Hotels need to be more Disruptive
The most effective way to be really successful in business is by challenging the status quo. Especially in a highly saturated industry like hotels, to compete and outperform the market you need a disruptive business model which delivers on a level competition cannot reach. There are many options to disrupt your local hotel market ...
Most business models are based on the "Me Too" copy cat principle, offering the same old boring stuff just like everyone else does. They are not disrupting the market place. This lack of differentiation will lead them to compete over consumer segments in a downward revenue spiral. It is simply not a sustainable approach and in the long run results will erode and suffer.
Before we dive in deeper, what does disruptive mean, and what is a disruptive business model. On my favorite I-don't-know-so-let's-ask-research-tool Google we are of course directed to Wikipedia. Words that jump out when I read various pages on this topic are:
- New values
A good resource for inspiration hoteliers should use is the marketeer Seth Godin. He has been motivating tribes of entrepreneurs into becoming a force of change. He is a master in challenging the status quo and fighting for the good cause of making businesses and people want to become better at what they do. His books and blog truly drive you to improve and excel.
You should also read the book "Blue Ocean Strategy" (by Kim and Mauborgne). It explains how strategy is all about creating a new and uncontested market space by increasing value through new products and services, while at the same time reducing the burden of unwanted features or services.
In essence it all comes down to a few simple questions, what do consumers want? What are they looking for? Is any hotel offering this? What is it that hotels are offering they do not value, which can be eliminated to reduce cost? With the rise of social media on the internet everyone has been acknowledging the need to treat consumers more like individuals.
Today’s consumer is looking for a more unique and personal experience. He values variety, choice and individuality. He is cost conscious and wants to pay for what he needs, and does not like to be charge for extras he does not use. So what can we do in the hotel industry to attract guests to stay in our hotel? Indeed you have guessed it, offer them a more personal, individual unique service and experience, matching his budget and spending patterns.
Individual hotels are more flexible than chain hotels when it comes to adapting their service and business model. They do not have to go through a long political decision process before changes can be implemented.
To truly disrupt the market you have to implement and element of surprise and be original. Below 3 examples of hotels which very well understand how to disrupt the market and have become leading hotels in their destination:
There are many lifestyle, boutique and design hotels in the market. All are more or less delivering the same experience. They are using the less effective copy cat / me too approach, and are saturating their own market space, which will lead to price erosion long term.
The owners of the Pantone hotel also wanted to attract the lifestyle experience consumer segment, but looked for a way to differentiate them. They created a hotel which revolves around the color line of the Pantone Universe, a well known brand with a powerful marketing machine and large following in the architectural and design world. The press spin off this gave is huge and non-ending.
They are not selling rooms, but colors, and not just any colors; they are selling the official colors trademarked by Pantone. They have a selection of colorful rooms which you can choose from at check-in.
The popularity of the Pantone brand and unique concept of selling colors created a buzz around this hotel which led to an enormous success. During the opening year expected sales levels were surpassed by more than 20%, and the results continue to grow sharply.
Another hotel hitting the boutique and design segment, but with a very original spin. They understood what it means to sell a destination when the developed their concept. They have uncontestable positioned themselves as the one and only hotel selling Paris in the city of lights.
What did they do? The rooms are themed after well known Paris tourist attractions. You can book the following rooms at this hotel:
- Mussée d'Orsay
- Moulin Rouge
- Tour Eiffel
- Opéra Garnier
- Atelier d’Arstist
It is so simple when you think of it. But they coined how to sell a destination like no one else.
Lets be honest would you not want to take your partner to a romantic weekend staying in the Moulin Rouge room? Guaranteed success and credits for life ;-).
Besides having these smartly themed rooms they focus a lot on giving exceptional guest service of course. For any killer success you need to have both the hardware and software in perfect shape.
With this too easy approach they have put themselves in the market as a leading hotel. On TripAdvisor they are in the top 1% of the 2000 hotels in Paris. And for competitor hotels it will be hard or rather impossible to compete with.
The city of Maastricht is located in the south of the Netherlands, and is renowned for its burgundy lifestyle and friendliness. When the Bergere Group developed their new hotel concept they understood that they had to incorporate this local character in the hotel.
They looked beyond the friendly staff in the reception, which surely most of the hotels in this destination have. They invented a hotel where you truly feel at home, your own living room on the road.
'Good afternoon sir, had a long ride to get here? Its cold outside no? (we are in Holland after all) Would you like a warm cup of soup?’ Yes the first thing you are offered when arriving at the hotel is a cup of homemade soup to warm you up. The soup changes every day; red pepper soup, goulash soup, pumpkin soup, cave mushroom soup, leek soup, ... And when you are hanging out in the lounge you can serve yourself as much as you like.
Brilliant! They are not selling rooms! No they sell soup and hospitality! Isn't that what a hotel should be all about? A real warm welcome … On hot days in summer they have a refreshing gazpacho and a water ice-cream for the kids. Smart!
And it is working; they are number 2 on TripAdvisor, and sometimes even number 1, for their destination.On the Dutch review site Zoover they are also scoring well.
These 3 hotels went out to make a difference, and the results are there. They don't have guests, but fans that are raving about them on social media and review websites. In REVPAR and GOPPAR these hotels are also leaders in their market outperforming their competition.
Albert Einstein said it best when he noted "the definition of insanity is doing the same thing over and over again and expecting a different result each time."
Bottom line… innovate and disrupt the market if you want to win!
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Patrick Landman @ Xotels