This article presents two concepts that could offer opportunities for the industry if hotels are willing to take a few steps away from the traditional business models.
The Catwalk
Concept
A model to capitalise on the
opportunities presented by the proliferation of international brandsHotels should capitalise on a key side effect of the global proliferation of international hotel brands: efforts aimed at building hotel brands have resulted in branding the guest population as well. Guests loyal to a particular hotel brand share identity traits and lifestyle preferences with each other and differ from guests that prefer different brands. Therefore, branded hotels are brick and mortar containers for very distinct, well defined, self-selected captive audiences that could be accessed for marketing purposes. This argument holds true to the extent that hotel brand preference is a reliable indicator of purchasing behavior and brand preference for other products and services.
A branded hotel can take three specific steps to capitalise on this opportunity:
- First, conduct research to identify specific brands of other products and services that appeal to their guests, for example, one such brand could be a particular type of flat-screen television whose design and price tag has been targeted to a specific type of customer.
- Second, explain to the companies identified the benefits of gaining access to their guests; the hotel could build guest market profiles to support the claims that its guests fit the profile of the flat-screen television’s target audience.
- Third, find inconspicuous ways to grant these companies access to the guests, for example, the hotel could agree to display the flat-screen televisions in its rooms so that the guests interact freely with the product, without ever feeling part of a marketing campaign.
The value proposition to the purveyors of goods and services is twofold.
- First, they would enjoy marketing benefits derived from their ability to reach a target audience in an environment that allows this audience direct and free interaction with their products. This opportunity would be especially valuable in instances when new products are tested in the market: the costs of testing the product will be reduced and the ability to reach the desired audience enhanced.
- Second, using hotel space as exhibition space or product-testing ground may also result in direct sales to the guests and indirect sales to audiences reached by word-of-mouth generated by the guests.
- First, they would benefit from exclusive access to tailored products or new concepts that will enhance the value derived from staying in that hotel.
- Second, they could benefit from exclusive discounts.
- Direct benefits would be derived from additional income streams, as hotels can sell the same space many times over during the same time period (that is, the guests would pay the daily rate to gain access to the desired room, interested suppliers of goods and services would pay to gain access to the guests).
- Indirect benefits could be derived from the added prestige of associating the hotel’s brand with other established brands, or from the increase in demand from guests as a result of marketing strategies that exploit the potential discounts offered to them.
The
Sanctuary ConceptA model to capitalise on the
opportunities presented by a particular aspect of globalisation
Hotels should capitalise on the trend of globalisation
by tailoring their product to serve the rapidly growing population of
professionals who relocate across the globe every few years in search of
better career prospects. The demand generated by these professionals is
recession proof, as it can be captured in good times, when people move
to a new region, and bad times, when they move out. Moreover, for a
hotel chain with international reach, this demand can be captured at
both ends, in the city left behind and in the new destination.
The extended stay hotel concept taps
into this market to some degree. However, to fully capitalise on this
pool of demand, hotels should focus on the particular needs of this type
of guest. It is true that guests relocating to a new city require
direct access to hotel rooms because they need accommodation; however,
these guests have a more pressing and important need for access to the
institutions and facilities of an unfamiliar new city. This need
highlights two opportunities, one related to a tailored product hotels
could offer, the other related to the Catwalk opportunities afforded by
catering to this type of guest.
Hotels could tailor
their product to incorporate logistic and ambassadorial functions aimed
at drastically reducing the acclimatisation period of any newcomer by
making the process short and effortless. This value proposition could be
particularly attractive if addressed to corporations, which would then
benefit from a speedier acclimatisation of their new hires in two ways. - Relocation costs would be cut significantly by reducing the time spent in hotel accommodation, searching for permanent accommodation and going through the necessary red tape.
- The companies would also benefit from an employee that can focus on the job immediately instead of spending a long amount of time trying to settle in their new city.
The concierge services of such a
hotel would include assistance with obtaining residencies and driving
licenses and help with finding a permanent residence, purchasing a car,
and so forth. The rooms could be tailored for guests travelling with
many possessions; the common spaces could be designed to increase
networking and interaction between people that share the same
potentially nerve-racking experience of relocating and starting a new
life in a new home.
The
Catwalk opportunities are very significant, as the relocating guests
share basic needs that go beyond issues of lifestyle and consumer
preferences. Virtually all of these guests will need a house and
furniture and most of them need a car. Moreover, there will be a great
immediacy for these needs, which should be satisfied within weeks so
that they can focus on their new job. How valuable would it be for
real-estate agents, furniture distributors, car dealers and other
purveyors of related goods and services to gain direct access to the
guests of a hotel catering exclusively to this demand segment? The
strategic alliances that could be formed to create an effortless
transition period for these guests are worth investigating.
