Today we shall study hospitality marketing

from a historical perspective.

By the end of this module,
you will know how hospitality
marketing has evolved over time,
and understand how current
hospitality marketing came to be.
The past causes the present,
and also the future.
This module will also help you
gain insight into the future
of hospitality marketing.
This module is largely based
on this journal paper:
"Hospitality marketing:
a retrospective analysis 1960-2010"
Hospitality marketing started in the 1960s.
It was all about promotion,
promotion, promotion.
Promotion is usually about a
package plan comprising hotel
plus return airfare and entertainment.
Such kind of promotion dramatically
increases competition among hotels.
The idea of marketing mix,
that is, product, place,
promotion and price,
was borrowed from traditional marketing
as a way to deal with hospitality marketing.
With the advent of the Holidex
reservation system,
distribution became highly efficient
and increased the effectiveness of marketing.
In the 1970s,
new hotel design became a prominent
product element in marketing.
Hotels tried to outperform one another
by coming up with better hotel design.
Architecture and technology were
part and parcel of the product offerings.
Marketing paid much attention
to developing new and innovative products,
and market research was used
to find out what products customers liked most.
Michael Leven brought up the importance
of service as opposed to physical product,
and he said,
“Service falls short
when employees are always trying to
please their immediate boss.
You end up putting layers
between yourself and the customer.”
Competition gathered momentum
in the 1980s.
The industry adopted
the concept of revenue management
to ensure optimal return
from fixed and perishable inventory.
The industry also adopted
the concept of branding,
which means image
could be created and it could be used
to influence purchase decision.
Isadore Sharp believed
in the power of branding.
He said,
“If we review the concept of branding,
it’s really about communicating values,
mission, and vision of the company
to the employee and customer.”
Branding in hospitality is not
just about logo and product,
it is also about the employee
who delivers the service.
When you come to think about it,
hospitality service is
invariably delivered by people,
employees, front-line staff members.
They could create long-lasting impressions
and images, good or bad.
In the 1990s,
the hospitality industry
really took off and customer satisfaction
is important because it leads
to repeat customer and loyalty.
Loyal customers are believed to be less
price sensitive than other customers.
Moreover, loyal customers
generate additional business,
they spread positive word-of-mouth,
and they usually contribute
to a large proportion of revenue.
As such, the concept of
looking after loyal customers
or "customer relationship management"
came about.
Bill Marriott advocated for
customer relationship management,
and this saying -
“It costs $10 to get a guest
to a Marriott Hotel the first time
but only $1 in special effort
to get this guest to return.”
This exemplifies very well
the importance of nurturing
loyal customers.
In the early 2000s,
Internet marketing emerged
and sowed the seed
for remarkable growth in the years to come.
Customer loyalty continued
to be important
and many studies were conducted
to find out more about this vague
idea of loyalty to a brand.
In the meantime,
global distribution system
became very sophisticated
and hotel electronic distribution
became more and more powerful.
In the 2010s,
social media became very influential
and the use of social media in
hospitality marketing
has gained importance ever since.
Hospitality marketing had become theatrical
in the sense that customers are treated as
audience in front of a stage.
They had to be entertained.
The service is part of the performance.
After all, we are all on stage.
Customers in the 2010s
are concerned not just about
self-interest and gratification;
they are also concerned about health,
environment, air quality, energy,
climate, and sustainability in general.
It was believed that
distribution depends on many factors
other than self-interest,
and it is less dependent on a brand.
Given the changes in customer orientation,
Simon Cooper questioned
the importance of branding and he said,
“The customer is much less brand-conscious.
They are looking beneath the brand,
under the tag,
and asking ‘Is this
a good value for me?’
– whether it is a handbag or a hotel.”
Now that we have traveled in
history and examined how hospitality
marketing has evolved over time,
you should have understood
how current hospitality
marketing came to be.
Customers will continue to change,
and marketing will further evolve.
By studying the past,
I hope you have gained some insight
into hospitality marketing in the future.