Hotel chains wake up to power of branding

Getting Nelson Mandela, Naomi Campbell, Winston Churchill and John Lennon and Yoko Ono to endorse a product is no small feat.

But that’s what hotel group Hilton International claimed to do last year when it launched a press and poster campaign through Delaney Fletcher Bozell. It featured celebrities who went to a Hilton, with the catchline “It happens at the Hilton”. John Lennon, had he been here, would no doubt have given the campaign one of his stinging put-downs. Nevertheless, it is indicative of how hotel chains – from luxury to budget – have adopted branding and marketing.

Upmarket Scotland-based chain Stakis is launching its first pilot TV ad in Scotland at the end of the month through the Morgan Partnership and plans to roll it out to different areas across the UK.

Budget operator Granada Travelodge ran its first TV advertising last year featuring a naked, dripping television weatherman Ian McCaskill. And Granada’s Forte has restructured its marketing department to focus on brands rather than splitting responsibilities geographically.

One of the main forces behind this marketing push is the pressure on hotels for differentiation. Previously they used high levels of service, upmarket restaurants or features such as satellite TV to stand out from the rest. Now these are standard in each sector, and the only way hoteliers can stand out is through brand building – creating an emotional attachment beyond the services they offer.

“If you ever stay in a three or four star hotel, they are increasingly offering more or less the same product and levels of comfort,” says Greg Delaney, chairman of Delaney Fletcher Bozell, which created the Hilton campaign. “Marketing is much more important now that added-value items are a standard. Companies are fighting for the same share and are continuing to up the ante.”

Stakis group marketing director Mike Ashton echoes this view: “A lot of people don’t really know the difference between the various brands. People expect things from hotels now, such as value for money and certain standards.”

Ashton believes that hotel companies have shied away from serious advertising because of a lack of clarity about what their brands actually stand for. “Before you project an image on TV, you have to have a clear idea of what the brand is and what makes it different. You also need to be able to deliver that in 40, 50 or 60 outlets 24 hours a day.”

Stakis has conducted an 18- month branding review and overhauled its corporate identity with a “softer” look. Ashton believes the staff best represent the brand, and they feature heavily in the ads which Ashton says have “an emotional rather than a rational appeal”.

The increasing consolidation and perceived threat of an economic downturn is putting pressure on the chains to take branding more seriously.

Two weeks ago, three-star operator Regal acquired County Hotels in a deal worth 116m, while Friendly Hotels recently won the management contract to run Lyric hotels, which had just been sold to Norwich Union.

Hotels were hit hard by the recession of the early Nineties and although they have flourished in the past five years, many expect a downturn. There is no concrete evidence that the slump is happening yet. Figures from BDO Hospitality Consulting show a small decline year-on-year of 1.8 per cent in overall UK room occupancy in November (1998 compared with 1997). But hoteliers do not want to take any chances.

“I think marketing is getting more sophisticated. And as the economy turns down they will be forced to have stronger strategies for competing with rivals,” says Marc Bell, marketing director for Travelodge and Little Chef.

Hoteliers’ new-found interest in advertising is also fuelled by marketers coming into hotel industry management from outside, an echo of what has happened in travel companies, supermarkets, the utilities and financial services.

“I think there is an increase in hotel companies looking outside for management expertise,” says David Bailey, associate director of BDO Hospitality Consulting. “People are coming into marketing with packaged goods backgrounds and are looking at new areas such as TV advertising.”

Such people include: Mike Ashton of Stakis, who previously worked for Procter & Gamble and as Hilton’s senior vice-president of sales, marketing and IT; David Scowsill, who joined the group from British Airways where he was director for Europe and the Middle East; and former Coke European marketing director Suki Kalirai, who is marketing director at Forte.

Changing hotel marketing from a short-term, tactical culture and replacing it with a long-term strategy may be difficult for some companies to grasp. But if hoteliers such as Stakis, Forte, Travelodge and the Hilton appear to be reaping the rewards, others will no doubt follow.

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