One Key Lesson to Learn from the Hotel Industry

Last week, two people in two very different industries told me essentially the same thing. One of the people was Jeremiah Magone of More Direct Bookings and the other was Patrick Walsh, the Contractor’s Copywriter. Can you guess what they said?

When you have a trip coming up, how do you decide where to stay? If you’re like a lot of people, you already know what city you’re visiting and why, so now it’s just a matter of lodging. People flock to sites like Travelocity or Priceline to see what hotels are in the area and what their rates are.

Sites like these are called OTAs – online travel agents. They aggregate information about lodging, flights, rental cars, etc. so you can easily compare them. For each, you get a thumbnail image of a hotel’s exterior or one of its rooms, along with the price. Aggregating like this, though, makes all the hotels look the same. It’s the price that draws the eye.

Hoteliers pay a pretty hefty commission to the OTAs for the bookings they get. And because they are competing on price, they’re pressured to reduce prices. Between these two forces, hoteliers make much less on OTA bookings than they do on bookings directly on their own websites.

What has this to do with the remodeling industry? What about sites like Angie’s List and HomeAdvisor?

Granted, these don’t slap per-project prices on their listings, but they do reduce each business to a photo and basic data, again making them all look much the same.

What happens when everyone looks the same? They’ve become a commodity. And this is what Jeremiah and Patrick both mentioned: once you’ve been reduced to a commodity, the only thing you have left to compete on is price.

I don’t want to knock Travelocity or Priceline, Angie’s List or HomeAdvisor – each has an important and valuable place in the market. But it’s not good to rely on these for the majority of bookings and referrals, or focus too closely on these for marketing, because that’s not where the prosperity is.

Let’s get back to the hotels for a second.

As the OTAs have multiplied and become more powerful, hotels have become more reliant on them for bookings to keep room occupancy high. An empty room is a room that loses money, so it makes sense to do all you can to keep them all booked.

However, hotels – particularly boutique hotels, independents, and small chains – are finding that even though occupancy is up, they’re still not making the kinds of profits they want to grow their businesses. Again, it’s that matter of commissions and pricing. Being a commodity is hurting them.

More recently, independent hotels and small chains are taking a page from what exclusive luxury hotels do. They are learning to capitalize on what makes their hotels unique and engaging. They are learning to focus on the customer experience, and to get involved in the customer’s dreams much earlier in the process than the booking stage.

That’s where Jeremiah comes in. More Direct Bookings is a marketing service that helps hotels get into the minds and hearts of their ideal guests early and often, well before the stay, so that when the time comes to book, the customer already knows where they want to be and why. They book directly on the website, where vacation packages and fun extras can be had. And by doing so, they save the hotel on commissions.

By using smart marketing, these hotels are not at all competing on price. They are competing on the chance to delight their guests and become the very favorite hotel in the area, meaning more business for years to come.

And the funny thing is, even if a prospective guest does go to an OTA, 53% of those go from there to a hotel’s website to check it out a little more thoroughly. That’s a big opportunity. If the hotel grabs them with what makes that hotel special right on the front page, they stand a huge chance of getting that direct booking.

What does this mean for the remodeler?

It’s important to fully understand what’s special about your business. What do you bring that your local competitors do not? Is it something special about your service? Your people? Is it a particular process you use that achieves better results?

I heard recently about one remodeler who has a much more methodical end-of-workday process than most to make sure the space is clean, and that dust doesn’t intrude on the areas that are still being lived in during the remodel. Their people check in with the homeowners to make sure the inconvenience is reduced as much as possible.

I read about another whose meticulous attention to detail in the design phase was the key differentiator. They highlighted how the details in any project can make enormous difference in the overall look and feel, and how their process helps homeowners nail down the key details early on, and then build from there a gorgeous space.

In copywriting, we call the key differentiator the USP – the Unique Selling Proposition. Sometimes it can be hard to find out what a particular business’ USP is, but if they’re even mildly successful, they probably already have one. The most successful know what it is and play to it strongly.

Once you have identified your USP, that becomes the key feature of your brand identity. Build on that everywhere your business name appears, most especially on the main page of your website. When people see you on Angie’s List, they want to know more, so they go to your site and look. And that’s where you get them.

Know what makes your business unique in your area. Know what delights your customers and how you deliver it to them, making you their favorite remodeler, meaning more business for years to come.

Play up the difference and leave the aggregators behind. And never be a commodity.