According to Geoffrey Moore in his book "Living on the Fault Line: Managing for Shareholder Value in the Age of the Internet," stock price is a measure of future potential based on present competitive advantage.

Competitive advantage consists of two components: competitive advantage gap and competitive advantage period. The competitive advantage gap (or GAP) is the distance between your hotel offerings and your nearest competitors. The competitive advantage period (or CAP) is the projected period a company can maintain its differentiated position. In other words, if a hotel company has superior products and significant barriers to entry, it has both a competitive gap (product differentiation) and a competitive cap (time lag for competitor entry).

When developing a cohesive marketing strategy, both CAP and GAP should be incorporated to achieve success for sustained periods. With that in mind, here are some guiding principles to help you achieve a competitive advantage in your market.

Distribution dilemma and marketing dollars

Many hotels receive reservations from third-party sources, most notably online travel agencies. It is important to understand the OTA booking process and what its impact is on the hotel. OTAs buy keywords that allow them to dominate the search process. This is largely due to their ability and willingness to spend marketing dollars. For example, if a guest attempts a search with the keywords "hotels in Scottsdale, Arizona," the top four results are Google Ads and, not surprisingly, these four ads are all for OTAs. While the results will vary based on the time of day and the number of people bidding on certain keywords, OTAs dominate the broadest-searched terms.

After scrolling past the four ad placements, you will see a Google Maps listing with three locations. These Google Local rankings are the results of a great search engine optimization campaign as well as Google's local algorithm. Once past the map, we get into the organic search results.

The top three results ("Top-10-type posts") are a great example of content marketing, and are extremely engaging and useful for guests, which is why Google has given them such high priority in its organic ranking. If you take note of what websites these links are for, you will not be surprised to find out they are all OTAs and metasearch engines. A metasearch engine—which is defined as a search tool that uses another search engine's data to produce its own results from the internet, like Kayak, Trivago or another aggregator—further demonstrates how OTAs control key real estate on search engine results pages, because Kayak is owned by Priceline and Trivago is owned by Expedia. In fact, Trivago has been climbing Google's ranks in related searches to hotels over the past five years.

Search engine optimization: Content marketing

This is where content comes into play. Content that is well-written, includes verbiage that plays well within the search engines and, most importantly, is what users want to consume, will win over potential guests.

Optimizing content marketing is different than just having command of the English language. It requires up-to-date knowledge on search algorithms and a vast understanding of what your online audience likes. This may come in the form of an agency or internal professional but basic search engine marketing is one of the most effective ways to grow your business in an increasingly competitive marketplace.

With millions of businesses out there all vying for the same eyeballs, it's never been more important to advertise online and search engine marketing is the most effective way to promote your products and grow your business. Companies such as Milestone, GCommerce and Screen Pilot can help get you started.

Data and analytics: What should you look for?

Your hotel has access to a lot of data, but the question is, do you use it? It is very costly to implement a comprehensive data analysis plan, especially across multiple hotel brands where systems cannot be integrated. However, each hotel has more information about its guests than ever before.

Prior to check-in, guests can now provide their favorite room types, room temperature, foods, TV shows, pillows and more. This tailored guest experience currently exists in new, high-end hotels but it will soon be available at every hotel. Utilizing this information and adapting it to our targeted advertising campaigns on social media and search engines can produce much higher returns on investment.

I use data to understand price sensitivity in each market. When is it better to take the soccer team of young adults to a room? What market segment is really better for this hotel? With occupancies at a peak, it is paramount to our success that we optimize rates to offset the rising costs of labor, health care and more. Taking all this data into account when building our marketing strategies will help us attract guests that are perfect for our hotels. In turn, this produces a better guest experience that results in higher reputation scores. It is a win-win.

To sum things up

Marketing is often an afterthought within the hospitality industry and where there is focus, it is pigeonholed to specific buzzword-oriented areas with hopes of creating a temporary boost in traffic translating into a temporary boost in bookings. This reactive nature is, unfortunately, a product of hospitality—an industry that lives and breathes off operations to achieve success. But marketing is meant to be coupled with a long-term strategy that guides the branding, voice and growth of your hotel over the next 10 to 30 years.

The OTAs embraced marketing in today's internet age before hotels but that does not make them the enemy. With the proper marketing strategies in place and a good understanding of your channel mix, hotels can work to regain ground on search engine results pages and be prepared for future success thanks to CAP and GAP principles.

Robert A. Rauch
R. A. Rauch & Associates, Inc.
+1 858 720 9500
R. A. Rauch & Associates, Inc.

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