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| Lobby and lounge at the Cambria Suites in Akron, Ohio. |
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Developing a new hotel brand requires years of research and planning. But there are two basic questions every company starts with: “Is there a specific traveler this brand will serve?” and “Is there room for another brand in this niche or segment?”
Three parent companies that recently launched new brands and now are opening properties and marketing the new brands all said the initial market research done years ago was most important.
“We started brainstorming and determined we needed to enter the select-service market to complement Four Points [by Sheraton],” said Brian McGuinness, global SVP of specialty select brands at Starwood Hotels and Resorts Worldwide, who helped develop and market the aloft and Element brands. “We did both qualitative and quantitative research. We e-mailed thousands of travelers and did research in 12 key markets. We determined that our competition wasn’t driving the select-service experience home, specifically from the lifestyle perspective, and that we could bring style for a steal.”
Choice Hotels International, developers of the Cambria Suites brand, researched segments that already were successful and determined how the generational shift of travelers would affect what was on the market. It was determined that Courtyard by Marriott and Hilton Garden Inn were leaders in the upscale segment, a
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| All Cambria Suites properties have a similar exterior, but some of the interior design can be customized to fit the local area. |
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market Choice hadn’t tapped at that time.
“Courtyard and HGI were designed at a time when the majority of travelers were baby boomers,” said William Edmundson, VP of brand management and strategy for Cambria Suites. “We were seeing a generational shift coming down the pipeline with the millennials.”
Besides the end-user—the guest—Edmundson said Choice had an obligation to provide its franchisees with a platform to grow and increase revenues.
“Franchisees who had worked with Choice in the past were making money and moving up segments,” he said. “We didn’t have anywhere for them to go. We needed to give them an offering—another more modern option in this segment.”
For InterContinental Hotels Group, research was so important in the brand-building process that it couldn’t be rushed. They set out to develop a branded boutique property in 2000 and didn’t announce Hotel Indigo until 2004.
Most of the time was spent learning about the consumer and trying to better understand where there were opportunities to attract a new guest, said Gayle Jett, director of brand management for Hotel Indigo.
“Are there certain attitudes or behaviors that people have and is there an opportunity to create a brand that would be somewhat differentiated?” she asked. “That’s exactly what we did—we looked outside of the industry first.”
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| A guestroom in the Hotel Indigo London-Paddington. |
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Jett said Indigo’s development team looked at retailers such as Starbucks, which was able to move a consumer from paying 40 cents for a cup of coffee to $4 for a cup of coffee by providing them with an experience—a more stylish place to consume coffee.
“That was our biggest learning curve,” she said. “We were trying to transfer some of those behaviors and, with that research, we uncovered there was no other hotel company offering that experience.”
Marketing to the guest
After each of these brands determined their targeted niche and began building and opening properties, the goals shifted to marketing reservation bookings.
For Cambria, which will have nine properties open by the end of 2008, advertising and marketing dollars are spent in non-traditional ways.
“Cambria is not in TV ads,” Edmundson said. “We’re part of Choice Privileges, but it’s just different people we’re going after. We have the opportunity to use our national sales team and national reservations system, but our guest is on the Internet, so we’ve got be on the Internet. We need to take advantage of social marketing and make it easy to book through the Cambria website as well as the Choice website.”
Edmundson said a new brand must pay specific attention to local markets. The early Cambria properties are in suburban areas, which Edmundson said are the more affordable markets to go to, but urban markets are in Cambria’s future. For instance, a Cambria across from Madison Square Garden in New York City will break ground before the year’s end, and Choice recently signed a franchise agreement for a Cambria in downtown Los Angeles.
“Backyard selling is important,” he said. “We decided we’d have a suite that we would build out in different areas. We built a full-sized suite in the Boise [Idaho] airport that would give us quick exposure to travelers that are coming into that market. ... We put emphasis on local markets.”
Since the first Hotel Indigo opened its doors in 2005, 19 additional properties have opened and plans to go international have firmed. Jett said the Indigo team is being selective in where they build.
“Because Indigo is more of a boutique product, it’s more of a difficult process to build one,” she said. “It’s not a cookie cutter design and it does take a sophisticated developer and franchisee to engage in the Indigo brand.”
To market reservations and business guests, Indigo relies heavily on direct sales.
“Our brand managers are field based and work hand in hand with the hotels, making sales calls with them,” Jett said. “[Brand managers] are showing them how to sell and market a brand that is differentiated. We spend a lot of time getting the hotels to engage in their neighborhood.
“It’s easy to be a national brand—we’ve got that powerhouse. What makes us different is that neighborhood approach.”
For Starwood, particularly aloft (14 properties open) and Element (1 property open), online advertising is a high priority. McGuinness said increasing search engine optimization and keyword search accuracy is “amazingly positive.”
“We know exactly what we’re spending it on and whether it materialized into a reservation,” he said. “That’s where we focus our marketing dollars.”
McGuinness said Starwood has pulled out of advertising in traditional media outlets because they see challenges in finding a direct correlation to driving revenue.
Similar to Indigo’s tactics, marketing teams at aloft and Element drum up business by generating awareness around the property. “Neighboring businesses are critical to us,” McGuinness said. “If big corporations are down the road, we’re in those offices regularly. That’s critical to us. We watch our feeder markets and see where most of the reservations are coming from.”
jfreed@questex.com
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