Hotels must get back to selling their “why”

Major shifts are happening in Florida’s beach markets, and Miami is suddenly falling behind to smaller, less flamboyant towns like Fort Myers and Sarasota. Miami isn’t selling itself like it always has — at least as long as it’s without an international market, cruises and conventions. Connectivity Matter’s Guido Salvatori explains the trend, and shares his thoughts on how Miami hoteliers should think differently about what they sell and why they sell it to better compete.

Contributors

Zach Stovall
Senior Creative Strategist, Flip.to

Guido Salvatori
Travel Entrepreneur, and Founder of Connectivity Matter

Transcript

Zach Stovall: Things are upended in travel right now. The industry is in disarray, and tomorrow is as hard to predict as next year. Things are open. Then they’re closed, then they’re open again. Borders, restaurants, attractions. Nothing’s dependable anymore. No one knows when it will be. That brings an inevitable shift in consumer attitudes — whether that’s for a short time or indefinitely, no one really knows. The tried-and-true marketing plans that worked in the past aren’t going to cut it now. It’s time for a new approach.

On today’s show, I’m talking to Guido Salvatori, a Miami-based travel entrepreneur with over 20 years in the hospitality industry. That includes distribution, revenue management and e-commerce. He founded a company called Connectivity Matter to help hotels take a holistic approach towards their tech stacks and channel mix, incorporating the latest products to work smarter, not harder. Thanks for being with us, Guido.

Guido Salvatori: Thanks, Zach, for having me. I’m really happy to be here and very excited to be talking about Miami.

Zach: Yeah, this is a great subject, and I think it’s going to hit home for a lot of people.

Zach: Guido, the hospitality industry can’t keep going the way it’s going. Obviously, something has to change. Where do we start?

Guido: In the past, strong destinations pretty much sold themselves. But now that everything’s shaken up, the industry needs to focus on one thing: the true intent of travel. Hotels need to get back to the concept of selling their “why?” In other words, a traveler’s time in destination and on property is limited, and focusing on the experience they’re going to have while they’re there is critical.

Extravagant yachts frame the skyline of Miami's downtown, docked very near the port where a string of empty cruise ships stands idle.
(Photo: Zach Stovall)

Zach: You live in Miami – the heart of South Beach. Miami has always had a strong pulse – the Latin influence, the theatrical showmanship — from mega yachts to flashy cars to bottle service. It’s a place the party doesn’t stop. Brunch is just a mix of people winding down the party, and others starting it. It’s a total scene.

Guido: Listen, I’m not a car guy, but it’s a city where I see more Lamborghinis and Ferraris than Chevys. On my morning walk at 6 a.m. I either see folks running on the beach or slowly making their way back to their hotel rooms.

Zach: Ah, the good old walk of shame. So, Guido, now you’re seeing something different. What’s changed in Miami?

Guido: For a city that’s been growing for so long, it’s eerie to see the beaches, streets and restaurants empty. You know, we still have the second highest percentage of hotels closed in South Florida. Sure, I know we’re in a global pandemic, but where secondary beach markets like Fort Myers and Sarasota are beating us out, something’s wrong.

Zach: It’s weird. Miami’s one of those cities that’s always sold itself, for obvious reasons. And beach markets are doing well in the pandemic, right? Shouldn’t Miami be crushing it, at least relatively speaking?

Guido: Yeah, you’d think. You know, I know there’s this optimism among hoteliers that it’s all going to come roaring back, but I think we need to take a pause and really consider what’s making people travel, or why they want to travel.

Zach: Why don’t we get back to the basics? Why do people travel?

Guido: To answer that question we need to think, what will they be doing? How will they be spending their time while they’re traveling? We gotta observe their time, and see what they’re doing on property and off property.

Zach: Not long ago, hoteliers were competing for travelers through updates in room amenities – a beautiful shower or a new bedspread. It was a competition based on the best room. But that’s not all that’s motivating travelers’ decisions these days.

Guido: No, that motivation has changed. Really, that motivation in terms of what would they be doing on property? The first phase is the perception. People are seeing different things, and that’s influencing them. They’re wondering, “Is the beach open?” I’m out on the beach every day, and I see it. It’s empty, man. This is the best time to be on Miami Beach. You’ve got the whole beach to yourself. Folks up North. What they’re hearing is the beach is either closed or there’s people partying on the beach. And this is really different than what’s happening. Before the motivation was maybe, “I want to go to a trendy restaurant. I want to go to that packed bar.” And today that’s completely changed. People want to be isolated. People want to be alone. They want to have their safe distancing. What better place to get that than on the beach?

Miami's uncharacteristically quiet South Beach is beset by an empty cruise ship anchored off the famous strand. The loss of cruise, international and group markets have devastated Miami's tourism.
(Photo: Zach Stovall)

Zach: The beach really is the perfect place to socially distance. But Florida also has a lot of beaches. And maybe the perception is that it’s easier to distance in a place that’s more relaxed than Miami. I guess that’s why it’s so important to understand your guest and what they need — especially at the dreaming level — to convince them to say “Yeah, I want to go to Miami.”

Guido: Yeah, that reason for travel differs for each guest. Each guest has different motivations. They have different things that they’re looking out for. And that rationale is going to impact their ability to say, “Well, let’s head down.”

Zach: An average guest is going to spend 72 hours in Miami. That time is finite, and the guest is looking for specific experiences while they’re here. In reality, hoteliers aren’t selling a room. They’re selling that time in Miami.

Guido: This is where Miami can shine. Miami has deep roots of Latin culture. It has the cuisine, the architecture, the art deco. It really gives travelers an experience to get away.

Zach: Yeah, I mean, Miami. It’s not just about the party scene. There are lots of cool things to do in Miami. So why is this not translating into the numbers?

Guido: Alright, let’s dive into where Miami was. It’s been a heavy transient market with a strong international base. I mean, Miami over the years has proven itself with a strong ADR of $200. A 75% occupancy, a RevPar of 150. But then we see Covid hit, and we see the opposite. We see 50% of the hotels closing in April and May. Today 15% is still closed, and that’s the second highest in South Florida. And occupancy is around 30%. We see destinations like Sarasota and Fort Myers where weekend ADR is up 20%, compared to Miami, down 15% weekend. Now that means — get this — it’s cheaper to get to Miami for the weekend than going to Fort Myers. I don’t know what gives.

Zach: That’s absolutely insane! You would never ever think of Fort Myers being a place that could beat Miami in any sense. Apparently, that’s what’s happening. Why is that? Why is Miami underperforming?

Guido: Right now, Miami’s dealing with the fact that international travel is down. For a city that has five flights from Buenos Aires to Miami going to zero, that hurts. That was a big source of demand. Then you’ve got the cruises. They’ve dropped anchor, and they’re not shipping out. Events, they’re cancelled, too. So, the playbook of Miami, that it usually relies on, doesn’t work right now. Today, they’re trying to speak to a different audience, and that audience isn’t looking for what Miami sells in a glossy magazine. And I think that’s where they’re struggling.

Zach: The perfect image of Miami: the beautiful people and the lavish lifestyle may not appeal to a new traveler. Miami’s on a peninsula. If you drop the airlift, you’re essentially left with a market of Florida and South Georgia. To compete, Miami needs to understand this traveler and what they want.

Miami's classic art deco architecture is easily appreciated while social distancing. The city was overhyped as a Covid epicenter, but is no longer. (Photo: Zach Stovall)

Guido: People don’t want surprises. Before, Miami would wow you and surprise you. Today, people want consistency. They want to make sure they’re not taking on too much risk. They want to make sure that places are open. They want to make sure they’re not going to be in the crowd. Really this is giving the secondary markets the opportunity to reach other customers. Now, these guests that now all of the sudden deviated from Miami, maybe heading to Sarasota. The question is, is this short term, or are they going to find a new family or a new vacation spot outside of Miami?

Zach: That’s a really good point. Gosh, it almost seems like Miami’s being beaten by the retiree capitals of Florida. It’s kind of like The Villages beating Orlando. It seems, if you start to look at it from that perspective, it seems pretty logical actually.

Guido: Listen, all markets are going through this. All markets are rethinking what their exposure is and how they should be positioned. So Miami’s not any different. But, this is where Miami has to consider — in the new normal — what’s the playbook going to look like for each individual guest? For the international traveler, for those looking for a certain nightlife event, Miami has something. But when we tune into the local market, and we look at people that want to have a different experience, I think that puts some things into question.

Zach: Okay, yeah. That makes sense. So, if we’re going to do that, what needs to change in Miami?

Guido: You know, hotels can’t rely on Miami selling itself. There has to be a shift in terms of taking control of the guest experiences.

Zach: So much is changing so quickly right now, and hotels can really play a bigger role in shaping a guest’s experiences. And not just in the short term. In order to do that though, hoteliers need to think beyond the promotion-based approach. So, Guido, how do you build a promotion unlocking a specific experience instead of just a discounted rate?

Guido: These experiences are typically going to take the guest outside of the walls of the hotel. And that’s going to involve restaurants or different activities in the area. In the past the concierge typically had the information of what time the restaurant opened or helped you get a reservation. And we need to unlock that and build that into what we’re offering to these guests. We need to build this information, this local intel, into what we’re offering to the guests.

Zach: As a hotelier, you really have to have your finger on the pulse of what’s happening around you, right?

Guido: Yeah, you have to be working in conjunction, and really in partnership. Where before, you just assumed, “Yeah the guests can just go down to that great restaurant on the corner.” Now people are wondering, “is it open or what’s the situation?” The hotel is really the owner, or the orchestrator of these experiences. And so, they’re going to be the ones dictating what you can do, where you should be going, and they’re influencing these memories. So, the hotels are in this perfect situation, or perfectly positioned to really dictate the memories that are being built. And they need to leverage that. And they need to be able to say, “Hey, this is what you should be doing. I know what you want, and here’s where you can go get it.”

Zach: That’s communicated at the dreaming phase, before somebody goes in to plan or book. I guess it’s part of making a decision between one destination and the next. And if your hotel is on top of that communication and telling people what they can do, there’s a better chance of winning a guest over. Let’s say if you’re communicating about the great restaurants open near your hotel, or maybe pitching some of the other attributes of the city that can be done safely — like exploring Wynwood or the Design District, or going for a paddleboard tour — then you’re really helping them frame Miami in a new way.

Richard Buckminster Fuller's "Fly's Eye Dome" anchors the courtyard of the Palm Court shopping plaza in Miami's Design District. The trendy neighborhood is known for its outdoor art displays. (Photo: Zach Stovall)

Guido: Yeah. Right now, in terms of communication, hotels are just hyper-focused on cleanliness protocols, and I get it. You need to make sure your guests know they’ll be safe at the hotel. But now, you need to think past that. You need to think about, “How do I shift my communication strategy?” Once you’ve tackled that cleanliness piece, pivot, and focus on letting the guest know the real experience on property and at the relevant areas and attractions. We need to be communicating with confidence, and map out that great experience the guest will have. That’s the type of communication that will win over the guest, but it’s not easy, man. Hotels need to have a strong partnership locally. They need to be dialed in with what’s happening. That means getting off property, working with the local establishments. Once you have the information, now you’ve got to think, “How do I share it?” Hotels are typically bad about posting information on their website or even communicating it. A lot of that information gets stale. And now, more than ever, it needs to be timely.

Zach: I really like this point that it’s not just leaving it up to the concierge. Because, you really need to communicate this before they even make the decision. So, if you’re letting the concierge do it, then you’re kind of late in the game.

Guido: Right, and when we talk about experiences, I think hotels need to take control, communicate what they can do, be in the know with the local restaurants and amenities, and be able to share this and build these experiences. And that’s going to resonate.

Zach: Absolutely. What is the long term, sustainable strategy for the city?

Guido: I’m super happy to see guests coming back. The other day I was out on Lincoln Road having dinner, and it was great to see restaurants open. But it does make you think about the long term. Why should guests come? What are they going to be searching for? What’s going to be their motivation? What are the types of experiences they are going to want to have in Miami? And I think that answer, where in the past Miami had a great offering — and it still does — but it does put into question. And I think hotels and the destination need to be in control of that story and make sure it’s not rewritten in the wrong way.

Zach: Really, once we understand our guest and their motivations, we can start to build a more effective marketing program to overcome perceptions and shift behavior. But this has to be about the guest, first and foremost. Time is money, and the same is true of the time a guest spends in your destination and on your property. How are you going to sell time differently?

I want to thank Guido Salvatori of Connectivity Matter for giving us another great Thought Starter. If you liked this podcast, be sure to check out some of our other Thought Starters. I’m Zach Stovall for Shape.travel.