NEW YORK—Customer expectations around the brands that they love are both a benefit and a challenge for hospitality leaders today.
While having a brand that resonates with people is great news, John Cohlan, CEO, Margaritaville Holdings, stated it could be a double-edged sword due to brands needing to constantly and consistently. deliver on the emotional expectation that people have about an experience
His comments were made sitting on a panel of experts speaking at the NYU International Hospitality Investment Forum on Tuesday.
Amongst them was Greg Juceam, president and CEO of Extended Stay America, who suggested that clarity over a brand’s ethos and purpose was central to its success. “Customers and hoteliers need to know what they’re signing up for. The clearer the expectations are, the better for everyone,” he noted.
For Barbara Muckermann, CEO of Kempinski Group, stressed that particularly at the luxury end, the brands was what made the difference between practical benefits and emotional benefits, noting that “battling to become a leading brand was worth it, as the prize was having your brand out there as one of the leading brands of the world”.
Meanwhile John Murray, president and CEO of Sonesta International Hotels, stated that brand power lay in delivering guests to your hotels and would help with achieving better outcomes.
Amidst all this, Larry Cuculic, president and CEO, BWH Hotels stressed the importance of a brand delivering revenue and providing support to their hotels so that they’re able to operate effectively and meet guest expectations
“It’s easy to be a brand in good times when there is confidence in the market but in tougher times, hoteliers lean on brands to provide the support they need,” he stressed.
Online Travel Agents
The panel discussed the growing power of online travel agents, and how they fit in with brand strategies.
“OTAs are part of the landscape, some people just prefer to book on those channels,” said Juceam. “However, I wouldn’t say that they are dominating the landscape.”
However, Cuculic noted that OTAs are as powerful as you let them be.
“The value of a brand is contrary to the value of an OTA. They can fill inventory when you haven’t, however, and AI may redefine OTAs and their ability to drive revenue, so we have to be aware of that.”
Added Muckermann: “OTAs become an undisputed large channel when you are a huge brand with rooms to fill. Smaller brands can be more selective and look for higher rates, without the OTA taking its cut.”
Cohlan called OTAs “the opposite of a brand – they are comparative shopping.” He described having some success in using OTAs to drive customers to his own site to ultimately book directly and noted that remained a goal.
Bold Moves
When asked which bold moves each panelist had recently made, Cuculic described how BWH Hotels was exploring a use of AI via its loyalty program. “At a brand level, loyalty programs are about data, and AI is about data. We are embracing it across marketing sales and revenue management – if you have information about your consumers you can market to them in the future.”
He also said that BWH had launched a property insurance program to counter growing costs in this space. “We are the insurers of our properties, which had been a pain point for all of our hotels.” He acknowledged that the move included some risk but had been well received, and that the company would next look at providing in-house insurance for general liability.
Murray highlighted the rollout of a CRM platform in recent months for all its managed hotels, with franchise properties next, which had been an important move for enhancing Sonesta International Hotels’ strategy via technology.
Meanwhile Extended Stay America had been exploring the potential of its newer brands, changing the brand on 150 of its 570 hotels. “We looked at longstanding ESA properties and said that some of these really belong in Premier Suites, and some in Select Suites,” Juceam said. “We didn’t have the possibility before to put them in the right bucket, but we can now build franchise growth in the right way and make sure the hotels we manage are in the right space.”