Luxury Travel, Lifestyle and Marketing Trends

New Hotel Revenue Models

the surf office

 

First it was business meetings that moved to Starbuck’s away from breakfasts at hotel restaurants or inking deals in a hotel lobby lounge. Then it was inroom movies, supplanted by laptops with streaming video or DVDs. And what about the legendary “power lunch”? As was reported recently in the New York Times, many millennials are skipping lunch for “crumbs on the keyboard”, viewing it as a waste of time.

What’s a hotel to do? Certainly the “Grab n’Go” concept manages to capture some revenue, provide a service, and appeal to a Starbucks budget and time-strapped business executives. In entertainment. Oz Eleonara,chief revenue officer for interactive content and connectivity provider Sonifi Solutions said there’s a greater movement in hospitality to combine entertainment, information and service to create new scenarios for digital interaction between hotels and guests.” In other words, turn a negative – movement away from current inroom entertainment models — to a positive – enabling hotels to connect with guests via technology. But, in the same article in Hotel Management, Scott Hansen, Director of Guest Technology for Marriott International said the company is looking it as a service and not a main revenue driver.

And now we’re seeing the beginning of the traditional hotel business/resort model under fire by offshoots of co-working spaces. In exotic locations worldwide, the countryside near urban centers, and beach destinations, properties are cropping up that offer communal work spaces, accommodations, and the opportunity to network, have fun and instant companionship.

What need does this address? Liz Elam founder of Link Coworking and executive producer of the Global Coworking Unconference said ,”More young people want work-life balance and maybe vacations completely unconnected are not feasible anymore; maybe people won’t take traditional vacations. But they can go to work in paradise for two months.” New centers described in the New York Times’ “A Desk in Paradise” have cropped up in Gran Canaria (The Surf Office), Turkey, and towns driving distance from Paris and Berlin. Right now they’re small in number and rooms and limited in facilities, but the appeal, especially to the Millennials is strong. They’re truly a new breed of “lifestyle” hotels.

The opportunity is there to expand the formula with new locations, more facilities, and ultimately, an upscale version of the concept. Let’s see who gets there first.

Design and Fashion: What the Hotel Doctor Calls For

kwe blog AC by marriott

When even Apple, an icon of high technology, makes moves to become what tech analysis site Stratechery called a fashion house, you know there’s something major afoot in branding.  For those who haven’t read it, an important article, “Apple’s Team of Tastemakers” appeared in the New York Times recently about the company’s hires of tastemakers from Yves St.Laurent and  Burberry to the addition of Beats’ founders Dr Dre and Jimmy Iovine for top management positions.  Their mandate is to remake the marketing strategy.

What is this about?  Design and fashon that are leading the lifestyle charge. We see this  across product categories and price points. If anything, expect it to accelerate with marketers’ attention turning increasingly to Millennials whom research has shown to  expect a major dose of style and good design,

This hasn’t been lost on the hotel industry as major groups continue to announce new lifestyle brands that they always bill as design forward, one of the latest being AC by Marriott. I couldn’t help but think will we soon see yet another new brand —  the hotel counterpart to a Zara or an H & M — low cost, big fashion statement,  and wildly successful? And then many of these same groups have new executive positions with serious titles who are like creative directors, helping ensure the brands continue to align with changing design and fashion values.

Travelers are seeing hotels with new eyes and new words to describe the hotel product.I  couldn’t help but think about the term “boutique hotel” which, when first deployed, implied a property with special style. Not so much anymore.With simple bed and breakfasts calling themselves boutiques, will this term become meaningless? I think so.

Amenities, even ones with a “wow” don’t seem enough to cut it these days. Travelers are going beyond that, looking for fresh new looks that excite and entertain.  A large dose of creativity is just what the hotel doctor calls for.

For more on hotels and fashion brands, click here to read a previous post on the topic.

 

 

Insatiable Luxury in China

luxury in china

Peninsula Shanghai image from www.sienacharles.com

Post by Karen Weiner Escalera

We’ve all read about the boom in sales of luxury products in China. But nothing prepared me for the reality — the quantity and size of stores of the big names in luxury brands. Staying at The Peninsula Beijing, within two blocks there were several Chanel stores, one larger than the next. Within the hotel itself, besides the entrance being flanked by Chanel and Louis Vuitton shops, there’s a two story arcade exclusively with all the big brands. And this is repeated throughout the city.  Curiously, walking past the shops there was seldom anyone inside. Why? Our guide said that wealthy clients get the brochure of the new collection (or see it online), call the shop, and have the item or items sent to their residences much as mere mortals would order take out food.

I asked the same guide why there weren’t more top Chinese fashion designers. She said why would anyone buy a local fashion brand and pay a lot for a name no one knows. Anyone in the luxury business should not miss a visit to the “knock off” multi-leveled emporiums – the Silk Market in Beijing and several in Shanghai. It’s fascinating to see what brands are being counterfeited besides the obvious – Hermes, LVMH, Prada, etc. Beats headphones and speakers seem to be “hot” items. No wonder Apple recently announced a possible purchase of Beats. It was also interesting to see how luxury brands have to quickly come out with new lines to stay ahead of the counterfeiters. Of course new models help fuel purchases but you can’t help thinking that in any case, this counterfeiting greatly debases the brand.

Speaking of luxury and hotels, I also had a chance to see the latest in hotel technology in action by the master, Peninsula. At the hotel in Shanghai, here are some of the picks for top features:

  • Built in “nail dryer” in the dressing room
  • VOIP for free international calls
  • Humidity control for the guest rooms
  • Preset internet radio channels
  • A Yamaha speaker built into a lacquered cabinet, totally unobtrusive
  • And then the bathtub that even they have taken up a notch: luxuriate in the tub watching tv, having a conference call by speaker phone, choosing your favorite spa music, and more

All this being said I kept asking if and when the bubble will burst. As someone said, throughout the country there are thousands and thousands of unoccupied apartments bought for speculation (said one friend, in China the crane is the national bird). Makes for an unstable situation, no?

Service, Small Business and CRM

No one doubts the effectiveness of CRM systems and loyalty programs though for small businesses, the costs of implementation in dollars and human resources can be a challenge. So what’s a small business – be it hotel, restaurant, service provider to do? Here are two examples of the right way and wrong way based on my recent experiences, and then a look at the takeaway.

Two hair salons. Both I’ve been going to for several years. Salon 1: Oribe in South Beach. When the hair stylist is running late they let me know. If there’s a big traffic tie up they give a call. And the best yet, this week I called to make an appointment. First, and unbelieve, the receptionist recognized my voice ( I go every 6 weeks). Then, she asked if I’d like an appointment in the morning, remembering my preferred time. Whenever I walk in, she makes me feel as if I’m coming home.

Salon 2. They have all of the tech stuff – as soon as I make an appointment I get a text confirming it. Then, a day before I get another text and a call (overkill). The problem. When I call they always ask me for my phone number which is in the computer, act as if this is my first time at the salon, and have me spell my name more than once.

Now which salon will I recommend? What’s the takeaway? It’s so important in a service company to have a good receptionist and do whatever to keep him/her so there’s longevity and he/she gets to know the client. Tech goes just so far.

Madigan Pratt, President of MP & A Digital and Advertising who has serious credentials in CRM summed it up. “Today CRM software allows companies with a culture of great customer service to move up to another level. When they do they can achieve a sustainable competitive advantage.

Problem arises when companies think office automation software is the answer to their customer service problems. Staff may know how to push buttons, but do they really know how to empathize a customer? More often than not, the answer is no.

“CRM with a human touch just may be the answer”, he concluded.

Budget Luxury

luxury budget

Flying a private jet doesn’t sound “budget” to me but new European jet carrier Wijet bills itself as “budget luxury”, charging $3,000 an hour for a Cessna Citation Mustang 510 that accommodates four people. As quoted in the New York Times, Alexandre Azoulay, owner, says the “budget” comes in since there’s no need to buy a minimum number of hours.

I guess if you’re an exec that has to get someplace in a hurry and millions or billions of dollars or Euros are at stake – or if you’re a billionaire, then $3,000 an hour is a “deal.” More apt, though, would be to call the service “value” luxury.

All of this prompted my thinking about what luxury means in today’s travel world.

The term “affordable or budget luxury” has been around for a number of years, meaning you’ll have a “luxury like” experience that’s within many travelers’ grasp. The expression packed some punch at the time it was first used, but now – with overuse – it has become almost meaningless.

Today, three-and-a-half star hotels and resorts are claiming to offer luxury – not in terms of service or expensive millwork, but with other elements such as top-of-the-line mattresses, designer linens, marble bathroom countertops or rainfall showerheads.

“It’s a challenging time for anyone who wants to cater to upscale consumers, regardless of their price point,” said Barbara DeLollis, the former USA TODAY hotels reporter. “Why? Younger generations who have vastly different expectations and needs than their parents are forcing new definitions of luxury.“

So this begs the question, what qualifies a hotel or resort as offering total luxury and how do consumers substantiate the claim? Prestigious awards certainly help. Invoking brand names of products used – from suites conceived  by fashion designers to luxury branded amenities and facilities. Not easy. And interesting that another word has not arisen to take the place of “luxury” so I guess we’re still stuck with it.

6 Things to Know to Attract the Same-Sex Wedding Market

same-sex wedding same-sex wedding

By Steve Deitsch

With marriage equality seemingly sweeping the country, more and more same-sex couples will be tying the knot in the coming months and years.  To date, well over 75,000 same-sex marriages have been performed in the U.S. and that number will only grow.  There are about 650,000 same-sex couples in the U.S.  so there is huge economic potential.  In fact, the U.S. Congressional Budget Office estimates an additional $1 Billion in revenue from same-sex weddings  if it were legalized across the U.S.

How can your property get a piece of the pie?  Here  are some things to consider:

1.  Become relevant before you relate
76% of same-sex couples want to work with LGBT-friendly properties and vendors. In 28 U.S. states and many countries, it’s perfectly legal for vendors to refuse to work with LGBT couples.  That means you need to vet your vendors, train your staff, and even update your forms so they don’t say “Bride” and “Groom” but “Spouse” and “Spouse,” for example.  72% of LGBT couples want vendors who use inclusive language and 69% want vendors to show inclusive photos.

2.  Location matters
The economic opportunity for those states in the U.S. or the 17 countries that offer same-sex wedding is enormous.  If same-sex marriage is legal in your location, research shows that same-sex couples will spend up to three times more on their wedding than in locations where only a civil union or domestic partnership is legal. Many couples also opt for destination weddings, so if you are in a desirable location in a state in the U.S. or a country where same-sex weddings are legal, cast a wide geographic marketing net.

3.  There is a difference between weddings between men and weddings between women 
Lesbians spend up to 15% more on their weddings than gay men  For example, 66% of lesbians bought an engagement ring, vs. only 19% of gay men. The women also tend to stick more traditional aspects of the wedding ceremony and reception.

4.  Be open to non-traditional and creative approaches to the ceremony and reception – especially for gay men
Because same–sex couples don’t necessarily follow wedding tradition, they are often interested in doing things beyond the ordinary to make it more personal.

5.  Same-sex weddings tend to be smaller and more casual, but more expensive 
Same-sex couples spend slightly more on their weddings and more per guest than the $28,400 the average straight couple spends. Because many of the same-sex couples have been together a longer time, they are often older and their parents don’t invite their friends and distant relations.  Also, most same-sex couples  pay for the weddings themselves.

6.  Show you care
Gays and lesbians are a lucrative audience, and tend to influence the general population and be extremely loyal to a brand or company that supports them.  So if you are new to marketing to the LGBT community, it’s important to establish that you not only want their money, but that you genuinely support the LGBT community.   This can be accomplished a number of different ways:  provide equal benefits and protections to LGBT employees; sponsor local (or national) LGBT charities; and offer products or services or packages that would be of special interest to the LGBT audience.

Sources:  Community Marketing Inc., TheKnot.com <http://TheKnot.com> ,  Pew Research, U.S. Congressional Budget Office, 14 Stories

Steve Deitsch is President of Reverberate! Marketing Communications. The company specializes in reaching the LGBT market.  

Tactics to Drive Direct Bookings Vs. OTAs

hotel direct booking

With OTAs (Online Travel Agents) driving over 20 percent of total room bookings, taking commission fees ranging from 10-25 percent, what can a hotel do to drive direct bookings to its website? A survey of 2500 consumers by Software Advice, a source for hospitality system reviews, revealed perks hotels can offer to get direct bookings. Here are the  results of their findings:

Main Takeaways to Drive Direct Bookings

1. A free Room Upgrade
It is the top incentive that will convince customers to book directly. This can be as simple as a better view, balcony or kitchenette.

2. Free Meals Top the List of In-Room Perks
When asked which in-room perk would convince respondents to book directly, 43 percent said they could be swayed with a free room-service meal. Tied for second was an in-room massage and free access to the minibar and snacks (19 percent), followed by free movies on demand (16 percent).

3. Free Food and Drinks Also Outrank Other Amenities
When asked which on-site amenity would convince guests to use direct booking through a hotel website, a vast majority (55 percent) chose free food and drinks.

For many hotels, offering a free meal isn’t new. Incentives like this already exist, and many hotels likely understand their effectiveness. The second most convincing amenity was a free spa package, at 23 percent. Trailing behind are a free fitness class (11 percent) and free golf or tennis reservations (7 percent).

4. A Restaurant Gift Card Is the Most Popular Offsite Perk

45 percent of respondents said they would be convinced to book directly if they received a gift card to a popular restaurant as an incentive over other types of gift cards. Far behind are free tickets to a popular event and free transportation services.

You can read the full report here: http://overnight-success.softwareadvice.com/skip-ota-with-incentives-0214/

Latest Trends: Men, The Rich Opportunity for Luxury Segment

luxury latest trends

New Berluti Shop in New York

 

Most everything comes full circle at some point, so in that sense it’s not surprising that men, once far surpassing women in sales of luxury goods, are back as a major target. And nowhere is this more evident than in luxury retail. LVMH, whom we know is the lead to follow, is investing tens of millions of dollars in the male market segment. This week they’re opening the first New York store of Berluti, the maker of expensive men’s shoes that they’ve turned into a full apparel and accessories line and are showcasing this in their new outpost. This is part of a $137 million investment they’re making according to the Wall Street Journal. During the Great Recession many women who previously traded up become introduced to the likes of H & M, Zara, Forever 21 and others, and realized they could get knockoffs of the latest trends, such as an “it” bag or clothing items, for a lot less. And it’s unlikely they’ll return to shopping as before. Not so men, who, according to the article, are more loyal to brands and care less about the latest trends. Plus, according to Bain & Co., between 2009 and 2013 men’s luxury spending increased 55% compared with 37% for women. So the luxury heavyweights are opening men only stores. In the past year alone, for example, in Miami’s Design District, Dior and Christian Louboutin have opened shops for men only along with a Berluti store.  If fashion leads the way in luxury latest trends, then what can we expect to see  for men in other lifestyle categories like hotels and spas?  Sounds like a real business opportunity.

 

Media trends 2014: celebs and content

Everything seems to constantly change – except the public’s appetite for celebrities. Sometimes it’s just too much, especially when it comes to Justin Bieber these days. But back to the point at hand…..

Celebs images, even “B” list it seems, are front and center in the media who chronicle their every step and, ideally in their eyes, misstep. But that’s nothing new. And now, it seems we’re getting the benefits of their wisdom as magazine columnists as the printed product in particular struggles to keep front and center in the public eye. As recounted in Adweek in article “It’s Written in the Stars”, this month kicked off A list celebs picking up the pen for magazines from Brides and Vanity Fair to Redbook, InStyle and Glamour. 

The lineup includes Drew Barrymore on beauty for Brides, Pippa Middleton on a guide to watching rugby for Vanity Fair, Alison Sweeney for Redbook, Q &A for InStyle with Diane von Furstenberg, and Girls’ Zosia Mamet for Glamour.  Does it build readership? The jury is still out but results are promising. Actress Olivia Wilde’s “The Dos and Don’ts of Turning 30” was among the top 10 most shared stories of 2013 on Glamour.com.

 

Untitled

 

 

 

 

Rent a Slum Dwelling, the Newest Hospitality Niche

 

 

The favela of Rocinho in Rio de Janeiro

The favela of Rocinho in Rio de Janeiro

We’ve written about tourism microniches from danger and grief to scandal and slum tourism. But all of that was about visiting sites – an in and out kind of thing. Now a new company is offering a chance to get up close and personal with Rio de Janeiro’s favelas, promising “cultural immersion, stunning views, and an alternative to expensive and boring hotels”. Fueled by the scarcity of rooms projected during the upcoming World Cup, a new start up called Favela Experience begun by an American is promising “affordable World Cup accommodations” in Rio’s slums. This can range from bunk beds to a private room or entire apartment. Many of the accommodations have WiFi and large screen TV as well as the promise of a favela tour by the owner, and rooftop terraces. Plus, they talk of an opportunity to do good as in helping to supplement the income of the favela dwellers. Part of the profits go to fund a DJ school for neighborhood youth. It’s very easy to believe that we could see the beginning of the gentrification of the favelas, already being snapped up  by investors who see the potential in the dramatic views commanded from the hilltop locations.