Unique Approaches in
Travel and Tourism
Marketing
Objective: Introducing the unique approaches required in
marketing travel and tourism services in relation to their
special characteristics.
Unique Approaches in Travel and
Tourism Marketing
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Services are different from tangible products, that is
why, different marketing strategies are needed to market
services. Those strategies are;
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Managing Differentiation
Managing Service Quality
Tangibilizing the Service
Managing Employees
Managing Risk
Managing Capacity and Demand
Managing Consistency
Managing Differentiation
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If the customers view the services of different
providers as similar, they care less about the provider
than the price.
The solution to price competition is to develop a
differentiated offer, delivery and image.
Service companies can differentiate their service
delivery in three ways, through; (use of more than 4Ps)
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People
Physical evidence
Process
Four Seasons,
Istanbul
Ritz-Carlton,
Istanbul
Managing Service Quality
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Service quality will always vary, depending on the
interactions between employees and customers.
Companies should take steps not only to provide
good service every time but also to recover from
service mistakes when they do occur.
If a customer has a major complaint, 91% will not
buy again, if it is resolved quickly, 82% of those
customers will return (study by Technical Research
Programs Institute).
“Complaint is a Gift”.
Tangibilizing the Service
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Tangible evidences such as promotional materials (e.g.
brochures), employees’ appearance, and the service
firm’s physical environment help tangibilize the
services.
trade dress; is the distinctive nature of a hospitality
industry’s total visual image and overall appearance. For
example, McDonald’s golden arch, restaurant décor…
To compete effectively, marketing managers must
design a distinctive trade dress.
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employee uniform and costumes; have an important and
useful role in differentiating one hospitality firm
from another and create pride in the employees.
physical surroundings; should be designed to reinforce
the product’s position in the customer’s mind. For
example, the furniture in the lobby of a Four
Seasons Hotel should be high quality and expensive
looking. Every piece of tangible evidence must
deliver the desired organization image to target
customers.
Managing Employees
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In service businesses, the customer and front-line
service employees interact. Service providers must
interact effectively with customers to satisfy them.
That is why, companies take care of their employees to
make profit. Because they believe that only satisfied
and productive service employees can create satisfied
and loyal customers.
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Internal marketing: means that the service firm must effectively
train and motivate its customer-contact employees to provide
customer satisfaction.
Managing Risk
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People, who will stay in an X hotel or travel with an X
airline for the first time, perceive high risk. Because
they don’t have any idea about the service quality before
they pay the price. There is no guarantee that they will
be satisfied.
As a result, (1) “image” and reputation of the
organization,(2) “word-of-mouth advertising ” and (3)
FAM trips become more important in hospitality and
travel marketing.
Managing Capacity and Demand
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Since services are perishable and can not be
reserved and sold in later sale, marketing
managers must manage capacity and demand.
If demand is less than capacity, hotel rooms and
restaurant seats are empty. If demand is higher
than capacity, there will be great difficulty in
coping with customer numbers. For example, a
restaurant must manage its capacity when there
is high demand on Mother’s Day.
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Managers have two major options for matching
capacity with demand: change capacity or
change demand. For example, an airline can
change capacity on a heavily traveled route by
assigning a larger plane to the route. If a larger
plane is not available, they can reduce demand
by eliminating discounted fares. First capacity
then demand management will be discussed in
the coming sections.
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In order to cope with high demand,
organizations must operate at a maximum
capacity and remember that their goal is to
create satisfied customers. Here, the problem is
that research has shown that customer
complaints increase when service firms operate
above 80% of their capacity.
Managing Capacity
In order to manage capacity with fluctuations in
short term demand, the following actions are
available;
Involve
the customer in the service delivery system
Cross-train employees
Use part-time employees
Rent or share extra facilities and equipment
Schedule downtime during periods of low capacity
Extend service hours
Use technology
Use price
Involve the Customer in the
Service Delivery System
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Getting the customer involved in service operations
increases the number of people that one employee can
serve, as a result, increasing the capacity of the
operation. This method is very useful especially during
busy periods.
For example, some restaurants have self-service salad
bars and vending machines for drinks e.g. Schlotzky
Restaurant, or hotels have computerized check-in and out e.g. Sheraton Hotels which enable the customers to
serve themselves and make it possible for employees to
handle more customers.
Cross-train Employees
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Cross-training employees gives the operation
flexibility, allowing the business to increase
capacity by shifting employees, and can help to
prevent the organization from reducing capacity
when an employee calls in sick. For example,
front-desk staff or banquet staff when crosstrained can be called on if demand is higher.
Use Part-time Employees
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Managers can use part-time employees to
increase capacity during an unusually busy day or
meal period or during the busy months of the
year for seasonal businesses. For example,
summer resorts hire part-time staff to work
during the summer period. Part-time banquet
waiters are called in when there is a large
banquet operation.
Rent or Share Extra Facilities
and Equipment
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Businesses do not have to have space or equipment
limitations. When they have busy periods, they rent
equipment or space.
In the hospitality industry, companies can work
together and share their resources as well. For example,
when X hotel does not have enough rooms, in order to
prevent losing customers, it may refer the customers to
the sister property. Or when there is not space for a
large group in the restaurant, in Istanbul the alternative
might be a dinner cruise on Bosphorus.
Schedule Downtime during
Periods of Low Capacity
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An organization also needs to decrease capacity
when there is low demand. One way to do this is
to schedule repairs and maintenance during the
low season. Employees can take holidays or
training programs can be scheduled during low
demand.
Extend Service Hours
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Restaurants and entertainment facilities can
increase capacity by extending their hours.
When there the demand is high, the restaurant
operations may decide to open one hour early.
For example, nowadays fast-food operations
have extended their capacity by opening for
breakfast.
Use Technology
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Technology can be used to increase the capacity
of systems. For example, the automatic wakeup call system in hotels that can make hundreds
of wake-up calls in an hour.
Use Price
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Price can be used to adjust capacity in
companies which especially have mobile
products such as car rental companies. Rent-acar companies may offer low or no drop-off
rates to areas where they need cars.
Managing Demand
For managing demand (when demand exceeds
capacity), the following strategies are available;
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Use price to create or reduce demand
Use reservations
Overbook
Use queuing
Shift demand
Change the salesperson’s assignment
Create promotional events
Use Price to Create or Reduce Demand
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Pricing is one method used to manage demand.
When demand is less than capacity, managers lower
prices to create demand. For example, Pizza Hut offers
“eat as much as you can” on weekdays between 15:00
to 18:00.
When demand is more than capacity, managers raise
prices to lower demand. For example, on New Year’s
Eve, many restaurants and hotels offer set menus and
packages that exceeds the normal prices. Higher prices
decrease demand but still be enough to fill the capacity.
Use Reservations
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Hotels and restaurants use reservations to monitor
demand.
When there will be more demand than capacity,
managers can save capacity for the more profitable
segments. For example, hotels do not except
reservation requests of travel agencies when they
expect high demand from the individual travelers.
When capacity meets demand, reservations can also
limit demand by letting managers refuse any further
reservations.
Overbook
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Not everyone who makes reservations comes – no
show. As a result hotel rooms remain empty. In order
to prevent hotel rooms to remain empty, managers
overbook – accept more reservations than capacity. For
example, if in an X hotel 20% of the customers with
reservations do not come, 10 rooms will be empty out
of 50 reservations. If in this hotel, the average rate is
$80, this means a potential loss of $292,000.
Overbooking must be carefully managed. Otherwise,
customers would be walked to another hotel and this
destroys the reputation of the hotel.
Use Queuing
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When capacity exceeds demand and guests want to
wait, queues will form.
Queues, such as waits at restaurants, are an effective
way of managing demand. Good management of
queuing can make the wait more tolerable for the guest.
It is better to overestimate the wait and tell guests it will
take 35 minutes, when the estimated wait is 30 minutes.
The following tips are useful for the management of a
waiting line;
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Unoccupied Time Feels Longer Than Occupied
Time: Managers can create entertainment to prevent
their guests to get bored from waiting. For example,
Disney Land has employees who wear Mickey Mouse
costumes talk to kids in waiting lines, occupying time
and making the wait pass faster.
Unfair Waits are Longer Than Equitable Waits:
Guests can become upset with a wait if they feel that
they are being treated unfairly. For example, after
waiting 20 minutes to check-in, one guests may have
to wait for another 10 minutes because of a phone
call which is supposed to be answered by the front
desk clerk. In order to eliminate this problem,
Marriott has started a policy of removing phones
from the front desk.
Shift Demand
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It is possible to shift demand for banquets and
meetings. For example, if the date of a banquet
or meeting is flexible, managers may offer to
shift the date to a period (e.g. 3 days before or
after the stated date) when the hotel is not
forecasted to be full.
Change the Salesperson’s Assignment
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In hotels, the director of sales assigns
salespeople to specific segments.
If the hotel is trying to increase its short-term
business, then the manager should shift the
salespersons from the association market (which
books a year or more out) to the corporate
market (which can produce bookings in a month
or less).
Create Promotional Events
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During slow periods, creative promotions can be
an effective way of building business. For
example, hotels develop special packages and
nights, casinos have slot and table game
tournaments during their slow periods to build
business.
Managing Consistency
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Consistency means that customers will receive the same
level of services every time they come to the service
organization. For example, a cream mushroom soup
will taste the same way it tasted 2 weeks ago, a hotel
room will look the same way it looked a month ago.
In order to manage consistency, a clear company policy
must be established. Training the employees the same
way and standardizing the production with equipment
as in McDonald’s would be helpful to provide
consistent service.
Useful Links and Sources
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Kotler, P.; Bowen, J. and Makens, J. (1999).
Marketing for Hospitality and Tourism (2nd ed.).
Prentice Hall. NJ.
Kotler, P. and Armstrong, G. (2006) Principles
of Marketing (11th ed.). Prentice Hall. NJ.
Middleton, V.T.C. (2004) Marketing in Travel
and Tourism (3rd ed). Elsevier. Oxford.
http://www.hotelsmag.com
http://www.tourism.bilkent.edu.tr/~eda