This document discusses branding strategies for luxury hotel chains. It begins by profiling some of the largest luxury hotel brands such as Hilton, Marriott, and Four Seasons. It then examines mid-tier luxury brands and smaller independent groups. The document notes the extremely competitive nature of the luxury hotel market and stresses the importance of differentiation. It provides examples of boutique "couture" hotels that have succeeded through distinctive designs. The rest of the document outlines strategies for driving earnings, attracting customers, justifying investments, and expanding opportunities through strong branding. It proposes a seven-step process for developing a branding strategy and program.

1. Issues and trends

2. 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)

3. 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.

4. 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]

5. 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)

6. 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)

7. 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

9. Differentiate or die

10. Design matters

13. 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

14. Palazzo Versace

15. 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

16. 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)

17. 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

18. Hotels are HIP

19. Mr and Mrs Smith

21. Curated Consumption

24. 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

26. The role of brands and branding

27. 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

28. 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

29. 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

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

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

32. 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

33. Segmenting Segmenting markets

34. Differentiating Badge engineering

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

38. “ 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

39. 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

40. More than logos and flags

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

42. Our proposal

43. 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

44. 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

45. 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

46. 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

47. 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

48. 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

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