Despite the fact that retailers and hotels could be perfect partners for lifestyle branding, it rarely works out that way. From stodgy luxury stores at downtown hotels to overpriced, kitschy gift shops at resorts, shopping at hotels has been very boring for a very long time.
John Knowles at the Roger Smith Hotel wants to change that.
The Roger Smith Hotel is often referred to in marketing circles as not just one of the most innovative hotels in the world, but also one of the most creative brands in social media – in any industry. The Roger Smith management did this largely by building an environment where “everyone is a content generator.” Marketing and creating their online presence was not just the job of a few people. “We view our hotel as a media company, and our space as a stage.” They also pioneered the concept of social hospitality that extends beyond just the people staying at the hotel, and into the extended community – which has turned the property into a hub of creativity.
Now, John and his team want to reinvent the way the hotel engages with retail and e-commerce – something they have been involved in for a while with the RS POP shop.
“The original pop-up shop concept was based on Japanese consumer culture and its devotion to rare and limited edition products,” explains S.D. Rockswell in his FreshlySerious article. “Initially, at a moments notice, customers would arrive at a clandestine location that housed a particular brand or product. Once the products were sold out, usually within a matter of hours, the store would be closed until the owner received more product and was able reopen the store again. After the first few runs the concept took shape, then evolved and took flight and landed in the mouth of corporate America.”
The RS POP space, a midtown Manhattan fixture on Lexington Avenue near Grand Central Terminal, has hosted a number of innovative brands over the last couple years. And, as the owner and director of Panman Productions, John has spent years working with innovative brands, helping them visually communicate their story through media. In the months ahead, the environment will combine these benefits to become a showcase for what John envisions as the next incarnation of retail in hospitality.
He plans to partner with a select number of brands to provide them with not only a physical display space – but a portfolio of promotional services that provide a holistic, 360° exposure to a core group of very connected, influential consumers in New York City. This will present the partners in a completely new light, and extend both brands beyond their typical audiences.
The concept: Pop+
The new concept is going to be called Pop+, based on the fact that this experience is all about the partner brand plus strategy, plus marketing, plus audience, plus community, and so on.
Providing the space with all of these additional media and PR services adds a whole new level of engagement. “We see this in the pop-up shop already, but now are offering a new kind of opportunity that’s a higher level of marketing.”
The opportunity is designed for brands that understand the environment – the social space and the marketing space – and want to test out ideas they wouldn’t be able to test out elsewhere.
“As part of your pop-up, we’re going to build you an integrated SEO program, set up a Google Plus profile, set you up with Google Wallet – or provide whatever mix of services you need. Whether it’s a content strategy or mobile initiative – we can assemble the right team of people to help you reach your goals.”
Built on partnerships
To deliver these services, and extend the whole “Pop+” concept, John will be engaging with local media professionals and other service providers to barter services that will be useful for the partner companies he’s engaging with.
“It’s creating an environment where everyone benefits from greater exposure and everyone builds into our greater community.”
When thinking about these partnerships, John wants the collaboration to fuel the marketing of his hotel as well. “We want to partner with forward-thinking companies. Collaboration is essential. Their success is my success.”
Inspiration for the project
“My motivation is the space we have,” said John. “I see our space and recognize the opportunity. Hotels have space. Space is value. So what we’re doing is not just one piece but a combination of efforts.”
“You take the existing pop-up model that happens in the pop-up shop, and the value of corner real estate on Lexington Avenue, and the value of our services – the opportunity is extraordinary.”
The hotel used to have a shoe store in the space, but John felt they were not contributing to the larger Roger Smith Hotel brand. “So I asked myself how can we regain control of this?”
Providing urgency and a real-world presence
By design, popup offers are time-sensitive, providing a level of urgency. “We might run a two-day program for authors. Showcase a book signing. The benefits of having our interactive community bring their work forward is huge.” And this is critical in our era of always-on digital communication.
Imagine a thriving online company that is launching a major new initiative. Google. Amazon. Gilt Groupe.
Technology companies may have an online presence, but they’re missing the real world presence and interaction, so this opportunity will be helping these companies establish a physical presence and connect with new audiences. It’s additional value they’re unable to get elsewhere.
“They don’t have the opportunity of physical space, brick and mortar everywhere. It’s incredible for them.”
Time sensitivity – plus a real-world presence – is a new opportunity for many of these organizations.
Why this matters
John’s story shows us how staying at the edge of innovation is not just about creating cool hotel marketing, but innovating areas like retail and mobile communications and e-commerce. The more you can pursue projects that push the envelope, the more you’ll build buzz around what you’re creating.
“The last two years our hotel got a lot of press in the hospitality industry when it comes to customer service and new media. What I’m working on now is the story that hasn’t yet been surfaced, and is what we’ll also be focusing in the future. All of these stories are what makes Roger Smith special. We’re a community and brand that thrives on staying in the spotlight.”
If this Pop+ concept sounds interesting for you, email John now to discuss partnership opportunities: email@example.com.
John will be sharing further insights into the Roger Smith Hotel’s on-site mobile strategies at EyeForTravel’s Social Media & Mobile Strategies for Travel conference, March 5-6 2012 in San Francisco.
In this interview, James Kinney – founder of James Kinney Live – shares how hotels can improve their content strategy and increase social currency through music and live events.
Josiah: Your marketing materials say you created James Kinney Live to “create intimate experiences that successfully communicate the culture and feel of a particular brand.” What does this mean?
James: What I see from a macro standpoint is that brands – if they have a million dollars to spend on marketing, advertising, external communicates – say, “OK. Let’s throw half of it at Google and half at Facebook, and maybe we’ll spend a little bit on mass media i.e. TV, billboards, radio, etc.” But what I’ve found through my research is that people really don’t want to be spoken to that way. People want to be wooed. People want to be romanced by a brand. When that happens, you turn ordinary people into extraordinary advocates.
You can use a shotgun approach out to a million people, but your ROI or your ROE – return on engagement – may only be one to five percent. However, if you make 50,000 true believers, those 50,000 people tell 50,0000 people, and then you’re in a whole new ball-game.
Josiah: Your tag line is “Increasing social currency through music.” What role does music – especially live music and live music events – play in creating these unique brand experiences?
James: Music, as you know, is one of the most powerful mediums that we have in the world, and live music, specifically; there’s a human interaction that exists within live music that is in no other form.
Since we started the Forty Four Live Music Series for Morgans Hotel Group – literally Josiah, every night – we see brand engagement at its finest. We see everything from small children on vacation with their families to businessmen in their 50s and 60s staying an hour or two extra at the Royalton.
Josiah: Do hotels have a unique opportunity to host live music events?
James: Absolutely. Hospitality companies are in an extraordinary position because real estate is king and most established hotel brands have real estate throughout the world. And when you look at the state of the music industry as a whole, it’s lost about half of its revenue. So a lot of amazing talent is looking for a way to market, generate income and gain new fans.
Hotels have an extraordinary opportunity to become mavens of culture, which increases their brand impressions and their bottom line. In the case of the Forty Four Music Series that we have at the Royalton… we’ve had Grammy Award nominees, Grammy Award winners – literally the best in New York City – play right in the lobby of the Royalton and people absolutely have that WOW factor, like, “Wow, I never expected this to be here.” We’ve seen an increase in sales and in their social media and digital assets as well, because the artists are tweeting about the property.
Josiah: How do you match music genres to hotel brands?
James: My content strategy is to first meet with the Director of food and beverage and the Director of nightlife to get a sense of what they think that their brand is and how they want it to be communicated. Then it goes into everything from the cocktails on the menu to the food that’s served, to the actual ambiance of the room.
For example, I know that in Midtown Manhattan, the demographic is very different than it is at Mondrian Soho or at Hudson. The music I program at Royalton is based on how the room feels to me; for instance, if you’re drinking a sazerac or a scotch, that is much more conducive to a warm jazz or soul sound than rock and roll.
Josiah: I get the impression that this is a very holistic experience that’s more than just a marketing play.
James: Oh, absolutely. It has to be; a lot of marketers don’t give people enough credit these days. We’re constantly bombarded with advertising and marketing and what we specialize in is creating an authentic experience. I put myself in the place of some guy who’s been flying for eight hours, just got off the plane, just walked into the hotel, and perhaps his room is not ready and he has to sit in the lobby. What kind of experience is he having at that point?
We try to appease all five senses when a guest walks in. If you can hit at least three of the five, they’re more apt to tell 10 people – or Yelp – about a positive experience.
Regarding food and beverage, we’re there to increase sales. At the Royalton, David Sewell is the Director of food and beverage; we meet weekly to make sure we’re not only increasing food and beverage, but rev par as well. So it is a holistic experience, yes.
Josiah: What steps do hotels have to think through as they’re working with you to launch a series of events?
James: At the project’s inception, I would meet with the President down to the Director of food and beverage. On the marketing side – the CMO of the company down to the Director of Marketing, as well as the hotel’s operational and engineering people.
I want to know from them, “What’s the problem? What are you trying to accomplish here? Are you just trying to put on word class entertainment that people talk about? Are you trying to sell more margaritas between the hours of 5:00 and 8:00? Are you trying to sell more brunch items on Sunday from 10am to 4pm?” Once I identify the problem and what exactly they need moving forward, I design a program that tackles that, specifically.
Josiah: Give us an example. Could you tell us a little bit more about your work with the Morgans Hotel Group?
James: Since November 16th of last year, we have had Sasha Dobson, who did a South American tour with Nora Jones. We’ve had Cedric the Entertainer – one of the largest comedians in the world. We’ve had K.J. Rose, who was on BET’s Music Matters. We’ve had Raphael Saadiq – a multi Grammy award winner who just played with Mick Jagger at the Grammys. This week, we have Jerome Bell, who’s Top 40 on American Idol this season.
On the nights that we program entertainment, we’ve seen a 14 percent increase in sales. In addition to that, our Twitter numbers for @RoyaltonNYC are up 308 percent since we began.
Josiah: A live event almost seems like optimal environment for some social media activity to take place, right?
James: You are absolutely right. Content is key, and there’s this big thing around social media where people go, “Oh, if I tweet that ‘you get 25 percent off of your next drink,’ then I’m going to have a herd of people coming over to my hotel.” As you and I know, that’s not the case. Whether you’re doing music or a movie screening or live dancers or whatever you’re doing, the content itself is how you communicate the property’s brand.
We have so many artists that are on the verge and that are famous coming to the property; when they’re tweeting and they’re taking pictures — “Oh, we’re at Royalton NYC at Morgan’s Hotel,” we’ve automatically increased their content strategy and their social currency and, specifically, their digital assets; all these things are very real in the digital world that we live in. But saying that you have a special on pancakes just doesn’t work anymore.
Josiah: No, absolutely not. Is there anything else you’d like to discuss?
James: I’ll just say, it’s a very exciting time right now for hospitality brands; there’s this whole celebrity culture. Look at how the chef world has just blown; the hospitality world and hotels are an extension of that. The brands are quasi-celebrities in their own right. It’s not just a place to stay anymore. It’s a place to do a movie premiere from Sharon Stone. It’s a place to do a concert from John Mayer, and it’s a place to launch a new chef menu from Bobby Flay.
If I had anything to say to hotel brands out there it’s, “Take advantage of this exciting opportunity to be the creators of content.”
Josiah: How can our readers contact you?
James: Anyone interested in branding their properties and making more money should give us a call; they can reach my cellphone 24 hours, seven days a week (817-675-3122), or they can email me at James@JamesKinneyLive.com.
Thanks very much, James!
(And a big thank you to Katie and Alex for turning a Skype conversation into this story!)
We all like to think we’re unique and special – like a snowflake – but recent research by Tealeaf is giving travel companies an alarming wakeup call.
The study suggested that an incredible 90% of UK travelers booked through a different website each and every time they make an online travel reservation.
How can we fight that trend?
Loyalty is crucial for long-term success. That’s not something new. Analysis over the past 20 years indicates it can be between 5-10 times cheaper to get an existing customer to buy from you than it is to acquire a new customer. So what can you do to get those guests and customers coming back?
Leisure travel planning typically takes place over a long period of time. The numbers vary slightly from study to study, but it’s probably fairly accurate to estimate that consumers are researching travel between 2-6 months before they make the purchase.
86% of consumers using reviews as a deciding factor
In an article published earlier this month, ComputerWorld.com reported that while the internet is killing brand loyalty, 86% of consumers are using reviews and ratings as a deciding factor in their purchasing decision. The amount of information written by consumers helps travelers feel they can avoid a bad experience if they do enough research. And the research they do is often to find reviews written by consumers like them. It’s this social proof that makes people feel secure with their purchase.
Build loyalty by making them feel secure!
According to Internet psychologist Graham Jones, websites must inspire confidence.
As the study from Tealeaf confirms, there is a large amount of browsing and going from site to site. Central to this is the assessment of trust…and central to that trust is social proof.
Human beings behave in ways designed to protect them from harm. Clearly, if many people are doing something and they don’t come to any harm, then it is ‘the right thing to do.’ As a result, people are always looking for signals on a webpage that what they are dealing with is acceptable to more than one person.
They want to see the product on offer is being used by many people–it is social proof that it is okay to buy. With holiday purchases, social proof becomes paramount.
That’s where social proof comes in…
Trust and confidence online is built through social proof. As managers, actively encouraging the creation and collection of this social proof – often in the form of online reviews – must become our top priority.
We need to turn our guests and customers into salespeople and spokespersons. This happens through creating a great experience in our hotels, and then encouraging people to talk about that online.
Monitor, collect, and re-publish
When people go online to talk about their travel experiences, that might do that anywhere. You don’t have a lot of control over this. So to take full advantage of opportunities online, use tools and systems to quickly join conversations that happen about you and about your brand wherever they take place.
And then use these conversations as an opportunity to build guest loyalty.
Think about ways you can collect and publish positive feedback on your website and marketing materials. This is the social proof that will set you apart from the claims made by others, and lead to higher customer retention.
ReviewPro provides hotel managers with access to one of the industry’s largest databases of online guest opinion: over 50 million reviews in 8 languages from 55 different travel review websites. The ReviewPro Quality Seal aggregates review scores from multiple review sites and OTAs into a single score to give your website visitors a clear picture of your overall reputation online. Get the details here.
Alright, I know Hotel Marketing Strategies isn’t exactly a unique name. But I think it’s safe to say that within the online hotel community, I’ve built it into the #1 source of original hotel marketing content over the past few years.
Since HotelMarketingStrategies.com has a top-2 ranking in Google for the ultra-competitive phrase Hotel Marketing (~34 million results), I know there are dozens of other websites gunning for my position. A lot of “gurus” and agencies are pissed off that they can’t walk the talk and use their great SEO strategies for their own websites.
But competition is good. I like it. May the best websites win.
What makes me angry is when someone tries to cheat and hijack the brand I’ve built here to accomplish this.
Which is what 99HotelMarketingStrategies.com appears to be doing.
Published by an Italian company, Futura Hospitality, it promises to include hotel marketing tips. “The first guide of its type ever” Not true. My own guide – 1001 Hotel Marketing Ideas – came out at least 5 months earlier – and I know there were other digital guides before mine.
My team is evaluating legal action on this, but for obvious reasons I’m not going to discuss that here.
Even if Futura is not doing this intentionally, it’s still a big issue. Negligence in doing research to avoid trademark infringement before launch of a website like this is a fault.
I’m fully aware that writing this post may send a lot of traffic their way. They’ll probably make a bunch of sales too.
But this is a reputation issue. So to clarify: I am not in any way affiliated with 99 Hotel Marketing Strategies or 99HotelMarketingStrategies.com.
I know this post may come off as a rant. And it is. But you know my goal here: to keep it real and walk through everyday, real-world scenarios.
So what are the lessons for you?
Be aware of other websites and organizations trying to steal traffic off the brand you have established.
Be vocal in clarifying the (non)relationship. I’ve seen several hotels face impersonators in social media and elsewhere – being silent about this isn’t the solution. Make sure people know you’re not affiliated to minimize brand damage.
Buenos Aires is paradise for design aficionados. Travelers are spoiled by the quality and personality of small hotels opened over the past decade.
If you were opening a new hotel in this market, how would you position it?
That’s the question I’ve been examining with Martin Rosberg, Managing Director and co-founder of Fierro Hotel – a new hotel opening in Buenos Aires this September. Fierro is an Insider’s Circle partner: a very design-focused hotel with all the best amenities. iPads in the lobby and suites. Double-glazed windows to ensure a silent, relaxing environment. The sort of place where you would love to spend a week or two.
But we both know having the best product is just the first step. We need to help travelers visualize the guest experience through our communications. So as we prepare for opening, Martin and I have been thinking:
“How can we communicate the Fierro Hotel difference, and separate the property from all the other boutique design hotels in Buenos Aires?”
It may help to have a little background.
The building will include the Hernán Gipponi Restaurante. From HotelChatter…
Chef Gipponi, by the way, is a local lad done good, having spent time in Michelin-starred kitchens in Spain before returning home to Argentina. We hear that the restaurant promises to become a local hotspot, but be warned that this does not mean it will be classic meat-haven parilla.
We’d happily eat steak day after day in BA, but if you’re a vegetarian or simply need something other than beef in your diet, you will be pleased to know that Gipponi will be serving up dishes such as Foamy Yogurt with caramelised pumpkin seedsm and Grilled Scallops with bok choy, pineapple and ginger juice, and pine nuts.
Additionally, the hotel’s wine cellar is run by Martin’s brother, Andres Rosberg – president of the Argentine Sommelier Association.
So here we have this beautiful design hotel, paired with some of the best food and wine in the city. Now, the brand position is obvious.
Fierro Hotel is the place to stay for the gourmand visiting Buenos Aires
Or, “The best lifestyle hotel for foodies.” If you’re a bon vivant, you need to be here.
We’re still finalizing the wording, but the difference is clear: If you’re serious about experiencing some of the best food and wine that Buenos Aires has to offer, Fierro Hotel is the logical place to stay. Not only do you have these great options on-site, but you have some world-class experts to recommend other establishments in the city.
The positioning lesson for you
Examine your story to find what position your brand can occupy exclusively in the market. Fierro Hotel has this strong emphasis on food and wine, but you will have something else. Whatever that is, define that…and then repeat it over and over in your communications.
Want to work together on branding for your hotel? That’s just one of the areas we cover in my Insider’s Circle program. See details on the special end-of-season offer available now.
Josiah’s note: Mihir Nayak, owner of the Mitaroy Goa Hotel, has been a big supporter of this blog, and I’ve enjoyed getting to know him over the past few months. For the next few weeks, he will be posting a few guest posts on lessons he learned from running his hotel. Today, he discusses the ‘power of one.‘
Although it is a term that is thrown about a lot these days, the USP or Unique Selling Proposition is the most important weapon in any hotelier’s arsenal.
Last week I was sitting with a hotelier friend of mine while he and his team were designing their latest advertising brochure.
It was really amazing to see how his team of hotel marketers, who had surely studied the concept of the USP, were throwing everything and the kitchen sink onto their brochure.
Talk about our comfortable rooms, said one. Talk about our French chef, said another. Don’t forget our spa area, said the third. And on it went for the next hour or so.
They ended up with 4 slogans, 1 long title, 3 subtitles, 14 unique selling propositions and 8 different photos. As a result, the size of the hotel name had to be reduced so that it was barely visible and the website was in a font too small and tucked away in the right hand corner to be visible at all. Oh, and there was absolutely no call to action whatsoever!
At the end of it all, I was totally confused.
Research shows that guests are bombarded with so much advertising they find it hard to concentrate. If they want to even concentrate on advertisements at all. And in the hotel industry, the case is the same.
As I said earlier, the solution is to have a USP (there shouldn’t even be a plural) that sticks in peoples minds.
A wonderful book called the 22 Immutable Laws of Marketing dips into this concept. The authors say that as a hotelier, you should try and own one attribute in your customer’s mind. And that one attribute should have great importance for your guests.
Four Seasons is associated with luxury. Marriott is associated with standards. And W Hotel is associated with design.
I sat down and did the same exercise myself. What single word was special to my Goa Hotel? What attribute could I own?
And then it hit me.
Unlike other hotels in Goa or indeed the rest of the world that offered guests rooms of only 20 sq mts, my Suites at the Mitaroy Goa Hotel were a spacious 100 sq mts or 5 times the size of my competitors.
That was what was unique about my Goa Hotel and why guests would choose my Goa Hotel over the other hotels in Goa.
And I went about telling changing all my marketing to bring the point home.
- My website said “Stay at our spacious Suites!”
- My advertising said “Stay at our spacious Suites!”
- And my business card said “Stay at our spacious Suites!”
(See what I am trying to do here?)
I also stripped away all my other attributes from my marketing materials, concentrating on my spacious Suites – how they are 5 times larger than my competitors and why space is so important.
When concentrating on one attribute, you will be forced to sacrifice all the other attributes you may want to be associated with. But this has its advantages. Not only do you own an attribute in your guests’ minds but your advertising also becomes much clearer. And the best thing is that research shows that if your guests rate you highly on one attribute, they also rate you highly on all the other attributes that are important to them.
So, as a hotelier, you need to sit down and ask yourself what one attribute do you want to own. What is the single reason why guests should choose your hotel and not your competitors. In short, what is your USP?
Let me know what you come up with…
The Dubai Mall is the largest shopping mall in the world. Among its 1,200 stores, you can find pretty much anything from anywhere. It’s possible to spend all day shopping and only be scratching the surface. (I speak from experience – I’m writing this from a cafe here to rest my feet.)
The choice at this mall is overwhelming. But there’s one store – The White Company – that narrows the selection by selling in one color only.
It doesn’t matter if they find a really cool product in green. It doesn’t matter if the customer wants a widget in blue. Even if yellow is the next big thing, they won’t stock it.
They only sell products colored white.
Limits are essential for building a brand. Constraints make the buying decision easier, and define what you stand for.
Do you clearly state what you offer and who your customer is?
Do you make it clear what you do NOT offer and who your customer is NOT?
Blurring this line in an attempt to add revenue will confuse how people see you among the competition.
Having explored the benefits and potential pitfalls of outsourcing in prior posts, it is important to use these criteria for assessing when it makes sense to outsource a particular task and when a hotel is best served by keeping it in house.
Front-of-House responsibilities require the ability to react quickly to guest demands; therefore, it is crucial that staff be empowered by the management’s support to do so. Communication needs to be instantaneous with as few hurdles as possible – not always the case with outsourced services managed by others. In order to maintain control over the quality of the face-to-face interactions guests have with staff, it’s a good idea to manage in-house employees who provide the hotel’s core services, i.e. front desk clerks, doormen, car valets, bellhop, concierge, etc…
Tangential functions of the hotel can be grey areas when assessing the suitability of outsourcing. Since increasingly more restaurants, clubs, spas, and fitness centers are co-branded, the hotel’s responsibility for these services are diminished. But when they are in fact brand extensions of the hotel, it again necessitates in-house management to maintain quality-control. Conference Facilities are an aspect where some, but not all, of the duties could be contracted out. While staff which interface with meeting inquiries and scheduling should remain under direct hotel management, outsourcing on an as-needed basis the supply, maintenance and support of the associated technologies could be best satisfied by an outside specialist.
Some Back-of-House and Administration functions are more likely candidates for successful outsourcing, Housekeeping and Facilities Management are examples where an outside contractor could either be cost-effective if the workforce remains consistent and knows the physical nuances of the property – or a financial loss if money is spent reeducating a quick turnover of staff.
Sales and Marketing roles are also instances where outsourcing makes sense for many, but not all, of the job responsibilities. Having an onsite Sales Director is of course crucial, but the majority of marketing duties can be successfully performed by an outside expert. Hotel marketing efforts are shifting exponentially towards online strategies as research and bookings are increasingly web-dominated. Remaining competitive requires a team of professionals with specialized knowledge of online interfacing. Partnering with the right marketing consultants is a terrific example of how outsourcing can make and save money.
Hotels certainly do come in all shapes and sizes. While yes, the trend is to create brands and designs geared towards more specific target markets, some of the global hotels on Unusual Hotels of the World really take this to the extreme.
Properties are ranked from being merely “Different” to somewhat “Wacky” to an outright “WOW”. In addition they are categorized by some truly Unique Selling Propositions: igloos, underground caves, underwater submarines, prisons, lighthouses and tree houses are just a small portion of the imaginative variety of experiences.
Take for example the newly opened Jumbo Hostel near Stockholm, in which guests not only spend the night (on the ground) of this retrofitted 747 jet, but plane aficionados also have the chance to climb around the engines.
Another off-the-charts hotel is Kokopelli’s Cave in Farmington, New Mexico.
This one-guestroom luxury hotel is located in a 65 million year old sandstone formation with a sweeping view high above the La Plata Rivera.
Today’s adventurous travelers are craving the added value that comes with the one-of-a-kind experiences offered by these hotels – and they’re not likely to be replicated by Starwood any time soon. While perhaps not going to the extremes seen here, could these hotels inspire you to add elements of surprise to your property?
Part I of our look at outsourcing in the hotel industry explored some potential pitfalls that could reduce a property’s overall strength. This second segment focuses on communicating your hotel’s priorities to service providers while reducing the likelihood of errors. When considering the option of outsourcing, it’s essential to select suppliers that understand and support your business goals. Specifying these objectives within their contracts may help a property avoid potential conflicts.
Following are some aspects to consider when evaluating the suitability of outsourced service providers, along with some practical ideas for minimizing risk:
A. Does your outsourced provider juggle many clients? How much time can they devote to your property? One idea: insist upon regularly scheduled check-in meetings.
B. Will your service provider’s bigger clients be more important than you, leading to your loss of control and quick reaction time to problems? One idea: set monetary incentives for promptly and sufficiently resolved problems as well as penalties for slower responses.
C. Are confidentiality agreements enough? Could your outsourced supplier leak proprietary information? One idea: password protection and strict monitoring of the access of sensitive data and documents.
D. Can your outsourcers adequately evaluate the levels of risk that are acceptable for your hotel? One idea: include in the contract a comprehensive database of potential scenarios and your hotel’s desired outcomes.
E. Is there consistency with the proficiency of those employed by your outsourced provider? Surging demand for less expensive skilled labor could lead to hiring insufficiently trained staff, which decreases quality and speed levels while defeating the cost savings intended by outsourcing; i.e. a booking engine maintained in an emerging technological region such as Bangalore. One idea: verify the employment and education credentials of your outsourcer’s team leaders.
G. Are the outsourced provider’s corporate ethics aligned with yours? Do they have unfair labor practices or irresponsible environmental/waste policies? It’s not just the matter of being unprincipled; could their actions harm your brand’s reputation? One idea: stipulate as a qualifying factor for awarding the contract your first-hand observation of the company’s actual work environments/factories, not just the corporate headquarters.
Successful outsourcing is all about due diligence to make sure your hotel is put into good hands without giving away your knowledge base. In the process you may decide it is not the most fruitful path to strengthen your brand. Part III explores this scenario with some ideas of how insourcing can make better use of your current staff resources.