Top Consultant Says: Time For Luxury To Get Back To Basics
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:
On Marketing: It's a good time to look again at who your customers
are, to re-evaluate your marketing. Are you hitting people who are
successful these days -- maybe some organization, a particular group
like consultants?" Weissenberg also says it's time to make better use
of Internet marketing, to look at tailoring Websites and Web marketing
to specific markets. Bottom line: "Challenge old assumptions."
On Sales: "Look at your selling from the bottom up. Do you have the
right people in place? Are you going beyond your traditional clients
and segments to sell? Maybe some groups that wouldn't ordinarily stay
in a luxury hotel might be moved by flexible rates."
On
Service: How do you make sure your level of service doesn't suffer?
"Anecdotally," says Weissenberg, "I hear service levels are slipping.
They are worse than a year ago."
On The Outlook: "We don't
make projections," says Weissenberg, "but this will not be a good year.
And travel takes a while to recover after the rest of the economy.
Optimists are saying a recovery could start this summer, but I think it
will probably be 2010 before there's a turn. I'm hoping more that we
hit bottom soon so at least we know prices aren't going down, that all
of our cuts are in place. Now, there is just so much uncertainty and
the only conversation seems to be about the economy.
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