Mr. Donaldson

Sales & Marketing

To Brand or Not To Brand

By Edward Donaldson, VP Marketing, Small Luxury Hotels of the World

The larger question of critical importance today, however, is the relationship of brand value. In reality, consumers value branded companies. A walk through any major shopping area will prove this. Brands deliver major impact to a business as they will most often bring loyal customers with previous positive experiences. For independent hoteliers, this can make a huge difference to being successful or not when competing in a market place.

In a chaotic world with fragile customer loyalties and fast shifting market preferences, brands such as Small Luxury Hotels of the World that work exclusively with the independent hotelier, whose focus is on utilizing brand awareness and put both energy and effort into driving it with dedicated customer support allows the independent hotel members continue to flourish and grow. It is also important that participants in the brand utilize every available opportunity to ensure complete capitalization is taken advantage of.

One key element that has changed over the course of the years is that the customer has become the primary asset. The hotel has become part of the distribution system that delivers branded products and services to the customer. In the global market, the intangible brand becomes a very tangible product and the brand becomes a focus; a rallying point in the marketplace and an identifiable choice for both customers and members.

Branded products and services, then, will become an even more important part of the marketing landscape in the future. Brands that control the branding message will be well-rewarded by higher than average returns where customer focus and continuity are in place. Some companies that own various brands attempted to market all of their sub-brands in an integrated message. There has been a shift away from that as in many cases it became confusing to consumers and difficult to focus on segmentation effectively. Although that strategy has changed, there is still a perceived impact for the stronger identity to support the weaker "sisters".

Brands, to be effective, must be promoted through to the consumers. For marketing organizations such as Small Luxury Hotels of the World one of the key elements for success is the knowledge of the brands' consumers. Once the information about who is buying a product is known, a targeted marketing plan can be executed to attract the clientele. Marketing is also targeted at the potential clientele. In the luxury sector, there is a great deal of "see and be seen" cache for those with aspirational wishes. In all branding exercises, there is a value assigned by the consumer. For the independent hotelier, being associated with the correct brand allows them the opportunity to ensure they are available for the correct consumer at the right time.

Advertising in the media has become an expensive proposition as the ability to get a message heard increases and the channels of distribution continue to expand. Additionally, the revolution in the messaging field changes daily and will continue to evolve. As a result, brands will focus more on direct and highly targeted marketing to identified consumers. This, of course, will need to be driven by sophisticated customer tracking systems that tie into the way in which reservations are made and customers arrive and depart from the hotels that they stay in.

But brand loyalty can be extremely difficult to achieve and thus for some brands, loyalty has to be bought. For many years, nothing was more symptomatic of this proposition than the frequent traveler program. Similar to the same type of programs develop by the airline industry, larger, multi national brands developed point reward systems for this purpose. In both the airline industry and hotel sector, these programs are viewed by many as an expensive luxury that cannot be afforded. Consumers tend to view these programs with skepticism as the redemption thresholds are regularly changed. In spite of this, we continue to see vast sums of money being spent in support of such programs.

Product consistency, as a result, remains one of the most critical issues and a key component to brands in the hotel industry. Many "hard" brands have been able to reached a critical mass and have been able to mandate the product with little difficulty. Brands that are involved with newly constructed properties have the ability to dictate the brand specifications. Other brands that rely on independently owned and operated hotels with often times older facilities have frequently had difficulties in ensuring their message is understood. Balancing the demands for growth in a global brand-oriented marketplace with the desire for product integrity and consistency will always be a tough challenge.

One of the areas that have "soft" brands have been able to excel in to have both a strong development environment as well as customer retention is concerning quality control and stringent inspection policies. This allows for these types of brands to demand adherence to a core mission satisfying and exceeding customer expectations concerning the product they buy.

Brands are an integral part to the success of any business. For the independent hotelier, it can be a winning proposition for all involved and a growing and lasting relationship that will reap ongoing benefits.

Ed started his career with Servico, Inc as Director of Sales for several franchised Hilton properties. After a move to New York he became Director of Sales for The Royalton. Ed also served in regional positions with Pegasus Solutions. He has headed up the sales efforts for Summit Hotels, Sterling Hotels, Golden Tulip Worldwide and Rosewood Hotels. Ed has served as Regional Director, UK for TravelCLICK and VP of Sales for hubX, recently purchased by Pegasus. Ed currently is VP, Marketing, The Americas for Small Luxury Hotels of the World. Mr. Donaldson can be contacted at 212-953-2064 or ed.donaldson@slh.com Extended Bio...

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