In Kevin Costner’s 1989 film “Field of Dreams” this prophesy whispered mysteriously from his cornfield comes true but that’s what Hollywood sells us – dreams. In reality, we see an increasing number of hotels, resorts and serviced apartments built around the world by investors in what seems, sometimes, to be this simple act of faith that building a hotel or resort will, of itself, make the end result successful.
There is actually little more than a hand-full of locations around the world where this approach works. The best approach, of course, is to undertake a thorough feasibility study of the project and to have the project adapted to what the feasibility study, including detailed market research, suggests. Our friends at Xotels have given some detailed advice on the steps to take, so we won’t repeat them here.
What will always come through is that building your dream hotel or resort is all about location, location and location. It’s one of the sayings that is as true now as it was when I entered the hotel industry 30 years ago and it says something that hoteliers and investors all too easily forget: selling your hotel is not simply about selling your hotel, it’s about selling your destination.
The definition of “destination” in this case varies from one place to another. In major cities like London, with thousands of hotels, serviced apartments and more, the “destination” is the city itself but also the part of the city where the property is located – e.g. for our network property The Harrington in London it is South Kensington as well as London itself, for Nyhuset Brussels Business Flats it’s about the major sights in that part of central Brussels, as well as Brussels itself.
Selling a destination includes recognising who your competitors are. London hotels and serviced apartments often forget that Paris can be as big a competitor for some business as the more obvious other hotel down the street and that each hotel has to approach its marketing and sales with that in mind. There was a recent reminder of this: when London was hosting the Olympics in 2012, summer leisure business to London hotels dipped whilst many hotels in Paris had their best summer for some time. Hotstats showed that July 2012 occupancy in London dipped 9.7% to 82% whilst Paris enjoyed 86.4% and Amsterdam 85.3%.
Hotels and resorts in Asia may face a bigger challenge in marketing their destination because competitors can be less well defined. The leisure traveller in the U.K. and Europe planning a summer holiday in South East Asia very often has no particular loyalty to any country and will chose what they feel is most attractive to them, as well as best value from their perspective, no matter whether the resort of their choice is in Vietnam, Cambodia, Thailand, the Philippines or Malaysia. For a resort in these countries, capturing market share to maximise on occupancy and rates during the European high season – distinct from the local high season – rests on effectively selling not only the resort but also the destination – the advantages of location and value that should make it compelling to stay with you.
Results for resorts in these countries are best achieved by having a London-based representative promoting the two things – resort and destination – side by side and positioning the property with the right tour operators and agents to achieve the result that you want. It’s also a good idea to run a very effective social media marketing campaign across at least the main channels throughout the year – not just at the times you want business.
The alternative, of course, is to leave it to online travel agents (OTA’s) to do the job, understanding that OTA’s, whilst they definitely have their place, ultimately have the simple interest of driving the highest possible volume and revenue through their portals, without really caring (at senior management level) where those clients stay. The other downside to this tactic on its own is that, unless the OTA’s are providing as much occupancy and revenue as you can take, you are missing out by not topping up their production with the business we are discussing, which is a separate market segment, as highlighted in our previous post.
What is your experience – do you have to sell your destination as well as your hotel or resort’s attractions ? Please comment below.