By Jane Auster, Hcareers.com
Your name is your brand, it's often been said. During difficult economic times, the power of your brand can mean the difference between a half-empty hotel and a healthy business.
"Branding is very important in a down economy," says Ian Graham, principal of The Hotel Solutions Partnership Ltd.. "For the corporate customer a brand provides a controlled price experience while for the non-corporate a brand de-risks the decision to buy."
There are some encouraging signs that the economy is turning in favor of the hotel industry. According to the Hotels.com® Hotel Price Index™ (HPI®), the average price of a hotel room around the world rose two per cent, and three per cent in North America, in the second quarter of 2010, compared to the same period a year earlier. This was the first time the average hotel room price rose year-on-year after seven consecutive quarters of price falls. Despite the more optimistic numbers, though, the average price of a room is still lower than it was in 2004.
The continuing sobering forecast is not lost on hotel operators. At the Carlson Hotels Global Summit in March, Carlson Hotels CEO Hubert Joly said categorically, "The future of the hotel business is [that] strong brands will win."
The power of branding
Strong branding initiatives that encourage loyalty, says Ian Graham, can increase a hotel's fill rate by 20 per cent or more in a large urban center.
"We believe that consumers look for and are more interested in value in these times, and they are finding comfort in buying something they know," says Graeme Barrit, president of Coast Hotels & Resorts, with 43 properties in the U.S. and Canada. "If your brand is positioned properly and your marketing is aligned with that brand, then you should be the beneficiary of that comfort."
Coast has bolstered its website to attract more travelers at a time when traditional business travel and meetings and conventions are down. The result is that branded website traffic has moved up six points in the last 20 months, as a different travel demographic responds to lower room rates and more "value" propositions.
Moving price to attract more – and different – customers is a common strategy in a down economy, but as Barrit advises, hotel operators have to find the right balance at the risk of damaging their brand.
"It's tough, in an interesting way. We've been forced to underprice our brand and pricing structure, and that can be as dangerous as overpricing. You have to be very careful when you're pricing, creating that brand equation, not to upset your brand's value. When the discount values are wide open, pricing delivers a different customer and changes the interactions with your staff and other customers."
Keeping a strong brand strong
Having a name with as much brand recognition as Disney helps to offset the vagaries of the economy. But even a marquee brand like Disney has to pay attention to customers' needs to keep the brand vibrant and viable.
"To sustain a strong brand, you must remind people of the core experience that led them to become loyal in the first place," says Bruce Jones, programming director at the Disney Institute. "As Bob Iger, CEO of Disney, has said: ‘When you have a valuable brand, it does a number of things. It gives you pricing leverage. It gives you access to more shelf space…in mass retail. It typically enables you to reach a market at less expense, meaning…the name recognition and the value proposition…goes a long way'."
For Disney, that means continually monitoring the brand through consumer surveys and other methods, correcting any problems or enhancing areas of the brand that show weakness, and finding ways to keep customers' perceptions positive.
One way is through rewards that surprise and delight guests, like hiding Easter eggs in attractions or movies.
Says Jones, "All Disney cast members (employees) are focused on one common goal: to create happiness for people of all ages, everywhere. No matter what their actual job within the company, cast members understand that's the end goal. That kind of culture leads to high guest satisfaction, and ultimately, brand loyalty."
And that loyalty can lift your brand during any type of economy.
Brand power tips
* Consider co-branding. Working closely with other strong brands helps to create a halo effect for your brand.
* Try different pricing strategies. Instead of simply cutting your prices, try building loyalty with other promotions, like three-for-two visit deals.
* Work your loyalty programs. The time is definitely right to find creative ways to encourage loyalty. Think free upgrades and customer service "surprises" to leave lasting impressions.
* Make employees part of your branding. Your employees help insure the customer experience builds loyalty.
* Take the time to examine your brand. The time is right to evaluate whether your brand is delivering the numbers.
About the Author
Jane Auster is the Hospitality News Writer and Editor for Hcareers.com. She has more than 20 years' experience reporting on news and trends in the hospitality industry.