Why waste money installing fancy bathrooms when guests really want to make memories outside your hotel, says Richard Bowden-Doyle
Wherever your hotel sits on the spectrum between luxury and budget, chances are that your immediate competitors are pretty similar. They offer similar services at similar standards and, in many popular tourism destinations, they’re often to be found right next door.
As a hotelier, you strive to make yourself stand out, but too often your efforts and investment fail to produce any long-lasting advantage. Have you ever asked yourself why?
As Mr Hilton knew, location is one way to stand out, but it’s not possible for every hotel to have the most prestigious postcode or the best views. Consequently, many hoteliers seek differentiation by engaging in constant, capital-intensive improvements and enhancements. The trouble is that much of that investment is wasted on things that generate no sustainable competitive advantage – cosmetic dressing that guests don’t really care about, such as marble bathrooms, fancy restaurants and expansive spas.
Today’s guest talks about what they did on holiday, not where they slept or ate. Holidays are about memories, not “stuff”. And worse, not only do guests not really value the fruits of a hotelier’s investments, the whole process is an unwinnable race. Who invested the most, most recently? It’s easy to get locked into a never-ending cycle of investment, driven by a desire to out-do the competition, but only the wealthiest can sustain that effort.
All brands are built on a number of attributes. Some attributes are ‘to play’ (those areas where the brand has to be just good enough) and other attributes are ‘to win’ (areas where the brand opts to be the best and where it creates its competitive advantage). How many leisure hotel operators invest in hardware – marble bathrooms and spas – in the belief that they are the to win attributes? This is a fundamental misunderstanding of how guests think. The reality is that most hardware is actually to play, not to win. It’s the experiences away from the to play aspects – the software – that are the basis of real guest satisfaction.
Focus on software – people and activities – and you will transform your business. It’s not necessarily easy, but it’s a lot cheaper and can produce startling results in terms of satisfaction, repeat rates and profitability. Think of a hotel in the Lake District with a wealth of activities such as hiking, climbing, mountain biking and kayaking on its doorstep. A great hotel with average activities makes for a poor holiday, but an average hotel with great activities makes for an excellent holiday.
Imagine this: your hotel is OK, your food and beverage offer is fine, but your guest satisfaction and repeat rate are extraordinary. The additional financial investment needed to convert your hotel into an experience hub, by linking into local activities and making the most of what’s local to you, is small. Offer these experiences to your guests as part of your inclusive rates. The prices achieved are more akin to four- and five-star hotel rates and are accompanied by high occupancy levels. I know – I’ve seen it work.
Everybody is busy investing in unnecessary hardware, but the answer is software. Don’t waste time and money trying to make your hotel better, try to make it irrelevant.
Richard Bowden-Doyle is executive chairman of Neilson