I'm very excited today because in this episode, we get to talk to Jesse Desjardins.
I have a great relationship with Jesse. He has worked with me for several years and then he's gone on to become a big deal and one of the top ten influential people in travel. He's head of social media for Tourism Australia He runs the Tourism Australia Facebook page, and has turned them into the number one travel destination in the world. He has incredible experience in working on the social media side of a destination, like Australia, but he's also got a passion for local, independent hoteliers.
We got to spend this episode talking about, and hatching some evil schemes for how independent hoteliers can apply the 8 Profit Activators to their before unit, their during unit and their after unit.
I think you're going to get a lot out of this episode, and this hospitality mindset really fits for any business, not just hoteliers, so I think you're going to get a lot of things that you can apply to your own business through this. Enjoy this episode.
Links:
Profit Activator Scorecard Episode
ILoveMarketing: Anthony Melchiorri
Jesse Desjardins: Linkedin
Tourism Australia
Want to be a guest on the show? Simply follow the 'Be a Guest' link on the left & I'll be in touch.
Download a free copy of the Breakthrough DNA book all about the 8 Profit Activators we talk about here on More Cheese, Less Whiskers...
Transcript - More Cheese Less Whiskers 013
Dean: Jesse Desjardins.
Jesse: Dean, how's it going?
Dean: Good. I'm very excited. We've been talking about doing this for a while. I'm pretty excited to see how the "Eight Profit Activators" fit for independent hoteliers.
Jesse: I think it's a tough one, but I don't think it's impossible to solve. I think typically, independent hoteliers tend to not use direct response marketing. They tend to be very focused on the delivery like in the during unit. The travel industry and on the whole and especially for hoteliers, there is just as much enjoyment and opportunity for consumers in the before and after the unit.
Dean: Yeah, absolutely. Let's start with the during unit because that's where they are already focused, and you and I travel a lot; both of us. We've had our own experiences as travellers. I always look at things with a marketing eye because I'm always looking for how the Eight Profit Activators apply. If we're thinking about this from a hoteliers standpoint, the during unit would start the moment someone makes a reservation. They've got an indication that this person is coming, and the during unit would go all the way through their stay and extended period just beyond their stay. Because, we've talked about profit activator five as creating that dream-come-true experience and then profit activator six which is delivering after sale service.
Thinking about what could happen after someone leaves. Most hotel experiences, especially if you're going with larger brands, it's very corporate in a way. It's very official. Here is your official booking confirmation number. When you leave, "Hey, thanks for staying. Here's your folio." That's it really. That's really all that ends up happening.
Jesse: Experiences like Airbnb, I think changing a lot of what we expect now from hotels. Like you said, that really kind of generic email that you get at the beginning, to me that is a missed opportunity to build a lot of value for someone who is potentially coming to your area for the first time. Someone who has never been there, but is confused as to what their going to do in those two or three days that they are there.
Dean: Here is my observation, because I keep a little running tally of the things that stand out for me in the during unit. I'll share a couple of those stories with you because they are kind of easy things that someone could adopt. The first one that really made an impact on me was from England. I was at the Cowley Manor Inn in Cotswolds just outside of London. I was checking in and it's this beautiful old, country manor house that had been converted into a boutique hotel and spa. It's this big mansion, and the property is just stunning. Lots of rolling hills, and then they've turned it into a world-class really modern spa. I checked in. I was going to spend four days there, and checked in at quarter till 3:00 in the afternoon. When you go in and check in, there is a desk that you stood at where you're being welcomed and going through all the check in.
While I'm sitting at the desk, right there beside my feet was a sheet, postcards, a little pile of postcard thickness cards that had today's available spa appointments. It had the times listed and the treatments that were available. I'm looking at this list, and at 3:30, there was a 60-minute massage available. I immediate said to the lady as I was checking in, "Oh, if that is still available, I'll take that 3:30 massage." I'm always hyper-aware of when marketing is working on me. I looked at this, and because I would have had every intention of getting a massage, I probably would have done it the next day or even a couple of the days while I was there. However, that definitely stirred me over the top here to do it right now. Literally, I went and dropped off my bags and went straight down to take that massage. I thought that that level of daily attention to creating something that was going to be right in front of every person checking in that day ... I wonder what the additional massage revenue or spa revenue they get from that one little thing.
Jesse: I image it is quite high, and it's not something that takes a lot of time to do.
Dean: No, but here's the thing. Some people would probably look at that and say, "Well, couldn't we just put a generic flier that says here is all the spa treatments that are available. Call this number to enjoy a massage while you're here. Something that would just be evergreen seems like it would be so much easier. However, that would not have gotten me to take that 3:30 massage today. There is something like that.
Jesse: Could you use the same thing, for example, at the beginning. Because when we talked about the first moment of the during unit is when they actually make the booking. They get that generic email. I recently stayed at a property called Sapphire in Tasmania, and it has been voted often one of the best resorts in Australia and probably the world. However, they basically have four different categories of people who book. They have the foodies, the adventurers, and when they have certain criteria that they look for, but when the identify as a foodie that's registered to spend the night or a couple of night, they actually get a customized package from the head chef himself. It's like they have customized the information that they are going to get on what your interests are.
Dean: Absolutely, that's setting it all in and makes a big difference. I was looking in my email while we were talking to see if I can find my welcome email from the Ace Hotel in London. It was really, really well done. The check-in email, the welcome email ... Let me see if I can find it here. They send an email that is written by a real person, and that's what is kind of exciting. Okay, you're reservation ...
Jesse: I guess a lot of the stuff doesn't seem like it's done by a real person.
Dean: That's what I mean.
Jesse: They're automated and things like ...
Dean: Yeah, that seems like what you normally get is a computer generated, just the fact kind of thing. Here's the one from the London Shoreditch Ace Hotel. They've got a nice picture of the room, and then I'll just read the welcome email that they send which looks like a personal kind of email. It looks like it's on letterhead. Dear Dean, Thank you for booking a room with us at Ace Hotel London Shoreditch. You're confirmation number is blank, arriving on Sunday, June 21st and departing on Thursday, June 25th. Check-in is at 2:00 pm. Check-out is at Noon. If you arrive early, we can keep your bags for you until your room is ready. If you'd like a late check-out, please let us know and we'll try to make it happen. When you check-in, we'll place a hold on your credit card for incidentals like booze or taking the blanket home with you.
Now, you're reading along in this just typical kind of email, and you get all of a sudden this little pinch like booze or taking the blanket home with you. This deposit will be applied to any charges you rack up during your stay or refunded at check-out if there are none. That is really like an amazing personal touch to this, like they had some personality to it. Then right below that, they've got all the reservation details and all of their policies. Now, the interesting thing is that I very rarely ever read these emails. Most of them are so mechanical and kind of machine driven, but I read this because it seems like a real person wrote this. Their pet policy, for instance. Pets are welcome at a friendly rate 25 pounds a night with no charge for additional pets. When we say "pet", we really mean dogs. If you're bringing someone larger or stranger than a dog, let us know and we'll do our best to accommodate both of you.
You gotta love that kind of communication. I think that sets the tone for the experience that people are going to have in the during unit. It sets the tone right from the beginning. You feel like your in for a personalize kind of experience.
Jesse: There is plenty of research that backs this up, too. For people, there is just as much enjoyment before they've actually experienced the hotel or the tour or whatever it is before and then after. It's like the actual thing in itself is fine, but then telling all of their friends about this is what they are going to do, and then telling afterwards, "This is what I've done," and showing all the photos.
Dean: How many people have I told about the Ace Hotel in Shoreditch because of this experience, and the Cowley Manor. When you check into the Ace Hotel, they've done an incredible job because all of the rooms are really ... I'll say hipster. That was the word that comes to mind. That's exactly what it is. However, everything in the room is for sale. You can buy the blanket, and you can buy the robes, and you can buy the toiletries. They got like a shelf of extra toiletries or skin care or bath bombs or all other things that you can buy; other independent produced candies and foods and all that kind of stuff. It was really like an interesting shopping experience.
Jesse: Essentially, every room is a showroom then.
Dean: Every room's a showroom.
Jesse: Yeah, it's pretty incredible if you can increase revenue per room say 20% or 30% just by having these other items to sell. I think that could work on any property even if it's a small independent hotel and even in a rural area. You can get together all the best local things and showcase them.
Dean: Yeah, now here's an idea that I've never seen anybody use, but I would be okay and actually appreciate it if they did. When I got this email from the Shoreditch hotel, I think it would be very valuable to get a daily email while I'm in residence at the hotel that lets me know about the basic things. When I woke up in the morning, let's say they send an email every morning at 5 am, so that when you get up, here's this email from your host at the hotel. This is what I love is that independent hoteliers are really in a better position to do something like that than a corporate hotel in a lot of ways. Because somebody there ... You get to put your ownership stamp on something more often and really practice that hospitality element of it.
I thought, for instance, if when I'm at the Hazelton in Toronto, high-end boutique, Yorkville, really great location, really great hotel. If somebody would, every day while I'm in residence there, send me an email with the weather for the day and here's what's going on in the city. Like if you have from the different departments maybe, if you have the concierge is sending it and saying that these are the concerts that are going on or the shows that are going on. If you'd like to get tickets for either of these, please just reply to this email or call us at extension this. Then from the restaurant saying that the chef has gotten this on special. This is the special for tonight or any kind of thing that would be enhancing my experience along with these are the spa appointments that are available today. Then maybe a super signature of the standardized things that you could do at the hotel that might be revenue generators that you didn't even know were available.
Jesse: I think like you said, independent hotels can really add their own kind of personality to it sort of thing. There is a really big insight in the Airbnb Guides. There are plenty of travel guides everywhere online like Trip Advisor, but the ones that I think are doing really well at the moment are the Airbnb guides where it's the host telling you what to do. What are the great spots around the property that's for rent? For example, the concierge might not just be recommending you that this top tours to do around the city, but they might actually have you try the coffee down the street. It's the best coffee here or go to do this or go do that. Things that you would not even know about.
Dean: Right, that's exactly right. Because there are a lot of independent restaurants and independent cafes and independent things that ... I think it's kind of important and a unique opportunity for independent hoteliers to think not just about the stay within the property, but to think about their visit to the city as a whole and to enhance that. That's what I was saying about the shows or about the things, but maybe to highlight different tour operators that are available or different independent shops or cafes or restaurants or experiences.
Jesse: Dean, you often talk about being the mayor of a niche, so this is as applicable to small properties?
Dean: I do. Here's the thing. I always look at when you start talking about all the opportunities. Everybody is very myopic in their view, and they are only worried about their own category or what it is that they are doing. The hotel stay, for instance. Here you've got all of these tour operators. You've got the independent restaurants and events and all of these things that everybody is just worried about how to get people to come to their establishment or their category. However, nobody is thinking about really owning or being the mayor of people visiting their locations. I think when you take that kind of approach and just organize the group, organize the collective, it creates a better opportunity for everybody.
Jesse: Absolutely, and I think that's when people want to work with you. That's when you create these strategic alliances that just work for everybody.
Dean: Yes.
Jesse: This week I flew out of Sydney, and the Qantas first class lounge is absolutely incredible, but instead of them doing the service themselves, they actually got Sofitel to come in. All of these staff, apart from the check-in staff at the front, are all Sofitel staff. Which is really quite incredible because it's not really a space that hotels typically operate in. I think it can kind of work in the reverse way also.
Dean: Swiss hospitality, right.
Jesse: Yeah.
Dean: Sofitel is Swiss, isn't it?
Jesse: I think it's French, yeah.
Dean: French, okay. Yeah, that kind of thinking like when you're thinking about the airlines or just thinking out of the box like that, and bring in a hospitality element. I think that's how airlines like Qantas and others are trying to enhance their business class and first class experiences by partnering with celebrity chefs for the menus, and for, just like you're saying, for Sofitel for the hospitality in the lounge.
Jesse: I think there's never been a better chance. Airlines are kind of one thing. It's quite expensive to create that incredible experience at 30,000 feet, but I think kind of bringing it back to the ground with small properties. I don't think there's been a better time to kind of leverage this great experience. I think what people expect now are not things that cost a lot of money. It's touch-points here and there that make a huge difference.
Dean: Yeah, well, there was a very famous hotel in Las Vegas that built their whole clientele offering free postcards to the people who were staying in the hotel. They would offer all of these gambling packages; a package with a show, and some money to get you started on gambling. It was a really good deal is how they marketed it to just Middle America. Come to Vegas, and have some fun. Go to a show. We'll give you some gambling money. All that kind of stuff. Then when people would come, they would give them the opportunity to send three or four postcards to their people back where they were from. They would encourage people to do that and show them where to put the postcards, and then when they would get the postcards, they would take the addresses of the people that they were mailing to and build their database. Then they'd do direct mail to them to invite them to come with a package at the hotel.
Jesse: It's amazing the amount of people that I speak to in terms of small hotels that when I ask them, "Oh, what is your repeat business?" They'll often tell me, "20% or 30% of people we know are repeat business." I'm like, "Well, how do you know that?" It's complete guesswork. They're like, "Oh, we don't really communicate with them. We just notice that they keep coming back every year." I'm like, "That's crazy."
Dean: Yeah, crazy. That's when we move into the after unit. That's really the big opportunity. Do you find that hoteliers live on sort of small margins or is it ... What would stop them from taking this mindset of nurturing a life-time relationship with somebody or orchestrating referrals which are the two profit activators that we have in the after unit?
Jesse: There's a few things. It really depends where you are. Partly for some properties, it would be low-margins. Other properties it would be seasonality. They're only six or seven months out of the year, so how do they fill in the rest of the spots? A big chunk of it, I would say the big topic for the past couple of years, has been your OTAs, your online travel agents; your Expedias, your Pricelines. You take anywhere between 15% to, at an independent property, up to 30% sometimes. That's quite difficult to complete with other properties around especially the big chain hotels.
Dean: Yeah.
Jesse: This is what I'm kind of wondering as we're talking: Is there an opportunity to, if you are paying that 30%, to reinvest some of that into creating that really great experience? I'm not quite sure, but there could be some opportunities there potentially.
Dean: I think if you look at it, certainly, it's about matrix. When you're looking at the during unit experience, you take 100 people and look at what the value of those 100 visit ... Or how every they look at their number, the average stay, and really start looking at what are the incremental things that we could do. Are there things like that? The daily email or the welcome email or in the environment where people are. One of the first times that I came to Australia, one of the hotels ... I think it was the Marriott downtown. Is that where I did the first Breakthrough Blueprint? Do you remember?
Jesse: Yeah.
Dean: The Marriott at Circular Key: One of the things I noticed about that experience was there would often be a door hanger on my door when I came back from the day. It would have some different business cards on it or some different other businesses on it. I don't know whether that was something that the hotel did or whether it was something that some enterprising entrepreneur was coming and doing door hangers without their knowledge. However, you think about those kinds of things. If you had been at other event hotels where they'll have a daily news letter about what's going on at the convention or whatever, I just think there is such a great opportunity there by email to have a daily email while I'm in residence. You just like that is such a simple thing. It's free. You've already got my email address. You know that I'm there, and so why not use that opportunity? I think that's a pretty easy strategy that any hotel could do and a really easy process.
Jesse: Absolutely, and when you're testing all of these different little things that you're doing, I guess you can kind of go back and ask yourself the whole value question. Does this little thing actually create value for the customer? You provide them with a daily events or activities or daily things. Yes, that would actually provide a lot of value to somebody who has never been to Sydney. It's their first time. They've just gotten up in the morning after a long flight. They are super confused. They only have 48 hours at that particular time. What is the absolute best things that they need to do? That create a lot of value to somebody, but then again, how do you bring value back into the business in the form of revenue or whatever it is? I think by aligning yourself with the right people.
I would imagine that you would see a lot of patterns after a certain while. If you're quite observant in your business, you would notice that certain people, when they do this, this is what they like to do. Families who come in with two kids, this is the tour that they like to go on. It becomes quite evident and it becomes quite a system after awhile. It becomes almost like a predictable algorithm.
Dean: Yes, and that's kind of like ... You think about being able to put together a little welcome package when people arrive. It's almost like giving some of the other ... As a revenue thing, to have the opportunity for tour operators or local businesses or out of the way things to be included in this welcome guide or welcome package that they get when they check into the hotel or that it's waiting in their room with some special offers or things that might lead people. You know, so often the hotels: What you end up seeing is that somebody does that on a more corporate kind of way. There's always in every city a tourist kind of magazine.
Jesse: I won't say that people sort of actively ... There's more and more people that actually don't look at those things. They would specifically want to go to things. I was in Dallas a few a days ago, and I went on Trip Advisor and was like, "Do I actually want to do the top 10 things? I want to do something very different." It wasn't until I actually took an Uber. I went to Whole Foods and I was talking to the Uber driver. He was super passionate about doing a ... He wanted to set up a BBQ like all the best BBQ places around the city to go to. I'm like, "That's amazing. I would actually really want to do that." I didn't even know about things like that. I think that would be a huge opportunity. If the hotel were to notice these trends, great. They could buddy up with a local entrepreneur and just create this thing.
Dean: I think that's a pretty cool opportunity. If you start looking, you realize how long people are going to be there and look at the whole experience timeline that people are going to have from their welcome email to the moment they arrive to the daily opportunity while they are there, and also what can you say and do after they leave to set the stage for them being part of the family now? I often get things from the Ace Hotel letting me know about different specials or different things that are going on. They've got other hotels outside of London, too.
Jesse: I get plenty of those emails, too. I'm sure that's like a welcomed email, but I get a lot of emails sometimes, too, and it's like "Oh, I stayed at this property two years and they are still emailing me." It's not personalized at all. It's just a generic kind of corporate looking email. I think, in the after unit of orchestrating referrals: One of the things that really upsets me is that you look at properties and they're like, "Oh, like us on Facebook or share stuff." I'm like, "Why? Why would I? It's all about you." Where it just seems like the opportunity should be much more about me instead because it's my experience. What are you doing to help me tell a better story about myself?
Dean: I think about when I was growing up, for several years, we would go to an independent hotel in Treasure Island, Florida. This was a place that was right on the beach in Treasure Island. It was just a small motel really. They had these efficiency apartment-kind of situations and a nice pool. It was owned by a family from Michigan who had moved down there and they had three kids; George, Greta, and Gary. I remember that we became like part of the family in a way. We would get Christmas cards and Thanksgiving letters, and things from them. It was like our home away from home in Florida. We probably did that for several years, always coming down one or two times a year to this one hotel. That's kind of the opportunity that an independent hotel has as well, especially if it's a owner operated. That's one of the things you've got is the opportunity to really ... That's one of the competitive advantages that you can have. It's hospitality.
Jesse: There is a hostel in Amsterdam called the Hans Brinker Budget Hotel. They pride themselves on being the worst hotel in the world. That's been their positioning for the past ten years, but it's quite incredible because the before unit: They're whole advertising was basically, "Stay at the worst hotel in the world." They would always take advantage of things that were trending. For example, when SARS was a big issue a couple of years ago, they had posters that said, "Improve your immune system by staying at the Hans Brinker Budget Hotel."
Dean: Yeah, right.
Jesse: They had blown up dust mites. Then one year, it was, "We are the world's first accidentally ecofriendly hotel. You can use the eco-elevator." Which was the stairs.
Dean: The stairs because they don't have an elevator.
Jesse: Exactly. That was interesting, but I guess what they noticed is that people would be stealing their posters and coming in and wanting to take something home, so they created this whole after unit where they would sell a lot of this work. Every campaign that they would do would be different posters, and people would buy them. I've seen these posters all across the world now, and people collect them. It becomes part of the story that people tell themselves, "I stayed at the worst hotel in the world."
Dean: They actually have a great book. I think you bought me the book of the ... They have a book that's nice leather bound book that is the worst hotel in the world.
Jesse: It's great, but it's again, that focus on you're helping people tell a story about themselves. Yes, there is a great story about the property, but I want to take that home. I want that on my wall, and I want that to be part of my story.
Dean: The simplest things: If we look at checking the boxes of what we've mentioned here so far in the during unit, in terms of looking at the welcome email, looking at the daily spa availability if you've got that, or whatever would make the sense of that, a daily email while you're in residence to keep me up-to-date. Here's the weather. Here's what's going on in town. Here's what tickets we can get for you. Here's a place you might want to check out, and then here's the spa appointments, or here's dinner reservations if you'd like that. All the while, just thinking about what are the things that would enhance my stay while I'm there, and then the in-room environment. What are the things that we could do? Could you raise the bar on this? Are there local food or toiletry or skin care or things that local artesian that would enhance that in-room experience. I would look at that as the opportunity.
Jesse: There is probably a lot of leverage in that where people would actually pay you or they wouldn't charge you to have those things in your hotel.
Dean: Exactly. How can we turn that into an enhancement and a profit center? That's really the bottom line of it, right? A lot of these restaurants would ... The best independent restaurants or the tour operators: A lot of those would. We are definitely in a culture right now where people are used to and willing to pay for booking or pay an affiliate type of situations.
Jesse: Absolutely.
Dean: Especially, as a tour operator would be happy to do that.
Jesse: Then they would pay a 30% commission. Let's say, for example-
Dean: There you go.
Jesse: That's a huge opportunity. Typically, it's a surf company or someone that takes out tours like a wine tasting tour. They'll usually pay 30% to an agent. Why can't the hotels have the same opportunity?
Dean: That's kind of a great opportunity there. I guess the thing in the during unit to look at is to map out that time line and to just kind of observe and to think, "What are the assets that we have? What are the opportunities that we have? What could we do at a low-cost to get in front of people? Who could we partner with or introduce that would enhance somebody's stay?" All of those things are real great opportunities, and when you start to look at it and you put a kind of metric around it to monetize all of these ... That's the whole point here is to figure out how can we get the most out of everything that we're doing here, and doing it in a way that's enhancing somebody's experience not in a way that seems like you're just pushing stuff on them. There is a subtle art to that.
Jesse: Do you think there's any opportunities here? I sort of feel like that independent hoteliers sometimes are a bit isolated from everything else because they're so busy working in the business that they don't have the benefit of a big hotel chain who probably has someone thinking about this full time.
Dean: Right.
Jesse: They're able to spread their insights throughout the whole network, but often, independent hoteliers don't really see a lot of these big opportunities because they are so busy working in the business.
Dean: Right. hosting a group of independent hoteliers to share ideas and to have access to things like that, to ideas like that, to bounce ideas off of or just model what other hotels are doing in other areas.
Jesse: I guess, the travel industry and especially the hotel industry tends to look at what themselves are doing and they often don't get inspiration from the outside. A lot of advertising agencies, especially in coming up with new designs for clients, often times it's just stuff that's been remixed from three or four other places. They'll look through a directory book or they'll look at other award-winning work and then be able to remix something in kind of a new formula for them. Most, when there is some kind of opportunity to look at the best cases from all around the world and present that back.
Dean: I think that would be awesome. If only there somebody who could put something like that together.
Jesse: If only there was somebody that could put something like that together. If I was a small hotelier, this would be something that is really worthwhile. I want to see what other people like me are doing all around the world and what are the best ideas that could be applied?
Dean: I agree. Yeah, I think that's a big opportunity. In the after unit if we think about the metric for the ... The metric in the during unit that you want to pay attention to is the sort of ancillary income. When you look at the revenue from the hotel stay on it's own, that's the baseline. Then, the strategic opportunity of how much extra revenue can we generate by having more diner reservations, more spa appointments, more affiliate type of relationship things. How can we enhance that experience for people and measure that to see that it's actually working? Because a lot of those things are the incremental cost of adding a new source like that is very, very low. You look at the spa experience at the Cowley Manor Inn. The cost of printing 50 or 100 of those postcards every day to put by the front counter is very, very low. They print them off right there at the place, but that, for someone like me taking that 3:30 spa appointment that would otherwise go unused ...
That's the thing about everything in the hotel industry is perishable. However, the incremental cost of having a new guest is very low. If that spa appointment went empty, that is zero revenue, so adding, and it doesn't cost very much to add something like that. However, you look at of all the people checking in, if that were to generate your one extra spa booking every day, that's a lot of revenue from that one little idea.
Jesse: You can also apply the same kind of model almost to tours because tours inventory is ... The tour still needs to operate even if there is only ten people on the bus and they can even fit fifteen. That's probably an opportunity to find five more people in a hotel who actually would like to go on that tour.
Dean: It think your right. Absolutely, even on a last minute thing. That would be the kind of thing where if I woke up and I have an email in my inbox telling me, "Here's what the weather is. Here's the latest local news. Here's what's going on. Here's three things in the "What should we do today" category. Here's some last minute opportunities."
Jesse: Absolutely.
Dean: That would be a win for everybody. If you were talking about ... Would a 100 room hotel be like a mid-sized independent?
Jesse: Yeah, there's some probably around I'd say 40 to 80 range would be ...
Dean: Okay, but you look at that for every day, there's 40 to 80 potential guests getting this email for whatever the occupancy rate is. I think it's a really low cost, high-yield opportunity there.
Jesse: I agree.
Dean: Then in the after unit, looking at the metric that we would use is of all of the people who have stayed at the hotel before, what percentage of them come back? What percentage of them come back to the hotel? I think that once that gets locked in, I think especially if someone is a repeat traveler to a specific area, there is something nice about being recognized as a return guest. At the Hazelton in Yorkville, I would alternate between the Four Seasons and the Hazelton, and I've kind of really been leaning towards more on the Hazelton side. They are both five star hotels. They are both the two nicest in the city, and the Hazelton is a smaller hotel. They know me by name. I have a great experience when I go there. I do want to come back, and I always talk about it.
Jesse: I think the trick, too, is being able to deliver those great little experience moments for people. It's about having the right staff behind the scenes. Like Sapphire, the property I was talking about before, this is my third visit a couple of weeks ago. "Welcome back, Mr. Desjardins." They know so much about you and I realized actually when I started asking them, "How do you remember all of this stuff?" They actually showed me the file that they kept on me, which I thought was a little bit weird, but quite incredible that they actually had three pages of notes from my previous visit.
Dean: Really?
Jesse: Yeah, that I had a cold last time, and when I have a cold I like to have warm water with some lemon and some ginger and that kind of stuff. Then I was having the same thing again, and they were like, "Oh, would you like some warm water with lemon and ginger?" I was like, "Oh, man. That's incredible. I've never met you before. That's incredible that you know that." They had a pretty good system to remember this stuff.
Dean: Wow. See, that is really great. That's awesome. I think at the Hazelton, they must have on their daily thing, "Here's who is coming. Here's who is arriving." They must get that sent because they all remember me by name, and there's got to be some level of cheating going on in a sense that they know I'm coming kind of thing.
Jesse: Because they listen to your podcast, I'm sure. Actually, someone did recognize you the other day from your podcast, so remember that.
Dean: Yeah, that was funny. In Manley when we were there, right. Now, I've got equity in being a guest of the Hazelton. I don't want to switch to something new. Dan Sullivan always had something great. As people, we want to grant people a monopoly on our business. It would just be, "I feel good about knowing that I've got my Toronto accommodation situation handled." I don't have to shop around or try and figure that out. I've got it. I know that for 60 or 80 nights that I'm going to be in Toronto, that that's where I'm going to be.
Jesse: I've even seen you come up to Manley, is it your fourth trip to Manley?
Dean: Yeah, my fourth.
Jesse: You know more about that suburb than I. I've lived in that city for ten years, and you know more about that suburb than I do because it's almost like you're a local now.
Dean: Yes, I love it, and that's the kind of thing. We have that tradition of starting my journey to Australia every year at the Pantry right on the beach. I'm always interested in adding new experiences to that. I did an Airbnb this time which was really a great experience because the lady came and met us right at The Pantry, walked me over to the place. It was all very accommodating.
Jesse: Airbnb is putting pressure, I think, on a lot of independent hoteliers because if they are providing a completely different experience.
Dean: A personal experience, yeah.
Jesse: That's the thing. I encourage anybody if they haven't done it yet to book a property in Airbnb and just look at on the lens of their whole before, during, and after units. Obviously, the during is up to the host, but Airbnb does an incredible job in the before and the after units. Right when you book, even the day before, it's like, "Jesse! You're going to Manley. Here's different things around that people have suggested. Don't forget to pack this. Here's the important details that you need." Afterwards even to write a review, they want you to write a review for you to see what the other person has written about you. You have to write one first, but ...
Dean: I know I saw that. That's great.
Jesse: Isn't that incredible?
Dean: Yeah.
Jesse: What better motivator to know that Dean, your host, has reviewed you. Oh, man. I want to see it. You've got to write one first.
Dean: Let's talk a little bit about the before unit for independent hoteliers. I talked about and I kind of left this to the end. Start with the during and after because I think that's where the lowest hanging fruit is. That's where the competition-proof opportunity is, right? When they're staying at your hotel, they are in-residence, under your care. You're the only one who has that opportunity to send that daily email. You've got them under that bubble of your competition-proof monopoly on being able to send them a daily email while they're in your hotel. That, I think, could be even a role within a hotel for somebody as the guest experience enhancer role. To have somebody take responsibility for that and constantly out looking for opportunities.
You remember the show "The Love Boat"? Do you remember the cruise director kind of thing where she would get to know everybody, and introduce opportunities for them? There's almost that role of someone being the host or the cruise director type of mentality. I think any hotel could have that opportunity. It could be a 20 or 30 hour a week position kind of thing. I think often where small businesses in general, hoteliers probably specifically, would find that when they have an idea like this, to try and put someone who's got other responsibilities in charge of this. Then it would be very inconsistent because when the hotel is busy, they've got other things going on, other things to do, and they wouldn't be able to expressly dedicate that time to it. However, if someone was completely responsible for this as an opportunity, I think it could make a big difference revenue-wise.
Jesse: I think often times, that's the role of the general manager amongst the million other things that they are doing. I think it's often the front desk person. The people who are the closest to the consumer ultimately, I think they have a role to play in all of this, too. I think a big part of this is, do you create that culture internally? It's all well and you have great intentions to provide great experience, but if it is not being lived and breathed on the front line-
Dean: I think somebody, especially when there's multiple people, that they're going to run into or multiple people who are going to be part of the experience, there is no one person owning it. We just added, I think maybe it's been a year already, but we added a concierge to our 90-minute book team because the 90-minute book process: They are going to touch lots of different people in the process. They could touch as many as six different people in that process. However, having one person, having Betsy now as the concierge to kind of walk and host people through that process seamlessly so that they have a great experience is making a difference. That people have a great consistent experience there, I think that could be a nice part of concierge's life experience.
Jesse: Having that consistency is also key. However, how do you put those right systems in place so that the consistency is throughout and not just when a few people come online?
Dean: Right, I think that makes a difference. In the before unit, when we were talking a little bit. You and I have talked about this before about the online travel agents. As a pretty consistent way ...
Jesse: Yes, I think that a big thing is that OTAs pretty much dominate a lot of things. Your Expedia or Priceline, all that kind of stuff. For a small independent, it's quite different because they are almost at the mercy of these big online travel agents because they are the ones who own all of the search listing, all the pay listing, and all that kind of stuff. It is quite typical that you see the actual listing for the property, the actual website will often be on the search listings because all of the tops ones will be your OTAs. How do you compete in the space especially when you're paying the 15% or 30% which is quite difficult?
Dean: The thing about it is that in a lot of ways ... The real estate industry is kind of going that way, too, in that a lot of things with the real estate agent: There's Zillow and Realtor.com. All of these lead generators, that in some ways, it does provide an opportunity for you because it's almost like they are acting as a before unit. There is a set kind of market value for it. If a hotel is willing to pay 20% or 30% of a booking to have a guaranteed booking, then that makes sense for them. In your experience, have you see what percentage of bookings come from the OTAs kind of thing for hotels?
Jesse: I think again, it depends on if it's a kind of chain hotel which can then be quite high because a lot of them all have agreements with OTAs. With a small independent, it can be anywhere between 20% and 60% depending on seasonality and where they are. What's difficult is what they'll do is they'll have to negotiate with the Expedias to have a certain number of rooms available per night, and if Expedia doesn't sell them, then they are rooms that are left unsold which becomes a little bit difficult. Often the trouble is when you're competing just on price, then it becomes quite difficult because you're just competing in all the OTAs simply on price and how do you differentiate yourself.
I think going back to the during and the after units, you're providing a lot of value. You're providing really great experience. A lot of that stuff actually feeds right back into the before unit. It feeds right back into your Trip Advisor listing to what people are sharing about you on social. It helps, even if your property is 20% more than all the other listings on Expedia for example. You're clearly demonstrating that customers are willing to pay 20% more because they are going to get a much better experience. I think that is the mindset you should probably have.
Dean: Yeah, especially if people see that the customer ratings are really high, even if the star rating of the actual hotel is lower.
Jesse: No one wants to stay at the second best Western. You want to stay at the Best Western.
Dean: I love that. That's so great. That's my favorite thing about the Simpson's. All of that background stuff. The Second Best Western. I think that when we look at the opportunities in the before unit, profit activator one, of course, is selecting single target market. You start to think about, "Okay, aside from just the online shopper who are looking for the hotels, what are the other opportunities that we could really get groups in." If I look at ideas like if you have a conference facility that you could ...
Jesse: Or weddings or anything like that.
Dean: Yes, weddings, conferences, business groups. I look at even just something like my Breakthrough Blueprint events. I do them always when I'm here Florida at Celebration which is a 110 or 115 room hotel. We've got a really great conference room. It's perfectly situated that there's no ... Nobody needs a car. There's all the restaurants and Starbucks and everything right there within walking distance. It's 20 minutes from the airport. You look at even a group like that, like a small group where if I have ten or twelve people, and that's ten or twelve hotel rooms, that's 10% of the property.
Jesse: Often, it's even more than that. I was at a conference last week, and we were taking up 200 out of the 240 rooms.
Dean: Right.
Jesse: It's huge, yeah. Often, I find because I've worked a bit in this space, too, where we kind of have to host different business events at different properties. Often, the business will get two to three different proposals from two or three different properties. To be honest, there's not a lot of differentiation between all of them. It's pretty standard all around. I've always thought that it's a great opportunity, again going back to a small kind of referral thing from a consumer point of view, to really help the business tell a really good story about themselves. Why couldn't a hotel actually provide me with really great, amazing internet, or really help share some of the knowledge that's being captured, or maybe provide something that's going to make it that much better for me to hold that conference there as opposed to anywhere else.
Dean: Yes, agree. I think that you're thinking outside of the box on that. If someone was seeking out people who do small group conferences. Celebration doesn't have a big ballroom. I've had some slightly bigger events there, but with maybe 60 people at the most. Thinking about what the asset is that you have. Is it your spa? Is it your restaurant? What is the opportunity there? Whenever I think about hotels, I immediate think about Gamal Aziz who was the guy who was the general manager of the MGM Grand in Las Vegas. I think that this approach that he takes is phenomenal. I share it because it works for any business, but he would look at every element of the operation. He would break it down into restaurants, entertainment, gambling, and the spa, and hotel rooms, and conventions, and retail. All of the things that go into making up all of the revenue.
He would look at these and take an approach of how high is high? If you got an asset like a conference room for conference space, and you start to look at how high is high, what would this be worth if we were fully optimized on that? He would do something like that with the restaurants. He looked their ... They had a great flagship restaurant that was doing $4,000,000 a year in sales, and it's profitable but no one would look at that and say, "That's a problem." He would stand in the entrance of the hotel night after night, and he would see people coming out of the hotel, getting into cabs, and he'd ask them, "Where are you going?" They'd say, "Well, we're going to Spa-go or we're going to Nobu." They would name these celebrity restaurants that they were going to.
Here he is in the largest hotel in the world, and he knew that if we had a celebrity restaurant, a celebrity chef, a high-end restaurant, we could be doing $8,000,000 a year instead of $4,000,000. He looks at that and counts it as a loss. He would say, "We're losing $4,000,000 a year because of our $4,000,000 profitable restaurant." He goes into the board, gets them to agree to rip out the restaurant. We do it. Same space. Same location. Get a celebrity chef, Michael Mena. Open up Nobhill, and the first year after opening, they did $11,000,000 from looking at that just one thing.
He did that same thing with every element. They got rid of their FX show, partnered with Circ de Sole. Went from $28,000,000 in tickets sales to $120,000,000 in ticket sales. Went from $40 haircuts in their standard salon to $400 styles in their celebrity hair salon. Looking at these things, looking at each element of the operation and seeing, "Okay, if we have a really great wedding package or wedding opportunity or venue, what could we do?" Is that a strength? What do we have location-wise? Do we have a great place so we could do outdoor weddings? Could we have a nice room specifically for boutique-sized weddings, and looking for really expanding that business as a front end. That's all the kind of things that are on a local basis; the opportunities to tap into something that you're not going to find on Expedia or Trivago.
Jesse: If you're going to have your wedding at that town, you've got to completely dominate it. Why not?
Dean: That's the thing. What would it take if you were looking to ... Could you have a state-of-the-art conference center, that it became the best place for a small company to come and have their annual sales retreat? What other kinds of venues to start thinking about the ancillaries stuff, the alternate reason that the hotel room just becomes part of the package. However, the big draw is that we're coming to the wedding.
Jesse: Even if you have your event at Celebration all the time, that's extra savings that they don't need to get new business. They've made the experience so good for you that you will keep wanting to come back there every single time. You're shopping around for a different one.
Dean: You think about that. I know the Celebration hotel has an agreement with a film school summer camp that they have some high number of rooms for the whole months of July or throughout July and August. Kids are coming from all over to go to this film school, and it's all done and they stay at the hotel. They get some package experience around going backstage at the Disney Studios and all those kinds of things. You start to think outside of the box a little bit. That's where, I think, the opportunity in the before unit is for a lot of these hoteliers, and to maximize and just accept that the OTAs are really driving the online just hotel room shoppers. Maximize your "do all the right things" that will make you stand out and be attractive during that.
Jesse: Even if you're paying the $10 more in commission, which is kind of typically what the issue is, you try to find the next opportunity to provide $20 or $30 more dollars value down the road, down the pipeline.
Dean: That's right. In the during unit if you know ... Because in your during unit, you've got this incredible well-thought out guest experience that you've got that opportunity now to ... You can afford to pay more, to bring a guest in because you know that the experience at the end of the day is going to be worth so much more.
Jesse: Absolutely. Even in the worst hotel in the world, The Hans Brinker, I've never actually stayed there myself, but I must have paid $150 maybe to buy products and I've never even stayed there.
Dean: Exactly, it's so great. That's so funny. I drove by it when I was in Amsterdam in July. I'm going to be back in Amsterdam again this year, and my friend Elko and I are going to film a video there.
Jesse: Cool.
Dean: Yeah, I think that's going to be a cool place. Jesse, I think we hatched some evil schemes for some hoteliers here. What do you think?
Jesse: I think it's incredible. I think this is a space where there is just so much opportunity. Like you said, I think looking at that experience and looking at the systems that make those happen that is where it's at. It's definitely exciting to be in this.
Dean: Yeah, it's awesome. I had Anthony Melcori from Hotel Impossible on our "I Love Marketing" podcast.
Jesse: He's great.
Dean: I came up with that name for him "Guest Experience Architect" which he loved. That would be a great companion episode to this here because he's really world class at that guest experience architecture here. You look at every episode of the "Hotel Impossible" show, he's basically looking at the whole experience through the eyes of the guest.
Jesse: That's the key part. I think that's what most hoteliers ... It's quite funny that they've been doing the same thing for the past 10 to 15 years, and he'll come in and say, "You're doing this wrong. Here's the opportunity." As a viewer, you're watching this going, "Why isn't this obvious?" I think it's kind of like it should have been the operator in the first place who should have been thinking this way.
Dean: Yeah, awesome. Well, that was fun, Jesse. Thanks for being a part of this one. I'm excited to see where this goes.
Jesse: Cool, thank you.
Dean: Awesome. I'll talk to you soon.
Dean: There we have it. Another great episode of "More Cheese Less Whiskers". If you'd like to continue the conversation, and you would like to find out more about how to apply the eight profit activators to your business, go to breakthroughDNA.com, and you can download a copy of the "Breakthrough DNA" book that explains all of the eight profit activators that we've talked about on "More Cheese Less Whiskers" and how to apply them to your business. We also have a scorecard for you where you can see where you're business stands, where the opportunities are, where you might have the biggest improvement in your business by focusing on either your before unit or your during unit or your after unit.
If you're in the United States or Canada, and you'd like to join us for a small group mastermind, we have a small group mastermind coming up in a couple of weeks at the end of October here in Celebration, Florida. We're going to spend three days with a small group of 10 to 12 people in a boardroom-style event. We go really deep in applying the Eight Profit Activators to your business specifically. It's my favorite kind of event that I do because we really get to spend personal one-on-one time really applying the Eight Profit Activators to your business. If you'd like to take part in that or get more information on it, send me an email. Dean@DeanJackson.com and put Orlando in the subject line, and we'll get you all the details, and hopefully, you can join us either in October or December for our Small Group Mastermind.
That's it for this week. Tune in next time. We'll have another great episode of hatching some evil schemes for another small business.