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Project Plaza Part5


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Project Plaza Part5

  1. 1. Issues and trends
  2. 2. Mega brands (luxury) 1 <ul><li>InterContinental Group </li></ul><ul><ul><li>InterContinental Hotels & Resorts (140 hotels; 75 countries) </li></ul></ul><ul><ul><li>Hotel Indigo – Atlanta </li></ul></ul><ul><li>Marriott International </li></ul><ul><ul><li>JW Marriott (24 hotels; N./S. America, SE Asia, Middle East) </li></ul></ul><ul><ul><li>Ritz-Carlton (57 hotels [35 city; 22 resorts] - worldwide) </li></ul></ul><ul><li>Hilton Hotels Corp/ Hilton Group </li></ul><ul><ul><li>Hilton (500 hotels, of which some true 5-star) </li></ul></ul><ul><ul><li>Conrad Hotels (19 hotels - JV between both Hiltons; 5 under dev.) </li></ul></ul><ul><li>Starwood </li></ul><ul><ul><li>St. Regis (11 hotels; 5 under development) </li></ul></ul><ul><ul><li>The Luxury Collection (40 hotels) </li></ul></ul><ul><li>Hyatt Hotels & Resorts </li></ul><ul><ul><li>Grand Hyatt (26 hotels worldwide) </li></ul></ul><ul><ul><li>Park Hyatt (24 hotels worldwide; 7 under development) </li></ul></ul>
  3. 3. Mega brands (luxury) 2 <ul><li>Le Méridien Hotels and Resorts </li></ul><ul><ul><li>Le Méridien/ Le Royal Méridien (130 hotels; 56 countries [35 city; 45 resorts] </li></ul></ul><ul><li>Fairmont Hotels and Resorts </li></ul><ul><ul><li>47 hotels [23 city; 24 resorts], mainly N. America </li></ul></ul><ul><li>Kempinski Hotels & Resorts </li></ul><ul><ul><li>40 hotels & resorts (17 countries in Europe) </li></ul></ul><ul><ul><li>30 under development (Global) </li></ul></ul><ul><li>Shangri-La </li></ul><ul><ul><li>39 Shangri-La hotels [30 city; 9 resorts], mainly Asia and Middle East </li></ul></ul><ul><li>Four Seasons </li></ul><ul><ul><li>63 hotels in 28 countries [42 city; 21 resorts] </li></ul></ul><ul><ul><li>28 hotels under development </li></ul></ul>Source of ranking information: Hotels’ Corporate 300, July 2004. Based on number of rooms.
  4. 4. Mid tier luxury brands 1 <ul><li>Mandarin Oriental – monolithic with location descriptors </li></ul><ul><ul><li>21 hotels (14 countries: 9 SE Asia; 6 N. America; 4 Europe) </li></ul></ul><ul><li>Raffles Hotels & Resorts – monolithic and co-branded </li></ul><ul><ul><li>12 luxury hotels </li></ul></ul><ul><li>Loews Hotels – monolithic and endorsed </li></ul><ul><ul><li>17 luxury hotels (N. America) </li></ul></ul><ul><li>Taj Hotels, Resorts & Palaces – monolithic with sub-brands </li></ul><ul><ul><li>9 Luxury Taj hotels (India); 13 international hotels </li></ul></ul><ul><li>Kimpton Group – monolithic (Monaco) and branded </li></ul><ul><ul><li>7 Hotel Monacos (US) </li></ul></ul><ul><ul><li>24 other 4.5-star hotels </li></ul></ul><ul><li>Dusit Thani Hotels – monolithic </li></ul><ul><ul><li>10 Dusit hotels; SE Asia [5 city; 5 resorts] </li></ul></ul>
  5. 5. Mid tier luxury brands 2 <ul><li>Oberoi Group – monolithic </li></ul><ul><ul><li>20 Oberoi hotels; (India: 11) </li></ul></ul><ul><li>Rosewood Hotels & Resorts – strongly-endorsed hotel brands </li></ul><ul><ul><li>12 individually-named hotels, endorsed ‘A Rosewood Hotel/Resort’ </li></ul></ul><ul><ul><li>Global [7 city; 5 resorts]; 4 under development </li></ul></ul><ul><li>Regent International Hotels – monolithic </li></ul><ul><ul><li>7 Regent hotels; (Asia: 4; Europe: 2; N. America: 1) </li></ul></ul><ul><ul><li>6 under development (China, Boston and Florida) </li></ul></ul><ul><li>Orient Express – medium-endorsed hotel brands </li></ul><ul><ul><li>34 hotels; (Europe: 10; Americas: 12; Africa, AsiaPac: 12) </li></ul></ul><ul><li>Rocco Forte Hotels – lightly-endorsed hotel brands </li></ul><ul><ul><li>13 hotels. Munich opening soon. </li></ul></ul><ul><li>Wyndham Luxury Resorts – strongly-endorsed hotel brands </li></ul><ul><ul><li>7 resorts (All USA) </li></ul></ul>
  6. 6. Myriad smaller groups <ul><li>Dorchester Collection </li></ul><ul><ul><li>The Dorchester, Beverly Hills, Plaza Athenee, Meurice, Principle di Savoia </li></ul></ul><ul><li>Maybourne Hotel Group </li></ul><ul><ul><li>Claridges, Connaught, The Berkeley </li></ul></ul><ul><li>Peninsular Group </li></ul><ul><ul><li>7 hotels in SE Asia and US. Tokyo opening in 2007. </li></ul></ul><ul><li>Langham Hotels </li></ul><ul><ul><li>Auckland, Boston, London, Hong Kong (2), Melbourne </li></ul></ul><ul><li>Como Hotels & Resorts (Christina Ong) </li></ul><ul><ul><li>Metropolitan (London & Bangkok), The Halkin, Parrot Cay, Cocoa Island, Begawan Giri, Uma Paro, Uma Ubud </li></ul></ul><ul><li>Morgans Hotel group </li></ul><ul><ul><li>Morgans, Royalton, Hudson, Delano, Clift, Mondrian, St Martin’s Lane, Sanderson. 3 under development (NYC: 2; London: 1) </li></ul></ul>
  7. 7. Competitor summary <ul><li>Extremely crowded market </li></ul><ul><li>6 truly global players </li></ul><ul><ul><li>Rest strongly focused in region of origin </li></ul></ul><ul><li>Many strongly-branded competitors </li></ul><ul><ul><li>More than most markets </li></ul></ul><ul><li>Scores of fragmented independents; hundreds of individual properties </li></ul><ul><li>Competition can come from unlikely sources </li></ul>
  8. 9. Differentiate or die
  9. 10. Design matters
  10. 13. Couture Hotels <ul><li>Bulgari combined their fashion pull with the management skill of Ritz-Carlton to create Bulgari Hotel & Resorts </li></ul><ul><li>Milan property opened May 2004 </li></ul><ul><ul><li>“ Contemporary luxury in hospitality” </li></ul></ul><ul><ul><li>Unique locations, contemporary design, superior service </li></ul></ul><ul><li>Bali property opened October 2006 </li></ul><ul><ul><li>Mountain-top resort at Pecatu village on the Bukit Peninsula </li></ul></ul><ul><ul><li>59 luxury villas (300 sqm) with patios and plunge pools </li></ul></ul><ul><li>Antonio Citterio architected both projects </li></ul><ul><li>Plans for London, Paris, New York, Miami, California </li></ul>
  11. 14. Palazzo Versace
  12. 15. Palazzo Versace <ul><li>Opened on the Australian Gold Coast in November 2000 </li></ul><ul><ul><li>$108m project; 250 rooms with sea view </li></ul></ul><ul><ul><li>Managed by Kempinski </li></ul></ul><ul><li>A luxurious oasis, offering a refined “Baroque” holiday in line with Maison Versace’s philosophy, tastes and lifestyle image </li></ul><ul><li>Furnishings and accessories chosen directly from the label’s Home Collection division </li></ul><ul><li>Second unit will be in Dubai Creek </li></ul><ul><ul><li>JV between Sunland Group/Emirates International Holdings </li></ul></ul><ul><ul><li>215 suites, 204 luxury villas </li></ul></ul><ul><ul><li>Opening 2009 </li></ul></ul><ul><li>Paris, Shanghai, Bali possible next developments </li></ul>
  13. 16. Modern Luxury hard to define <ul><li>“ The new definition of luxury has evolved from grand five star hotels to one-of-a-kind smaller hotels that heighten the five senses. </li></ul><ul><li>Luxury travelers are seeking hotels that provide total sensory experiences.” </li></ul><ul><li>Christine Gray, Editor, (April 2005) </li></ul>
  14. 17. Emerging trends <ul><li>Five Star Living </li></ul><ul><ul><li>Condo hotels are the latest trend in vacation home ownership </li></ul></ul><ul><ul><li>Five star hotels joining forces with developers to offer ‘Residences’ </li></ul></ul><ul><li>Members’ clubs </li></ul><ul><ul><li>Home House </li></ul></ul><ul><ul><li>Soho House </li></ul></ul><ul><ul><li>Fairmont Presidents Club </li></ul></ul><ul><li>Take the hotel home with you – </li></ul><ul><li>Women only. 68 rooms at Grange City Hotel, London </li></ul><ul><li>Nation clubs – Thailand Elite </li></ul>
  15. 18. Hotels are HIP
  16. 19. Mr and Mrs Smith
  17. 21. Curated Consumption
  18. 24. Where it all comes together <ul><li>Hotels are the perfect melting pot for many of today’s lifestyle trends; a place to hangout not just to sleep </li></ul><ul><li>Hotel bars are back in fashion </li></ul><ul><ul><li>Berkeley Blue Bar, Claridges, The Dorchester </li></ul></ul><ul><li>Celebrity chefs queue to partner with hotel brands </li></ul><ul><ul><li>Alain Ducasse, Gordon Ramsay, Jean-Georges Vongerichten, Nobu </li></ul></ul><ul><li>Hotels have their own CD compilations </li></ul><ul><ul><li>Hotel Costes, The Berkeley, W Hotels </li></ul></ul><ul><li>Hotel FF&E is now for sale on-line </li></ul><ul><ul><li> </li></ul></ul>
  19. 26. The role of brands and branding
  20. 27. Brands: a strategic asset <ul><li>Improve financial performance </li></ul><ul><ul><li>Premium pricing and increased earnings </li></ul></ul><ul><ul><li>Above average ROCE </li></ul></ul><ul><li>Reduce risk </li></ul><ul><ul><li>Protect against swings in the economic environment </li></ul></ul><ul><li>Create competitive advantage </li></ul><ul><ul><li>Raise entry barriers for competitors </li></ul></ul><ul><ul><li>Help to attract opportunities, talent and better partners </li></ul></ul><ul><ul><li>Defence against hostile takeovers </li></ul></ul><ul><li>Make corporate strategy visible </li></ul><ul><ul><li>A symbol that signals what the company stands for </li></ul></ul><ul><ul><li>A lens for decision-making and innovation </li></ul></ul>
  21. 28. Benefits for hotel groups <ul><li>Driving earnings </li></ul><ul><ul><li>Brands command a price premium </li></ul></ul><ul><ul><li>Clear customer proposition for a precise target </li></ul></ul><ul><li>Luring guests </li></ul><ul><ul><li>Brands create visibility for the product </li></ul></ul><ul><ul><li>Why sell to a satisfied customer twice? </li></ul></ul><ul><li>Justifying investment </li></ul><ul><ul><li>Marketing efforts are leveraged across the portfolio </li></ul></ul><ul><ul><li>Publicity for one hotel benefits the whole collection </li></ul></ul><ul><li>Attracting opportunities </li></ul><ul><ul><li>Will help you to expand the business more quickly </li></ul></ul><ul><ul><li>Owners believe in the power of brands </li></ul></ul>
  22. 29. Driving earnings <ul><li>“ 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 </li></ul>
  23. 30. Luring guests <ul><li>“ Hilton hotels beat expectations because they used their brand to lure guests to their properties.” </li></ul><ul><li>Mark Abraham, Bear Stearns sector analyst </li></ul>
  24. 31. 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
  25. 32. Attracting opportunities <ul><li>“ 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….” </li></ul><ul><li>Isadore Sharpe, Founder </li></ul>
  26. 33. Segmenting Segmenting markets
  27. 34. Differentiating Badge engineering
  28. 35. Attributes and values Functional & Physical Technology Quality = German engineering Performance Exclusivity = Luxury brand Emotional & Psychological The Ultimate Driving Machine
  29. 38. <ul><li>“ 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 .” </li></ul><ul><li> Business Week </li></ul>
  30. 39. A lifelong relationship <ul><li>BMW’s brand and product range is a text book case study in how to transcend isolated transactions… </li></ul>My first BMW Yuppie Family Empty nesters
  31. 40. More than logos and flags
  32. 41. Three ingredients of contemporary branding: People, celebrity endorsement, no product
  33. 42. Our proposal
  34. 43. Seven steps to success <ul><li>Business strategy </li></ul><ul><ul><li>Corporate vision & mission. What’s your ambition? </li></ul></ul><ul><li>Statement of identity (self-analysis) </li></ul><ul><ul><li>Who we are, What we do, How we do it </li></ul></ul><ul><li>Brand promise </li></ul><ul><ul><li>Attributes and values defined and expressed as a proposition </li></ul></ul><ul><li>Brand architecture </li></ul><ul><ul><li>Structure of the product brands within the portfolio </li></ul></ul><ul><li>Naming & visual identity </li></ul><ul><ul><li>Naming strategy, verbal and visual identity </li></ul></ul><ul><li>Operationalisation of the promise </li></ul><ul><ul><li>Turning the promise into a valuable customer experience </li></ul></ul><ul><li>Brand management </li></ul><ul><ul><li>Sustaining the promise and maintaining the experience </li></ul></ul>
  35. 44. Programme - Stage One <ul><li>Discovery – Look, listen and learn </li></ul><ul><ul><li>Project kick-off </li></ul></ul><ul><ul><li>Review of existing planning and strategy work </li></ul></ul><ul><ul><li>Stakeholder ‘soundings’ (internal & external) </li></ul></ul><ul><ul><li>Product immersion & familiarisation </li></ul></ul><ul><ul><li>Market review, competitor analysis & other desk research </li></ul></ul><ul><ul><li>Consumer research (tbc) </li></ul></ul><ul><ul><li>Communications audit (direct and indirect competitors) </li></ul></ul><ul><ul><li>Duration: 6-8 weeks </li></ul></ul>
  36. 45. Programme - Stage Two <ul><li>Definition & Design concept – sorting inputs, shaping strategy </li></ul><ul><ul><li>Clarification/confirmation of the business strategy </li></ul></ul><ul><ul><li>Brand positioning </li></ul></ul><ul><ul><ul><li>Attributes and Values </li></ul></ul></ul><ul><ul><ul><li>Benefits, attitude & personality </li></ul></ul></ul><ul><ul><ul><li>Essence </li></ul></ul></ul><ul><ul><li>Brand promise </li></ul></ul><ul><ul><li>Brand architecture </li></ul></ul><ul><ul><li>Naming </li></ul></ul><ul><ul><li>Initial design concepts </li></ul></ul><ul><ul><li>Consumer research (tbc) </li></ul></ul><ul><ul><li>Duration: 6 weeks </li></ul></ul>
  37. 46. Programme - Stage Three <ul><li>Design & operational development </li></ul><ul><ul><li>Finalisation of design concepts </li></ul></ul><ul><ul><li>Sign-off and design freeze </li></ul></ul><ul><ul><li>Internal communications planning </li></ul></ul><ul><ul><li>Stakeholder presentations </li></ul></ul><ul><ul><li>Delivering the promise - operational delivery planning </li></ul></ul><ul><ul><li>Duration: 6 weeks </li></ul></ul>
  38. 47. Programme - Stage Four <ul><li>Delivery: advocacy and action </li></ul><ul><ul><li>Completion of brand identity design </li></ul></ul><ul><ul><li>Communications plan including launch </li></ul></ul><ul><ul><li>Implementation of the brand </li></ul></ul><ul><ul><li>Internal alignment </li></ul></ul><ul><ul><li>Implementation of Branded Operating Procedures </li></ul></ul><ul><ul><li>Duration: 12 weeks </li></ul></ul>
  39. 48. Project costs <ul><li>Stage One - Discovery </li></ul><ul><ul><li>Fees £75,000 </li></ul></ul><ul><li>Stage Two - Definition & design concept </li></ul><ul><ul><li>Fees £136,000 </li></ul></ul><ul><li>Stage Three - Design and operational development </li></ul><ul><ul><li>Fees £95,000 </li></ul></ul><ul><li>Stage Four - Delivery </li></ul><ul><ul><li>Fees £30,000 Total fees £336,000 Outside costs £33,600 Grand total £369,600 </li></ul></ul>
  40. 49. Next steps <ul><li>Q&A </li></ul><ul><li>CS Partners to review formal proposal </li></ul><ul><li>Decision and appointment </li></ul><ul><li>Commence project 1 Dec 07 or New Year </li></ul>