At the same time, the importance of celebrities and admiration for the stylishly wealthy – from Roman Abramovich to David Beckham has meant that glamour is most definitely “IN”. Refinement and elegance fused with grace and style now form part and parcel of the luxury hospitality industry’s core offer; sublime experiences with distinct and discriminating taste.
However there is also blurring and polarisation taking place. By 2015 the middle market will could disappear in most developed countries taking mid–price retailers with them.
Many consumer markets are already polarising between economy and premium sectors (low price versus luxury). High net worth customers can happily live in both segments buying $15 T shirts and mixing them with $500 jeans and $250 trainers.
Most importantly, we have the relatively recent rise of the brand as the key core communication principle, the DNA of every company, their soul or brand essence. At grow, we call this the “BIG IDEA”. The brand, probably the greatest gift that commerce has ever given culture, allows us to identify with other like-minded people, products and services to create the world around us in our vision, resonating with our needs and aspirations. It’s a shorthand to identify your “tribe” or “brand” and align with it.
Recently, witness the rise of brand extension. This is where customers are happy to suspend their rational, logical, objective analysis of a brand’s functionality and are willing to go along with a brand they believe in emotionally and trust that it can produce new products not part of its original core competency. So you have Marlboro selling jackets, Caterpillar selling boots and Porsche selling sunglasses. You have bookshops selling coffee, coffee shops selling music, supermarkets selling loans, Ralph Lauren selling white paint and water companies selling gas. So why are we not surprised with Bulgari and Versace Hotels opening somewhere near you?
So with all this going on, what about Qatar and the Hospitality Industry? To set the scene, as we already know, we have massive, sudden wealth. A local population where 65%+ are under the age of 31, mostly well-travelled, well-educated, well-heeled and, well, incredibly brand aware. These are people who appreciate value and values, where heritage, tradition and family are fused and work together with a forward-looking and ambitious outlook on life. And finally, they are online and on the case.
Qatar is growing exponentially. Over 41 hotels, planned or in the process of opening,
with clubs, spas and luxury hotels all here or coming soon and all requiring their share of a growing population. Add to that the visitor mix, with businessmen representing 85% of visitors and occupancy in the region of 70%-75% and you have an interesting opportunity where the demand/supply scenario is going to shift and the hospitality sector is finally going to have to compete for real and differentiate their offer to maintain market share in light of increasing competition.
This is already happening. On a global scale, Sheraton have revamped their identity and added the tagline “Belong”, thus seeking to identify with people seeking a community of like-minded individuals (a “global neighbourhood”).
Sharq Village and Spa has created a luxury hotel resort based on the interesting concept to portray the Qatar brand of yesteryear fused with traditional Arabian hospitality and world-class service in a beautiful authentic Middle eastern village type environment that has grown organically over time, supported by Six Senses Spas. A wonderful notion and a very credible positioning in the luxury boutique sector, especially as cultural holidays are the fastest growing sector of the tourism market, according to the World Tourism Organisation.
I believe there will be a tough battle in the luxury to premium sector in Qatar as the Shangri La, Hilton, Rotana, Millennium, Intercontinental, Sofitel, Renaissance, Al Fareej Resort, Radisson SAS, Hyatt, Kempinsky, Wyndham and La Cigalle fight for market share along with existing Ritz Carlton’s and Four Seasons. It is going to be increasingly important for these brands to identify who they are targeting and reinforce their positioning and differentiation to a very brand-savvy and aware audience that has no brand loyalty and will always gravitate towards the new.
I believe there is room (excuse the pun!) for the Sheraton, Intercontinental, Marriott, Mövenpick and Ramada, among others, to market exclusively to the business traveller,
but then their offer must include ALL the high-tech gadgets, high bandwidth, easy-to-use technology, plasma screens and dedicated secretarial and concierge service to assist these commercial warriors to do battle and win. These people don’t want to muck about with adaptors and connections that don’t work, or cost an arm and a leg to operate.
Instant access, on demand and preferably in-built into the cost of the room.
Examples include DIY check in and check out services, available online. The quicker these hotels focus on prioritizing and servicing the needs of the hotel guests of the future and their insatiable demand for instant convergence and simplicity, the quicker they can garner market share.
I believe there is a huge growth market in two very distinct areas. One is in the budget business hotel, presently catered to by Merweb: simple, functional and available.
Watch out for Stelios and his crew at EasyHotel and the new Yotel. I also believe that the fully furnished serviced apart-hotel as exemplified by the pioneering Le Mirage Executive Residence and Le Mirage Suites is a growing category which is competing head on with 3-4 star hotels. I also believe there is a growing market for the local family seeking a weekend away. Rather than going to Dubai or booking a villa at Sealine Hotel, they could access some hotels here and book 5 or 6 rooms or a villa for their family to enjoy a long weekend.
We’ve yet to witness the arrival of the hip, boutique hotel, the slick-minimalist-style made famous by pioneers like Phillipe Starck and Ian Schrager. Names like Brown’s Hotel, Sandersons Hotel, Anoushka Hempels’ original Hempel Hotel, “41” in London and “Dream” Hotel in New York, among others, satisfy the increasing demand for personalisation and have infiltrated the industry and become a feature of major hotel chains such as Hilton, Starwood and Le Meridien. I am sure that the boutique concept will also feature in Qatar (witness the arrival of “W” hotels) as it grows in sophistication and variety. For the winners in this category, also check out Gansevoort, James and Thompson boutique chainlets in USA.
Luxury hotels have to offer unique, individual experiences, fused with a dynamic theatre of the exceptional as opposed to homogeneous pampering (“am I in Hyatt Boca Raton or Honolulu?). First class service and quality come as standard. Pushing the boundaries of individual service and gastronomy, mixing art, music and theatre with high technology, creating worlds within worlds and legendary experiences represent the next phase of the successful luxury hotel. At the same time, honouring the individual and his/her needs and requirements is key. Witness the 24 hour-a-day-check in policy at the Peninsula Beverly Hills for a clue to personalisation. Other recent hotel 'innovations' include bath butlers at the Sydney Hilton (to run your bath for you), e-butlers at the Dorchester Hotel in London (to explain how everything in your room works), personal oxygen bottles (Optus hotel in Vancouver), iPod rentals (Dream Hotel in New York), Wi-Fi access inside elevators (Langham Hotel in London), and personalized room lighting (Sofitel Paris).
The Hospitality sector has realised that brands are the only key differentiator between their offer and their competitors – as the saying goes: “a hotel without a brand is just a bed for the night”. Investment in your brand is key to your success and will lead to lower customer acquisition costs, increased market share, happy staff and customers and healthy profits. And never forget that your staff are (almost) more important than your customers. They are your brand ambassadors and can retain or lose a client in a moment of unawareness or sabotage. (For more proof and analysis of the value of brand in the hotel sector, read the Cornell University School of Hotel Administration’s groundbreaking analysis of the effect of brand affiliation on a hotel property’s value.)
Your brand is the essence of who you are and what you stand for as a company. The communication of it has to be holistic and consistent – internal as well as external and as a minimum must stand for something that is both meaningful and true, something we can believe in. How you communicate your brand on its journey to the customer and what it stands for is what makes the difference between ordinary hotel brands and truly great hotel brands.
