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Hospitality Expert: Cutting Hotel Rates is a 'Caribbean Addiction'

Jan. 14, 2009 — Contrary to a widely held belief that the "Caribbean addiction" is Cruzan rum, it is actually "hoteliers lowering rates to match the competition when the crunch is on."
At least that's what John Fareed told the V.I. Hotel and Tourism Association Wednesday at its first meeting of the new year.
Fareed, an internationally recognized hospitality marketing expert, shared strategies for "Winning Market Share in a New Economy," with an emphasis on the Caribbean, where he has traveled extensively. In 2008 Fareed was recognized as one of the Top 25 "Extraordinary Minds in Sales and Marketing" by the Hospitality Sales and Marketing Association International and the International Society of Hospitality Consultants.
Fareed is a magician, or at least he was — he spent 15 years performing on cruise ships and in casinos. He hasn't lost the touch. Fareed is an animated speaker. He disregarded the podium in favor of a more personal touch, walking around the room to illustrate a point or two.
First of all, he told folks what they wanted to hear: "Things are not as bad as you think. We are recovering from what we call 'Shocktober.'"
Since 1937, the U.S. has had 11 recessions, and they all lasted from six to 16 months. This is the "good news," Fareed said, because experts agree the current recession started in November 2007, "which means we are in the 14th month now." He continued, "By the third quarter of this year, we should be moving out."
If the room didn't break out in sighs of relief, the audience was intent on learning more about how to counteract the current market.
It's not all gloom and doom," Fareed said, emphasizing a few effective marketing strategies.
Back to the Caribbean addiction again: "The Caribbean is the main market that does this. Do not lower your rates to beat the competition. That makes you as good as your dumbest competitor. You lower your value when you do that. Keep the rates steady, and add value."
Fareed gave a description of "added value."
In the Caribbean, he said, a beach hotel could add free snorkeling equipment, or throw in a boat ride. Bridal parties are always big sellers, he said.
"Give the bridal suite at a regular or rack rate with a few amenities, and you will make it up with the six or eight rooms their wedding party will take," Fareed said.
He offered a novel idea to the owner of a St. Croix car rental company.
"They wanted to know how to beat the big guys, Hertz and Avis," Fareed said. "I told him to buy a few coolers and fill them with water bottles labeled with the company logo. Tell the parties that it's just for them, and ask them to leave the cooler in the car when they return it. I guarantee you those people will tell folks on the plane home about how wonderful you were."
Several hotels already offer added value through the association's USVI Hot Deals, said Lisa Hamilton, V.I. Hotel Association president. The deals include $50 credit at participating activities/attractions, a $50 meal credit, $300 in American Express travelers' checks, a complementary fifth night when four nights are paid, and a coupon book with other savings.
People earning more than $75,000 annually will travel this year, Fareed said, while those who make less probably will be less able to afford vacations. This was essentially the same information Tourism Commissioner Beverly Nicholson-Doty gave out last year in laying out the 2009 Tourism plan.
"Our core market has a different attitude about vacations," she said. "They believe they have earned it; it's a rite of passage."
She quoted Travel Industry Association statistics as saying "71 percent of that market will vacation this season."
The travel market is mostly decided by women, Fareed said, which the women and men in the audience seemed to take for a given, agreeing with a few laughs. Most bookings get made online, he said, providing a couple hints that may be worth their weight in bookings.
Tripadvisor.com has a vast influence on potential travelers, he noted. The site offers reviews of hotels by guests.
Fareed suggested that hotels put out comment cards when a guest is checking out, and check the cards later.
"When the remarks are good," he said, "call the guest and ask if he minds your adding that quote to your hotel's site. Most people will be happy to do that."
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