How to debrand a hotel in 90 days (and make more profit)
How to become an independent hotel and surviving without brand recognition.
Most traditional hoteliers would think you lost your mind if you said you were going to debrand and become an independent hotel. “How will you survive without brand recognition and backing of the brand? No one will find or book you! You will never able to compete with the other branded hotels next door!” Well we did it anyway. And this is how (true story).
3 months ago, no one had heard about our new independent hotel. Today it is well positioned in the market, produces more bookings on the key online platforms than any other hotel in the city and is consistently stealing market share from well-established hotels in the destination, branded and non-branded. And on top of that, we haven’t spent a € in Sales & Marketing. So how did we go about it?
Keep Distribution Simple
First of all, we made a decision to distribute on high impact channels only (you know who they are). Instead of spending countless hours setting up a complex distribution structure we focused our attention on leveraging the big ones that would have a significant impact on revenue generation. That meant, the top 2 third parties in our city, our own booking engine and GDS.
Offer High Value for Money
Secondly, we made sure we had a very competitive starting price point. Although we have a new product, we realized that we aren’t in a position to charge premiums for our unheard of, untested hotel. With that said, we didn’t dump our rates – instead we made sure we participated in and leveraged every single marketing campaigns that was paid for by others (OTAs). Not only did this help to fill our hotel but indirectly it also positioned us well on the third party websites in the longer term which we are enjoying the benefits of today. But most importantly, we wanted our first guests to feel they got extremely good value for money with us. Once we started receiving our first reviews, we knew we had succeeded. And as our review scores rose, so did our price point.
Remove Customer Friction Points
Thirdly, we made the customer experience, from research to post-stay, as seamless as possible. We enhanced touchpoints where we could connect emotionally with our guests (greeting each arriving guest personally) while automating non-emotional touch points by providing mobile check-in and outs, for example.
To date, the independent version of our hotel is selling more and at a higher rate than it ever did under the branded flag. We also keep more of what we sell e.g our cost of acquisition has decreased. We may have a higher commission bill; but we have also gotten rid of all brand and loyalty costs, we spend less in payroll through automation and have overall a more productive operation.
Referring back to the end of my first paragraph; We did actually spend some S&M – For us the investment was in terms of commission cost payments to the OTA. We realized that the awareness and conversions that we were able to generate by working with the OTAs (and not against) were higher than what we would have ever been able to do by ourselves (or working against). And as a result, we are able to deliver higher value to our owners. So in conclusion, we are generating more revenue, are more profitable and our guests are happier – I would say we are doing pretty well without the brand.
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― About the Author ―
Jens has worked the past 3 years at the Pandox Revenue Management Center directing the distribution strategy for both independent and branded hotels with a strong focus on owner profitability.
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