As an advanced marketing student, we spent 3 months (September-November 2016) working with the marketing team the Palmer House Hilton Chicago to figure out ways to solve the challenges they were facing. My team focused on ways to ensure Palmer House Hilton's relevancy in the accommodation market and competing with newer, more contemporary hotels.

1. THE PALMER HOUSE
HILTONDePaul University
Marketing 359 Thursday Evening
November 10, 2016

2. • 32 Students were split between 8 teams.
• Dean Lane, General Manager, Gene Hare, Director of
Sales and Christine Smith, Assistant Director of
Marketing met with our class at the Palmer House
on September 22nd, (3rd week of class) to discuss
and identify 8 areas that needed attention
(Challenges).
• Students had 6 weeks to work on this “consulting
project” that represents 25% of their grade for the
class.
• Each group met regularly and developed options
from a marketing perspective.
• Students contributed to all 8 areas throughout the
class.
• Each team came up with a list of alternatives and
recommendations for the Palmer House Hilton.
BACKGROUND – FORMAT FOR
THE ANALYSIS
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3. • Built in 1871; rebuilt in 1873
• 18 languages spoken at the PHH
• People Based Business - Moment of Truth - Only get one chance with a customer
• 1641 rooms
• 750-800 employees (team members)
• 85-90% unionized
• SWOT - via Trip Advisor
• Most mentioned - Lobby, "an aspirational sense of arrival"
• Largest Business Travel Group - IBM
• Gene and Christine handle sales and marketing for 6 Hilton hotels but are based
at the PHH
• Rolling out mobile downloadable scan for room key - no need to stop at front
desk to check in
• Christine is a big social media person - Stop Clicking Around campaign is
currently running
• Uses a PR Company out of New York - does a lot of Press Releases - Built great
relationships with the press
• $135M in Revenue/$50-52M Gross Operating Revenue, last year
• Competitive Set of hotels - Hyatt, Sheraton, Marriott, Hilton Chicago, Westin
FACTS LEARNED ABOUT THE
PALMER HOUSE
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4. 1.) Bringing Back Music/Entertainment in the Empire Room
2.) Air B&B - The New Alternative to Hotels - How does PHH compete in peak and non-
peak times?
3.) How does the PHH stay relevant and compete against newer, more contemporary
hotels?
4.) Changing the Lockwood Restaurant stigma? Why should guests choose Lockwood
over the 65+ restaurant alternatives within a 2-3 block radius?
5.) New Years Eve - Saying Goodbye to the plastic cups. How do we create a 25+
elegant event that attracts a different/more profitable demographic.
6.) Driving for Jan-March stays at the PHH.
7.) Extending Business travelers stays - before or after their business stay - targeting
Sunday and weekend stays.
8.) Making better use of the 7th floor breakout rooms. Finding uses and markets for
this floor.
THE CHALLENGES
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5. • Background
In 1933 the luxurious empire room was converted
into an entertainment venue and hosted many world
class performers.
Frank Sinatra, Judy Garland, Ella Fitzgerald, Harry
Belafonte, Louis Armstrong, and Liberace have all
graced the Empire Room.
Situational Analysis
Eighty years later, events hosted here continue to pay
homage to it’s dazzling past.
Post-war era entertainment has changed
tremendously and the challenge of staying relevant is
more prevalent than ever.
Performers must be cohesive to the Palmer House
identity and the crowd it draws must reflect positively.
CHALLENGE # 1 - THE EMPIRE
ROOM
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6. • Competitive Landscape
Consumption habits for entertainment has changed
dramatically and evolved with media.
Other notable Chicago concert venues include:
• Chicago Symphony Center
• Chicago Theatre
• House of Blues
Palmer House’s venue is unique in that it does not share the
same properties as a traditional venue. We have concluded
that it is so distinct that it does not compete with other local
venues.
In addition to the lavish décor, it has the advantage of having
tables and providing intimacy. Most other concert venues have
immobile single seating facing the stage.
THE EMPIRE ROOM
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7. • Born and raised in Chicago
• Went to St. Ignatius College Prep
• Diverse Crowd
• Targeted Towards Millennials
• But Would Draw in Parents and Other Crowds As
Well
• Booking Cost
• $50,000
THE EMPIRE ROOMTHE EMPIRE ROOM
JOHN MULANEY
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8. • Historical Figure
• Tied to Chicago Roots
• Fantastic Story Teller
• Highly Regarded/Award Winning Artist
• Grammy Hall of Fame Member
• AMA Artist of the Year
• Etc.
• Possible Charity Tie with American Cancer Society
• Battled Cancer in 1998
• Lost Manager of 40+ Years to Cancer in 2015
• Booking Cost:
• $25,000-$39,999
THE EMPIRE ROOM
JOHN PRINE
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9. • Still a Significant Following
THE EMPIRE ROOM
JOHN PRINE
• Seating Map from Chicago Theatre for November 4,
2016
(Available Seats Shown in Blue)
• Ticket Prices Range from $60 to $500
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10. • Common Event in Western Canada
• Often Put on by Universities
• Ticket Based Faux Wedding Banquet
• Palmer House is a Perfect Venue
• Major Draw for Millenials
• “In-Between” Weddings Period
• Possible Second City Partnership
• “Mock Wedding at the Palmer House Presented
by Second City”
• Co-op Promotion
THE EMPIRE ROOM
MOCK WEDDING
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11. • Other Marketing Tactics:
• Groomsmen/Bridesmaid Package
• Sit at the Head Table
• Hotel Rooms for the Night
• Snapchat Filter on Day of Event
• Other Social Channels to Broadcast the
Festivities Live
• Second City has 150,000+ likes on
Facebook
THE EMPIRE ROOM
MOCK WEDDING
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12. Background of Airbnb:
• Founded in August of 2008 and based in San
Francisco, California
• Operating in more than 34,000 cities and 191
countries, over 2 million rental listings
• 6/22/16 – New ordinance on home rentals passes in
Chicago, but with lower restrictions than other large
cities
• $10,000 Airbnb annual license
• 21% tax vs 17.4% for regular hotels
• $60 owner annual fee
• New regulations on Airbnbs throughout the
city
• Brings in more tourism dollars, estimated at $152
million in 2015
• Estimated total income for owners in 2015 - $33
million
CHALLENGE #2 – STAYING COMPETITIVE
AGAINST AIRBNB RENTALS IN CHICAGO
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13. Welcome Experience at the Palmer House Hilton:
• Complimentary welcome beverage available at any
establishment within the hotel.
• Complimentary Lockwood brownie upon arrival
• Brownie would be branded with Lockwood and
PHH to drive business to the restaurant during
their stay
• Digital Key Card - Market the ability to skip the
traditional ”check-in” process which shows one
competitive advantage PHH has over an Airbnb.
• “Step back in time” at the Palmer House Hilton,
market the history of the hotel and the beautiful
lobby. No Airbnb can compete with that.
CHALLENGE #2 – STAYING COMPETITIVE
AGAINST AIRBNB RENTALS IN CHICAGO
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14. Why Stay at the Palmer House Hilton?
• Hilton Honors Points – build points throughout the
Hilton network when you stay at the PHH
• Free Wi-Fi
• Location – in the heart of downtown Chicago, just
steps away from everything the city has to offer
• Everything you need during your stay can be found
within the hotel itself from breakfast to late night
drinks
• Covered parking available at the hotel
CHALLENGE #2 – STAYING COMPETITIVE
AGAINST AIRBNB RENTALS IN CHICAGO
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15. Advantages of staying at the Palmer House Hilton over
an Airbnb
• 24 hour staff available for your various needs while
staying at the hotel
• Security available at PHH around the clock
• Room service available from Lockwood or Potters
• Hand-tailored experience throughout your stay at
the PHH
• Spa and 24 hour fitness center on site
• Starbucks available inside the hotel
• Private bathroom
• Cleanliness
CHALLENGE #2 – STAYING COMPETITIVE
AGAINST AIRBNB RENTALS IN CHICAGO
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16. In 1933 the luxurious empire room was converted into
an entertainment venue and hosted renowned
performers. Frank Sinatra, Judy Garland, Ella
Fitzgerald, Harry Belafonte, Louis Armstrong, and
Liberace have all graced the Empire Room.
Situational Analysis
Eighty years later, events hosted here continue to pay
homage to it’s dazzling past. Post-war era
entertainment has changed tremendously and the
challenge of staying relevant as an entertainment venue
is more prevalent than ever.
CHALLENGE #3 - HOW DOES THE PHH
STAY RELEVANT AND COMPETE
AGAINST NEWER, MORE
CONTEMPORARY HOTELS?
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17. EMBRACE THE PHH HISTORY
- Arrange special events during anniversary
- Welcome letter and history introduction on TV when
Customer turn on the TV
- Highlight achievements that has occurred over the
company’s tenure
- Have photos about history of PHH in lobby, elevators,
hallways
- Bring the PHH to Life!
17

18. Bringing The Palmer House “To Life”
with Augmented Reality - Aurasma
Select Paintings or Photos “trigger” short
videos about the subject, telling the story in
a historical context.
Potter Palmer
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19. EMPLOYEES DRESS IN HISTORICAL
COSTUMES FOR SPECIAL EVENTS
When having special events at the Palmer House, the
employees could dress up in historical costumes.
This would help emphasize the history behind the
Palmer House and could attract people who are
curious as to why the employees are dressed up.
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20. COMPARE TO THE GRAND HOTEL IN MICHIGAN
The Grand Hotel in Michigan is seen as one of
the Historic hotels in America. The Palmer
House can brand themselves as a historic hotel
as well.
There is a lot of history in the Palmer House and
they can embrace it similar to the way the
Grand Hotel in Michigan does.
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21. OPEN A RETAIL SHOP THAT FEATURES BROWNIES
Lockwood brownies! The Palmer House is ‘the first’ in a
lot of things and one of them is the first place to have
created the brownie.
Take advantage of the history you had in the making of
the brownie. The world's favorite chocolate pastry.
On each brownie packet, Palmer House should add a
little piece of information so with each bite customers
gain a sense of knowledge
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22. EMPHASIZE THE BROWNIE AT THE PALMER HOUSE
LOCKWOOD BROWNIE
- Arranged event “Join us to win Brownie!”
- History of brownie
- Different flavor of brownie
 Classic
 Nutella
 Nuts
- Brownie Gift set
- Free brownie for VIP
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23. IMPROVE THE USE OF SOCIAL MEDIA
Make more current content and involve greater
engagement towards the Chicago neighborhoods.
Create posts that highlight the hotel in a way that
will make potential consumers want to book a
room.
Use each platform differently; Twitter and
Instagram
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24. TWITTER
1. Service & conversational medium (@replies)
2. Shows Twitter isn’t exclusive to push commercial
messages
3. Retweeting positive feedback
4. Retweeting other resources:
a. Curate what is considered “hip” – But don’t call
it “hip”
5. Media mentions
6. Asking questions
7. Create a contest – Augmented reality scavenger hunt
8. Real-time info (weather, delayed passengers who
need a place to stay)
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25. INSTAGRAM
1. High quality images
2. Pictures of PHH’s exceptional service and
unparalleled guest experience
3. Utilize trending hashtags #Thembrowniestho
#Celebseatingbrownies #Palmerhouse
4. Use pets as models (if allowed).
5. Make it funny!
6. Create a contest
7. Pictures of local restaurant meals
8. Make it enviable
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26. Collaborate with local stores relating to
seasons, current events and trends.
Potentially establishing new relationships
Ex: Mindy’s Hot Chocolate, Bucktown
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27. CELEBRITY ENGAGEMENT
Social Media Campaign
#CelebritiesEatingBrownies
Celebrity pictures are drawn at the
Palm Restaurant and becomes a
permanent “endorsement”.
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28. CHALLENGE #4 – CHANGING
THE LOCKWOOD IMAGE
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29. Using Yelp to communicate to customers and find
out how things are really going.
Add the Menu on Yelp
Advertise the brownie
The Yelp Reviews – Address head on and do not
take lightly.
Recent Yelp Reviews –
• HUGE line to get in...and a dining room that had TONS of
empty seats.
• Service was also incredibly slow and pretty rude.
• I think the staff is totally overworked, or something.
• Lockwood does not come close to living up to the Hilton brand,
and is a complete waste of time and money.
• So, this is the birthplace of the brownie recipe and they still
use the original recipe...but serve it a la mode. The catch is
that it is not on the menu. That being said, it is always
available...they say they purposely leave it off, but serve it with
a smile once ordered.
MAKE BETTER USE OF YELP
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30. • Because the Palmer House and Lockwood is the
birthplace of the Brownie there is an opportunity to
make it a marquee attraction to the Lockwood.
• Introduce/advertise multiple flavors; “The Original”
Blondie, The Lockwood Brownie, etc.
• Associate Brownies with the Lockwood the way
Chicagoans associate Garrett’s with Popcorn
o THE marquee attraction
o Potential to sell wholesale instead of just as a
dessert
• Potential Brownie attractions:
o Brownie Bar/Buffet in the restaurant
o Intermission Brownie Service in partnership with
the PrivateBank Theatre
• Brownies can include small discounts for
snacks or drinks at the Lockwood after the
show.
o Offer special “take home” Lockwood Brownies to
be purchased for friends and family
EMBRACE THE BROWNIE
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31. • Marketing mascot that travels around Chicago
sampling Brownies, potentially in an old fashion car
from the 1920s-30s (similar the the Red Bull Girls)
• Social media campaign that lets Chicagoans know
what area of the city the Brownie Butler will be in
that particular day
• Take pictures of yourself with the Brownie Butler
and post to social media with the hashtags
#BrownieButler and/or #LockwoodBrownie for a
future discount at the restaurant
• Serve all brownies with a Lockwood brand napkin
for brand recognition
BROWNIE BUTLER CAMPAIGN
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32. • Utilize the honey roof and incorporate it into the
menu for Lockwood
• Create a Lockwood house brand “Honey Bourbon” to
attract more interest in the restaurant and honey
production
• Offer customers and guests of the hotel the option
to purchase bottles of “Lockwood Honey” when they
leave/check out
EMBRACE THE HONEY
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33. • Young adults and college students are constantly
looking for fun and interesting networking events
• Host a networking event for young professionals
once a month (maybe the first Thursday of every
month) at Lockwood
• Tickets include a food buffet and drink tickets for
the bar
• Take place after work from 6 to 9 pm
NETWORKING EVENTS
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34. • Introduce monthly specials based on older menu
items
o Notable celebrity meals?
o Adds an extra dimension to Lockwood history;
actually experience the Lockwood’s legacy!
• Include more portraits of notable names that have
eaten at the Lockwood (classy 8x10 b/w photos)
o Think “The Palm” but with an extra dash of
refinement
o Celebrity tables
A HISTORICAL TOUCH
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35. • Heavy competition in the city for NYE party
• Looking to draw in a ‘less rowdy’ crowd
• Want to minimize the risk of the hotel
• Need a creative and fun idea to differentiate
CHALLENGE #5 – NEW YEARS EVE
Problem Statement
• Regular: $119/$139/$159
• VIP: $179/$199/$219
• Velvet Rope: $220
• Private Room: $5000
• Room Rate: $182 (When you mention code)
• 2015 Average Room Rate for Upper Upscale: $202
• Food: 9pm-10:30pm
• Drinks: 9pm-1:30am
Current Situation
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36. • Create a themed event
• Separate rooms
• Drink and Food Room
• Music Room
• Offer meal AND appetizers
• Keep kitchen open late
• Make food for party until 12am
• Keep kitchen open for room orders all night
• 1 Ticket: $160
• 2 Tickets: $300
• 1 Ticket and Room: $325
• 2 Tickets and Room: $450
CHALLENGE #5 – NEW YEARS EVE
The Solution Themed Event Timeline
8pm: 50’s Band
9pm: 60’s Band
10pm: 70’s Band
11pm: 80’s Band
12am: 90’s Band
1am: DJ
2am: DJ
Suggested Cost Breakdown
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37.  Bulls/Hawks/Bears VIP Experience
o 2 tickets for a game with a week stay
o 2 free beverages
o Uber Discount
 Chicago Theatres
o 2 tickets with weekend stay
 Comedy Packages
o Second City
o UP Comedy
o Uber Discount
Challenge #6- Increasing Jan-March Stays
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38.  Valentines Day Dinner/Room Special
o Dinner for two at Lockwood
o Champagne & Strawberries upon arrival
 St. Patrick’s Day Special
o VIP viewing of parade/dying of the river
o Drink specials with partnered bars
o Uber discount
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39.  Spa Experiences
o Package deals:
o 5 – 10 % Discount off of the regular spa
price packages
o Loyalty program for each spa experience and
PHH stay.
 Winter Birthday Weekend Packages
o Special Birthday Discount with weekend stay
o Complimentary bottle of Champagne
o Uber discount
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40.  Millennium Park Experience
o Ice Skating
o Hot Chocolate/Fireplace
o Carriage Ride Deal
 Museum Package
o Art Institute, Shedd Aquarium, Museum of
Science & Industry, Field Museum,
Planetarium
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41. - The issue at hand is getting people,
specifically business travellers, to stay longer
than the allotted time for work
- We as marketers are attempting to get these
busy people to stay over the weekend, or
come a little early on a Sunday
- Currently, these folks are leaving as soon as
business is done
CHALLENGE #7 - EXTENDING
BUSINESS TRAVELERS STAY
41

42. • A Thin Line to Walk
- Have to be able to make money (can’t give
too much away)
- If there is too little incentive, they will likely
leave anyway.
- Most have families, and don’t want to spend
time away.
- Has to attract the demographic of a business
traveler.
- Some people are uncomfortable in a large
city.
CHALLENGE #7 - EXTENDING
BUSINESS TRAVELERS STAY
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43. • Sunday Get Ready Special
Pre/Post meeting opportunity that enables business
employee’s to arrive a day early for their meetings.
Specials would include:
• Airport Pickup
• Free WiFi
• Spa treatment
• Dinner at the Lockwood on Sunday night
CHALLENGE #7 - EXTENDING
BUSINESS TRAVELERS STAY
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44. • Extend Your Stay Special
● Post meeting recuperation to allow customers
to properly relax
● Specials would include:
○ Complimentary spa treatments
○ Complimentary dinner
○ Provide rides to the airport/around city.
CHALLENGE #7 - EXTENDING
BUSINESS TRAVELERS STAY
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45. • Event Tie-In
Offer an event ticket that comes complimentary
should they choose to extend their stay
For example: they’ve booked a stay Wed-Fri,
but there is a Bulls game on Sat. Offer
them a complimentary Bulls ticket if they
extend their stay through Sat.
Could be non-sports related events as well
Lyric Opera
Lollapalooza
Symphonic Orchestra
Museum admission
CHALLENGE #7 - EXTENDING
BUSINESS TRAVELERS STAY
45

46. What is the problem?
• Rooms are not in constant use
• Floor appears empty and dull
• Not enough traffic to justify the floor for its current
use
Benefits of the breakout rooms:
• Grants opportunity to bring more types of business
• Create multiple atmospheres within the building
• Provide space for multiple companies
• Central hub – great walking distance from
everything
CHALLENGE #8 – UTILIZING THE 7TH
FLOOR BREAKOUT ROOMS
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47. • Rent each space to companies to hold interviews
and informal discussions
• Career fairs for Universities
• Job Fairs for the public
• Networking Events
• Students and Employees
• Each room is a separate job type, company
CHALLENGE #8 – JOB FAIR
BREAKOUT ROOMS
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48. • Renting out each space to respective companies
• Reception area at the front of the space
• Space may be used as meeting space, desk space, or
individual work stations
• Renting space
• Rented out by any company
• See reception for availability and to
reserve
• Large conference rooms for meeting space
• Individual work areas
• Designated rooms for groups of 4-5 with
necessary conference supplies (white board,
projector, phone)
• Great potential for entrepreneurs
CHALLENGE #8 – OFFICE SPACE
OPPORTUNITY
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49. • Advertising this space properly
• Palmer House website
• Twitter, Instagram
• Snapchat filter for the Palmer House
• Remodeling the office spaces to create a
modernized look
• Attracting millennials and all ages
• Getting rid of the stereotypical office
appearance to create a more inviting
atmosphere
• Having a secretary at the front desk to maintain an
organized environment
• Helping those who come in looking for specific
offices
• Keeping track of who has rented out specific
spaces
• Providing perks as if they are a guest at the hotel
• Club room access
CHALLENGE #8 – DRIVING
ATTENDANCE
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50. • Invest and/or Implement a Social Media
Management Software like SproutSocial or Hootsuite
• Monitors interactions/mentions
• Can schedule posts according to planned events
• Uses a Single-Stream Inbox
• Manage and engage with customers across multiple
channels with all your messages in one place
(dashboard)
• Tag & Organize Messages
• Mark Messages Complete
• Hide completed messages from the inbox to stay
focused and track progress
• Use interns to help manage the social media
dashboard
OVERALL RECOMMENDATION FOR
ALL CHALLENGES
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51. THANK YOU
Thank you to Dean, Gene and Christine and the entire Palmer House Hilton staff for
participating in our consulting project for the Marketing 359 class at DePaul. We
wish you nothing but success and hope our ideas will help the Palmer House Hilton
continue to be a success for generations to come!
- Mike Hernandez and the students of DePaul’s Advanced Marketing Management
Class – Autumn 2016
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