Independent hotel reinvention via niches and micro niches
With so much hotel product in the market (with more to come), combined with the drop in occupancy worldwide, more and more hotels are going to need to reinvent themselves. Big global chains have been doing this for a few years now, rolling out new brands to serve additional market segments (Aloft, Andaz, Element, Indigo, etc). The competition has become so fierce that, as most of you have read, Starwood and Hilton are even going to court over alleged stealing of research and market intelligence by the latter.
To date, hotels and resorts have distinguished themselves through design, technology, amenities and service, but it’s not going to be enough to survive in today and tomorrow’s crowded marketplace. Independents will need to reinvent themselves, to better serve new niche and micro niche markets. So far, entire hotels or resorts focusing on families, couples, nudists, swingers, gays and lesbians have done well, but there are other niches and subsets of existing nichesthat will present equal or even greater opportunities.
In the next five years expect to see serious fragmentation in the hospitality industry, with entire hotels dedicated to more niche and microniche products. We’re beginning a new assignment with a hotel group in Mexico looking to reposition their hotel in one of the new micro niche markets, to escape from winning or losing business based purely on room rate. Stay tuned when we roll out the new concept.
2 Responses to “ Independent hotel reinvention via niches and micro niches ”
April 22nd, 2009 at 2:20 pm
Well said and I agree. Having an innovative concept doesn’t insure success. Execution accounts for a lot. That being said, the gay/lesbian and clothing optional markets are now “mature” so there’s a lot of competition. My point is that hotels will need to look beyond these “mature” niches to their subsets (e.g. how about gay and lesbian parents?) and completely new niches. For instance, women travel is going to boom as never before. There are many microniches within that category. Just look at the specialized tour operators catering to the female market: women and wine, divorcees, single parents, etc.
Karen Weiner Escalera
President & Chief Strategist
KWE group
April 22nd, 2009 at 10:47 am
I am a past president of the Palm Springs chamber of commerce. You are so right about niche marketing.
However, it needs to be done well. Just because you cater to a niche, it does not mean you will be successful.
For instance here in Palm Springs one of the best clothing optional resorts in the world according to AOL.com is located in our sunny town. It is The Terra Cotta Inn http://sunnyfun.com blog: http://theterracottainn.blogspot.com
They have the 2nd highest occupancy rate of ALL hotels in town and were the only established hotel that was up in room sales in 2008. Yet, another nudist hotel in town went bankrupt last year. So just because you cater to a niceh, it doesn’t promise success.
The same is true of the gay market in town where every year some gay hotels do very well, and others fail.
Just because you pick a niche, it doesn’t mean you will be successful especially if you don’t live that niche. For instance I can guarantee if you start a nudist resort and you have not been a nudist for years, you will not be successful.
Tom Mulhall