Hospitality Brand Management, Marketing, Advertising, PR, and other fortuitous thoughts.

L2′s Second annual Hotels Digital IQ Index® Reveals Little Differentiation

Apr 14, 2012 0 comments

Four Seasons, Hilton and Marriott Top L2′s Second annual Digital IQ Index®: Hotels. 

In its second edition, this report is now the benchmark on hotel online brand management+ execution; and serves as a compendium of what different hotel brands have done over the year.  The study reveals that differentiated content on site and mobile bookings drive traffic and high margin revenue. The research demonstrates a clear relationship between hotel brands’ Digital IQ® and shareholder value.
“In this year’s report, an overwhelming 38 percent of brands registered an Average ranking, versus just 10 percent in 2011. The standard deviation across the Index tightened from 38 in 2011 to 21 in 2012, suggesting differentiation in digital has become increasingly difficult.”   —Scott Galloway, L2 Digital IQ Index: Hotels Author, NYU Stern
A must read for all hotel executives.

Download the Full Report from >> News of the Week

Dec 11, 2011 0 comments

The Hotel "Social Lobby" Trend Goes Mainstream and Ceases to be a Competitive Advantage

Dec 8, 2011 1 comments
AttributionNoncommercialShare Alike Some rights reserved by Davezilla 

A decade ago, hotels began differentiating themselves from their competition by reinventing their lobbies as social spaces, introducing unique f&b concepts, promoting lively lounge bars, and even reducing the size of the front desk to increase guest interaction.   These properties began to define their brands by their hotels' social lobby design; however, today's USA TODAY article Hotel lobbies become multi-use spaces details how every major brand now features "social lobbies".  Any hotel defining their brand by their "social lobbies" is no longer differentiated.  The "social lobby", just like the specialty beds of last decade, has gone from being a point of differentiation to being a point of parity.

The predecessor of the modern hotel were the Inns & Public Houses of years back--a place of social gathering for locals and travelers alike.  When Atlanta's Hyatt Regency Hotel opened in 1967, it was the first atrium hotel to be built, influencing hotel design for the following decade.  The opening of this hotel signaled the climax of hotels being a place of "social gathering".  This quickly changed in the 1980's as architectural and real estate efficiency became the name of the game, turning the hotel lobby into a check-in/check-out, transactional building feature.

The pendulum swung back a little over 10 years ago, when boutique hotels changed the traditional design of their lobbies, turning them into restaurants, bars, lounges, and general places of merriment.  W Hotels then branded this concept and rolled out hotels around the world, as the revenue potential was realized its parent company, Starwood Hotels and Resorts, and their competitors began redesigning their lobbies across multiple brands.  Based on past research and today's article--aside from a multitude of independent hotels--the following brands have already launched "social lobby" concepts:

Marriot Hotels
W Hotels
Le Meridien
Holiday Inn
Hilton Hotels
Hilton Garden Inn
Hyatt House

Hotel designers around the world have taken note and added "social lobby" as a required building specs.

READ MORE "social lobby" coverage on >> News of the Week

Dec 3, 2011 0 comments

The Power of the Loyalty Program

Nov 29, 2011 0 comments
Image  courtesy of American Airlines
Today's chapter 11 announcement by American Airlines is a strong reminder of the power of customer loyalty and most importantly, of the contemporary significance of the frequent flyer program.

To provide a little bit of background, American's AAdvantage program is credited as being the first loyalty program in the world, having launched in 1981. Currently, it is one of the largest (if not the largest) of such programs with 67 million members.

Fast forward to today: American Airline's parent company AMR has filled for Chapter 11, and AA sent an email to all it's AAdvantage members. What is immediately clear from that email is that AA wants everyone to know that (a) their miles are safe and (b) the program will not be altered as part of these reorganization procedures.

See the  entire letter Here

Airlines enter into Bankruptcy through what seems to be a never-ending revolving door. The real news is that their frequent flyers programs are never touched, highlighting the amount of brand equity + trust deposited in them and the fiscal value inherit in them. Aside from the customer loyalty aspect of these programs, they maintain open important revenue generating opportunities with credit card companies, retailers, other airlines, hotels, etc. through point-exchange partnerships.

How much are these programs worth? In 2005, Air Canada sold 12.5% of its Aeroplan program for $250 million, which would value the whole program at $2000 million (Note that this was only for a small program with 4.5 million members). We could use these numbers to project an estimated value for the AAdvantage program of at least $29.8 billion dollars--that is a significantly low estimate, as it only takes into account subscription numbers, and not it's other revenue producing partnerships.

This leaves us at the main point. As it turns out, it can actually be less damaging to a brand to renegotiate with its lenders than to negotiate with its frequent flyers + loyalty program partners....

Brand Management is Revenue Management, move them to the same department.

Aug 26, 2011 1 comments
If every encounter a customer has with the brand either helps or hurts the brand value, then everything in a business comes back to brand management. And if the goal is to maximize revenues, then brand management is revenue management. This is why these two roles should be moved into the same department to enhance collaboration.

As the recent article, Reputation management is Revenue management, hotel industry is starting to see the power of this relationship between Branding and Revenue Mgt... just starting. But even five years ago the people in charge of brand management (at the corporate or property level rarely ever talked to the Revenue managers. They were secluded to opposite sides of the building, the brand and marketing people seen as 'those people who have their heads in the clouds while everyone else does the work' and the revenue folks on the other side were 'those people who crunch the numbers while everyone else does the work'. Unfortunately, this is still the case in many organizations today, a result of Revenue Management being moved into its own department, to keep the Sales Department accountable, and Marketing continued to be grouped with Sales (in many cases under sales).

The problem of having Brand Marketing under Sales is that the Sales Department typically services a laundry list of corporate, MICE, leisure and group accounts... Rarely do any of these accounts generate more than 5-10% of revenues. Having Sales focused on so many small clients can diverge a Branding Strategy from having a top level approach. The benefit of having Branding and Marketing grouped with Revenue Management is that you can take market feedback from Social Media, Sales' different accounts, Competitive Pricing, Historical performance, and Forecasted performance when creating an ongoing Marketing Strategy and targeted campaigns. The most important point is that these campaigns would be more closely watched and it's effectiveness measured.

We have recently seen various examples of the effectiveness of marketing campaigns being created quickly when the branding and revenue management teams work closely together. Recently shown by Starwood's W Hotels when they were the first to market with a "New York Same Sex Marriage Package" only days after the court ruling.

Let's be honest a lot of revenue managers out there are already doing a lot of Branding tasks, weather it be servicing OTA accounts, managing property descriptions online or on GDS, deciding weather or not to participate in OTA or Corporate campaigns, tracking competitive rates, market share, and vying for better placement online. The goal would be to increase the efficiency of information flow within the organization and outward to the consumer. As Josiah Mackenzie mentioned in the aforementioned article, Reputation management is Revenue management, the opportunity is to, "take these analytics and do something more creative," move the information flow closer together by grouping Branding and Revenue Mgt together, and you can use all of the different feedback sources to do something more creative, FASTER, before your competitors.

What is The Ritz Carlton Reserve Brand?

Jul 20, 2011 0 comments
Photo Courtesy of The Ritz-Carlton Hotel Company  
With recent news of the second Ritz Carlton Reserve property set to open in December 2012 as the Dorado Beach, a Ritz Carlton Reserve in Puerto Rico, the question is:  What is the Ritz Carlton Reserve Brand?

The announcement of the brand came in 2007, when it was described as:

A departure for Ritz-Carlton in size and scope, The Reserve brand will feature signature, one-of-a-kind boutique resorts located in choice settings, each with a distinctive personality and sense of place... The Reserve brand will be distinguished from other award-winning Ritz-Carlton resorts by offering guests' exotic, hand-selected "hideaway" destinations; a relaxed, casually elegant atmosphere; and an even greater level of individualized service through a higher staff to guest ratio. (source)

In short, this is a brand extension of smaller hotels (around 100 rooms), distinct destinations, and higher level of service.   Today's description has not changed much, although there is a bigger emphasis on sustainability.  The brand currently has one hotel in operation, The Phulay Bay A Ritz Carlton Reserve in Krabi, Thailand.  Two other future developments have been announced:  one in Binh Dinh, Vietnam and a second in Los Cabos, Mexico.

Interesting to note is that each property will have its individual name + logo , and will simply attach "A Ritz Carlton Reserve" at the end of it.  From a customer point of view, this highlights the hotel's individuality, personality, and services.

For hotel owners/developers, does this mean that there is a lower management fee compared to a typical Ritz Carlton given the discreet Ritz branding?  Not a lot of information available on the Marriott Development site about this.

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Hospitality Brand Management, Marketing, Advertising, PR, and other fortuitous thoughts.


This blog does not represent the thoughts, intentions, plans or strategies of my employers or clients. It is solely my opinion.