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The annual BBGV (British Business Group in Vietnam) Charity Fun Run took place in HCMC yesterday, and this year the Duxton got involved as a food sponsor and by entering a team of around 40 runners.

Our catering team did a great job of serving over 1000 hot dogs to those taking part, and we ran out of food much earlier than we thought – those hot dogs must’ve been good!

As for the running, it was tough going as, despite the early start (0645), it was extremely humid, and it must also be said that the police didn’t do a very good job of closing off the roads, leaving runners to jockey with motorbikes on several stretches of the route. Surely it’s not too much to ask for these people to respect a charity event and stay off the roads for half an hour?

But anyway a good time was had by all, and congratulations to Mr Pham Van Tuy (F&B) and Ms Tran Thi Ngoc Chau (Engineering), who won the Duxton 1st male and 1st female prizes. Me? I staggered in a few minutes behind, sweaty but happy at beating my 2007 time by 5 minutes!

Time to start training for 2009…

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As a marketer who has been heavily involved in social media for the last couple of years, this article on Social Media Optimisation for the Hotel Industry caught my eye this morning.

Before joining the Duxton, I was in charge of marketing for a large IT/web design company based in Saigon, and spent a lot of time discovering various areas of social media and how we could use them for marketing/PR purposes. To tell the truth it wasn’t ideal for a company selling $5-figure software installations, but when I moved to the Duxton, I realised that social media channels would be far more appropriate in a hospitality context. So appropriate in fact, that I’m frequently stunned at how few hoteliers are even aware of the term ‘social media’, let alone actually getting involved!

Anyway, getting back to the article above, here are my thoughts on the seven areas mentioned by the author, and how I’m using them at the Duxton:

1. User-generated content
This is by far the most relevant area to hoteliers. Web 2.0 travel sites such as Tripadvisor and Yahoo! Travel attract millions of visits per day, giving travellers a forum to share advice, experiences and, most importantly for those of us in the business, hotel reviews! This is an area where all our marketing and PR nous counts for nothing – it’s all about how guests experience our product and service.

But whilst we can’t control the conversation (and neither should we try!), we can contribute. Have a look at our Tripadvisor page and see how I respond to reviews, both positive and negative. Critical reviews usually get an apology and explanation, positive reviews get a personal thank-you message from me, and reviews with inaccurate information receive a polite correction. I also visit the Vietnam forum every day and give help and advice when I can. In total this probably takes about 20 minutes of my time each day – a small price to pay in return for interacting with guests, raising awareness of our brand, and positioning the Duxton as a modern, technologically-aware hotel with good local expertise. Such a small price, in fact, that the lack of activity on the part of other hotels is a constant surprise – and disappointment.

2. Blogs
Well, you’re reading this so little further explanation is needed! But here is the rationale behind the Duxton blog. The most important point in Anil’s article is the one about credibility and trust. People are naturally (and often rightly) cynical about brochures, press releases and promotional emails. Blogs effectively ‘break through the fourth wall’ and permit greater honesty and transparency, and customers see this as a more genuine reflection of the organisation’s character than the usual marketing blurb.

3. Online Videos
Another hugely under-used strategy, in the hospitality industry at least. For just a few thousand dollars, hotels can get a professionally made video, even a 360-degree virtual tour, which they can add to their website or post on Youtube, and provide a piece of marketing collateral that is far more immediate and effective than a brochure or a set of still images.

We had this video made in 2007 in conjunction with a Japanese TV channel, and ignoring the rather cheesy music for a moment, it’s been a really useful sales tool, especially for customers overseas who aren’t able to come to Vietnam for a site inspection.

4. Personal Social Networks
In our case, the hugely popular Facebook. One of the first things I did when I joined the Duxton was to create a Duxton Facebook group, making us the first (and still the only) hotel in Saigon to have one. Why? Well, Facebook has a large, active Ho Chi Minh City group that has proven to be very useful for local bars and restaurants to announce events and promotions, and in a city with poor local media and only one decent what’s-on magazine (The Word), a real-time promotional channel was long overdue.

We use Facebook to promote F&B promotions, parties, special offers, anything that we feel is worth shouting about. Does it work? In direct $$$ terms it has so far had little impact, but in terms of raising brand awareness and positioning ourselves as a modern, net-savvy business, then the answer has to be yes!

5. Photo-Sharing
Customers/partners, particularly tour operators, travel agents, press and third-party websites, frequently ask us for hotel images. When I joined the Duxton we were providing them the old-fashioned way – on a CD-ROM, via a login on our website, or by email. All pretty unwieldy, overly complex methods, especially email, which doesn’t permit the sending of large, hi-res images.

The solution? A hosted photo-sharing site, in our case Google’s excellent, free Picasa application. Whenever we commission new shots of the hotel, we can have them uploaded before the photographer has even left the building, so that people who need them for their brochures, articles or websites can download them, and my sales staff can send the link to potential and existing customers. No more CD-ROMs, logins or huge email attachments!

6. Social Bookmarking
7. Articles & Online PR

I’ve put these two together as they are both part of the hotel’s PR strategy. Each month we send out various press releases on any topic we feel like shouting about – F&B promotions, new appointments, hotel awards etc.

But rather than just sending them out to our press contacts, I also add them to our website, submit them to PR websites, and post them on popular social bookmarking sites like Digg and Cyvee. The benefits of this strategy are numerous, and include increased web traffic, a resource of articles for use in email newsletters, brand awareness, and search engine ranking.

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As Anil says at the end of his article, “We have experimented with all of the strategies described in this article and have found significant increases in the hotel’s search engine rankings as well as online revenue.  Social media channels may not result in direct increases in revenue from the channels, but indirectly do cause the hotel’s website to generate additional revenue. “  And that’s the whole point of working in social media – it costs next to nothing, but has a considerable ROI in terms of branding, perception and, further down the line, revenue.

It’s not our primary strategy – hospitality is still about old-fashioned jobs such as working the phones, pressing the flesh and meeting real people rather than Second Life avatars, and to an extent it always will be – but it’s a valuable part of our marketing mix and, in a field where none of our competitors are active, it gets us noticed!

Today’s Saigon Times reports of hard times for the city’s luxury hotel market, with occupancy as much as 10% down on the same period in 2007 (to tell the truth it’s closer to 15%!). Citing factors such as global recession, increasing air ticket prices and the 2007 hotel rate hikes, the city’s upscale hoteliers are wringing their hands and pining for the boom years.

With one exception. One hotel is still achieving high occupancy, hitting 95-100% in midweek and holding a steady 80% over the summer low season period, without cutting its rates or offering promotions in order to do so, and thus holding the highest occupancy in Saigon and probably in Vietnam as a whole. That hotel is, of course, the Duxton!

How are we doing it? Well, we have a few yield management tricks up our sleeve which I’m not prepared to divulge in public, and our consistent marketing and busy networking schedule have helped, but another reason is the very factors cited in the opening paragraph. In a time of recession & rising prices, travellers, be they business or leisure, look for ways to cut their travel costs, and those who usually stay in 5* hotels often choose to stay in a 4* instead. As the only international standard 4* hotel in the centre of Saigon, we are in a great position to benefit. And when those guests try us and see that our service and location are as good as, if not better than, many of the city’s 5* properties, they become regular customers.

This highlights probably the biggest reason for the decrease in visitors, particularly tourists, to Saigon and Hanoi – the lack of 3* & 4* hotels. Both cities have plenty of 5* properties – too many in low season, as the Saigon Times report bears out. What they lack are mid-range hotels to cater for tour groups, affluent tourists who prefer to save their money for shopping & eating rather than blowing it on a room they will only use for sleeping & showering, and business travellers who have been told to cut their travel budgets!

Looking at hotel development plans for the next few years it doesn’t look as if the situation is going to improve, with most planned openings being in the 5* bracket. Why is this? Well, one obvious answer is simply that, all things being equal, 5* hotels make more money. But another answer is that, in Asia, the concepts of prestige and ‘face’ are more important than in the west, and Asian hotel owners value the prestige of owning a 5* property. And so the trend for 5* hotels continues, leaving a big gap in the market for good 3/4* hotels.

We’re not complaining – we like being unique, as it’s good for business, and our customers enjoy getting a 5* location and 5* service at a 4* price, and our occupancy figures reflect this. But in the long run, if Saigon and Hanoi are to cement their status as popular business, tourism and MICE destinations, hotel developers need to swallow their pride and be a little more pragmatic – far better to be the owner of a full 4* hotel than a half-empty 5*!

Last Friday (22 August) we held a party for around 150 representatives of our top corporate & banqueting accounts here at the hotel, as a way of saying thank you for their support so far this year. The party included food, drink, live music from several bands & singers, a speech from yours truly, various games and a prize draw, and judging from what many guests said to me, a good time was had by all!

 

Obviously laying on food, drink & entertainment for 150 people isn’t cheap, but as far as I’m concerned it’s money well spent. Some marketing expenditure – press advertising being a prime example – is difficult to measure. But the value of getting 150 top customers together, showing them a good time, and being able to chat to them personally, is immediately apparent. I attended a seminar on inflation on Monday (inflation in Vietnam is currently running at around 28%!), and one of the key messages from the speakers was that, during times of high inflation, businesses need to reinforce relevance and remind their customers just why their product or service is worth paying for. Getting 150 of our top accounts into the hotel and reminding them how good our food & service is, and how friendly our staff are, is a great way of doing this.

 

A quick thank you to the sponsors who kindly donated prizes for the evening – Sofitel Dalat Palace, Victoria Hotels & Resorts, Blue Ocean Resort, Apollo Education & Training, Kose Cosmetics, Plus Vietnam and Cantina Central. Your support is much appreciated!

 

  

 

Tim with happy guests

Tim with happy guests

 

 

 

 

Whenever I need to describe great hospitality service to my staff, I always give the same example. No, it’s a not a luxury 5* hotel, Michelin-starred restaurant or business class lounge, but a small, family-run beach bungalow resort on Phu Quoc island.

 

I stayed at Beach Club last November, in a simple but comfortable beach bungalow which cost me $25 per night. Not the kind of place you’d expect to find memorable service you’d think, but you’d be wrong. Right from the moment their representative met me at the airport, picked up my luggage and drove me to the resort, all through the 4 days I was there until the return airport drop-off, the resort staff excelled in every area. They learned my name within 5 minutes of my arrival and used it frequently, their smiles were genuine, their food service was faultless, and whatever I wanted them to arrange – beach massage, motorbike rental, fishing – they did so efficiently, happily and with a minimum of fuss, which is very rare in Vietnam!

 

What’s the secret? There isn’t one. The owner, an Englishman named Mike, hasn’t invested thousands of dollars in training or recruitment – he’s simply employed naturally friendly people, made his expectations clear, and given them a stable and enjoyable environment to work in. As a result, his staff turnover is virtually 0%, and his guests are delighted.

 

You can see the same principle in effect on Tripadvisor. Which hotel do you think is ranked number 1 in the site’s list of most popular Ho Chi Minh City hotels? No, it’s not the Hyatt or Sheraton, but a little known hotel in the backpacker district called Bich Duyen. This isn’t because it’s cheap and Tripadvisor is frequented by budget travellers – 8 of the top 10 HCMC hotels are pricey 5* properties. It’s simply because, like Beach Club, the Bich Duyen offers a high standard of personal service. The manager makes an effort to get to know all his guests personally and goes out of his way to exceed their expectations, and employs staff who are similarly hospitable.

 

Many hotels and other service companies often lose sight of what makes great service. They spend thousands on training courses and recruitment, yet forget that the most important factor is friendly, happy service staff. I’ve been to luxury hotels where staff have been trained to give an identical greeting to the customer. This may seem slick and professional, but it also makes you feel as if you’re surrounded by robots. At the Duxton, we merely require our staff to be friendly and polite – how they greet the customer doesn’t really matter, as long as it makes the customer feel good. And whilst in a 200-room hotel we can’t remember every guest’s name, we at least try to remember those who stay with us regularly.

 

The important thing is to hire the right people in the first place, and provide a pleasant working environment. We’re lucky in that the southern Vietnamese are naturally friendly and hospitable anyway, and we have to be careful not to overtrain them and lose their natural charm!

Duxton service

 

A story in today’s Saigon Times reports that several Ho Chi Minh City hotels, suffering from low occupancy, are cutting their rates by as much as 40% in order to sell more rooms. It seems like an obvious tactic – cut your prices, and you sell more product. But does it work?

 

We’ve found in the past that it doesn’t. Previously we’ve cut rates for certain low periods such as public holidays or weekends, but the effect on our occupancy has been negligible, and we’ve noticed that rate cuts have the following negative side-effects:

 

  • Lower revenue, as customers who would have booked with you anyway end up paying less for their rooms, while few new customers are attracted
  • Negative value perception – whilst budget travellers are sensitive to price variance, luxury hotel guests are largely impervious to both discounting and increasing, and indeed they will often see discounts as a reflection of a decrease in a hotel’s quality, standard and brand value
  • Customers get used to the new low rates, making it difficult to increase them again
  • Gossip! When competitors and customers see a hotel reduce its rates, it isn’t long before tongues start wagging – “They must be struggling”, “Business must be bad” etc.

 

Many hospitality experts feel the same – have a look at this article by Neil Salerno, in which he concludes that the small occupancy gains that may accrue from rate discounting aren’t worth the decrease in revenue. As he says: Hoteliers who myopically focus on cutting expenses to produce profit, without a substantial effort to improve top line revenue, are doomed to failure”.

Welcome to Heart of Saigon, the Duxton Hotel Saigon’s new blog. It’s basically a new channel for us to talk about developments at the hotel in a more informal way, to give advice to visitors to Ho Chi Minh City, to talk about the local hotel and tourism scene, and hopefully to facilitate dialogue with our customers.

 

Traditionally, businesses communicate with their customers via brochures, ads, sales letters, newsletters, and emails. These are all well & good, but they have two drawbacks: they’re formal and ‘rigid’, and they’re one-way. Blogs allow businesses to chat with their customers in a more relaxed, open and less sales-orientated way, and allow those customers to respond, give feedback and even contribute themselves. In the new collaborative economy, web-savvy customers don’t just like the opportunity to converse with businesses, they expect and demand it, and hotels should be no different – we’ve all been quick to use the internet as a distribution channel, but a lot slower to embrace web 2.0 concepts such as social networking or blogging.

 

So please enjoy our blog and feel free to leave comments, suggestions and even contributions. All are welcome, and as you’ll read in future blog entries, we do listen to and act on customer feedback.