The hotel sector has realised that global brands means global marketing and when the global market falls away, they do not have the people or the experience to bring guests in through the door from alternative markets.
The loyalty programmes were the backbone of the global operators’ distribution strategy’, but their power is stripped out when the frequent business traveller is grounded. As the pandemic makes its presence felt, the global players have had to cut their staff and pull back on their marketing as they moved into cash-preservation mode, just as their franchisees desperately needed that distribution support.
Hoteliers have been forced to turn to different sources for guests, including construction and key workers, but without the history of looking for solid, reliable sources of revenue, their success is patchy.
At Magnuson Hotels, the group has years of experience in bringing in the guests that others have passed by, allowing owners to outperform the mar- ket during the pandemic. In 2020, Magnuson Hotels’ local business strategy outperformed the USA RevPAR average by 3X, and largely via a foundation of local business for each of its hotels.
Tom Magnuson, Magnuson Hotels’ CEO, said: “With international leisure and the largest corporates grounded, hoteliers are having to look local to fill beds.
“Traditionally, the big, global operators have built their businesses around being able to fill hotels with the top-tier loyalty members, the road warriors who spend over 200 nights a year travelling. But that market does not exist at the moment and it is not clear when it is coming back.”
‘Our strategy always has been to secure 50% of your business base through local segments such as construction, government, transportation, security, medical.These segments always ravel 52 weeks a year, and will protect hotel owners though ups and downs.’
“What we have seen is that SMEs are sending their folks out on the road by car, and that the leisure traveller is also staying close to home, enjoying rediscovering what is around them.At Magnuson Hotels we have always looked for guests which others overlook and during the past year our local teams have been working with care providers and building firms, even monitoring development plans to see where demand will pop up.Where other companies have had to turn to the expensive OTAs, we’re proud to have been able to bring guests in without it costing the hotelier.”