Mr. Portugal

Sales & Marketing

The New 'H' Word and the Future of Hotels

By Marc Portugal, Director of Marketing, Bortz Group of Companies

So here's a riddle:

• What begins with the letter "H" - provides the opportunity to dine, drink, spa, exercise, network, romance, and maybe fit in a little sleep - and is not a hotel?

• Answer: the new hotel - the hotel of the future - which for the sake of this article I will refer to as a Habitat.

The volatility - or at the very least the unpredictability - of the economy both now and in the coming year(s) is not merely a financial roller coaster. It is also an emotional house of horrors. Will companies be able to afford to travel as much (or at all) to conduct business? Will hotel team members face growing job insecurity? Will people still go out to eat and drink? What is the future of the hotel as we know it? Again - the answer is the Habitat. Say it out loud...it feels good, doesn't it? It has a sense of activity and serenity all at the same time. It's a fun word - and more importantly a word that will make hotels millions of dollars if executed correctly.

Why do people really love hotels?

• It's not the scratchy towels and continental breakfasts.
• It's not the out-dated patterned carpeting in the meeting rooms.
• It's not the travel sized bar soap or the cold bathroom tile.
• It is the opportunity to get away from daily routines.
• It is the opportunity to live out expressions of aspiration.
• It is the opportunity to become a "celebrity" for a day - to the extent that a guest feels the experiences of both extraordinary recognition and paramount service.

A Habitat is the incarnation and delivery of the sentiments of relevant, experiential, and meaningful promises. This is also how a brand is actually defined.

Habitats - the new hotel - pursue emotional markets rather than merely "statistical" markets. Further, habitats focus on interests and rituals of local guests as much if not more so than transient guests. These sensibilities overlap with transient guests - but the local money is in market every single day. Habitats also take the cliche "Live | Work | Play" and practically bring it to life. Habitats create relevant and repetitive magical moments - that can again be engaged with a greatly higher frequency by local guests.

Green is green. If XYZ dollars equal XYZ dollars (with comparable costs to achieve XYZ dollars) - why must those dollars come from rooms or meeting spaces? Why not from a meal, cocktails, a Pilates class or a hot stone massage? Conventionally (no pun intended), hotel revenue generation focuses on room revenues from individual business travelers, group travelers for conventions and trade shows, and leisure travelers. Please note the operative word is 'traveler'. What if people start traveling less, and it lasts for a while?

Solution: make your hotel a Habitat. How? Three basic steps:

• Re-concept existing lobby, food, beverage, and/or (potentially) meeting spaces into lifestyle-driven, experientially branded venues appealing to local residents as much as to transient guests. Examples of these venues would be theme restaurants, bars, ultra-lounges, salons, spas, gyms, and so forth.

• Revive the "spirits" of local guests by hosting activities relevant to their interests and rituals.

• Retain their business, their loyalty and their invaluable word of mouth marketing by instituting communication and CRM programs that keep local guests informed, involved, and inspired. FREE word of mouth from local guests' memorable experiences is invaluable.

I know what you're thinking right about now. Stupid article - this Habitat thing has been done before. I know. The Habitat model is NOT a reinvention of the wheel, per say. We will get back to "reinvention" momentarily.

"Cool" alone not enough for a Habitat to succeed. Habitats do exist today at multiple boutique and lifestyle hotels across the country. Again - not a reinvention. These hotels are not, however, exempt from the inevitable need to reinvent their Habitats, nor from the necessity to deliver the promises of their Habitats. There are many hotels whose reputation and revenues have slipped because they fail to execute the Habitat model effectively, and they are not reacting to the inevitability of change nor to the precariousness of the economy. "Cool" is neither a constant nor a guarantee. Habitats must change with the ebb and flow of guest interests, rituals - and spending habits.

"Value" alone is not enough. Some hotels do offer affordable concepts, venues or activities that resemble a Habitat - but these hotels do not have the time, focus, resources or experience to execute the three R's.

The next question you might be asking: Is this Habitat thing actually affordable to accomplish? That depends on your perspective. Here's an example: Let's say you have $250K to spend on marketing and advertising in Q1 of 2009. You can buy billboards, online banner ads, magazine ads, mailing lists, and so forth to your heart's content. OR - you can spend +/-150K on the build-out of a space in your hotel that becomes a cool sushi restaurant, a rock & roll theme bar, and/or a "spa-on-the-go" with massages, manicures and waxing. Then spend the other +/-100K on labor and marketing. That restaurant or bar space - if conceived, marketed and executed correctly - should gross about $30-40K a week. That's the same as trying to fill 200 rooms a week at $150 a night...and more fun...

What if people don't have the same need or ability to travel in 2009? Are Habitats "recession proof?" Not necessarily - but Locals will still be hungry, thirsty (so to speak...), and in need of some stress relief. Even the circus that is our economy (and the associated politics) will not keep people from pursuing a social life at home. Further, the reputation of your Habitat will travel - again for free, via good old word of mouth - to businesses that still have clients traveling to your market(s) and are seeking lodging recommendations. Except this is not lodging - not anymore. This is staying at a Habitat. Much more fun, and much more profitable.

In summary - local guests have the same attributes as out-of-town guests - except for the fact that the potential frequency of their participation in your property (in one form or another) is much HIGHER. Simply put: create a magical and memorable experiences called "Vacation at Home" - by way of a Habitat.

Extend local guests opportunity, value and status in their locale by way of social, lifestyle or entertainment experiences they are already committing to elsewhere in town. Your Habitat can deliver the promises they are looking for, and deliver the revenue YOU are looking for. Hotels that do not evolve to address the "available" rituals and emotions of local consumers and the associated revenue potentials will miss out.

Marc Portugal launches brands and associated programs – including events, sponsorships, partnerships, and more – with a focus on the mindspace, feelings and rituals of consumers. Marc’s most notable achievement is the brand launch of the Palms Casino Resort in Las Vegas. Marc founded ground-breaking marketing partnerships with Playboy, MTV, Red Bull, and other brands that elevated the Palms to a Boutique Casino Resort, and arguably reinvented standards for lifestyle branding and nightlife-driven entertainment nationwide. Mr. Portugal can be contacted at 312-850-8186 or marcportugal@yahoo.com Extended Bio...

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