The more, the merrier?

Not necessarily. Sometimes less is more. Psychologists say too much choice doesn’t free us, but numbs us. We cope by opting out, and begin to make purchase decisions based solely on price. With the addition of every new brand, we add to the confusion and commoditization of the hotel industry, making marketing efforts all the more difficult. The luxury segment is fast becoming a textbook example of over branding, in terms of declining brand loyalty and the premium consumers are willing to pay.


Armani.
Bulgari.
Missoni.
Versace.
And now Harrods?

In the absurdly over-branded world of luxury hotels and resorts, Qatar Holding LLC announced this month plans to open Harrods hotels in a number of cities including New York, London and Paris. Qatar Holding LLC, the investment arm of the country’s sovereign-wealth fund, purchased the famed British luxury retailer two years ago.

Given that consumers—and most hoteliers come to think of it—can’t define with any intelligence the differences between a Four Seasons, Mandarin Oriental, Peninsula, or Ritz-Carlton, do we really need another luxury hotel brand?

Sure, Qatar Holding LLC can afford it. But just because one can do something, even if it’s fashionable, doesn’t mean one should.

But hoteliers love developing brands, don’t we? Sexy ones like Armani, Bulgari, Missoni or Versace. Ones that are ripe with history and prestige are hard for us to resist too. We’ve taken iconic properties such as the St. Regis and Waldorf-Astoria, and watered them down into meaningless extensions of the Starwood and Hilton line of products—tasteless, non-emotional replicas of grand dames.

Within the hospitality industry, strategic marketing’s task is to design a hotel or resort with a product-service combination that provides real value to targeted customers, motivates purchase and fulfills genuine consumer needs.

In my opinion, hoteliers have stepped away from the practice of strategic marketing, and left much of the final product development in the hands of architects, interior designers and the financial institutions and investors whose primary goal is to limit risk.

We’ve rounded the edges, smoothed out the differentiating features and made our branded products and services so bland, that it’s difficult to tell one luxury hotel or resort from the next—no matter the service level.

This is primarily because as an industry, with few exceptions, we have failed to grasp the basic concepts and long-term paybacks associated with differentiation strategy—adopting strategic methods of identifying potential customers, and inspiring and attracting them to come to one hotel or resort rather than another by embracing creativity and innovation.

Creativity implies conceptualizing, visualizing and bringing into being something that does not yet exist. There is certainly a skills and technique element to creativity; in a business context, for example, we can be taught creative thinking and behavior in the context of decision making.

Innovation builds on creativity when something new, tangible and value creating is developed from the ideas.

Together, creativity and innovation make up two key elements necessary for pursuing a differentiation strategy.

A successful differentiating strategy allows an organization to charge a higher price for its product and gain customer loyalty because consumers may become strongly attached to the differentiation features—developing emotions for the brand.

As an industry, let’s please remember that luxury travelers are buying an experience, not just a room with a bed. Yes, they want pampering, but they are also looking for something that is simply unique, something that evokes a feeling. Bragging rights, if you will.

I encourage you to challenge yourself, and your development team, to embrace the concepts of creativity and innovation. Move out of your comfort zones and into a strategic marketing mindset that anticipates where the consumer is headed, and then develop offerings that are relevant, original and exciting.

Invest in ideas that are inspired and bold, and then meet the consumer’s needs in ways that others are not, thereby separating your brand from the competition, and successfully differentiating your hotels and resorts.

I promise the resulting effects, when measured both qualitatively and quantitatively, will create broad and positive consumer awareness, strong sales and significant increases in asset value.

This entry was posted on Thursday, July 5th, 2012 at 2:41 pm and is filed under Creativity and Innovation, Opinions, Strategy . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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