By UTalkMarketing Editor, Clark Turner.
The recession has affected all businesses in one way or another. Some have gone under but others have seen an improvement in their fortunes on the back of rethinking their approach to marketing.
The luxury market has been no exception. Initially considered to be immune from the economic downturn, it soon suffered just live everyone else.
Take retail brands for example, who have swapped exclusivity for ‘inclusivity’. In a bid to make purchasing more easy and drive more sales, many brands have opened up new purchasing channels with shoppers now able to purchase their Louis Vuitton, Prada and Gucci goodies online.
The travel industry has also been hit hard with consumers thinking about prices more than ever. So to be a luxury operator in the travel market would be a double curse, one might think. But think again.
The Von Essen hotel group has announced an extensive multi-million pound investment across its collection of properties for 2010. In addition, the group is to open a new London Hotel – its first - complete with heliport, with hopes of capitalising on the Olympics. Things are unquestionably looking onwards and upwards.
So when many hotel operators have been suffering in the downturn, what has been the secret of the Von Essen’s success? How has the recession forced a reassessment of marketing strategy? And what lessons have been learnt?
One factor is a £14 million investment programme that was initially launched in 1995. So when the recession hit the group had a premium product. The programme involved bring all its hotels up to an equally high standard so 3-star properties were elevated to luxury status.
The group operates five hotel ‘sets’: Classic (including Cliveden and the Royal Crescent, Bath), Country (middle-England), Family, Continental (based in France) and Metropolitan.
The move into France is just the beginning of an extensive expansion plan, with the goal of growing the group to a collection of 75 hotels in total, with 15 in each set.
“Admittedly we did loose some customers by raising the price point of refurbished hotels but we have balanced that by promoting new, more affordable products via CRM programmes,“ executive director of sales and marketing, Greg Ward, told UTalkMarketing.
“If the recession has taught us one thing it’s to be more targeted in our communications rather than go wide with general messages.”
CRM is managed through different programmes – B2B and B2C – and messages are tailored to specific guests’ interests.
“Staying in a hotel is about ‘the experience, be it a spa, or fine cuisine, high performance cars, or even aviation, with our new heliport hotel,” revealed Ward.
“With 48 per cent of revenue generated by food and beverage sales alone, it’s about operating in a market that looks for a choice of ‘experience’ and meeting that demand.”
He added, “Our experience of CRM has taught us that you’re only as good as your last message. You have to be both relevant and interesting to the recipient.”
The recession has forced Von Essen to go back to the drawing board looking at just who its target market is and reassessing both the collection and the facilities at each individual hotel for both the leisure and MICE markets.
In terms of targeting luxury leisure consumers specifically, the group has entered into a number of affinity partnerships with brands including, cruise specialist Silver Seas, country clothing company Dubarry, in addition to the jewellery companies De Beer, Tiffany and Boodle and Dunthorne.
Meanwhile, in a bid to drive wedding custom, the aim of marketing strategy has been to increase the distribution and awareness of products on offer, as well as communicating the ability to accommodate all budgets. Comms are supported by advertising in key titles and having a presence at exhibitions.
So once Von Essen has attracted a customer for the first time? How do they turn that into repeat business?
“Our repeat business is up by 30 per cent, with 95 per cent of guests coming from the domestic UK ‘staycation’ market,” revealed Ward.
“We’ve found that customers are more likely to buy a brand over a product. There’s a reassurance in buying from a brand – be it Von Essen, or Ritz Carlton.
“People have expectations about service delivery and to the challenge is to surpass them.”
He added, “Electronic marketing has helped us tremendously in this recession and as we expand the group we’re looking at making our websites multilingual to cater for different territories.
“Beyond that, we’ve been working with a multitude of online booking channels used by travel agents to boost sales. We’ve also been working with affiliates such as bookings.com, laterooms.com and lastminute.com, but we have a strict tariff ruling that is uniform across all sites.”
Ward describes social media as “fascinating”, with a new strategy currently in development.
“You need to understand it in terms of getting your messages out,“ he added. “We’ve learnt you need to be consistent and any offers need to be aspirational and interesting.”
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