Delivering the brand promise
The Cornell Hospitality Report
by Robert Bryant and Mike Tansey
Brand is the critical tool for achieving differentiation and success in today's competitive hotel market.
Hospitality 2010, Deloitte's research into the
future of the industry, has pinpointed brand
as a key driver of change for three reasons:
1.Loyalty schemes, traditionally the preferred
tool for winning and retaining hotel
customers, have a declining impact. Many
hotel guests now own loyalty cards for all
of the major chains, therefore such
schemes are no longer a dominant factor
in their choice of where to stay. Whilst for
some ‘point chasers' loyalty schemes do
change perception, brand will increasingly
be the ‘X factor' which influences the
decision-making process for travellers.
2.Many hotel groups are divesting their
real estate interests and pursuing an
‘asset-lite' strategy in order to free up
capital for expansion. Ownership of bricks
and mortar is giving way to ownership of
the brand itself, in both its physical and
intangible aspects: a major cultural shift in
the industry.
3.Hotel expansion is intensifying
competition, most gateway cities
are reaching market saturation with
leading brands sited close to one another,
and travellers frequently spoilt for choice.
In the future, brand will increasingly be as
important as location in determining
customer choice.
There are now clear signs that hotel groups
are beginning to recognise the importance
of brand management within their
organisational structure. However, this
remains very much a work in progress.
Deloitte has identified some key obstacles
and challenges which go to the very heart
of the hospitality business model, and which
will need to be addressed if companies are
to deliver their brand promises more
effectively.
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