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A Hotelier's Mind
Setting Strategy for the Future
By Jeroen Gulickx
AuthorHouseCopyright © 2016 Jeroen Gulickx
All rights reserved.
Hotel Brands The rise of brand and diversity
The year 2015 and 2016, can easily be recognized as years of rebranding or branding. New hotel brands are popping up like mushrooms. Mainly with one target, to market the Millennials generation with heavy influence and propelled by the Internet. I will write more about the Millennials much later in the book.
A few examples of new brands are AC by Marriott, Virgin Hotels and Tommie Hotels. Another example is the new group of boutique hotels, Indigo Hotels by InterContinental Hotels Group. A recent example is the OE collection by Loews Hotels, a lifestyle collection with focus on original experiences. This immediately follows the new brand of Langham Hotels called Cordis Hotels & Resorts, a brand that unlike the others, is not focused on the Millennial generation.
Hotel companies are obviously feeling the need to serve a customer, whom they don't currently cater for, and who will be the deciding generation of the future.
Branding is a strategic matter; it is the core of any business. The goal of a brand is to create a differentiated and significant presence in the market place.
Creating a brand is like creating a startup company. There is an idea based on market knowledge and an expectation based on facts that there is a need that is currently not fulfilled. That also requires a process, within which the hotel business is based more on feeling than a mission or a goal. Even within the branding, goals for the hotel are not well defined, easy to get off track which allows flexibility in the design or core of the brand. Additionally, and often misunderstood is that creating a brand is not for the now, it is for the future. In short, a brand needs to reflect:
1. A solid motivation for the buyer
3. An emotional connection
4. A clear message about what the product of service will deliver
5. A strong potential for loyalty
Hotels are not unique in and of themselves but can be differentiated with design, the services offered, and/or the use of technology. I have learned a lot from the Blue Ocean strategies and innovation. They preach discovered ways not to compete in an existing market but rather finding a new market. Is that even possible within the hotel industry? To answer that, we need to look at how a brand within hotels can be created that can really make a difference to travel in the future.
Creation of the brand
1. Market research and data collection
This is by far a static part of the process. Before defining what your product is really about, you need to base that on much more than gut feeling, common sense, brainstorming or workshop. Data is readily available from the Internet and a brilliant start to what is needed to lay the groundwork for either collecting additional data be it interviews or questionnaires. The main reason for collecting data is to understand the process of how consumers or guests make a decision to choose a hotel. Through this exercise, you will also find opportunity that you never know existed.
Collecting data is not industry driven. In fact, most of the great innovations came from learning from other industries and their consumer behavior. Getting stuck in the typical hotel selection process is not wrong, but it will make it harder to find a niche. That niche should be defined as a next step, which is all about defining the core values of your product or service.
Another advantage of collecting data is that all team members start getting involved at a very early stage. Often, team members should be responsible for the creation of the brand step once the core values of the company has been defined, or sometimes even later. Remember how many companies talk about the importance of internal communication? This process is much the same; knowledge, experience and involvement are the key to creating the right base for the creation of the hotel brand.
Without exception, you find clear answers and opportunities in the process of looking for data using online or offline research and interviewing,. The goal has to be specific. A brand should be as uncomplicated as possible and it should carry a clean message.
Another advantage of collecting data, is that once you start defining the brand, you would have identified potentials for future expansion through adding concepts, product variation or adding services at later stage that will keep your guests and customers loyal and interested in your story. This is also important for the marketer, who will be in charge of sales and strategic planning.
Naturally larger companies have the financial resources to do some serious market research. Historical data has often been used to measure behavior of spending or purchasing as well as to find structural changes in the market place over time. This can be used to identify market potentials or even analyze trends. Market research trends are another way of identifying behavior and can often be more successful when looking beyond the Hotel industry itself. For example, what makes Lufthansa successful? How is it possible for them to fly a plane, with sales campaigns to the low cost traveler as well as the first class traveler, while maintaining the same high service levels? Or how did Audi become a trendy, cool premium brand from the old rusty brand that they were years ago? Another popular method, though quite costly, is a proper trend analysis. The analysis can be split into many different elements, like intensity, individuality, affinity and should be measured over time leading up to what the brand is today. This trending analysis is a useful tool for predicting where the service or product should be in five years, for example. Note that none of this research really make sense to conduct without a very skilled team, often outsourced. The objective needs to be extremely clear and should be in line with the company's vision.
2. Define the core values of the company
In many cases, defining the core values is the starting point for a team working on hotel branding. A clear definition of the core values of the brand or company, is essentially needed. Core values are tools that in turn help to create strategy and vision, tools that have to be strictly pursued, internally as well as externally. They don't all have to be set out from the beginning, but can be fully defined and mastered at a later stage. A core value is not a guideline. It is a value that all team members should adhere to when making important decisions, to that ensure one's cohesive direction reaches the company objectives is maintained. Marketers clearly use these in communicating with their consumers as well. Some examples of core values include:
1. Guest happiness first
2. We create wealth by creating profits first
3. Do more with less
4. Pursue growth and learning
5. Build open relationships with communication
Often these core values are communicated online, in annual reports or painted on the walls in a staff lounge. They are a constant reminder of what the company really believes in and strives to promote and what the company wants its team members to further do in their work.
This part of the branding is the basis for strategic decisions and is used for communication with all stakeholders. Even more so, the entire company culture is based on the core values.
3. The Mission
The mission is another part of the creation of the brand, which reflects the purpose of the company. Missions are slightly more difficult to define, yet not of less importance. The mission statement typically has 3 key elements which include: the target customer, the product you are providing that customer and what makes your product unique. The mission statement should answer the following questions: (1) For whom do we do what we do? (2) What do we do? (3) How do we do it? and (4) What is it worth for the stakeholder? A mission statement explains the path to reach company objectives and therefore, should be one that can be fully understood by all stakeholders. It is also often used for setting targets for personnel.
4. Vision Statement
A vision statement should communicate the objective of the company. It answers the question 'what does the company want to become?'. It is in fact, part of the mission. It is long term focus and direction, not too specific and yet not too broad. It should reflect what your business does and how you would like that to affect the consumer or guest. It reflects your appearance to the world.
5. USP AKA Value Proposition
The Unique Selling Point or Value Proposition is one you create to set your hotel apart by creating an experience or product that stands out from your competitors. The hotel industry is not complicated in what it has to offer. However, each individual whose business you are trying to win is different, with different expectations, different ideas, and different backgrounds. In the UK, a 4-star hotel designation is totally meaningless when compared to a 4-star hotel in Dubai. Even though hotel brands can offer a similar size room and all of the standard amenities, it might totally miss guest expectations without offering something unique. This is not to say that all guest expectations need to be exceeded, as that may depend on an individual. Many people choose a hotel for the loyalty points rather than the room size it has to offer. What we do know is that the USP serves as a very important differentiation.
The early days of the '4 P's of marketing', (detailed later in this book) has now made space for content marketing. Content marketing is a way of creating marketing strategy which is based on creating a connection with your guest. That connection is created through differentiation, through highlighting those elements that are incredibly important for the guest. The USP has to appeal to the guest in both short as well as long term. The USP is your personality, and by all means, it should be very personal.
A hotel can have many USPs, but not too many as the message needs to remain clear. You have to first build on your promise. My team recently created a very good example of this. Many hotels are currently struggling with their gyms. Guests often choose a hotel for its gym, whether they use it or not; it is an important factor in hotel selections, particularly long stays. In a recent survey, we tested the use of the gym and found over 60% of women and men who use the gym in the hotel between 7-8 in the morning and/or 5-7 in the evening. This lends itself to machines not being readily available, refreshments out of water, queues, etc. We found that more than 70% of women don't want to use a gym when it is located in a small dirty room at the end of the corridor where they do not feel safe. As a result, we created the 1Sq Meter Gym with Casall, a Swedish fitness and clothing company. It includes a number of machines and fitness tools that fit into 1 square meter, that can be added to hotel rooms. It was created to train all muscles of the body. It even comes with an app that can be set to whatever time the guest requires. Upon check in or at time of booking, a guest who is looking for exactly that can choose this room, and you can charge a premium for that room. This is potentially amazing USP, as you can market your hotel as the cool, healthy option on the block furthering the concept of exercise and promotes good sleep and health.
Not all brands have a tagline, but I strongly advise creating one. A tagline is created by combining a few words that strengthen and support the brand name. The tagline should be special or specific and serve to identify a product or service.
The tagline is often remembered by consumers and seen as fun, or particularly even weird sometimes. A tagline is extremely important in marketing as it delivers the first part of a story that the marketer needs in order to create a content. The tagline is to be short, explanatory, be about your company delivery and simple.
7. Creation of the Brand Personality
This often is one of the harder steps within the branding process. It requires deep understanding of why the brand is created, and often even by whom, and definitely, for whom. Just like humans speak, think, act and behave, a brand needs to do the same. These characteristics help to ensure that a team, marketers and all involved communicate in the same and identifiable manner. This will lead to a deeper relationship with the consumer and that leads to loyalty and sales.
Some typical examples of brand personality characteristics include: fun, exciting, creative, and trustworthy. To be more successful, make sure to create a brand personality with a unique voice - not an echo.
8. Brand Identity
Finally, an important part of branding for hotels includes the name, design, the logo or symbol, and color schemes. You guessed it, brand identity needs to reflect all of the above values and traits. It is the representation of your company. Consumers see it before you even have a chance to talk to them and certainly before you have the opportunity to show them more. Brand identity opens doors and must create interest.
This representation of your brand should show purpose, passion, strength and above all, value.
In a recent interview with Barak Hirschowitz, President of the International Luxury Hotel Association, I asked about his expectations of hotel brands, operations, and what he feels are important factors that will influence the future. Indeed, all elements that should be taken into consideration when creating a brand.
Interview: Barak Hirschowitz President of the International Luxury Hotel Association
1. Please tell us about the objectives of the International Luxury Hotel Association?
Answer: Our vision is to become the pre-eminent association promoting, unifying and advancing the luxury hotel industry. We hope to achieve this by providing insight, opinion and research to executives and professionals in the business.
2. We will see a continued growth in the diversification of brands, what impact will that have on setting Hotel Strategies?
Answer: No. Independent and soft brands are ranking top of online reviews in many major cities by a large margin. The trend towards diversification that was strong two years ago has reversed because of this. In the past, affluent travelers relied on the consistency that brands offer. Today they are less brand loyal use easily accessible online reviews to see which hotels are delivering. Hotels need a strategy that focus less on promoting the brand and more on ensuring the property is providing authentic experiences and personalized service that will drive its reviews higher.
3. What influence are large Corporate Brands having on actual Hotel operations?
Answer: Big hotel brands can bring enterprise level resources and trainings along with corporate culture. But they need to realize that travelers care less about the brand name and more about the hotels total experience. This is good for the industry, it puts the emphasis back on service and less on big money marketing. The brands also need to keep a close eye on those properties whose online reputation is not stellar as it will weigh on the rest of the group.
4. Which departments within Hotel Operations will see the biggest change and why?
Answer: HR – it's now vital that hotels recruit the top talent, train them and retain them. Bad service damages online reputation quicker than any other factor and great service drives it up.
5. What does the shift to online bookings mean to Hotel Strategies?
Answer: That online reputation and transparency will continue to be the top decision-making factor in the luxury segment.
6. How can Senior Management adapt to the quickly changing market segmentation?
Answer: Go local. Luxury hotels that provide authentic experience based on their local or regional market will continue to do well. There was a time when the affluent traveler sought a common consistency as they traveled the world. Leading luxury brands would provide a similar food, design and décor across their properties regardless of where they were. Today a New York hotel should provide an authentic New York experience while in Manila the focus should be on that region.
7. What would you suggest is the best way to keep up to date and action change with regards to Technology?
Answer: The ILHA covers tech trends and best practices at our events and through our online resources.
8. What other industries do you feel we can learn most from and why?
Answer: The cruise industry provides a great template for how to take ownership for your guests through technology. They provide an active engagement program that starts the day they make their reservation and continues right through their stay.
9. What can Hotel Owners expect from the future, will hotels remain a lucrative investment?
Answer: Yes, especially in the luxury segment. According to last year's BCG report, todays affluent travelers spend almost double on luxury experience including travel over luxury goods. That is a seismic change and bodes well for the hotel industry.
10. What is your view on attracting highly qualified staff within Hospitality and what is the best way forward?
Answer: The most successful hotels have always seen their team as the most important asset. Those that invest in their people first will see a higher retention and stronger reputation. Retention is important, people pay attention to those companies that have a high turnover than those that don't and the stars will always gravitate towards those with the best reputation.
Excerpted from A Hotelier's Mind by Jeroen Gulickx. Copyright © 2016 Jeroen Gulickx. Excerpted by permission of AuthorHouse.
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Table of Contents
Chapter 1 Hotel Brands The rise of brand and diversity, 1,
Chapter 2 I Need a Dollar Data Collection in a New Light, 21,
Chapter 3 Eat Me Opportunities in F&B, 45,
Chapter 4 Lead it A stakeholder's analysis, 79,
Chapter 5 Innovation wonders More than just a thought, 105,
Chapter 6 Delivering the dream Leading guest satisfaction, 133,
Chapter 7 Housekeeping sleepers A clean cut approach to clean tiles, 159,
Chapter 8 Financial crackdown Tricky business, 171,
Chapter 9 Digitality Why we need to know about 10 systems or more, 189,
Chapter 10 Taking wellness seriously Run fast, 221,
Chapter 11 The end of the 4 p's Data as source for sales & marketing, 239,
Chapter 12 The final challenge Implementation and people, 285,