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Overlooked strategic marketing can deliver superior ROI

‘‘Hoteliers who wish to succeed in the times ahead must listen carefully to the customer, have an ability to think creatively and possess a deep understanding of strategic marketing.” Those are the words of Marriott International Chairman J.W. Marriott Jr., when he accepted a lifetime achievement award at the Hospitality Sales and Marketing Association International’s Adrian Awards.

Most hoteliers think only of its tactical form, namely, a lot of sales, promotion and digital advertising, but a strategic marketing plan encompasses significantly more than a traditional annual marketing plan – more closely related to the general business concept – and covers a period of three to five years. It aids in defining the hotel’s most valuable target markets and provides insights necessary to develop the best possible product to win these markets – to include brand, architecture, design, amenities, guest services, et al – and informs the messaging most likely to deliver a competitive advantage.

Organizations that have implemented strategic market plans enjoy greater ROI. Sanctuary Camelback Mountain Resort & Spa in Scottsdale, Arizona, implemented a strategic market plan as part of a repositioning. Based upon research findings, the resort positioned itself away from traditional families with average household incomes greater than US$250,000, focusing exclusively on affluent couples interested in luxury resort travel with average household incomes greater than US$400,000.

The competitive analysis prompted a major renovation to combine smaller guest rooms into luxury suites, a shift in the resort’s comp set and increases in room rate. The resort spent significant marketing dollars on digital assets including photography and video, website, marketing tools and public relations.

Post repositioning, the Sanctuary enjoys one of the highest ADRs in the state and achieved the target ADR a year ahead of projections. The plan also resulted in a culture shift whereby the resort now benchmarks against the very best in the industry. The financial rewards from the effort developed quickly and the goals set were exceeded.

Apollo and Chartres purchased the Novotel New York Times Square for US$94 million in 2012 and began a US$85 million renovation. The property remained open through the “metamorphosis” and achieved increases in ADR and RevPAR during the process. After completing the repositioning in 2014, Millennium & Copthorne acquired the hotel for US$274 million. It’s a great success story – one in which strategic market planning played a key role.

Effective strategic market planning is best conducted via an integrated team process, facilitated by the organization’s vice president of sales and marketing, director of sales and marketing, or knowledgeable expert. The team should include ownership and/or the asset manager, general manager, and other department managers; but it may also include the architect, designer and other relevant team members for a new-build or repositioning initiative. 

The planning process generally requires three to four months to complete and employs numerous marketing apparatus, including research, competitive analysis, an inventory of current marketing tools and processes, and behavioral timeline development.

I challenge you to give it a go and predict you will never develop another project without crafting a strategic market plan.

 


Contributed by John Fareed, managing director, Horwath HTL, New York City

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