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There’s No Such Thing as a Little Hotelier

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Posted by Alex Gaggioli
April 13, 2016

Introduction:

There is no such thing as a little hotelier. We live in an interesting time where small- to medium-sized hoteliers can compete on the same level as the Marriott and Hilton next door. Technology and the Internet have advanced so quickly that the tools hoteliers need to run their businesses are much more affordable than they once were. Sure, the local Hilton might have a $100,000 PMS/CRM system and ample resources. But, the little hoteliers of the world can rejoice in the fact that the playing field becomes more level every day.

Thanks to utility computing, software as a service, OTAs, and direct marketing techniques, enterprise level hotel technology is used by small properties every day.

First Things First–What is Utility Computing?

Utility-Computing

Utility computing is the idea that technology services are priced based on customer usage. In the same way that water and gas companies charge customers based on how much an individual uses, Internet companies now charge in increments too.

Utility computing has made it easier for people to run businesses and the websites that power them. You no longer have to pay a large sticker price for servers, content management systems, and even tools such as email and cloud storage.

This is important for small- to medium-sized properties because they don’t use many of the complex functions and features large chain hotels use. It used to be that software makers would produce a $10,000 system for large chain hotels. If innkeepers wanted to use it too, it was all or nothing. This left managers and owners of smaller properties without software, or stuck with a huge price tag for a piece of software they only used 10% of. Now, with utility computing, hoteliers can pay only for what they actually use, making powerful software within reach.

Most people are familiar with sites like Dropbox and Box, which cover cloud storage. A customer only pays for what they wish to use. Now, the same principles have been applied to other online services such as software and other systems.

These same principles carry over to technology properties use daily. Now, for example, your hotel doesn’t need to buy, maintain, and store their own servers. You can purchase cloud servers on a subscription basis that are professionally managed and are often much safer.

What is Software as a Service (SaaS)?

Cloud-utility-computing

Software as a Service (SaaS) is a software distribution service where vendors host applications and make them available to customers over a network, according to SearchCloudComputing. Now that the Internet has become widely available, it is now possible for businesses to operate almost solely on the web. Even ten years ago, SaaS was far less popular than it is today due to technological limitations.

Generally, SaaS companies sell licenses for on-demand software that customers can purchase for a designated period of time.  As you may know, Cloudbeds operates on a SaaS model, as a form of utility computing. Properties purchases licenses for one or all of our products on a monthly or yearly basis.

SaaS models are often less expensive and easier to use than traditional software. SaaS allows companies to update software in real time with patches and in-the-cloud updates. Before, software companies would only update their software once a year or once every few years. With a subscription based model, this allows small to medium-sized hoteliers to have the most up-to-date software year round. As is the case with Cloudbeds, customers enjoy frequent performance enhancements and new features.

Software as a service allows users to reap all the benefits of constant updates and new features without a huge price tag.

Now that we understand what utility computing and SaaS are, here are some other major ways small- to mid-sized properties can compete using today’s technology.

OTAs

It’s no secret that large OTAs like Expedia and Priceline dominate a large share of the hospitality space. These large OTAs can be a successful revenue stream for small- to medium-sized properties. OTAs spend a significant amount of money on retargeting and search engine ads to target guests when they’re about to book. Properties of any size can benefit from this. It’s an advertising strategy that has proved effective over the past years.

Niche OTAs

Today, there are hundreds of niche OTAs that work particularly well for smaller properties. Niche OTAs allow for properties to reach smaller, more distinct markets. One example that we’ve used before is Bud and Breakfast, the marijuana-friendly OTA. They only list properties that legally allow cannabis on the premises.

HostelsClub is another example of a niche OTA that caters to the hostel market. While both cannabis friendly properties and hostels can survive on the large OTAs, these segmented channels allow properties to reach more targeted guests.

Direct Bookings

Direct-Bookings-

The Internet is an amazing place because, for the most part, it is free and anyone can use it. Every property has the opportunity to capitalize on their own networks, no matter how big or small. Direct bookings offer hoteliers the largest margin per booking because there are no commission fees.

Today’s technology allows every property owner to implement a direct bookings strategy at a low cost. Hoteliers don’t need expensive software to email guests, manage past customers, or even find new ones.

Email

We previously published a post on cheap email marketing tools that can help power your email marketing strategy. Some of the most popular tools include MailChimp, Constant Contact, and FanBridge which either offer free or relatively cheap plans.

Email is a great way to reach past guests and entice them to visit again. You can send property updates, promotions, and seasonal content that will inspire them to book again. Email helps increase direct bookings because you can direct guests straight to your website.

Content

We are fans of content marketing over here at Cloudbeds because we think it’s one of the best ways to gain people’s attention. The big hotel brands may have a larger content team and more assets to create blogs and videos, but that doesn’t mean small hoteliers can’t win too.

As a small hotelier, you are actually at an advantage because you can be more nimble. Large brands often have to go through many layers of bureaucracy that cause compelling content to lose its luster. Not to say that large hotels can’t create interesting content, but it often takes longer and is more sterile.  

Smaller properties have the opportunity to produce content that more deeply resonates with your guests because they’re often able to get to know them better.

For example, imagine that you own a hostel in Paris that caters to early- to mid-twenty-year-olds. You get to know your guests pretty well and learn that the majority of them are repeat Paris visitors. If that’s true, then it would be in your best interest to offer content that caters specifically to this audience. Instead of telling guests they should visit the Louvre, you can offer insider tips to the hidden gems of Paris that they shouldn’t miss.

Long story short, every property, no matter the size, has the opportunity to create content that resonates with the guests they want to reach. It’s often a matter of listening to your current and past guests to understand what it is they care about.

Regular content dramatically helps search engine optimization, which will help your property capture new bookings. We will explore the topic more below.  

Social Media

Social media is also (mostly) free. It’s free to join and to share updates, but it may cost you some advertising dollars to reach a significant portion of your target market. Social media is often a direct reflection of the market, meaning if people like you, they’ll come and stick around for the party.

In our guide to Instagram, we gave several examples of smaller properties that are winning on social. Small properties have the same opportunity as large properties to win on social. For example, Urban Cowboy BnB is a small property located in New York City. Despite their small size, their Instagram presence dwarfs much of their competition with 37,800 followers.

While social media advertising may not be in your marketing budget, the tools to succeed are free. With a little creativity and hard work, you can use social media to boost your presence.

Search Engine Optimization (SEO)

A content strategy and social media are two of the most effective ways to optimize search engine results. Big hotels and small hotels alike benefit from search engine optimization, because consumers turn to Google when they’re looking for information.

Because large properties have a strong hold on short keywords like “Parisian hotel” or “best hotel in Paris”, we suggest creating long-tail content to achieve ranking for long-tail keywords. Long-tail phrases like “best place to stay in Paris when I’ve already visited the city before” are more attainable to rank because large hotels don’t focus on them.

As a small hotelier, you likely have local knowledge that big chain hotels and OTAs do not. This gives you the opportunity to produce content that closely meets the guest’s needs.

If you’re that Parisian hostel we mentioned above, you want to try your best to be Google’s first search result when people search for long-tail, obscure phrases like ”cannabis friendly riverside youth hostel in paris” or “cheap hotel close to bastille market with view of eiffel tower”.

Search engine optimization has changed a lot over the years. Today, it’s less about having perfectly optimized keywords and more about providing content relevant to your audience. A regularly updated blog is a great way to boost SEO. A frequently updated blog tells Google that you, as an author, are still active, and that the website is still maintained. This sends Google a positive quality signal for the overall website. It also tells readers that they should subscribe, because you’re actively writing.

Also, social media sites tend to rank well on Google. Thus, having an active presence on popular sites such as Facebook, Instagram, Twitter, and Pinterest will help users find your profile and website while using search engines. For this reason, you should make sure all the information on your social channels is correct and has a link back to your website.

Conclusion

There’s no such thing as a little hotelier, because these days every hotelier has access to enterprise-level software. The technology and tools necessary to run a property are more accessible now than ever. Utility computing and SaaS platforms allow smaller properties to operate on the same level as large hotels. Property management systems and beautiful websites are available to anyone who wants them. In a way, technology has helped level the playing field. Now, hoteliers must focus on executing with these tools to win.