Partnerships aren’t easy. They take time and require expertise.
But forming successful partnerships could be the difference between success and failure as the industry recovers from the pandemic.
In a world of reduced demand, it is more important than ever for hoteliers to be at the top of the game to ensure that those guests willing to travel choose to stay with their brand.
In the fifth of The Growth Works Network’s Thoughts on Thursday discussions, our very own James Lemon, Founder and CEO of The Growth Works, explains why partnerships are so important right now and what strategies are needed to ensure they are successful.
You can watch James’ presentation below.
After the talk, The Growth Works Network, a global community of hospitality mentors and mentees from brands such as Fairmont, IHG, Taj, Sofitel, Selina, Louvre Hotel Group and Les Roches, took part in an exclusive discussion on how the pandemic has affected partnership strategy.
Our next webinar, led by Karla Brooklyn, of Siteminder & formerly of Selina and Sandro Fonseca of Louvre Hotels, will focus on Commercial Planning for recovery, given new types of demand and profitability pressures, on July 2nd.
Thoughts on Thursday is a weekly discussion between members of The Growth Works Network. Our mentoring programme and webinar series is free for individuals. If you’d like to participate as either a mentor or mentee, sign up here.
An important question for hoteliers right now is: “why are guests going to choose your brand on the other side of the recovery?”
If the answer is simply: “because our hotel is clean” then you have a lot more work to do.
It’s going to be a highly competitive time. In order to stand out from the crowd and recapture reduced demand, brands are going to need to up their games.
This means taking some time to think about strategy for the next two-three years. What can you do that’s new? What do you need to change from before the crisis? How can you make your teams more efficient?
Partnerships offer great solutions to these problems. And thanks to a growing trend of tech providers offering revenue share models, partnerships could be huge enablers of recovery even for brands with constrained budgets.
Once you’ve identified where you want to take your brand and business, you can start thinking about partnership strategy.
Every area of the business – rooms, operations, sales & marketing, restaurants, bars, revenue management, distribution, finance, HR, etc. – can benefit from partnerships. It’s all about finding the right partner for your brand.
Specificity is everything – the right partner will depend on your business, your strategy and your priorities. It’s so important to evaluate each partner in relation to your specific goals, team culture, technologies and customers.
At The Growth Works, we’ve combined our expertise in hospitality with our vast knowledge of hotel tech to create a five-step framework for partnership success.
- Plan – Evaluate your own strategy, assess your current tech setup, audit your current partners. This is about setting mid-term goals based on your owner/investor horizon and defining how you want your business to look. Then you can identify areas to improve and focus on who in your team is going to lead innovation projects going forward.
- Identify – Partnerships require time and expertise. The wrong partner can waste time. Don’t just go with somebody you met at a conference or a cold-call from LinkedIn. Research potential providers, hold discovery calls, ask for testimonials, find out what will work with your existing tech.
- Accredit – This is about balancing speed with thoroughness to ensure that your chosen partner can deliver. Are they proven? What customers do they have? Are they going to stay in business? It’s also about negotiating for the best price, safeguarding customer data and minimising other risks.
- Test – Share data with the partner and work together to carry out a pilot at the most suitable markets/regions/hotels. Monitor results regularly and cooperate in order to tweak and refine. Trust and relationship are key here.
- Scale – Get the partnership out there. Great innovation dies on the vine if left unnurtured. Assign ownership to somebody who naturally works across teams, has broad expertise and can align different departments and stakeholders. Implement new processes, train staff and encourage a culture of innovation. Measure results and continue to build trust and cooperation with the partner.
Following this framework will help you pick the right partners, minimise risk, monitor results and make the most of a partnership. For a more in-depth explanation of the mechanics of building partnerships, watch the presentation or get in touch for a free consultation.
Successful Partnerships: A Hotel Chain Case Study
We’ve established that partnerships aren’t easy. But are they worth the effort?
Over the last three months, we’ve been working with a major hotel chain to drive new revenue with zero internal investment.
With budgets completely frozen and teams furloughed, we weren’t able to integrate with central revenue systems or property management systems. But following the framework, we still found ways to improve the guest experience and unlock new revenue.
We started by creating an in-house innovation team and shortlisting 10 ideas to drive new revenues across different areas of the business, such as day rental, gift cards, food delivery, local tours and more.
We whittled it down to the three most viable partners at this moment in time and shortened onboarding from six months to just two weeks. By developing trust and nurturing the relationship with our chosen partners, we were able to share the effort and investment. You’ll find that partners are just as keen as hotels to make these projects work.
We launched pilots after just 60 days, and our hotel client is now on track for €2 million of new revenue and +4 points guest satisfaction.
So, with zero internal investment and 100% revenue share, we were able to improve the team culture, lay the foundation for future innovation and meet crucial business goals.
The key takeaways here are the need for speed and robustness.
Now, more than ever, is the time for partnerships as hospitality brands compete to attract the slow trickle of guests willing to travel as the recovery takes shape.
This means sharing the effort, investment and success with partners. It’s a relationship that requires nurturing.
It also requires education and a willingness to create a culture of innovation by bringing others along on the journey.
Choosing a Partner
Following James’ presentation, The Growth Works Network discussed their different approaches to partnerships.
Sabah Mehta, a student at Les Roches, asked with so many providers out there how do you decide who to work with?
Pablo Torres, a Hotel Consultant at TSA Solutions, agreed that the partnership space can be overwhelming, with so many cold calls and LinkedIn messages.
James Lemon, CEO and Founder of The Growth Works, said it starts by getting to know hotel brands and deep diving into their strategy to identify the best options and areas for partnerships. He reiterated that it is so important to keep an open mind and to constantly revaluate and shortlist potential partners appropriate to specific clients.
Angelo Vassalo, F&B Director at Fairmont, explained that he’d found success through a three-year partnership with a local wine supplier that involved investment from both parties and led to future collaboration. It supported local business and gave guests the opportunity to experience local culture. He also mentioned that with tech services, demos and pilots were especially crucial in order to test viability and refine operations.
Mihir Thacker, an owner of hotels with Accor, Hilton, Novotel and Taj, suggested that Starwood Hotels have led the way with hotel partnership, citing their branded wi-fi service with Yahoo, a spa development with Bliss Spa and a restaurant partnership with celebrity chef Jean-Georges.
James Lemon said it was great that a global brand renowned for its guest experience and design had an open, forward-thinking culture with the confidence to retain some control while partnering up.
Impact of the Pandemic on Partnerships
Eva Holt-Rusmore, Global Impact Director of CSR at Selina, said that partners who can offer a sustainability edge are prioritised at Selina. In response to the pandemic, attention has turned to finding ways to take successful programmes online, such as online voluntourism. However, she mentioned that this approach presented difficulties with quantifying return and maintaining control over the guest experience.
James Lemon said that during the pandemic it was sometimes a case of weighing up the balance of priorities and difficulty to implement. He gave the example of a private tour operator that doesn’t offer a large profit margin, but is ready to go with zero investment and could help drive demand as hoteliers look to focus on domestic markets and provide access to local attractions.
Anuja Rananaware, a Manager at Sofitel, said that she’d also found success partnering with a vineyard, which provided authentic guest experiences and promoted local Indian wines that have proved popular in the restaurant and bar.
Sabah Mehta agreed that partnerships were a great way to add to a brand’s sustainability drive.
Pierre-Edouard Vintrou, a hotel investment advisor, said that from an owner’s perspective, the aim was to find a partnership that provides the biggest impact with the least investment. He said that local art projects are great for PR and community engagement, but obviously difficult during the pandemic. He also mentioned that he’d struggled to find support for an ingenious cost-cutting partner who placed cameras on food bins to analyse food waste in order to optimise menus. The idea sounded strange, but the results were worth it for those that understood its potential.
Sandro Fonseca, Head of Revenue and Sales at Louvre Hotel Group, said that in Brazil, it was a race to be the cleanest hotel and that industry bodies were looking at ways to introduce a 1-5 star cleanliness rating system.
The conversation concluded with a reminder that with this new drive for attracting local demand, not everybody will be able to win. Hoteliers need to look at ways to stand out in order to recapture reduced demand, plus examine how they can do the boring things better, such as cutting costs and reducing inefficiency through innovative partnerships.
The Growth Works Network is hosting two more Thoughts on Thursday discussions over the next fortnight. Sign up here to join our community to broaden your network, gain expert insight and participate in the debate.