Premium hotels turn to personalisation

The uniformity of the premium hotel experience was once its selling point. But with business travellers under pressure to cut expense accounts and leisure travellers choosing to spend their holidays at home, it’s becoming difficult to justify the luxury of a big-brand hotel chain.

As many as three-quarters of hotels in the UK have seen a fall in business travellers, with ten chains likely to go bust in the next year, according to research by international law firm DLA Piper. Now large hotel brands are being forced to turn to mimicking the way smaller businesses act by creating faux-boutique style services to convince consumers to spend.

It’s goodbye to the beige walls and hello to rooms with their own branded “personalities”. Big and faceless experiences are out, and smaller, unique experiences are in.

Daniel Kerzner, a regional director of marketing at Starwood Hotels & Resorts for north-west Europe, says there is an urgent financial imperative behind the trend.

“One of the things we’re seeing, even in the current economy, is the guests that are coming into our hotels are really looking to have an experience,” he says, adding that hotels must avoid being seen as a “commodity”.

But won’t consumers looking for something more unique than the big-brand hotel experience simply check into an independent boutique?

Janis Cannon, vice-president of global brand management for Hotel Indigo, the lifestyle brand of the InterContinental Hotels Group, argues that many guests want the personal touch but with the security of a big corporation.

She explains: “There’s a consumer out there who is very design conscious and they are looking for an experience of what individual boutiques can offer. But they also want the reassurance of a brand.”

She argues that the backing of a global booking system and loyalty programme allows people to enjoy a “hip hotel” without straying too far outside of their comfort zone. This is especially important when people are already anxious about spending money with smaller businesses that may not have strong balance sheets in a recession.

The desire for “mass personalisation” is not just coming from consumers, claims analyst Dr Cris Tarrant, chief executive of Business Development Research Consultants (BDRC). He says big chains are also “looking for a bit more edge” through introducing boutique brands and using them as test locations before rolling successful services or products out to the whole portfolio.

For example, Hyatt’s Andaz boutique (the only hotel brand in the corporation’s portfolio not to carry the Hyatt name) is only open in five locations around the world, but it has more than 370 properties operating under other brand names around the world. “It’s a way of big chains trying out new things without the risk of damaging their main brands,” claims Tarrant.

Hotel Indigo, however, is pushing forward with a global expansion plan, after initially testing the water with about 20 outlets in the US and Canada. It is hoping to increase its presence with more than 50 new hotels planned and has recently opened its first hotel in London.

Hotel Indigo’s Cannon says the hotel group takes its inspiration from outside its own sector to make sure it remains fresh. It follows the fast model of evolution favoured by retailers to refresh art work and update its food menus regularly to reflect the local area.

Indigo also attempts to hold a place in consumers’ lives beyond the physical visit to the hotel. It has launched an online music podcast programme that can be downloaded free from its website as an attempt to take personalisation beyond what Cannon dismisses as “a bowl of fruit and a bottle of water in the hotel room”.

Starwood’s Kerzner is also looking at the digital area to boost customisation techniques. About 80% of his group’s total marketing budget is spent on digital marketing. He claims that Starwood’s personalised offers have increased conversion rates by about 50%, which in the current climate helps the group maintain a healthy business.

Kerzner emphasises the importance of loyalty clubs and data to help companies effectively personalise services: “We look at some specifics of the booking that comes into us and we try to go back to our guests with a relevant offer that’s personalised to them.”

Starwood has been testing video embedded into emails to tempt guests to upgrade, showing what a superior room would look like in the hotel they’ve booked. But Kerzner says it’s important to leave the consumer in control of the decision whether to upgrade or not, without pushing too hard: “That shift of control is really important in the way that people interact with the internet and social networking sites.”

As people become more cautious about spending money, online users have developed more of a “looker mentality” so it has become increasingly important to spend on search marketing. Kerzner argues: “It’s about understanding search behaviour online and providing bespoke messages. It’s not enough just to have the message, we have to segment the message and tailor it.”

But one chief executive of a boutique hotel says the bigger brands concentrate too hard on their loyalty programmes and forget the fundamentals of a good hotel experience.

Michael Sagild, chief executive of European boutique brand Franklyn Hotels, says that building the wow factor into the service is key; something that the big corporate boutique chains can’t replicate. “Service is forgotten in the bigger chains. I believe they are married to points programmes and repeat guest strategies.”

He adds: “I think the way guests have been treated in the bigger chains over the past ten years has opened this space for us.”

Hester Stuart, group marketing director at the Eton Collection, a small UK boutique hotel company, agrees. She argues that large chains have created a “copycat style” but cannot replicate boutiques. “We keep an eye on them (the big chains) but don’t necessarily think they get it right, and don’t see them as direct competition,” she claims.

Eton’s marketing budget is dwarfed by those of the global chains, so Stuart uses affinity marketing to partner with other brands targeting its potential consumers. It partners with the likes of Harvey Nichols, The Tate and the British Museum to offer packages that can’t be replicated on a larger scale. “You’re giving a reason for people to come to the capital and visit you,” she explains.

While the smaller boutique brands are unsurprisingly fighting their more personalised corner, the large chains are also attempting to create “unique programmes”.

Hotel Indigo and Starwood have music performances in their hotels; and Crowne Plaza has created “think tank” sessions, organising speakers from explorers to writers to give talks.

Eva Ziegler, global brand leader of Starwood’s W boutique brand, once spearheaded by Ross Klein (see profile overleaf) argues that W provides service levels that go beyond a standard chain hotel. Its “whatever, whenever” concierge service allows guests to ask for any level of service during their stay.

Ziegler says this varies from simple tasks such as fetching extra blankets to more unusual services, such as the occasion when a bride and groom asked W to find an outfit for their pet dog that matched their wedding attire.

“We call it customer experience management rather than customer relationship management,” she says.

While Ziegler and her contemporaries are keen to present their individual services as a brave new world for guests, with so many brands trying to be “unique”, they will have to make sure that services are genuinely fed by consumer needs and are not just attempts to stand out from the crowd.

BDRC’s Tarrant says innovation in this sector is long overdue; it’s just evidence that companies are finally catching up with their consumers: “Hotels haven’t kept pace with people’s lifestyles. There’s more individualism in their own lifestyles and as a consequence they want a hotel that mirrors that image.”

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here