What makes the rooms in your hotel different than the rooms in the hotel down the street? If the only difference is price, then you are in a race towards diminishing revenue. There are hotels built on the basis of being the most affordable in the area and that is fine. There is a market for those hotels. What about those hotels trying to increase their revenue? What about those hotels wanting to charge more for their rooms? The answer to solving these problems is in unique value propositions.
What Drives Buying Decisions?
Have you ever gone to the grocery store to buy table salt? In the United States, there are a few major brands of salt. Knowing next to nothing about each brand and when faced with a buying decision, it would boil down to price. Salt is salt, right?
Salt is a simple commodity. Unique variations of salt ‘de-commoditize’ it. Pink and black salts, salts from the Himalayan mountains, and salts from France differentiate it. This differentiation allows the manufacturers to sell the salt for more money. Price is no longer what sells the salt.
Hotels can become a commodity, supplying a room for a night for a price. It seems like the OTAs and even Google push hotels in that direction. When you search for a hotel in Chicago all you see is a map filled with prices. There is no sense of the experience you will have at any of these hotels. You only know how much it costs and where in the city it is located.
The map implies every hotel is the same except for location and price. A room is a room, according to these services. If salt can have differences allowing it to be sold for more money, then certainly hotel rooms can.
