Case Study: Hotel Uses Deals to Fill Rooms Without Diluting the Brand

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Laura McIver knows her demographic. As the general manager at the Canary Hotel in Santa Barbara, California, McIver targets an upscale clientele by advertising in strategic publications and by offering exclusive deals online. She’s also found success in her partnership with SocialStay, a mobile application that lets users check-in and connect with fellow guests at select hotels.

What makes the Canary Hotel different from other hotels in Santa Barbara, and how does that influence the way that you advertise?
We’re the only full-service luxury hotel downtown. Most of the hotels in Santa Barbara are either by the beach or are limited-service. We really fill a niche, since we’re within walking distance to all of the State Street shopping, galleries, and restaurants. One of our strategies has been to really use media to target local clientele, to drive business for events that we host at our restaurant.

How did your partnership with the SocialStay mobile application come about?
We were actually the first hotel that launched on SocialStay. SocialStay was founded by a local guy named Seth Epstein and he has his workshop over in Montecito, not too far from us. He approached us about a year ago and told us what he was doing. He wanted to have an app that was really specific to high-end hotels. He really wanted to target four- and five-star properties. He was providing an opportunity for us to get in with him and help him build the app with our expertise, so it was exactly what we wanted. It has been two months we went live with it, and he’s still making changes. If we get customer feedback or if we think something’s not working, he makes the adjustment. So, it’s been really great.

Can you explain a little more about how the app works? What do people use it for?
Sure. It has a few features, including a social aspect, but most people are using it like a pocket concierge; to communicate with us if they have a need. [SocialStay] has the functionality of telling you what our favorite restaurants are with Google Maps, so you can see where [a restaurant] is if you’re walking down State Street. It has all of the recommendations from our concierge built into it, and it also has the capability for someone to give us a message right away. [With the app] they can say, “I’m on the roof, and I really want a hamburger.” So [guests] don’t have to pick up the phone and they don’t have to wait for a server. They just send us a note and we can put the room service order in.

It also has a social aspect, where people can write on the wall just like a Facebook wall. They can leave notes for each other. They can say, “I’m going for a run, does anyone want to go with me?” and you can show that you’re here. You can check-in to the app and say, “I’m here,” and then other people can see that you’re here. Or you can avoid that; you don’t have to have anyone know that you’re there and you can still use the app for all the other purposes.

Why does the Canary Hotel advertise on the hyperlocal site Noozhawk, and what has your experience with local online advertising been like, generally?
We do a little bit of online advertising, Noozhawk is one. We usually use it for events that we’re promoting. So, we probably use them about six times a year in the local market. It’s pretty well read in our area, and there’s a local contingent in Santa Barbara that is pretty active in the community. [Noozhawk] is on the ground in Santa Barbara and we know they work in the community, as well. We also advertise with The Santa Barbara Independent, both in their hard copy as well as on their online site.

How about daily deal websites, like Groupon? Do group coupons work for luxury hotels?
I have done a couple of different deals. We’ve worked with Groupon once for the restaurant a few months ago, and it was fine. We did get some new people into the restaurant that hadn’t been there before. There’s a local company called Axxess, which does a discount book that gives back money to the schools. They have started a daily deals program as well. So, we’ve worked with them a couple times. I like that because I know I’m reaching 15,000 locals. That’s really great. They are good to work with because they are in the community, too. They know what’s working, what’s not working, and they get direct feedback.

We did one [deal] with Travelzoo that was a hotel deal, and that was huge because they have such a big reach. That one just ended. We did a two-month deal in April and May. We tried to do it at a very high rate because I didn’t want to dilute the brand. That’s my biggest concern with these coupon deals, that we’re conditioning people to wait for a deal instead of buying like they would normally buy.

Have you found an answer to that? How do you prevent people from waiting for a better deal?
It has to be the right deal and timing. It was good for us in April and May because we had a few slow dates and it did fill those. It was primarily a Sunday through Wednesday package. Sundays and Mondays tend to be a lighter day for us and that really helped bolster that up.

Where do you see the future of hotel advertising going?
I think there’s still a need for traditional advertising. I do print advertising in strategic publications, but I definitely think that social media and earned media through PR are really going to surmount the traditional advertising in the future.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.