TREND Highlights: The Evolution of Luxury Hospitality
After our TREND event, we reflect on an evening that delivered inspiring insights relating to the evolution of the luxury hospitality industry, featuring a line-up of amazing speakers paired with a very valuable audience.
We summarised the talks and with further research, we wrote a white paper on ‘The Evolution of Luxury Hospitality 2017’ co-authored by Dr Navdeep Athwal from Sheffield University Management School.
The event kicked off with a keynote speech by Ana Andjelic; luxury brand strategist and former SVP & Global Strategy Director at Havas LuxHub. Andjelic’s presentation focused on how hospitality brands can utilise offline consumer behaviour to cultivate an online advantage.
As a doctor in sociology, she helps luxury fashion and lifestyle brands to adapt to the digital economy and to understand the new disruptive technologies and how best to use them to achieve business goals.
Andjelic highlighted the importance for luxury hospitality brands to understand how today’s consumers behave, how they share their personal experiences in social and how, all of a sudden these hospitality consumers become “hotel brand ambassadors”.
“It’s better to have 100 people who love you than a million who just sort of like you… Just focus on 100 people. If they love you, they will market the product for you and tell everyone else.” – Paul Graham
Luxury brands, especially those in the hospitality sector, find greater value from found audiences more than from targeted audiences. Andjelic remarked that having small numbers of brand advocates will make your brand grow much more than having a larger audience that is less passionate about it.
Andjelic then went on to outline the key shifts that luxury hospitality brands can apply today.
For hospitality brands, the shift relies on focusing on the consumer’s journey instead of the company’s own funnel. Brands should look at which other brands they follow, how their patch to purchase forms and therefore, initiate human/personal conversations with them. Brands should not use the internet to take every single opportunity to push offers and urge them to buy; instead, the next step is to go from purely eCommerce (a mere selling/buying transaction) to providing a holistic path to purchase where all your marketing channels are integrated, conveying the story of your brand.
On her last point, Andjelic explained that hospitality brands should embrace the ‘Dave Brailsford approach’. She referred to how Sir Dave Brailsford applied a theory of marginal gains to cycling, improving every single element that he could think of that applied to cycling and achieved a significant aggregated increase in performance as a result. For brands, these continuously targeted micro-actions can highly improve a company’s position versus a single mass spend directed at only one channel.
After the keynote speech, Chris Donnelly, Founder and Managing Director at Verb, introduced the powerful panel debate that combined the perspectives of in-house hotel brand experience, luxury travel PR and that of a sustainable travel entrepreneur.
Donnelly highlighted the potential of the luxury hospitality market in reference to a graph from Bain & Co which showed that in 2016, luxury consumption shifted away from goods and towards experiences such as travel and gastronomy, which in turn grew faster than luxury goods over the given period.
In tandem with less ostentation, Donnelly also remarked how luxury consumers seek higher spiritual and emotional motives such as the need for inner fulfilment, creativity and self-esteem, thus driving the desire to travel. In previous years, travel would serve lower parts of Maslow’s pyramid levels, such as self-esteem and status. Today, travel experiences should fulfil the highest level of Maslow’s Pyramid: self-actualization.
The main challenges
Daisy Bird, Founder at Bird Travel PR, outlined that from a consumer’s point of view one of the major changes in the travel industry has been in the nature of the consumer itself. They have become more digitally savvy and are able to source their own research and plan their own trips in order to pursue the experience they are looking for.
“When consumers use a third party to organise their travels, they are expecting much more than just the trip itself”.
Anna Nash, Head of Global Public Relations at Aman resorts, gave her contribution from a hotel brand’s perspective.
“One of the main challenges for hospitality brands has been keeping up with the immediacy of today’s world, and the instant access to any desired product or service.”
Nash used examples like Uber, a service which has encouraged people to order a taxi and ‘expect it yesterday’, as well as the rise of same-day deliveries from online retailers like Amazon.
The sharing economy
We asked Holly Tuppen, travel journalist and Founder of Bouteco Hotels, about the impact of the sharing economy on luxury hospitality. Tuppen stated that Airbnb is the ultimate travel disruptor, but that this can have a positive impact on existing accommodation providers as it has ‘shaken things up’ in the hospitality industry, encouraging hotel brands to move forwards and innovate with their marketing strategies to compete and remain relevant to their luxury consumers.
She also pointed out that hotels have a competitive advantage versus self-catered accommodation.
“The hotel lobby, the reception, the personal service, the particular decoration in public spaces, the locality surrounding the hotel…. All these services and facilities are the reason why many consumers chose a hotel over a self-catered accommodation”
In relation to this, Bird gave some tips to help brands attempt to remain at the forefront of the hospitality industry. Brand integrity and a human touch are the keys to a successful marketing strategy. From a digital perspective, it is key to not over-position yourself and to choose your channels wisely.
“Owning your own channels and presence, as well as forming your own community which involves brand ambassadors are hugely important. In addition to this, there is a need to understand the tendency of consumers to look for a unique experience and exclusive locations, which can lead them to look for boutique hotels instead of well-known chains. Brands need to build their online reputation and to do so, photography and editorial value are essential. It is key to invest as much in the content as in the technology behind it”.
Building brand loyalty
Anna Nash stated that hotel brands struggle to achieve customer loyalty mainly because consumers are always seeking the next adventure and for hotels, it is hard to make them want to repeat the experience. However, she also explained that a personal touch, authenticity, experiences, booking service and impeccable quality are even more relevant when talking about luxury hospitality.
“Hotels need to look ahead, own the relationship with their customers and build a personal connection with them. There isn’t a secret trick to achieve better brand loyalty”.
Can luxury be sustainable?
Sustainability expert Holly Tuppen explained further the role of hotels in taking care of the environment. For a hotel to be sustainable, they have to meet a minimum of requirements that make the whole hotel ‘sustainable’ for future generations. It is not only about asking guests not to clean their towels every day; they have to prove the ethical and sustainable thinking behind their energy sources, the origin and conditions of their staff, the involvement with their local community and the overall environmental care. Her advice for hotels looking to go down this route is to show their consumers what they do, not only tell them.
“Sustainability is a trend but also a necessity. If this is not done, tourism taxes may need to apply because there is an increased risk of destroying unique paradises, or even not to have snow, due to the climate change. In addition, sustainability allows hotels to provide a unique experience, and allows consumers to forge an authentic connection with the destination.”
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