The key to effectively marketing cheap hotels on a limited budget is to understand who the potential customers are and to execute targeted marketing strategies aimed at that audience. The United States Small Business Administration (SBA) states that targeting a focused market "makes strategies for designing, pricing, distributing, promoting, positioning and improving your product, service or idea easier, more effective and more cost-effective."
- Set a marketing budget before beginning any marketing activities. If the hotel is already in operation, an adequate budget would be approximately 2 percent of sales. If it is new, under new management or recently renovated, the budget could be up to 10 percent of projected sales. The amounts can vary depending on sales and growth goals.
- Research must be carried out to determine who the target market is for a cheap hotel in a particular geographic location. Major feeder markets, or where visitors come from, must also be determined. Your local or state tourism board should be able to provide you with some of this information. The American Hotel & Lodging Association has a research and data center available. Research your local area as well. While other cheap hotels may not be willing to impart any information, talk to the people who work at local restaurants or other businesses that may service tourists.
- Once the research has been accomplished, you should be able to segment the group or groups of tourists that you want to focus on. One set of criteria that every hotel uses in their segmentation is geographic location of area tourists. Demographic, psychographic or behavioral criteria may also be used in the segmentation. A cheap hotel in south Florida, for example, might have a primary target market of families from New York, New Jersey or Connecticut with young children who are value-conscious. A cheap hotel located in Cape Cod, Massachusetts, might have a primary target market of college students in Boston who are on a budget.
- The media mix that is used in a marketing campaign depends on the most effective means to get exposure to the target consumer, tempered by the size of the budget. A cheap hotel should have, at minimum, brochures at local tourist agencies, casual restaurants and tourist attractions. If the marketing budget cannot sustain advertising on websites such as Expedia.com or Hotels.com, look to alternate websites such as CheapRooms.com or bloggers who write articles about your area. Look for organizations, websites and publications that the target consumer frequents and purchase advertising with them.
- Be sure to plan for some intercept marketing during your area's peak season. Intercept marketing is getting exposure for your hotel to tourists who are already vacationing in your area. Proper signage in the right places, sponsorship of events or local radio ads might be considered.
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