Through the year,
Luxury Travel 360 regularly published articles about promotions that were
creative - and that worked effectively to generate ROI in the form of business
driven, publicity garnered, image enhanced, etc. We went back to
some of these promotions to see if they were still in place, and still creating
brand buzz, or if they had ended to make way for other initiatives.
Here's an update on
the staying power of several innovative promotions we covered.
Ritz-Carlton Chicago's"Stay As Long As You Like" program
enables guests to store clothing and other items (including, in one case, a
Christmas tree) to ease their packing and unpacking chores.
According to Michele
Grosso, the general manger, "The program continues to be an extremely popular
service for our frequently returning guests. We have storage closets full of
their clothing and other items -- one guest even stores a guitar with us. We not only store
their items, we place them in the guest rooms according to their preference.
And when they leave, we pack up the items for them.
But Luxury Travel Connoisseur Karen Weiner
Escalera says Value Added Alone Is Not Enough
Karen
Weiner Escalera, president of the KWE Group
in Coral Gables, one of the most insightful thinkers on luxury travel, told an
industry newsletter in an interview that, "Early in 2009, many marketers
thought that offering "value adds" would be enough - i.e. a
four-night stay for the price of three, a resort credit, a free dessert when
ordering an entrée, etc. As the year progressed, it was obvious that these
initiatives weren't enough. The overall rate had to be priced right as
well."
Escalera
continued, "The winning combination is value add and the right rate.
I am not accustomed to seeing such verve from parent
paper Wall Sreet Journal, but editor Tina Gaudoin gave us a treat with her take
on The Changed State of Luxury. My favorite nuggets:
..."Luxury
goods houses will have to rethink the way they appeal to us, the
consumers, in order to survive. In which case, we're talking better value
and maybe even lower prices. But will this approach ultimately devalue the
meaning of the L word?" PS > Editor Gaudoin thinks not.
...‘People
want value for money in every single market, says Chloe' CEO Ralph
Toledano. 'Pricing is a key issue we are working on'.
...
"You couldn't go to a cocktail party and say you just bought a $25 million
dollar apartment. Now you can---as long as you got 30% off'.
...'It's
just a question of time before China will be a luxury car market on par
with the U.S.,' says the VP of marketing for BMW in China
Just as after 9/11, luxury hotel occupancies and rates tumbled faster
than the rest of the industry and many questioned the very viability -
and even future - of that segment. Joe Brancatelli, editor of Joe Sent
Me, the website considered the voice of the business traveler, told us,
" Every rule is off the board now as far as where people stay. While
many business travelers are staying in lower categories other are
asking, 'If I can get a Hyatt for $49 a night, why not.' He added, "The
industry is not getting the message that we won't want to pay for
frills that we don't want. We don't need five-ounce bars of Bulgari
soap."
According to Brancatelli, one of the top luxury chains had closed "all
its fancy restaurants." He noted that, " When the Mandarin Oriental
opened in New York at an $850 rate, nobody sneezed; now if a hotel asks
that rate, people laugh."
" My plea," Brancatelli concluded, "is for real luxury at a
real price. It's just like the price of a business class airline seat -
if you take away the markups for all those extras that many travelers
don't even want, it could be much more affordable."
When it comes to hotel industry conferences, Jim Burba is
the man to see and he is also a good man to listen to because he is in constant
contact with all the industry's big players. His Burba Hotel Network runs a
cluster of high-powered conclaves every year. They range from the very well
attended Americas Lodging Investment Summit in San Diego in January to the
Hotel Investment Conference Asia Pacific in Japan; also on the agenda are
conferences dedicated to the Caribbean, India, Central America and Southeast
Asia.
At the 2009 ALIS conference, at the very lowest point of the economic crisis, Burba shook things up predicting "Heaven in 2011." He was not referring to luxury specifically, but he did tell LT360 in an interview that, "If you take a longer view, if you can get through this period as a luxury owner you will be in a good position. With luxury having been so tied in to mixed use and residential project, which is not happening now, there will be great opportunities for those who do manage to maintain a luxury product."
Burba also agreed that the affluent represent "a great opportunity to reach into another market. You can get them to know you; the tricky question will be how to keep them."
A year that began with warnings about "the end of luxury" is ending
with headlines about "surge in demand for luxury" (Smith Travel
Research) and "Luxury Makes a Comeback" (Fortune Magazine).
Looking forward, we are focused on lessons learned during the Great
Recession by smart luxury travel marketers and experts who shared their
experiences –and their counsel—in LT360 columns and stories during
these challenging times.
Senior Editor Harvey Chipkin and I have used boldface black—a
hopeful color for the coming year—to highlight smart marketer themes,
actions, and adaptations below that will pay large dividends going
forward.
In today's commentary we share thoughts
from a recent conversation with Mary Gostelow, editor of KIWI's online WOW
Report. They don't say "Affluent", but they sure point to a more
sensible, and comfortable travel culture to come:
Everybody was using
luxury for everything. We've been living in a time of growing excess which
was not really necessary. Why should bedrooms get bigger and bigger? Why
should the thread count of sheets get higher and higher? Who cares? Does
anybody even know what thread count means? Why should one hotel's terry
bath towels get thicker and more sumptuous than anybody else's? You know,
it was as though everybody was going for the Guinness Book of Records the
whole time.
