Copy Right

Marketing Strategies For Hotel Business

The Secret Of Improving Hotel Marketing Performance in the Tourism Industry

 

 

 

by

Murniati, SE., M.Si

Suryaning Bawono SE.M, Si

(Practitioners and Academics in Hotel Business)

 

 

 

© Murniati and Suryaning Bawono

 

All rights reserved. No part of this publication may be reproduced, stored on a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording or otherwise without the prior permission of the publisher.

 

Published

18 December 2020

 

Published, Printed, and Distributed to the Asian region by 

PT.Frost Yunior

Indonesia

 

Published, Printed, and Distributed to Europe and America by

 

Triple Nine Communication

Singapore

 

 

 Note: This eBook is a guide and serves as a first guide. In addition, please get expert advice

 

FOREWORD

 

Praise Gratitude, we always pray to the presence of the One and Only God for the abundance of His grace and guidance so that we can finish making this book.

Tourism is a sector that has an important position for economic growth and community empowerment. One type of travel that can boost tourism growth is by optimizing the development of budget travel trends. Budget travel is a form of tourism that places the budget as an important consideration, especially by choosing accommodation and transportation at affordable prices. Most of the millennials fall into the budget traveler category.

This group of young people also has its own character; namely, they prefer to travel based on digital technology when ordering budget hotels and transportation tickets.

To answer the needs of the digital era, to meet the needs of tourism players, it is necessary to optimize marketing by tourism managers, especially hotels with a digital strategy; therefore, we present a book entitled Hotel Marketing Strategy in Digital, The Secret Era of Improving Hotel Occupation with the Internet. This book is presented in the form of theory and practice written directly by academics and practitioners.

This book is intended to become one of the reference books for academics and practitioners in the field of hospitality and researchers and planning in the field of tourism and hospitality that can be used as strategic materials in marketing development in the digital era. The material for this book is based on the author's experience as a lecturer and practitioner in economics and hospitality.

In writing this book, we would like to thank all those who have helped in the process of making this book. In this book's writing, maybe it is still not perfect; we accept criticism, suggestions, and constructive messages for the better in the next book edition.

Bina Nusantara University (BINUS)

Malang-Indonesia, December 2020

Author, Murniati, SE., M.Si

CHAPTER 1 MARKETING MIX THEORY AND PRACTICE

 

In achieving success, marketing activities support the company's success. Marketing strategy is a plan to select and analyze target markets, develop and maintain a marketing mix that meets consumer needs (Kismono, 2011). An effective marketing program combines all marketing mix elements into an integrated program designed to achieve company goals. Making decisions about products, prices, promotions, distribution channels, or locations must create a cohesive marketing program in the target market.

Service marketing is said to be a form of product, which means any action or action offered from one party to another and is intangible. The marketing program consists of several decisions about the marketing tool mix, which is called the marketing mix or better known as the marketing mix. According to (Kotler, 2003), The marketing mix is:

"The marketing mix is ​​a set of marketing tools that a company uses to pursue its marketing objectives in target markets."

The marketing mix is also a policy used by companies to market their products and make a profit. The marketing mix is a set of marketing tools (marketing mix) used by companies to achieve their target markets' marketing goals. This marketing tool was known as the "4Ps" and was developed into the "7Ps," which were used very precisely for service marketing. According to (Kotler, 2008). There are seven keys to the marketing mix in the service sector, namely:

• Product
• Price
• Place
• Promotion
• People
• Physical Evidence
• Process

 

1.1  Product

According to Philip Kotler the definition of a product is:

“A product is a thing that can be offered to a market to satisfy a want or need”.

 

A product is anything that can be offered to the market to satisfy a consumer's desire or need. The product offered in the hotel sector is lodging services. However, what is needed to win the competition is to differentiate lodging services from competitors who are oriented towards adding value to customer fulfillment. This is related to the application of consumer behavior theory in improving product quality.

Figure 1.1 Example of Hotel Products

Source: SR Homestay Malang Documents

 

Hotel service improvements must take into account the level of consumer needs based on the targeted hotel segment. The application of consumer behavior theory will be discussed in another chapter in this book. There are 3 things that need to be considered in improving hotel accommodation services

1. Comfort facilities (amnesties)
2. Additional services that guests need are tailored to market segments
3. Fulfillment of human needs (application of Maslow's Theory)

The Gandrung City Hostel segment is backpackers or travelers with low budgets. They need supporting facilities in lodging such as kitchens and access to information, ordering tickets for their next trip.

Figure 1.2 Example of Additional Kitchen and Computer Facilities for Guests

Source: SR Homestay Malang and Gandrung City Hostel

 

Backpackers need computer facilities and the internet to access information, plan trips, and book lodging and transportation for onward trips. So that computer facilities are an added value for the guests.

 

1.2 Price

According to (Kotler Philip 2013), Understanding Price (price) The amount of money charged for a good or service or the amount of money that consumers exchange for the benefits of owning or using the product or service. According to Philip Kotler, the definition of the price is: " Price is the amount of money charged for a product or service.” Price is an amount of money with an exchange rate for obtaining profit from owning or using a product or service. Price is a flexible marketing mix in which a price will be stable within a certain period of time, but in an instant, the price can increase or decrease, which is contained in the income from the sale.

Pricing is based on the marketing strategy adopted, cost structure, revenue streams, and consumers' willingness to pay. Pricing must be adjusted to the selected consumer segment according to the marketing strategy taken, the cost structure in providing hotel services, and the revenue flow in hotel services. According to the existing segment and level of competition, determining prices can use market analysis provided by online travel agents, for example, market analysis from Expedia. Market analysis using online travel agent facilities is discussed in another chapter in this book.

Figure 1.3 An example of competition analysis in the area around a hotel

Source: Expedia's analysis of Gandrung City Hostel Market share

 

1.3 Place

The place of the hotel business determines the decision in choosing a hotel to stay in. Of course, the hotel's location is critical to consider in determining the marketing strategy and pricing and other facilities needed to monitor service offerings to potential customers.

According to (Kotler Philip 2013), the definition of a place (place) is: "Various companies strive to make products accessible and available to target customers." The place is the various activities undertaken by a company to make its products easily accessible and available to target consumers. Distribution has a vital role in helping companies to ensure their products. This is because distribution aims to provide the goods and services that consumers need and want at the right time and place.

Examples of lodging places in Malang are SR Homestay Malang, which is strategically located in the middle of Malang city and in Banyuwangi, namely Gandrung City Hostel and Cheap Inn, located in the middle of Banyuwangi city with the advantages of having its own cafe, wifi and very close to transportation facilities. Public bus terminals and train stations are very suitable as a stopover for climbing Mount Ijen

 

Figure 1.4 Location of Gandrung City Hostel and Cheap Inn on Google Maps

Source: Google Maps

 

The location of Gandrung City Hostel and Cheap Inn is not located on the side of the main road. Still, it offers a lower price with quite complete facilities for climbers and travelers who stop in Banyuwangi. Furthermore, to support the bargaining power of a location that is quite close to popular destinations and public transportation facilities, Gandrung City Hostel strengthens its offering with restaurant facilities with 100% organic food ingredients from their own rice fields and herbal drinks for climbers, which are certainly strong enough to attract local and foreign tourists. Staying at Gandrung City Hostel, coupled with transportation services in cars and motorbikes, makes it easier for tourists to travel in Banyuwangi. Location is an important consideration in determining the hotel marketing strategy.

 

1.4 Promotion

Promotion is a tool for marketing communication (Yeshin, 2006). According to (Kotler Philip 2013), the definition of Promotion is "Promotion includes all the activities of the company undertakes to communicate and promote its product the target market." Promotion is all activities carried out by the company to communicate and promote its products to target markets. The purpose of promotion is to establish communication with potential customers and customers who have purchased hotel services. Communication means or promotional channels are certainly needed in establishing communication.

In this digital era, hotels can take advantage of Internet facilities to reach potential customers and customers worldwide. The power of offer in the promotion logic plays a vital role, but it must still take into account the hotel cost structure because hotels need profits to grow and develop (Cummins & Mullin, 2010). The use of the internet in hotel promotion is discussed in another chapter in this book.

 

Figure 1.5 Examples of Internet Use in Promotion

Source: Google Search

 

1.5 People

Staff or a group of people involved in hotel service provision have a considerable influence in building hotel service consumers' image and satisfaction. It is not only about staff or employee appearance but also invincibility by segment. According to Philip Kotler, the definition of Person (Person) is the process of selecting, training, and motivating employees, which can later be used to differentiate between companies in meeting customer satisfaction.

 

 

Figure 1.6 Photos of guests of Gandrung City Hostel from various countries

Source: google search

 

In the backpacker segment, Gandrung City Hostel prefers a relaxed appearance with everyday clothes to enhance a family's impression and a sense of home for guests to feel at home and treat as their own family.

Figure 1.7 Examples of international guest reviews from the hostel manager's interactions with guests

Source: google search

“Can”t express how wonderful my experience here was! Nino the owner is the most helpful and generous hostel owner, he was willing to cook for us any time of day and even showed us around Banyuwangi on motorbikes. Would give an extra star if I could. The hostel itself is big and could do with some decorations but the free breakfast and large beds make up for it.”

(Leila Kikuchi, United Kingdom)

 

1.6 Physical Evidence

Services or services are not tangible, which can be seen with the eye but are surrounded by tangible elements such as building forms and other physical appearances. Physical evidence According to (Kotler Philip 2013), physical evidence is held by service providers aimed at consumers as a consumer added value proposal. Physical evidence is a tangible form that is offered to customers or prospective customers.

 

Figure 1.8 Gandrung City Hostel is a backpacker hotel

most recommended on booking.com

Source: booking.com

 

Physical evidence surrounds a product in the form of a service (Verma, 2012 & Nargundkar, 2010). Physical evidence of hotels is the form of buildings and hotel websites and hotel photos on online travel agent websites, which have a significant influence on the decision-making of potential customers to choose a hotel to stay.

Figure 1.9 Gandrung City Hostel is the most popular hotel on traveloka.com

Source: traveloka.com

 

1.7 Process

The process in the marketing mix is a business activity process (Fifield & Richter, 2012). Business processes determine the influence of repeat orders or re-orders from consumers who have purchased hotel services. Of course, it is essential in digital marketing because good internal processes affect customer satisfaction, as reflected in consumer reviews. Process, namely all actual procedures, mechanisms, and activity flows by which services are delivered, serves service operations. A process is a form of activity carried out to market goods or services to potential customers.

 

Figure 1.10 Reviews of Gandrung City Hostel on google

Source: google search

 

 

CHAPTER 2 SEGMENTING, TARGETING, AND POSITIONING

 

Marketing (marketing) is a process of social, cultural, political, economic, and managerial activities (Rangkuti Fredy 2014), while according to (Sunny TH Goh, Khoo 2005) Another definition explains that marketing is a social process where individuals and groups get what they get. They need and want through the process of creating, offering, and exchanging products and services freely with others. Good marketing focuses on customer satisfaction, where customer satisfaction will lead to loyalty to consumers; this makes long-term benefits for the company or business.

In developing marketing, a strategy is needed where the strategy is an effort to market a product, be it goods or services, using a planned pattern and a certain way to increase sales. According to (Assauri. Sofjan 2013), a Marketing strategy is basically a comprehensive, integrated, and unified plan in marketing that guides activities to be carried out to achieve a company's marketing objectives. In other words, a marketing strategy is a series of goals or objectives, policies, and rules that give direction to the company's marketing efforts from time to time, at each level and its references and allocations, especially as a company's response to the environment and conditions of constant competition.

The process that must be passed in determining the marketing strategy is segmenting, targeting, and positioning (STP). Segmenting, targeting, and positioning are the basic keys in formulating a hotel marketing strategy. This book exemplifies Gandrung City Hostel's marketing strategy with a fairly high occupation at its level, so it needs to be supported by the provision of Gandrung City Hostel rooms by Cheap Inn Banyuwangi.

 

 

Figure 2. 1. The occupation of Gandrung City Hostel is more than 1500 rooms a month

Source: traveloka.com

 

Gandrung City Hostel, in marketing its rooms, uses the concept of segmenting, targeting, and positioning using google trend tools and focusing on marketing using online travel agents and search engine optimizers with the keyword "Cheap Hotel Banyuwangi." This keyword describes the Gandrung City Hostel segment, which is travelers worldwide who travel to Banyuwangi, targeting low budget travelers or tourists so that they position themselves as low budget hotels in Banyuwangi

Figure 2. 2. Position of Gandrung City Hostel on google with the keyword "Cheap Hotel Banyuwangi."

Source: google.com

 

Figure 2. 3. Position of Gandrung City Hostel on google with the keyword "Banyuwangi Hotel"

Source: google.com

 

Search for Gandrung City Hostel using the keyword "Cheap Hotel Banyuwangi" occupies the top position. With the keyword "Hotel Banyuwangi," the position of Gandrung City Hostel ranks third, right below star hotels. In addition to obtaining a strategic position in the search engine, Gandrung City Hostel uses SEO techniques discussed elsewhere in this book.

 

2.1. Segmenting

Segmenting is the first step in determining a marketing strategy. According to (Tjiptono 2014), the definition of market segmentation is the process of grouping a heterogeneous whole market into groups or segments that have similar needs, desires, and behaviors towards specific marketing programs. Meanwhile, according to (Mudrajad Kuncoro and Suhardjono 2012), the notion of market segmentation is the activity of identifying classes in society that have different needs for bank services. So that with this segmentation, a heterogeneous market can be divided into several homogeneous market segments.

According to (Lupiyoadi 2001), market segmentation divides the market into groups of buyers who are differentiated according to their needs, characteristics, or behavior that may require different products. Market segmentation can also be defined as the process of identifying and analyzing buyers in a product market, analyzing the differences between buyers in the market. The variables used in segmenting the market are:

1. Geographical Segmentation To divide the market into geographic units such as country, region, state, city, or housing complex.
2. Demographic Segmentation, dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality
3. Psychographic Segmentation, dividing buyers into different groups based on characteristics of social class, lifestyle, or personality.
4. Behavioral Segmentation, Classifying buyers based on their knowledge, attitude, use, or reaction to a product.

Segmentation is the process of dividing a market into sections, or segments, which can be defined or explained, accessible or accessible, actionable, profitable, and has growth potential (Stewart, et al., 2017, Witt & Baird. 2018). In dividing the market or segmenting the market, it is necessary to pay attention to the following points:

1. Definable (can be described or described).
2. Accessible (accessible).
3. Actionable (actionable)
4. Profitable (can provide benefits)
5. Have a growth potential (potential to grow and develop)

 

2.1.1. Definable

Definable means the number of people who can be identified and targeted with reasonable effort, cost, and time to find out how many groups of people in a segment or market share are potential to buy (potential customers). For example, the number of tourists who come to Banyuwangi can be found by searching on a search engine.

 

Figure 2. 4. Google search results for the number of Banyuwangi tourists

Source: Google.com

 

From the search engine results, more than four million people are visiting Banyuwangi both domestically and internationally. This explains or identifies more than four million people are willing to stay at inns in Banyuwangi. However, more than four million groups of people have different tastes and budgets. And to meet all the demands of this group of prospective customers, it requires a property investment budget that is not small and requires various property arrangements. So it is necessary to adjust the carrying capacity of the property with a group of smaller and uniform people or have the same taste or demand, which is the target of promotion or the target of communicating to obtain a request called targeting.

 

2.1.2. Accessible

A market segment must be accessible in terms of geography and economy. Prospective consumers must be affordable in hotel promotion channels to allow accessibility of hotel services, for example, the use of online international travel agents to reach potential customers abroad, the use of meta search to optimize searches on the google map to reach potential customers in the hotel area. Gandrung City Hostel in reaching potential customers worldwide in collaboration with 200 online travel agents so that potential customers can make hotel reservations while still in their country. For potential customers who are already in Banyuwangi, Gandrung City Hostel optimizes searches on the google map to find Gandrung City Hostel through a search engine.

Figure 2. 5. Gandrung City Hostel in collaboration with various online travel agents

Source: gandrungcity.com

 

Gandrung City Hostel collaborates with various online travel agents at home and abroad to reach potential customers. The service market segment of Hotel Gandrung City Hostel can be reached using an online travel agent.

In the digital era, the use of search engines is very familiar in society. Not even a few new tourists are looking for hotels to stay in on the same day and are already in the destination city. This can be seen from the reservation reports at Gandrung City Hostel in the last six months. 94% of guests who stayed at Gandrung City Hostel booked the same day to stay. However, some guests booked a few days in advance from their scheduled lodging at Gandrung City Hostel.

Figure 2. 6. Report on the Reservation of Gandrung City Hostel on Traveloka

Source: Tera Traveloka

 

Figure 2.7. More than 500 customers a month come directly to the hotel via google maps

Source: Google My Business

 

Figure 2. 8. More than 36 thousand people found Gandrung City Hostel on google in a month

Source: Google My Business

 

2.1.3. Actionable

Actionable in segmentation is a consumer grouping or segmentation that can be followed up, as discussed in subchapter 2.1.2. Accessible. For example, the consumer segment of Gandrung City Hostel can be connected through promotional channels, namely online travel agents and google search engines. There are consumer actions that can be followed up, such as contacting hotels, viewing information on the hotel website, and coming directly to the hotel resulting in a closing sale of hotel rooms. Gandrung City Hostel receives more than one hundred orders every day through online travel agents and direct orders for customers who find Gandrung City Hostel on the google search engine.

Figure 2.9. More than a thousand people order Gandrung City Hostel on Google in a month

Source: Google My Business

 

There are over a thousand directions requests a month, with 50% of customers coming to hotels and making hotel bookings. There were 94 direct bookings by telephone and 35 website visits that led to bookings made through online travel agents. The website becomes an important part of supporting marketing in the form of follow-up to potential customers by 3.5%.

 

2.1.4. Profitable

The focus of consideration in determining a marketing strategy is the potential profit in market segmentation, for example, the daily rate average received by Gandrung City Hostel on Traveloka.

Figure 2.10. Average daily rate Gandrung City Hostel at Traveloka

Source: Tera Traveloka

 

Total revenue from room sales is Rp. 56,116, - / room x 1500 rooms of Rp. 84,249,000 - with an average daily rate of Rp. 56,166 - and an average occupancy of 1500 rooms. Gandrung City Hostel's other sources of income are transportation (56% revenue contribution), food (15% revenue contribution), and travel equipment rental (5% revenue contribution).

The structure of hotel expenses from the nominal income that exists is the salary of 4 employees of IDR 2,000,000, water and internet electricity IDR 2,000,000, food and toilet expenses IDR 8,000,000 per month to calculate the potential profit of more than 70 million each month.

2.1.5. Have a Growth Potential

The hotel market potential in Banyuwangi from 2009 to 2018 tends to increase. This shows the potential growth of the market. To see the market potential can be seen from google search or google trends.

 

Impressum

Verlag: BookRix GmbH & Co. KG

Tag der Veröffentlichung: 15.12.2020
ISBN: 978-3-7487-6847-0

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