Today I’m delighted to be joined by Hans Pfister, founder of Cayuga Sustainable Hospitality – a management company with six small luxury hotels in Costa Rica and Nicaragua. As I explained in my recent post – “The Power of Predictability” – I’m very interested in how repeatable systems can be used for consistency. I think this is an area where there is a strong connection between hotel marketing and operations management.

Arenas del Mar Nature Resort

>> Can you tell me a little bit about your experience with operations – and some of the systems you use at your hotels?

I’ve studied hotel management and worked in more chain-oriented hotels before — and there’s a lot more standardization there. I opened the Hampton Inn here in Costa Rica, and I worked at the Sheraton, so I’ve had exposure to that.

The hotels my company manages now are different: they’re smaller so it’s harder to standardize things. But what we’re trying to do is focus the standardization not on the guest experience, but on more on the back of the house activities. For example, we don’t want our guests to walk in the bathroom and see the same shampoo and shower as everywhere else in the world -  you don’t really know where you are that way. For our guest experience, we want things to be very unique.

But for activities such as accounting or housekeeping operations and maintenance — that’s where we want to standardize things and become much more efficient.

>> Since you’re a fairly new company, are you creating brand new operations manuals for this or do you have an operations manual you’ve used at other hotels?

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Tailor Made Hotel from outside

A highlight of my trip to Buenos Aires last week was visiting the Tailor Made Hotel, and talking with owner Mariquel Waingarten. In a very short time, she has taken her new property to among the most popular design hotels in Argentina. Here is an excerpt from our conversation:

Can you tell me the story behind how you opened your hotel?

I lived in the neighborhood, and liked this property when I used to walk by. I finally built up the courage to make an offer on the building, and the Tailor Made Hotel opened within a year. The location is very important, as most of the hotels in Buenos Aires are concentrated in Palermo neighborhood. Las Canitas – where we are – is a lovely neighborhood: very residential and local. There a lot of good restaurants and shops, and it’s only a short walk to Palermo.

I like to travel, but there were many things I didn’t like about hotels I stayed at. I like going to expensive hotels, but I hate going there and then being charged for WiFi or paying $10 for a bottle of water. Design hotels can be a little bit pretentious, and it’s easy to feel a little out of place. This is weird, because I’m the guest and I should feel like I’m the queen.

So I wanted to have a nice hotel with good design and a concierge service that is friendly. There is a fine line between being too much and just being helpful and friendly.

Nowadays, when you travel, you always need access to WiFi. The fact that I have five rooms is an advantage, because I can put a computer in each room. For travelers, it’s a relief because they don’t have to bring a laptop or netbook. I’m really inspired by Apple technology and Apple design. All their products are really simple, and you really understand what they’re supposed to do.

So at this hotel we have a culture is based on three things:

1. Personal concierge service
2. Apple technology
3. No extra charges (We don’t charge for WiFi, laundry, phone calls or drinks.)

Apple Computers at Tailor Made Hotel

From the feedback I see on the web, your guests are very happy with the service they get here. How do you consistently provide excellent service?

At the very beginning, when a guest makes a reservation, we invite them to fill out a form online. Before they arrive, we already have some knowledge about their expectations for the trip, and what they are wanting to find here. So for example, they may say that they’re really interested in history or architecture or design or shopping – and then we can take this and prepare activity recommendations for their days here.

All the recommendations are personalized, and come from places me or Loli (the manager) find. We go and talk with the owners of the place and make sure the place has good aesthetics, service, and quality – it needs to have that mix. Guests appreciate knowing the places that I would go to myself.

I like wine, so every afternoon we serve our guests and I really like that moment. I like to see the city through the eyes of the guests who come here.

Which marketing tactics have you used to get the word out?

Our only marketing was personal effort: blogs, social media, and TripAdvisor. We built such a good online reputation that mainstream travel publications such as Condé Nast and Travel + Leisure contacted us to do a story. They were interested in us.

On Facebook, YouTube and Twitter we share things that we like — common interests with our typical guests: design, art, environmental issues, and hospitality.

Which marketing method has worked best for you so far?

TripAdvisor.

Okay, you’re number one in Buenos Aires — how did you do that?

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When was the last time you bought food or coffee from a national chain instead of the independent local place you never visited before?

Chances are, you didn’t want to risk something unfamiliar. Going with the chain provided a consistent level of service and product you could expect.

The business did that by building and following systems. Every single time. Around the world. Procedures that specified down to the last detail how your experience was created.

Predictability is crucial for building loyalty. Nothing turns people off faster than experiencing great service the first time, only to be disappointed the second time.

Let me ask you: How do you provide predictable excellence?

(I’m looking to explore this subject a little deeper in the future. Do you know any great hotel operations experts I could talk with?)

Today we’re going to talk with Micheal Rosney, and discover how the Killeen House Hotel consistently receives excellent reviews from their guests online…and how they received the TripAdvisor Travelers’ Choice 2009 award.

Josiah: Tell us a little bit about your hotel.

Michael: The Killeen House is a 23 bedroom Country House style of Hotel, located just outside of the town of Killarney: Ireland’s premier Tourist destination. It has been owned and personally managed by Michael and Geraldine Rosney since 1992. Mainly targeted towards the upper end of the International Leisure Market, it is a uniquely Irish property, with the emphasis firmly placed on good friendship, good food and good water pressure in the showers! As much as 70 percent of all of our business is either direct repeat business or direct referral from past Guests. This is a major plus for us, because it means that our Guests know exactly what we can offer them, and we know exactly what it takes to meet – and hopefully exceed – their vacation expectations.

How have you achieved the success you have on TripAdvisor?

We became hyper conscious – to the extent of being almost paranoid -  of it! When we first became aware of TripAdvisor a couple of years back, we immediately identified it as a tool that had tremendous potential for us to get the message and the ethos of our property out into a Marketplace that we otherwise had no hope of reaching. We made all of the great people working with us aware if it, and explained to them that this was an opportunity that we felt would have very tangible and positive long term benefits for the Killeen House.

We have always operated our business on the basis of treating our Guests firstly as individuals to be welcomed and looked after in a personal and individual way, and secondly as new friends, who we want to show a great time to while they’re visiting with us. And anyone glancing through the reviews we have garnered on TripAdvisor will be clearly struck by the big number of them that specifically mention the PEOPLE rather than the PLACE. Its not within our power to make the bedrooms bigger, or to order up 80 degrees of sunshine, but it is very certainly within our power to ensure that all of our Guests receive a uniquely warm and Irish welcome from all of us here in the Killeen House…..

How are you encouraging guests at your hotel to talk about their stay online – and share their experience with others?

Given that we are a small operation, we have ample opportunity here in the Killeen House to meet most of our guests on a personal level, If we find our for example that they have heard of us via TripAdvisor, than that is a natural opportunity for us to ask them to keep on spreading the word!

Thankfully, we frequently receive notes and e-mails from our Guests after they have departed, telling us how much they have enjoyed their stay with us. Again, a great opportunity to ask them to post a TripAdvior review of their experience. We have found that after the initial first number of reviews, that it almost becomes a self-perpetuating thing

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A presentation at EyeforTravel by Scott Bacon, Senior Revenue Account Manager, Preferred Hotel Group.

Infrastructure is a challenge for small, independent hotels. To overcome that, build a solid training program. Build a library of information. If you don’t make that investment, you hurt your hotel’s profitability.

Invest in efficiency. If you have to track multiple data dashboards, you waste time.

If you’re small, you can be quick & nimble. Capitalize on that.

The “average-ness” of averages.

Industry research can be construed & misleading. Don’t rely on it completely. Look at data in a way that is meaningful, and use frequency distribution.

How can hotels price competitively to gain exposure while maintaing rate integrity?

Package with value-adds. Stay “under the radar” with private pricing offers (semi-opaque channels).

How can hotels build guest loyalty with a rational pricing strategy?

Build a guest recognition program. Never ask “have you stayed with us before?” – you should know that answer already.

You don’t have to give away upgrades…just recognize your loyal guests.

How do you increase revenues when you’ve got high occupancy rates?

Raising the rates seems obvious, but it could backfire at times.

So, test. Develop interesting tests and play with the market.

How do you raise your appeal to higher-rated segments?

Not a lot of hotels know where their market position is. Define and position yourself.

Ride the coattails of partner brands that have already spent lots of resources establishing themselves.

Many hotels are working on their marketing budgets right now. I have received multiple requests for advice on budgeting this week, and wanted to put together this practical, straightforward guide. We will examine the biggest factors to consider when planning your Internet marketing budget, 11 major categories hotels should budget for, and finally 3 basic hotel budgeting approaches.

This advice comes from my own real-world experience as the marketing manager or consultant for dozens of leading organizations around the world — and also as the owner of three companies. When your own company’s money is on the line, you tend to take a very pragmatic approach to marketing, and that’s what I intend to do in this article.

Factors to consider while planning your hotel marketing budget

Many industry professionals recommend you start with the industry average marketing budget. I disagree. Every business success I’ve been involved with has been contrarian. If you spend your resources like everyone else, you’ll get average results. Breakthrough campaigns often require unusual approaches. You decide what works for you.

Be aware of industry standards, but don’t feel bound by them. It can be helpful to know the average prices hotels are paying for individual marketing tactics — if only for a point of reference.

Start with an internet marketing plan for the year. Sounds simple, but true. If you don’t know how you want to spend your money, calculating the amount will be extremely difficult! Some tactics to include are explained below.

A good budget will take into mind past results your company experienced — but will also realize that things change. What worked five years ago may not work over the next five years.

Remember your primary business objective. Do you want more overall sales, to build your brand, or consolidate your profits? Each requires a different approach, which we’ll cover later.

Know your marketing priorities. Separate the “musts” from the “wants.” So many things can happen along the way that cause you to deviate from a plan made months ago. Having priorities ensures the essential gets done.

Identify which marketing strategies you don’t need to implement. There are a seemingly unlimited number of marketing tactics you could try, so identifying the non-essential helps you focus and cut costs. Every hotel doesn’t need to do every tactic out there.

Be aware of trends, and budget appropriately. Some organizations on annual budget cycles approve money for trends way too late — and missed the boat. Make sure the resources that you’re dedicating to a tactic or strategy will be valid 1, 2, 5 years from now. You don’t want to outdate yourself.

I personally recommend most hotels abandon all traditional marketing and advertising in favor of any Internet focused strategy: 75% of budget for web-based communications, 25% for PR. You can discount this advice as someone who has worked in web marketing his entire career, but the numbers don’t lie. In the campaigns that I’ve been involved in, we have achieved phenomenal return on investment… and received media coverage an organization our size shouldn’t normally be entitled to.

Separate your marketing costs into two categories. Initial development costs include research and strategy development, website design, content creation, marketing systems set up. Ongoing expenses and maintenance include e-mail marketing, pay per click advertising, search visibility improvement, website maintenance and development, consulting fees, and analytics and tracking analysis.

Ensure that you are sufficiently capitalized. Many marketing tactics will take several months to show results, and often the best results are obtained by sticking with your marketing plan month after month — for the next 12 months. You may have to adjust your marketing plan to enable this, but make sure your budget is sufficient to accommodate consistent execution.

Be aware that your most important marketing investments may not even be under the traditional ‘marketing’ budget category. For example, introducing a fabulous collection of guest amenities can cause your guests to promote your hotel for you. At the end of the day, your guest experience is the marketing. Money you spend to create an amazing guest experience at your hotel has some of best ROI.

Finally, think of your marketing program as an investment. If you are promoting properly, every dollar that you spend on marketing will come back to you many times over. Good hotel marketing budgets are never an expense, and it’s important we remember this.

11 most important hotel marketing budget categories

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Some hotel marketing functions are best kept in-house. For others, it’s more profitable to outsource them to an outside partner. Here are ten of the most profitable hotel internet marketing tasks to outsource and why.

1. Web Design

Why: Designing an effective hotel website requires time to create pages that are attractive, informative and visitor friendly. This requires a knowledge of the hotel industry in addition to technical knowledge and an understanding of usability guidelines.

2. Website Maintenance

Why: Building and managing a website are two different tasks. Website design gets a lot of attention, but upkeep is equally important. It’s important to constantly update your sites with the latest information.  Unless you have the technical expertise and time to do this in-house, it’s common to outsource this function.

3. Pay-Per-Click Advertising

Why: Sure, anyone can throw together a PPC campaign in a few hours, but it requires a lot of research and testing over the long term to do this well. A good agency will take time to understand your business needs, and build a campaign around them.

4. SEO Optimization

Why: Effective SEO can include website re-design, optimization and a strategic linking strategy – so it can be nice to have someone else manage this whole process for you.

5. Content Creation or Copywriting

Why: Many managers understand the benefits of content marketing, but struggle with writing it. Fortunately, there are many talented writers that would be happy do this for you. These people can be hired to help you write articles, website content, blog posts, email newsletters, and more.

6. Twitter

Why: Twitter can take a lot of time to use effectively. Some of my colleagues have achieved excellent results – both in positive buzz and in generating revenue – but they invest a lot of time. If you don’t have the time to participate, you may want to hire someone else to do it for you.

7. Online Reputation Management

Why: Again, this is a task that just takes a lot of time to do thoroughly. Hiring someone to monitor the web and reply as needed can be a worthwhile investment.

8. Video Production

Why: Hiring people with expertise in producing quality videos will help your company gain higher visibility in YouTube, Google Video Search, Blip.tv, and so on. A good video marketing team will understand your branding objectives, and produce video to accomplish them.

9. Mobile Phone Promotions

Why: This is one of the hottest new distribution channels, and hiring specialists in this area can help you gain a first-mover advantage. Hire someone else to begin your mobile promotions strategy, then learn and experiment as you go.

10. Website Optimization

Why: Website optimization is different from search optimization – it’s the process of adjusting your website so operates at peak sales performance. Hiring someone for this can have a big impact on your overall internet marketing success. A good website optimization specialist will have a good understanding of your hotel, how people buy online, and website conversion improvement.

The bottom line? Outsourcing individual components of your internet marketing campaign can reduce the burden of employing staff to perform those tasks in-house.  It can allow you to focus core business activities, spend more time on strategic planning, and less time on implementation.

Is fear holding your hotel back? Are you avoiding action because you’re afraid of failure?

David Meerman Scott recently wrote an excellent post on fear. I also have seen many hotel executives scared of trying new marketing that could benefit their hotel and their guests — simply because there are afraid.

Afraid that they’ve never done this before.

Afraid that it might make them look bad.

Afraid that they cannot track everything.

Progress and innovation are impossible unless we take calculated risks. Educate and prepare yourself, then go out and make things happen.

Stop letting fear prevent you and your organization from achieving success.

What’s holding you back? What are you afraid of?

[Photo credit: flikr]

London’s Heathrow airport recently had the brilliant idea to have Alain de Botton as a writer in residence for one week. The Swiss-born author and philosopher will be writing his new book — Writing at the Airport: A Heathrow Diary — about life inside the Terminal five.

As part of this project, the airport plans to give away 10,000 free copies of the book as a bit of literary promotion.

Since I’m a huge proponent of content  marketing — and understanding that many hotels do not have the time or resources to publish it — this got me thinking. Could your hotel hire a writer to spend a week or more living on-site to write about life at your hotel?

You may think this is just a wacky new marketing idea… but there is a historical precedent of authors writing from and about hotels.

I know that if I owned a hotel, this would be one of the first things that I would do…

[Video interview from the BBC on YouTube]

From time to time when I get reflective, I ask myself why I do what I do. What am I trying to accomplish?

At the risk of sounding grandiose, my vision is to bring every hotel to the place where:

* They understand how the guest’s buying process has fundamentally changed, and how that necessitates a completely new approach to marketing

* They strive to create a truly unique experience that becomes the focal point of all marketing efforts

* They use new media formats to share a realistic picture of what it’s like to be a guest at their hotel

* They use the latest technology to distribute this media

* They publish a lot of incredibly useful, educational content – making guests feel like an insider before they even arrive

* They monitor a wide range of networks on the web to communicate with guests and potential guests – providing a new level of customer service.

* They quickly act on feedback they receive: both in replying to the guest and in implementing the change

That’s what I’m working each day to achieve. It’s what I’m trying to accomplish for my clients. It’s what I hope every hotel will be able to do.