Luxury in a Time of Restraint

Panelist and marketer Karen W. Escalera, president and chief strategist at KWE Group, was recently featured in a Lodging magazine article “Four points of view on positioning and designing for high-end lodging” by Philip Hayward, and she offered this insight:

Lodging Magazine: How do you view the market for luxury lodging in 2009?

Karen W. Escalera: It’s helpful to look at luxury in the hospitality industry in recent historical context. In our January 2005 newsletter, we pronounced the word luxury debased and diluted, much as what happened with the word gourmet in the food and beverage industry. The proof was the top-tier hotels saw a need to differentiate themselves from the four-star wannabes by describing themselves as 6 and 7 stars. From the point of view of marketing, we needed to connote luxury without using the L word.

We employed several strategies. One was to develop ideas to promote ‘wow’ amenities and features that demonstrated going the extra mile. Going beyond what was expected. In 2005, when we launched the Palms in the Turks & Caicos, we talked about the pool as the destination.

Another strategy was through packages—over-the-top getaways. Probably, one of the most over-the-top packages we developed was ‘Vacations for Billionaires’ at the Marquis Los Cabos in Mexico. It was $8.4 million—five days, four nights. You got a private jet for transportation from anywhere in the world, a [private] round of golf with Jack Nicklaus and a private concert with Carlos Santana, as well as the use of the yacht with a crew of eight.  

That was all pre-financial meltdown.

Lodging Magazine: And now?

Karen W. Escalera: There is a definite backlash against conspicuous consumption and the word luxury. So we’ve been employing dramatic changes in our messaging and vocabulary. You can’t do anything that says extravagance or over-the-top. The messaging now needs to be linked to guests’ desire for comfort. Comfort is a very important word; so is well-being, elimination of stress and the desire to save time.

The same hotel we did the over-the-top package for, we are now doing a ‘Guru Getaway’ with an authority on wellness and fitness. We have things like a visit to an organic farm, Tai chi, yoga and Pilates and meditation in the desert. 

Certainly, giving back to the community helps. Repeated surveys have shown this a factor in [consumers’] travel decisions. The expression ‘green hotels’ in a city name is one of the most searched-for Internet phrases in many markets. 

Lodging Magazine: Have you had to adapt phrasing for your clients?

Karen W. Escalera: We are using a new vocabulary that strikes a chord with middle-class values. We’re mov¬ing from Wall Street to Main Street. Definitely words like ‘honest,’ ‘real comfort,’ ‘authentic.’ We advise our clients to steer clear of clichés such as ‘unspoiled,’ ‘paradise,’ ‘best kept secret.’ These type of clichés say outdated and out of touch.

To read the full article, click *here*