Setting up a successful hotel is something that takes time and patience. But many businesses of this sort stop at the first location. Their owners don’t seem able to expand them, no matter what they do, never becoming the national chains that make enormous profits.
What are they getting wrong?
That’s the topic of this post. We look at why some hotels become national brands and why others don’t. This exploration will hopefully help you if you’re considering setting up a hotel and expanding it to more than one or two locations.
So, why are some hotels so successful?
The primary reason some of these hotels are so successful is because of their consistent approach to branding. They do the same things at every location, ensuring their customers get the same experience, regardless of where they go.
This consistency is essentially what builds trust, similar to restaurant chains. If people know they are going to get a certain standard, no matter which hotels in a chain they go to, then they are much more likely to want to use it.
Consistent branding takes many forms, but the idea is to ensure the look and service quality are the same, regardless of location. This approach requires getting the management right and ensuring that they understand the vision for the firm. They need to know what to do and which resources to deploy for the best results.
Part of this approach involves using effective franchising models, a system that works for many chain-based companies. The idea here is to get operators to invest in their hotels and then operate them under brand guidelines.
This approach reduces setup costs and makes management more compliant. It also improves on independents that don’t always have the management structure in place.
Effective franchising seems like a risk to many hotel operators, but the reality is that the system works. Giving franchisees ownership over their operations encourages them to behave more consistently and build a better service.
Some hotels also become national brands because they have robust marketing programs with loyalty offers. These help them grow demand for their accommodation and allow them to use this income as leverage for further expansion.
For this step, most hospitality firms use a hotel marketing agency that understands how the industry works. Going to generic outreach companies or trying to come up with something in-house is usually a recipe for disaster and doesn’t often work.
Smaller hotels can begin scaling up using local outreach and public online platforms. However, they really need a good story and help from influencers who genuinely believe in what they do (which can be expensive). While these hotels can expand, they aren’t always able to do so, simply because capital can be so limited.
That’s where guerrilla marketing is so critical. Getting under people’s skins increases demand substantially and encourages new VC money for quick chain-like expansion.
While drumming up new revenue is important, successful chain hotels also seek operational efficiency to bring their costs down. They know that even small changes can have a profound effect on their margins and what they can borrow for further expansion.
For example, most chain hotels use property management solutions to take care of their buildings. These help them see what’s likely to go wrong in the future and enact proactive maintenance.
They are also careful with their accounting. These businesses take the time to work out what their accounting needs are and how they can lower the costs of running their buildings through techniques like depreciation and allowances.
Many of these larger hotels also make a point of adapting to larger trends around them. They know that their businesses have to adjust to the times.
For example, many chains used to focus on families in the 1990s and 2000s. However, with collapsing birth rates and the rise of single living, that’s changed, and isn’t something people are focusing on as much anymore.
Hotels are now offering breaks for busy single people or those with hectic careers looking to recharge their batteries. Many establishments are also offering places where people can bring their pets, including in their bedrooms, again to drum up demand and make life more interesting.
Finally, successful chain hotels are choosing strategic locations for their operations. They know that if they can catch the right spots, they can take advantage of trends and new bookings every day.
P.S. Before you zip off to your next Internet pit stop, check out these 2 game changers below - that could dramatically upscale your life.
1. Check Out My Book On Enjoying A Well-Lived Life: It’s called "Your To Die For Life: How to Maximize Joy and Minimize Regret Before Your Time Runs Out." Think of it as your life’s manual to cranking up the volume on joy, meaning, and connection. Learn more here.
2. Life Review Therapy - What if you could get a clear picture of where you are versus where you want to be, and find out exactly why you’re not there yet? That’s what Life Review Therapy is all about.. If you’re serious about transforming your life, let’s talk. Book a FREE consult call here.
Think about subscribing for free weekly tools here.
No SPAM, ever! Read the Privacy Policy for more information.
