food and beverage options are available there. The August issue of the Hotel Business Review will report on all the recent trends and challenges in the food and beverage sector, and document what some leading hotels are doing to augment this area of their business.