26. May 2020

Position your Hotel, it makes a difference!

By Riccardo Giacometti

Positioning in the hospitality industry is an organized system for opening a door to the guest’s memory and anchoring yourself there. Positioning means taking a particular position and standing for something specific and distinctive, and not others. Consequently, positioning is a conscious preference for certain guests and a renunciation of other guests. It’s not only in difficult times that the hotelier has to take a clear position and concentrate on their strengths. But now, in this particularly unusual time, hotels have the extraordinary chance to adopt a new brand position or to strengthen their existing positioning.

Now you might argue that you cannot afford to do without certain guests and that you ought to be there for any and all guests. A fatal mistake! Today, guests can find comprehensive information and choose a hotel that will best meet their expectations and needs. Hotels that are not positioned may offer average value, but not an exciting image. Such hotels primarily use price as a differentiator, because they have not developed a unique selling proposition (USP).

Positioned hotels have more success

Repositioning is a courageous and rewarding path. It requires reviewing all operational processes, taking an unconventional perspective, and with little regard for the status quo. Repositioning requires questioning whether what seemed reasonable yesterday can be organized more easily and more effectively and efficiently today. It is a matter of breaking away from outdated structures. If you have decided to take this step, then you have made the right move. 

You want to position your company successfully. You want to create a unique and distinctive product. You want to align your core strengths with new trends in society. You and your employees stand behind the concept and embrace it. You take time to develop and implement the concept and constantly monitor the effectiveness of the idea.

Positioning is the result of strategy development

What does it mean to be “positioned” and how do you manage to anchor your brand position in the guest’s memory? Positioning is the result of strategy development. A 5-star wellness hotel, for example, is already two-dimensionally positioned: 1. toward health-and-wellness-conscious guests and 2. as high quality. Further, dimensions can be created from the point of view of guest benefit, such as the size and features of the rooms, the quality and size of the pool, the attractiveness of the culinary offer, and much more. The clearer and more distinct the profile, the better positioned the hotel is and the stronger the demand, provided that the guests are delighted.

The strategy development process determines the scope and characteristics of the success criteria. It is obvious that the number and quality of each individual success factor have to do with investments and costs, which have a considerable influence on the financial results. The aim of effective strategy development is to find the best mix of dimensions, i.e., the best positioning, which is different for each property.

Always remember to adjust the price to account for the increased perceived value of the additional guest benefits resulting from your investment. Quality has its price and price is one of the most important quality indicators. New positioning should always be accompanied by a pricing strategy. Guests are willing to pay for an unforgettable experience. However, should you decide to size your offer and service down, you need to adapt the price as well.

Existing hotels can also be successfully repositioned

For new hotel projects, positioning development as part of strategy development is a self-evident fact. No bank or investor will finance a new hotel project if no coherent concept is available. In the case of existing hotels, repositioning should be approached systematically. A change in strategy usually means making investments, considering other target customer groups that want to be addressed differently, and usually higher prices too. Such serious changes require an intensive study of the strategy and the use of proven strategy tools.

The development of a strategy begins with a systematic and thorough analysis of the existing situation. This should include analysis of a series of KPIs over a longer period of time, as well as benchmarks for comparison. Have a look at my article about KPIs, which you can find here. Competition and external factors should also be systematically evaluated. If there is clarity about the strengths, weaknesses, opportunities, and threats (SWOT) of the organization and its brand, then “strategic alternatives” can be developed and evaluated. This can be done in a visionary way by creating a concept with the elements of vision, mission, values, and value proposition. Or one can also choose a generic approach and develop different alternatives. Sometimes a combined strategical approach is promising.

Your hotel deserves the best positioning

To position a business means to select a certain strategic option and discard all others. But how can you be sure that the chosen strategy is the optimal one?

The art is to visualize the alternatives in detail and to evaluate them professionally. This means not only analysing the individual alternatives in terms of advantages and opportunities, disadvantages, and threats but above all quantifying them down to the last detail. I recommend a detailed and thorough scenario analysis of all alternatives, by which you are able to map all economically relevant key figures in their interlinked form over several years. A comparison of alternatives helps to find the optimal strategy and thus positioning. If your gut also feels right about the strategy you’ve chosen, then you can start with the repositioning.

The strategy is also the foundation for other activities that are crucial to success, such as brand management, budgeting, controlling, implementation, and marketing.

How to proceed?

Develop a specialised field of activity

A SWOT assessment and analysis of the local surroundings provide initial points of contact for new ideas. The unique selling proposition should distinguish the product from its competition by highlighting a unique benefit and encouraging the consumer to buy it. Through market saturation and objective interchangeability of products, “USP’s” are becoming increasingly important. Positioning is all about making a unique value and sales promise in terms of the service. The USP must be defensible, target group-oriented and profitable, and must be defined in terms of price, time and quality.

A clear, uncompromised message that is honestly lived and reflected throughout the hotel, is important. This, in turn, arises from answering numerous factors and questions, which you should first answer on your own, but also in collaboration with your team and with other experts:

  • What makes our hotel different? 
  • What makes our business unique? 
  • What attracts our ideal guests to our hotel? 
  • Which guests do we still address too little? 
  • Which guests do we actually want?

Define your target group

A professional target group analysis based on your existing mailing list, combined with a turnover analysis, provide an overview of existing guests. These can be divided into A, B, and C guests depending on the turnover size. But much harder than an existing guest potential analysis is the definition of a new target group. Important questions have to be answered in this context:

  • Where are our markets?
  • How do we reach these markets?
  • Which markets do we already serve where there is still potential?
  • Who are our best customers and why?
  • Which offers in the region provide a basis for further marketing and have not yet been used?

When selecting your target group, the topics are important because each topic addresses a specific target group and covers their specific needs. Also inform yourself about what kind of guests are addressed in your region/city. Join in and strengthen the message for the target groups that are already being worked on for each region/city. With accompanying measures you can achieve much more than with a standalone approach.

Solve the “problem” of your target group

There are two possibilities for finding new customers: either you solve a problem/pain of your customer or you create a completely new need for your customer. The royal discipline being identifying and targeting their latent needs. The guest is not yet aware of these needs, and yet they are omnipresent. A note at this point: Quality means doing the ordinary extraordinarily well! Although ideas can indeed be products of chance, it makes sense to introduce a methodical innovation process in the company in order to achieve a structure and consistency for the implementation of new ideas. While an idea can arise by chance, its implementation – the actual innovation – is the result of planned, entrepreneurial action.

Create solutions that are beneficial to the majority of your guests, not just to a small subset of visitors. Remember again and again that it is not about you as a host or manager, and what you personally like. It is about the guest, what they need, and if they are willing to pay for it!


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