Project Plaza Part5

Issues and trends

Mega brands (luxury) 1
InterContinental Group
InterContinental Hotels & Resorts (140 hotels; 75 countries)
Hotel Indigo – Atlanta
Marriott International
JW Marriott (24 hotels; N./S. America, SE Asia, Middle East)
Ritz-Carlton (57 hotels [35 city; 22 resorts] - worldwide)
Hilton Hotels Corp/ Hilton Group
Hilton (500 hotels, of which some true 5-star)
Conrad Hotels (19 hotels - JV between both Hiltons; 5 under dev.)
Starwood
St. Regis (11 hotels; 5 under development)
The Luxury Collection (40 hotels)
Hyatt Hotels & Resorts
Grand Hyatt (26 hotels worldwide)
Park Hyatt (24 hotels worldwide; 7 under development)

Mega brands (luxury) 2
Le Méridien Hotels and Resorts
Le Méridien/ Le Royal Méridien (130 hotels; 56 countries [35 city; 45 resorts]
Fairmont Hotels and Resorts
47 hotels [23 city; 24 resorts], mainly N. America
Kempinski Hotels & Resorts
40 hotels & resorts (17 countries in Europe)
30 under development (Global)
Shangri-La
39 Shangri-La hotels [30 city; 9 resorts], mainly Asia and Middle East
Four Seasons
63 hotels in 28 countries [42 city; 21 resorts]
28 hotels under development
Source of ranking information: Hotels’ Corporate 300, July 2004. Based on number of rooms.

Mid tier luxury brands 1
Mandarin Oriental – monolithic with location descriptors
21 hotels (14 countries: 9 SE Asia; 6 N. America; 4 Europe)
Raffles Hotels & Resorts – monolithic and co-branded
12 luxury hotels
Loews Hotels – monolithic and endorsed
17 luxury hotels (N. America)
Taj Hotels, Resorts & Palaces – monolithic with sub-brands
9 Luxury Taj hotels (India); 13 international hotels
Kimpton Group – monolithic (Monaco) and branded
7 Hotel Monacos (US)
24 other 4.5-star hotels
Dusit Thani Hotels – monolithic
10 Dusit hotels; SE Asia [5 city; 5 resorts]

Mid tier luxury brands 2
Oberoi Group – monolithic
20 Oberoi hotels; (India: 11)
Rosewood Hotels & Resorts – strongly-endorsed hotel brands
12 individually-named hotels, endorsed ‘A Rosewood Hotel/Resort’
Global [7 city; 5 resorts]; 4 under development
Regent International Hotels – monolithic
7 Regent hotels; (Asia: 4; Europe: 2; N. America: 1)
6 under development (China, Boston and Florida)
Orient Express – medium-endorsed hotel brands
34 hotels; (Europe: 10; Americas: 12; Africa, AsiaPac: 12)
Rocco Forte Hotels – lightly-endorsed hotel brands
13 hotels. Munich opening soon.
Wyndham Luxury Resorts – strongly-endorsed hotel brands
7 resorts (All USA)

Myriad smaller groups
Dorchester Collection
The Dorchester, Beverly Hills, Plaza Athenee, Meurice, Principle di Savoia
Maybourne Hotel Group
Claridges, Connaught, The Berkeley
Peninsular Group
7 hotels in SE Asia and US. Tokyo opening in 2007.
Langham Hotels
Auckland, Boston, London, Hong Kong (2), Melbourne
Como Hotels & Resorts (Christina Ong)
Metropolitan (London & Bangkok), The Halkin, Parrot Cay, Cocoa Island, Begawan Giri, Uma Paro, Uma Ubud
Morgans Hotel group
Morgans, Royalton, Hudson, Delano, Clift, Mondrian, St Martin’s Lane, Sanderson. 3 under development (NYC: 2; London: 1)

Competitor summary
Extremely crowded market
6 truly global players
Rest strongly focused in region of origin
Many strongly-branded competitors
More than most markets
Scores of fragmented independents; hundreds of individual properties
Competition can come from unlikely sources

Differentiate or die

Design matters

Couture Hotels
Bulgari combined their fashion pull with the management skill of Ritz-Carlton to create Bulgari Hotel & Resorts
Milan property opened May 2004
“ Contemporary luxury in hospitality”
Unique locations, contemporary design, superior service
Bali property opened October 2006
Mountain-top resort at Pecatu village on the Bukit Peninsula
59 luxury villas (300 sqm) with patios and plunge pools
Antonio Citterio architected both projects
Plans for London, Paris, New York, Miami, California

Palazzo Versace

Palazzo Versace
Opened on the Australian Gold Coast in November 2000
$108m project; 250 rooms with sea view
Managed by Kempinski
A luxurious oasis, offering a refined “Baroque” holiday in line with Maison Versace’s philosophy, tastes and lifestyle image
Furnishings and accessories chosen directly from the label’s Home Collection division
Second unit will be in Dubai Creek
JV between Sunland Group/Emirates International Holdings
215 suites, 204 luxury villas
Opening 2009
Paris, Shanghai, Bali possible next developments

Modern Luxury hard to define
“ The new definition of luxury has evolved from grand five star hotels to one-of-a-kind smaller hotels that heighten the five senses.
Luxury travelers are seeking hotels that provide total sensory experiences.”
Christine Gray, Editor, LuxuryTravelMagazine.com (April 2005)

Emerging trends
Five Star Living
Condo hotels are the latest trend in vacation home ownership
Five star hotels joining forces with developers to offer ‘Residences’
Members’ clubs
Home House
Soho House
Fairmont Presidents Club
Take the hotel home with you – www.hoteluxury.com
Women only. 68 rooms at Grange City Hotel, London
Nation clubs – Thailand Elite

Hotels are HIP

Mr and Mrs Smith

Curated Consumption

Where it all comes together
Hotels are the perfect melting pot for many of today’s lifestyle trends; a place to hangout not just to sleep
Hotel bars are back in fashion
Berkeley Blue Bar, Claridges, The Dorchester
Celebrity chefs queue to partner with hotel brands
Alain Ducasse, Gordon Ramsay, Jean-Georges Vongerichten, Nobu
Hotels have their own CD compilations
Hotel Costes, The Berkeley, W Hotels
Hotel FF&E is now for sale on-line
WHotelsTheStore.com

The role of brands and branding

Brands: a strategic asset
Improve financial performance
Premium pricing and increased earnings
Above average ROCE
Reduce risk
Protect against swings in the economic environment
Create competitive advantage
Raise entry barriers for competitors
Help to attract opportunities, talent and better partners
Defence against hostile takeovers
Make corporate strategy visible
A symbol that signals what the company stands for
A lens for decision-making and innovation

Benefits for hotel groups
Driving earnings
Brands command a price premium
Clear customer proposition for a precise target
Luring guests
Brands create visibility for the product
Why sell to a satisfied customer twice?
Justifying investment
Marketing efforts are leveraged across the portfolio
Publicity for one hotel benefits the whole collection
Attracting opportunities
Will help you to expand the business more quickly
Owners believe in the power of brands

Driving earnings
“ Hilton Group said earnings climbed to £144.3m compared with £108.8m during the first half. Analysts agreed that Hilton Group’s brands helped it beat expectations . Hilton remains a strong brand for business and leisure travellers, even as the hotel market in Europe slows down.” 2001

Luring guests
“ Hilton hotels beat expectations because they used their brand to lure guests to their properties.”
Mark Abraham, Bear Stearns sector analyst

Justifying investment “ Talks with the owners of the 100 Le Meridien hotels under management contract have suggested they are prepared to invest£500m in the brand . That will be in addition to the £360m already pledged by Principal Finance Group.” 2001

Attracting opportunities
“ We are confident about our ability to realize our growth objectives over the longer term due to the quality of our new unit growth, and the quantity of new opportunities that the Four Seasons brand is attracting….”
Isadore Sharpe, Founder

Segmenting Segmenting markets

Differentiating Badge engineering

Attributes and values Functional & Physical Technology Quality = German engineering Performance Exclusivity = Luxury brand Emotional & Psychological The Ultimate Driving Machine

“ In an era of wide consumer choice among roughly comparable products, marketers have learned to think of their brands not so much as a list of features or a logo or an advertising tag line, but as a relationship with the consumer .”
Business Week

A lifelong relationship
BMW’s brand and product range is a text book case study in how to transcend isolated transactions…
My first BMW Yuppie Family Empty nesters

More than logos and flags

Three ingredients of contemporary branding: People, celebrity endorsement, no product

Our proposal

Seven steps to success
Business strategy
Corporate vision & mission. What’s your ambition?
Statement of identity (self-analysis)
Who we are, What we do, How we do it
Brand promise
Attributes and values defined and expressed as a proposition
Brand architecture
Structure of the product brands within the portfolio
Naming & visual identity
Naming strategy, verbal and visual identity
Operationalisation of the promise
Turning the promise into a valuable customer experience
Brand management
Sustaining the promise and maintaining the experience

Programme - Stage One
Discovery – Look, listen and learn
Project kick-off
Review of existing planning and strategy work
Stakeholder ‘soundings’ (internal & external)
Product immersion & familiarisation
Market review, competitor analysis & other desk research
Consumer research (tbc)
Communications audit (direct and indirect competitors)
Duration: 6-8 weeks

Programme - Stage Two
Definition & Design concept – sorting inputs, shaping strategy
Clarification/confirmation of the business strategy
Brand positioning
Attributes and Values
Benefits, attitude & personality
Essence
Brand promise
Brand architecture
Naming
Initial design concepts
Consumer research (tbc)
Duration: 6 weeks

Programme - Stage Three
Design & operational development
Finalisation of design concepts
Sign-off and design freeze
Internal communications planning
Stakeholder presentations
Delivering the promise - operational delivery planning
Duration: 6 weeks

Programme - Stage Four
Delivery: advocacy and action
Completion of brand identity design
Communications plan including launch
Implementation of the brand
Internal alignment
Implementation of Branded Operating Procedures
Duration: 12 weeks

Project costs
Stage One - Discovery
Fees £75,000
Stage Two - Definition & design concept
Fees £136,000
Stage Three - Design and operational development
Fees £95,000
Stage Four - Delivery
Fees £30,000 Total fees £336,000 Outside costs £33,600 Grand total £369,600

Next steps
Q&A
CS Partners to review formal proposal
Decision and appointment
Commence project 1 Dec 07 or New Year

Project Plaza Part5

by Nobby285

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Project Plaza Part5 Presentation Transcript