Enlightened View

Traditionally, to take on a marketing position within a hotel group, it was necessary to have broad operations experience. The idea that to have a top-notch marketing campaign, hoteliers had to employ a top-notch marketer simply had not filtered through and a marketing professional at board level was almost unheard of.

However, recent research by the British Development Research Consultants (BDRC) for The Hotel Marketing Association (HMA) suggests the message is finally sinking in. Not only are hotel companies bringing in people with marketing qualifications, but they are doing so from outside the hospitality industry.

In 1997, the time of the previous survey, fewer than two in five senior hotel marketers had experience outside of the hospitality industry. This has risen to three in five.

As the report says: “In terms of enriching the talent pool and introducing new ideas to a sector that in the past has been regarded as rather inward looking, this must be seen as a positive development.”

HMA chairwoman Pamela Carvell says: “When I was marketing director of Holiday Inn, I think I was the only person in the industry in that position who had a marketing degree. I got a lot of stick about it. One person asked me how I could do my job if I didn’t know how to fold a serviette 35 different ways.

“There were examples of hotels hiring marketing professionals from other industries, but they didn’t last long as they weren’t prepared to be treated like second-class citizens.”

Changing attitudes

The change in attitude has been inspired, in part, by the extensive mergers and acquisition activity in the hospitality sector during the past three years.

“As hotel companies have got bigger through consolidation, they have realised the need to run their marketing divisions as other industries do,” says Carvell.

Sales and marketing are still largely functions of the same department, with sales being predominant. Only seven out of 16 companies interviewed said marketing departments were separate. Few marketing personnel become board directors: just one in eight heads of marketing has a main board position. Most chief executives have an operations or finance background. Of the 30 hotel groups contacted, only in one in four has a chief executive with a marketing background.

Jarvis Hotels marketing director Hugh Taylor is one of the few. “Marketing is at last being given more credence in the industry,” he says. “Marketers are being taken seriously.”

Taylor has an MBA in marketing from the US. He singles out two chief executives with a sales and marketing background: his boss John Jarvis, and Hilton International Hotels’ David Michels. Hilton senior vice-president of marketing Mike Ashton is also on the board of directors, and has a consumer goods background.

“The move to bring in people from other industries can only be welcomed,” says Taylor. “We could learn a great deal from them. The hotel business only started to mature in the late Nineties.”

Customer relationship management (CRM) is a case in point. Hotels have been taking customers’ addresses when they check-in for years. They could have been building demographic information and servicing customers’ needs by knowing more about them. In fact, CRM is only 18-months old in the industry, says Taylor.

In print

This is reflected in the research, which shows that while some respondents’ organisations saw marketing as at the core of their activity, others were positively prosaic, for example: “To print brochures”.

Indeed, hotel marketing has traditionally been dominated by print media, with brochures, leaflets and print advertising accounting for 45 per cent of marketing in 1997, compared with 34 per cent in 2000.

Taylor believes that partnership is the most powerful method of marketing hotels. Jarvis Hotels has carried 150 million items of its promotional material on other people’s collateral in the past four years, including 50 million on jars of Nescafé. “We found that by working with brands from other industries, people bought more of their product and we got brand exposure,” he says.

Brand awareness

Although hotel brands have existed for years, there has been little understanding of them, according to Ashton. “There has been a growing awareness of brands over the past two to three years. Brands will be the key indicators of success in the business over the next two decades. But not everyone in the business understands how to develop them, or appreciates the value of CRM,” he says.

The BDRC research shows that hotel marketers are focusing on brand building and positioning. More than half make some mention of the brand, up from one in three in 1997. Director of business consultancy TRI David Bailey, says that certain facilities become a brand in their own right, such as Savoy Hotels. “The name has a powerful brand image in terms of service and luxury,” he says. “But they are individual properties.”

“Traditionally, in the hotel industry, a brand was launched and then left to get on with it. But without a brand manager, if it is abandoned, it will die,” says Ashton. “No brand will remain a leader unless it has the equivalent of the new and improved enzymes in Ariel Automatic.”

Outside experience

Ashton’s experience at Procter & Gamble and Johnson & Johnson is evident. He feels that with packaged goods there is an intuitive understanding of the need to “invest in dialogue with the consumer”. He says: “You find out why people choose your brand, and then improve, refresh and reinvigorate it to maintain the degree of difference. Customers need new reasons every six months to come and use your product – whatever it is – so that they don’t get bored.

“But in the hotel industry there has not been the same belief that this is a worthwhile, tangible thing. The idea of investing in people is more of an emotional hurdle outside packaged goods.”

The Internet also features on a large scale. The 30 hotels interviewed all have websites and from those with transaction/reservation capability, the average is three per cent of sales. The position of the Internet in overall marketing strategy is the first priority in 11 per cent of respondents, and very important for 57 per cent.

Electronic media are increasing the potential for more targeted marketing. The recent proliferation of branded conference packages is testimony to the importance of brands.

The BDRC research shows that above all else, hotel marketers are directing their efforts towards product and segmented marketing “with numerous mentions of the conference and meetings market”.

In fact, since the last BDRC research in 1997, this sector has risen to the number one slot as key business market opportunity, as well as a targeting of corporate accounts.

Conferences/meetings were seen as a key growth market by 50 per cent of respondents, against 32 per cent in 1997.

Consistency is perceived as a problem in the industry: “There is no brand consistency throughout a chain,” says Paul Hussey, director of events organiser The Olive Partnership. “There are always loopholes, so that a conference product is not available in all properties, or not all rooms in a property.” The greatest vote of confidence any hotel can aspire to is that guests will recommend their services to colleagues. Hoteliers who listen to their customers are most likely to achieve that recommendation.

The influx of marketers from outside the hotel business is achieving a greater understanding of the need to listen to and communicate with guests. However, it is a sad irony that those whose greatest experience is with chocolate bars or soap powder seem to have a better understanding of what makes people tick than the hotel industry.

We have been asked to point out that Graham Elton, who was quoted in our February 8 issue as chief executive of United Business Media, has moved to a new position as managing director of eVolution. Elton left UBM shortly after he was interviewed late last year.