Rethinking Hospitality: A Fresh Approach to Marketing in a Post-9/11 Economy

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In the wake of the September 11 attacks, the hospitality industry faces a stark new reality. The economic repercussions are unfolding, and the landscape is drastically altered. For businesses in this sector, the most constructive action is to reevaluate and reinvent their strategies to support economic stability. This means discarding outdated marketing plans and crafting new ones that address the current challenges. The hospitality industry, once enjoying robust growth, now confronts a significant downturn. Data from PKF Consulting USA (now CBRE Hotels) indicated a 5.6% decline in operating profits for the average US hotel in 2001, a stark contrast to the 10% profit increase in 2000. This downturn necessitates a complete overhaul of marketing strategies to adapt to the rapidly changing market conditions.

Competitive Landscape: Redefining the Battlefield

The competitive environment for hotels has intensified. Every establishment,Rethinking Hospitality: A Fresh Approach to Marketing in a Post-9/11 Economy Articles from budget franchises to luxury accommodations, is vying for the same diminished pool of travelers. It's crucial to prioritize value and service over traditional rate structures to retain existing customers and attract new ones. In this climate, differentiation is key, and hotels must be willing to adjust their offerings to meet customer needs and preferences.

Value Proposition: Enhancing Guest Experience

To prevent top accounts from defecting to competitors, hotels should consider lowering rates and including additional perks such as complimentary breakfast or beverage vouchers. While this may impact overall revenues, the alternative—losing clients to competitors—could be more detrimental. The focus should shift to maintaining cash flow rather than strictly adhering to net operating profit targets.

Market Segment Analysis: Adjusting Expectations

Hoteliers should anticipate at least a 20% reduction in their projections for the first half of the year. It's essential to identify market segments that can still be influenced and to aggressively pursue them. This includes targeting government travelers, drive-in markets like AARP and AAA members, and developing local packages for those who may opt for rail travel or staycations due to a reluctance to fly.

Advertising and Promotion: Smart Spending

Resist the temptation to slash advertising and promotion budgets. Instead, invest in marketing efforts that can be tracked and measured for direct revenue impact. Maintain visibility among loyal customers through loyalty programs and targeted advertising in proven channels. Demand accountability from advertising representatives by requiring them to provide performance data for their services.

Sales and Marketing: Investing in Talent

Rather than reducing the sales team, consider expanding it by recruiting from competitors. Training is crucial, as many sales personnel have become accustomed to a reactive rather than proactive approach. Equip them with the skills to prospect and sell effectively, and incentivize their performance to drive results.

Customer Service: The Heart of Hospitality

Now, more than ever, customer service should be a focal point. Training staff in delivering exceptional service is paramount. The hospitality industry must remember its roots in providing genuine care and going the extra mile for guests, as exemplified by the heroic efforts of NYC police and firefighters.

Core Competencies: Back to Basics

The industry must return to its core competencies, moving away from a focus on asset management and statistics to locating and retaining guests in a contracting market. As Bob Alter, President of Sunstone Hotels, once noted, revenue generation is straightforward when the top line is healthy. The real challenge lies in driving sales and delivering exceptional customer service to ensure a robust bottom line.

In conclusion, the hospitality industry must adapt to the new economic reality post-9/11 by reevaluating its marketing strategies. Emphasizing value, customer service, and targeted advertising can help businesses navigate these challenging times and emerge stronger.