TORONTO — The approach and resources available to market hotels and hotel brands has shifted dramatically since the onset of the COVID-19 pandemic in 2020, and experts said the industry is only now starting to reach a level of normalcy.
But even approaching pre-pandemic norms, hotels still lag other industries significantly in the resources allotted to marketing.
Speaking during the "Executive Insights" session at HSMAI's 2023 Marketing Strategy Conference, Steven Gottlieb, executive vice president for commercial strategy at Graduate Hotels and Marine & Lawn Hotels & Resorts, said the industry simply doesn't have the cash at its disposal that many others do.
"We're in a business that doesn't have significant margins, which doesn't lead to a lot of research and development that other companies can afford to do," he said. "That's a major crunch for us in general."
Gottlieb said that problem is more pronounced in the independent hotel sector, where margins are historically smaller.
"You're so caught up in running the day-to-day business that there's not a lot of that forward thinking that provides for these really innovative ideas," he said.
Michael Innocentin, senior vice president of commercial projects for Fairmont Hotels & Resorts, said it's also a people and resource allocation issue.
He said staffing in marketing is only now approaching the levels of early 2020, and the COVID-19 pandemic forced hoteliers to shift what marketing power they had left behind to local campaigns to "get heads in beds."
"Now we're coming out of it, and I think people are catching their breath," Innocentin said. "But as the industry starts to change and advertising starts to change — and I think we may talk a little bit about privacy regulations and the difficulty that's coming along with online marketing — we're going to be forced to innovate."
Dawn Gallagher, chief commercial officer for Crescent Hotels & Resorts, agreed that innovation is going to be key for the long-term health of the industry. She said that will mean finding new ways to personalize and tailor messaging.
"We still have to think about how to get out of that hotel traditional mindset and get into what that marketing piece looks like, then really couple it with how you're talking to the guests," she said. "It's about personalization. How do we make sure that your innovation is speaking to the guests at their level and the way they want?"
Gallagher said part of the challenge of innovating with relatively limited resources is finding ways to get the marketing team to shift into more of a brainstorming mode and away from day-to-day challenges.
"That's just as important as driving revenue, and I think we forget that and sometimes have too much muscle memory on yesterday," she said.
Gottlieb agreed that between daily demands and concerns outside of work, it's hard to find the bandwidth for innovation. He said part of the solution to that is cross-industry collaboration and sending employees to relevant conferences so they can devote time to hearing new ideas outside of their normal day-to-day grind.
"Even if you're sitting there and checking emails, you have those moments where you hear something someone says and it gives you additional thought," he said.
Innocentin said he does take solace in the fact that there are some fundamental tailwinds supporting hotels and the broader travel industry, not the least of which is some companies and hotels have existed for more than a century and are proven commodities. But beyond that, consumer behavior continues to shift in a way that supports the long-term health of the industry.
"There's a little bit of economic hardship and high inflation, they're making savings in other places, but travel is not something people are willing to give up on right now," he said. "I think that's just from being home for so long, right? And they want these once-in-a-lifetime experiences."