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Hotel Security and ROI, from Marko Cabric

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Marko Cabric

Chief Security Officer, Lecturer and Author

Hotel Security: The Correlation Between Security, Risk, Marketing and Pricing

Security and Marketing

Security is often more usable when explicitly advertised in marketing campaigns of services than those of physical products. In certain cases, such as in the hospitality industry, the relevance of security for the product and the marketing appeal of security are equal. Basically, security is namely one of the criteria that would determine if a guest would choose a certain hotel and as such it would be logical to use security as a factor in marketing campaigns. The same goes for, for example, airlines and airports, internet providers and cell phone operators, software manufacturers, companies that are handling the sensitive data of clients, etc. In some cases, the way that security supports a product is much higher than its actual marketing potential. For instance, the important role that security plays in protecting the integrity and ensuring the safety of drugs in the pharmaceutical industry, or basically any manufactured product, is obvious. However, emphasizing security in the marketing campaign for medications wouldn’t actually make much sense as it would not really appear relevant to the consumer. On the other hand, in certain cases, the marketing value of security is higher than its practical importance for the specific product or service. Having security guards in bank branches is more about addressing the clients’ need to feel secure than providing actual security.

Security and Hotel Price Segments

So, we have the ideal situation that the actual importance of security for a hotel and its marketing appeal are equal. How about the correlation between price segment and the level of security? Even for laymen, a higher price equals luxury which is the outcome of the combination of brand, performance and reliability. So, while the quality of performance of the product is directly related to its purpose, reliability addresses the quality of its other features that are not necessarily visible, such as safety and security. Basically, as consumers, we expect all the elements of a product to follow the price. When we buy an expensive electrical appliance, we buy a brand, better performance, and more attractive design. However, we also naturally expect the product to be proportionally safer than its cheaper alternative. But is this opinion actually founded when we talk about the hotels, their grade, room rates and security? Yes! According to the investigation of the security features of US hotels conducted by the Cornell University, there are significant differences in the level of security that is related to hotel price segments. Overall, luxury and upscale hotels recoded the highest scores for safety as security.

Security, Risks and Pricing

We have reached an interesting point. We have basically established that higher rates mean better security. But can we use pricing to promote security? Let’s take the example of the Tunisia hotel industry. Would it be good to decrease the prices of rooms in order to attract guests that were chased away by terrorist attacks? Most hotels would think so. They would try to use the prices as decoy. However, as price and risk are interdependent it would be clear to most of the potential guests that the prices have decreased because of the higher risk. Basically, the higher the risk that the guests have to take on themselves, the lower the price that they have to pay. Furthermore, the gusts were not discouraged by the prices in the first place but by the risks. Moreover, keeping the prices as they were and pretending that nothing has changed will not do much good either. So as absurdly as it may seem at first glance, a successful strategy would have to be based on advertising security improvements and even backing it up with higher prices. Basically, if we are presented with a challenge (which the real risk of terrorism certainly is), every action or lack of action makes a statement. When offering cheaper service, we are stating that our guests will be compensated for accepting it. When keeping the prices as they were, we are mocking their genuine and well-founded concern by pretending that nothing is happening. With tighter security and higher prices, we are telling our clients that we understand their concerns and that we are actually doing something about it. 

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