The industry veteran talks about why golf still matters, how the company saves money on Coca-Cola and why brands can sometimes work against luxury hotels.
Last month, we ran an interview with Lindsey Ueberroth, who heads up brand development for Preferred Hotel Group; and Sarah Clark, vice president-marketing. Just as a refresher, Preferred is a 700-hotel conglomerate of brands comprised of mostly independent properties - including Preferred, Preferred Boutique, Summit Hotels & Resorts, Sterling Hotels, and Historic Hotels of America (see www.preferredhotelgroup.com for descriptions of each brand). But the man who bought the company in 2005 and has grown it rapidly is CEO John Ueberroth and he had his own take on a few things. Here is what he told LT360 in a recent interview.
"A lot of travelers like the differences you find in a non-chain hotel; sometimes being a chain at the high end will works against you. We will take a chain hotel but not usually. There are so many new chains coming along and they tend to be very similar."
"We don't recommend overlapping membership in other hotel groups; we do have a few members in that category."
Operating five brands makes selling to corporations easier because "for the most part they do not stay in five-star hotels; we have more ways we can help.
By Combining Independents Into Five-Brand, 700-Hotel Conglomerate
Marketing, Sure -- But A Fierce Focus on Sales
Preferred Hotels & Resorts is a venerable name, frequently ranked as a marketer of upscale properties alongside players like Leading Hotels and Small Luxury Hotels. Since industry veteran John Ueberroth took control of the company in 2005, it has become a 700-hotel heavyweight conglomerate of brands - now including Preferred itself, Preferred Boutique, Summit Hotels & Resorts, Sterling Hotels, and Historic Hotels of America (see box for examples of member hotels; and www.preferredhotelgroup.com for descriptions of each brand.) PHG members are overwhelmingly independent, through chain properties are welcome.
We spoke with Lindsay Ueberroth, vice president-brand development (who started up Preferred Boutique); and Sarah Clark, vice president-marketing about why PHG is growing so quickly fast at this time (including the fastest-growing consumer loyalty program in the industry) - and why they are so serious about selling. Highlights of our discussion follow:
Carroll Rheem, Phocus Wright's Director of Research, takes on this subject crisply and clearly in her March 20th FYI Bulletin Online:
"Some questioned Expedia's strategy when it threw down the gauntlet on March 11 by announcing a promotional fee cut for flights. Competitors were bound to respond, sparking a downward spiral cutting into their revenue margins.
Adam Weissenberg, vice chairman, U.S. Tourism, Hospitality and Leisure, for Deloitte, talked to Luxury Travel 360 about how luxury hotels can start rebuilding their business - block by block.
Among the highlights of our chat with Weissenberg:
On Leisure Travel: So far, says Weissenberg, luxury hotels are doing everything they can to avoid outright discounting - incentives, add-ons like 3rd or 4th night free, etc... He considers that a good tactic for appealing to consumers who actually plan to travel, though it may not actually stimulate travel. Weissenberg believes it is rarely worth it to discount in order to drive occupancy for the usual reason - rates are difficult to reclaim come the turnaround; in addition, he says discounting can negatively affect a hotel's image.
On Business Travel: Weissenberg sees that as a relatively small segment but one that can be hit hard. He believes that while the very top luxury hotels represent only about 10 percent of total rooms, when corporations start cutting back they will cut back disproportionately on luxury spending - to the point where it will get close to Zero. He asks: "How can you justify letting employees go while having conferences at luxury properties? In addition to being expensive, it's a difficult sell." Despite that dire scenario, Weissenberg still thinks the following approaches should apply to both business and leisure travel:
The Luxury Marketing Council, with researchers IPSOS/Mendelsohn, surveyed 320 luxury companies in New York City and 65 in Boston across industries to see how they're doing and how their best customers are changing. Greg Furman, founder and chairman of LMC, shared the results and answered some follow-up questions related to travel. Here's what he had to say:
The luxury sector is under siege - and not just the aspirational customer, but those with investable assets of $1 million and more - the typical buyers of couture products and services. Many brands experienced double-digit losses for Q4 08 and anticipate continuing losses in the first half of 2009. It's no longer
78% say recent economic/financial events have negatively impacted their business. Surprisingly, 22% said "not."
65% said sales were declining; 34% said less store traffic; 28% said fewer inquiries from customers; only 9 % said less spending/commitment on the part of best customers; 6% had cut budgets and only 2% were experiencing an increase in returns.
Ross Klein, Hilton's luxury guru, sees luxury as going through "identity crisis."
Americas Lodging Industry Summit (ALIS), meeting in San Diego last week, is the first big industry conference since the industry really turned south in the last quarter of 2008. Interviews with attendees and attendance at panels revealed a consensus that rough times lie ahead but opportunities are there for the savviest.
One of the savviest, Ross Klein, who heads up Hilton's luxury and lifestyle group - including Waldorf-Astoria, Waldorf-Astoria Collection, Conrad - and a brand to be announced in March - built the successful W Hotels brand. Following are highlights of our chat with Klein - then a quick look at other conference goings-on.
Ross Klein On Luxury
The "identity crisis" involves the end of "traditional rationales" for a luxury vacation - to be replaced by luxury versions of new styles of travel -like eco-tours, and "road maverick" vacations.
Ipsos Mendelsohn and American Express Publishing-Harrison Group OfferFreshInsight on Consumer Behavior in 2010
According to new studies from two blue-chip research sources, Ipsos Mendelsohn and American Express Publishing - the affluent are not only ready to travel -- they are frequently going to spend more on it. While the Ipsos study focused on intent and American Express Publishing on mindset, they both point to a surge in affluents taking to the road (Amex sees an increase of 6 to 8% in spending on all luxury categories).Interestingly, both studies agree on a positive attitude despite lingering concerns about the economy. Here's a look at the highlights of both 2010 studies.
LuxuryTravel 360 has long looked to the affluent as a burgeoning market in business and leisure travel, fueling growth in more affordable, common sense luxury - less glitz and glamour, but ready to pay extra for memorable family experiences and genuine local culture.
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Carroll Rheem, Phocus Wright's Director of Research, takes on this subject crisply and clearly in her March 20th FYI Bulletin Online:
