Hello ,
AI news is everywhere, there’s so much of it one could think it was written by AI. I’ve decided to make a section for that – I do think there’s a huge shift on the way. But hotel’s are still in the physical service business and it isn’t that easy to replace with an AI chatbot.
I’ve also added a recent discussion I shared about brand and price on the bottom. Feel free to join the exchange.
Best, Martin
About me: I’m a fractional CMO for large hotel technology companies to turn them into industry leaders. I’m also the co-founder of 10minutes.news a hotel news media that is unsensational, factual and keeps hoteliers updated on the industry – in their language.
Food for thought.
Storytelling, Design, Hotels
The trend of immersive and narratively driven hotel experiences is compelling, we need to do this. Bland and boring is just not good enough (well unless you’re just going to price dump). But for hotels, incorporating storytelling into design should complement, not complicate, the guest journey. I recall a hotel where I was made to sit-down and get into the whole “check-in experiences”. It takes some clever work to balance the story telling experience with the needs of the customer. However, if I had to chose I’d much rather sit down for a great hotel than have a fast check-in to a boring and bland hotel.
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Taylor Swift, pricing, justice
The antitrust lawsuit involving Ticketmaster and influenced by Taylor Swift highlights significant issues in the ticket sales market. But mostly it shows the power that some celebrities have to move monopolies which haven’t been moved before. This case has brought together a rare coalition of American politicians and thinkers from diverse ideologies, aiming to address monopolistic practices that adversely affect both artists and fans by imposing exorbitant fees. Incredible how celebrities and individual personalities can drive such change.
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Global marketers on ROI
Nielsen surveyed global marketers for their spending and objectives, revealing four key themes: spending optimism, tactical and KPI misalignment, potentially harmful digital dominance, and incomplete confidence in measurement. Despite inflation and uncertainties, marketers are optimistic about 2024 budgets, but a siloed vision could impact overall ROI. While performance marketing must always be the immediate solution, hotels, should strive to balance brand-building with performance marketing. Because as I mentioned it below, brand is where your ADR is.
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The State of Digital Advertising
Digital advertising are really just advertising today. The non-digital ads are the ones who need a category name. In fact I’m not sure what to think about people who explain what they do and say “digital marketing”. But that’s another conversation. For those who are interested in the increasingly complex but important world of advertising. Here’s a 30m video from Luma Partners. And yes, the world does need to grow up and professionalize.
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AI use cases in hotels
Let’s be honest, AI will not be able to do the hardest part of hospitality – cleaning rooms and keeping a smooth running hotel. But there are some AI applications. Particularly those based on large language models (LLMs), which promise to enhance marketing, booking management, revenue optimization, guest communication, and waste reduction. While this presents numerous opportunities for operational improvement, hoteliers should be cautious in their adoption, ensuring that the technology genuinely meets their needs rather than succumbing to hype. Still any list of ideas of how to use AI in hospitality is welcome, here’s one from Doug Rice.
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AI could manage your PMS
At Microsoft Build 2024, Microsoft demonstrated how Copilot Studio can enhance business productivity by automating repetitive tasks and integrating experiences across Microsoft Power Platform and Teams. Real-world examples from Peppermint and Docusign show how these tools can streamline business processes. If the promise holds and is as good as they say it opens the door to a whole different look at managing one’s PMS (and other systems) where the operating system (Windows in this case) could be used to automate tasks and facilitate the work of hotel staff. I don’t know how rapidly this will actually happen but it does bring the operating system back, front and center.
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Google’s AI search
The recent announcements at Google I/O mentioned AI 121 times. Lots of amazing features promising lots of great new functionality. One which will change a lot is AI powered search. It will change SERPs, it will change hotel search but how much will it change? We don’t know yet. However we do know they will do all they can not to kill the “10 blue links” because it is their business model. And yet, here we are.
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THOUGHTS:
If you want pricing power you need a brand (or a monopoly
If you want pricing power you need a brand (or a monopoly). The CEO of LVMH recently claimed that they don’t do marketing because marketing “is against what a company like them should do”, but marketing is the main thing they do. Of course they make high quality products, but take the same artisans, and the same materials and try to sell a Croissant handbag with no brand, for $2500. Good luck.
Brand building is the ultimate marketing activity. And unless you have an absolute monopoly, it is the main long term goal marketing should be working on. Unless you don’t care about growing profits or multiples.
Every company can (and should) build a brand, a brand doesn’t need to be big, doesn’t need to be centuries old or based on some ancestor’s secret formula. Software companies build brands, B2B tech companies are brands. The phrase “Nobody gets fired for buying IBM”, was purely a testament to a strong brand.
A brand is not about making a fancy logo. One of the brands I worked on had an unimpressive logo, it was a problem, but we never changed it. They sold at almost double the price of the competition and had more than triple the margins. And still had a better customer feedback than them.
Anyone can be cheaper and make more volume selling a brand-less product, especially consumer products. But in B2B you need to build a brand if you want longevity. The “fear of messing up” factor when selecting a new vendor is real. The strongest asset you have to over-coming that is a solid brand. Just like the IBM example above.
Building the brand takes time, it takes obsessive persistence, it takes constant repetition, nice design helps but repetition helps more. A persistent mediocre logo is stronger than a great logo that keeps changing.
It takes patience to build predictability in quality from the market. Some tech companies are notorious for bad service and still win deals. Customers know what (pain) to expect. Not every brand is about great service or great products. It can be enough to be larger or scrappier (try to build a brand around worst customer service, might work, but I don’t recommend it).
Independent hotels need to build brands, if they want to move beyond the rat-rate of market pricing. Even if it’s just a few points higher.
In short, unless you have a monopoly, the only way to gain pricing power is by building a strong brand. We could even argue that building a brand is how you build your monopoly. But that’s for another day around a few beers 🍻.
