The more equity a brand has, the more value it has.
How long does it take to position a brand in the market and how much will it cost? How do you measure Brand Equity in the market? How do you sell seemingly intangible benefits of branding activities to financial controllers and owners?
In this month's Hotelintel.co 'The Conversation', we receive a master class in Hotel brand management and measurement by some of the best in the business:
Michael Marshall (MM), Minor Hotels, Chief Commercial Officer (CCO);
Paul Emmerson (PE), Onyx Hospitality Group, VP Brand;
Tom Thrussell (TT) , Centara Hotels & Resorts, VP Brand, Marketing & Digital;
What's the best way to measure Brand Equity for you?
MM: Ultimately revenue and profit. The more equity a brand has, the more value it has. The value of a brand is defined by how many people choose that brand over other brands, which is also known as brand affinity. At Minor Hotels, building brand affinity is a key element of our strategy to offer our guests a proposition that aligns with their shared values to retain loyal customers for longer.
TT: There are many indicators of brand equity, from qualitative metrics such as brand awareness and customer satisfaction through to the more quantitative like RevPar and profitability. The more robust your business, the stronger your brand equity is likely to be. Important barometers for me include:
Net Promoter Score - a likelihood to recommend suggests the experience suitably met or exceeded expectation, key in any successful branding strategy;
Guest Retention Rate is similarly important;
RGI (RevPAR Index/Revenue Generating Index) - helps us understand our share of business versus key competitors.
I'm also an advocate of conducting periodic research studies on brand perception and positioning. Not only can this inform development, product and experience decisions, it also serves as an objective tool to understand brand mind-share and validate that brand perceptions are aligned to strategy.
PE: Brand Equity (BE) is the importance of the brand in our guests' minds. So key metrics include things like brand awareness, salience, visibility, loyalty, pricing resilience - all of which can be easily measured - however, it can be quite hard to measure your brand equity vs. your competitors.
I tend to look at the developing strength of our BE to ensure we're staying on track to exceed revenue targets.
For example, guest research aligned with the analytics from digital campaigns (engagement not impressions).
Average Daily Rate (ADR) allows us to compare ourselves to our competitor set and shows how resilient our ADR is, an excellent indicator.
Combine this with the size, growth rate and engagement rate of your loyalty program and you'll start getting a clearer picture of your BE.
Brands care about branding. How do you explain the importance of 'branding' to non-branding people like your Financial Controller or your owners?
MM: It comes down to brand equity again. When a brand is established and well known within its customer base, it has a significant advantage over other brands and competitors. Therefore, we prioritise our own brands which are very well established and have a proven track record of success.
The physical 'touch feel' experience is branding in all its bare simplicity. People relate to specific types of experiences which in turn predisposition them to make their purchasing decisions.
At an owner level our main priority is managing the correlation between spending investment and profit generating.
My view at owner level always focuses on the journey between investment and revenue; even if the revenue is intangible which branding in many instances can be, it can still directly correlate to cash.
The explanation of branding to FCs or owners should always follow the direction of how product awareness and loyalty relates to revenue. The other key factor is the invaluable commodity of consumer data segmentation.
TT: Often it is a case of not just explaining the importance, but also what branding actually is. To many, branding remains visual -- the logo, design, colours, pictures etc., which is of course merely one facet. I find once people understand it holistically, from organisational culture to people and from product to service and experience, then they have greater clarity on the relevance and power of branding, as well as the role that everyone in an organisation plays in building their brand. Fortunately at Centara, our owners and finance executives are very savvy when it comes to the relationship between a strong brand and positive financial impact. They recognise that a strong, authentic, unique and consistent brand strategy builds preference, trust and loyalty, driving both occupancy and rate but also total revenue. The metrics mentioned earlier are good indicators
PE: You may be surprised to hear that this one is easy to answer... BE drives Brand Value (BV); BV is the financial value that the brand adds to your business. So if your CFO & shareholders want to see higher profits and a more valuable business, they'll want to be as much of a brand guardian as the brand managers are. Businesses who do not invest in their brands will find themselves having a far harder time building brand awareness, and supporting a high and resilient ADR.
This argument always comes in handy when I'm submitting my budgets and plans!
What are some average ROI figures for branding, and PR & marketing activities for your company and where do you want to see it grow in the future and how can you achieve that goal?
MM: From the commercial side we will continue to focus on building brand awareness, as brand awareness and brand equity ultimately leads to more revenue. During the peak of lockdown we launched an #AnantaraEscapism content campaign focused on keeping the Anantara brand front of mind for our consumers whilst they could not travel. During that time frame we were delighted to see that Anantara secured a 40% share of voice against our main comp set demonstrating the power of engaging with our audience in a timely and authentic manner. We will continue to apply these learnings to all of our future campaigns and messaging for 2021 and beyond.
Across public relations, social media and marketing our key focus is to continue navigating the changing landscape of traditional print vs. digital media through the ongoing creation and investment into high quality content across all our platforms. The Anantara Experience campaign is an example of a large wide scale integrated campaign which features stunning video and photography content which was then adapted to be used in multiple ways from digital advertising to media stories and led to a huge boost in our international brand awareness and high consumer engagement.
Brand recognition also comes from prestigious awards such as the Travel + Leisure and Conde Nast Readers' Choice and we've done very well in this area especially for the Anantara brand.
Four resorts were named in the overall Best Resorts in the World, with Anantara Chiang Mai Resort in Thailand achieving #4, Naladhu Private Island Maldives #5, Qasr Al Sarab Desert Resort by Anantara in the UAE #29 and Anantara Al Jabal Al Akhdar in Oman #50. Anantara Chiang Mai Resort and Anantara Golden Triangle Elephant Camp & Resort were also awarded the number one and two spots respectively in the Top 10 South-east Asia Resort Hotels category in the 2020 Travel + Leisure World's Best Awards. The Anantara brand was also voted in at #9 in the world by Travel + Leisure readers. Award wins such as these help PR our brand recognition on the world stage.
TT: There's no straightforward answer here I'm afraid. ROIs vary dramatically according to the objective, targeting strategy, communication channel and more. What's important however is that all activities complement one another to drive the end goal. Take online advertising as an example of this in microcosm. We'll run prospecting display ads and generic term search ads, both with seemingly low ROIs. At the same time however there will be highly focused retargeting ads and brand term search marketing, both with high perceived ROIs. The fact is that without the top funnel efforts at driving awareness, the opportunity to drive conversions at the bottom of the funnel would have been far more limited. This pattern is attributable to all activities across the marketing mix and the reason it's important to take a comprehensive and often 360 degree approach to initiatives.
PE: This is tough to quantify as it's so dependent upon the activity, offer, creative messaging, media etc.
At ONYX, we look hard at the results of each marketing campaign, even each social media post, but these activities are supporting a broader top line goal of maintaining our ADR and occupancy goals.
In a time of great disruption, like now, there is a great opportunity for brand innovation, so I'd encourage any business to test and trial as many new ideas as they can, because the old benchmarks are now confined to the history books.
What's the most challenging thing about the commercial side of operating hotels?
MM: A key challenge we overcome regularly is the length of time and investment it can take to correctly position a new brand in the market. From all aspects of the commercial side including PR, Marketing and revenue, it is much easier to leverage an existing well-established brand when launching a new property in order to generate revenue more efficiently and effectively rather than a completely new or standalone project which would involve more time and resources to build brand recognition and affinity. With the integration of NH Hotels brand portfolio, we are hugely excited about the opportunity to 'cross-pollinate' some of these brands with Minor Hotels brands into new regions such as Avani and Anantara launching in Europe and NH Collection and Nhow brands coming to Asia, depending on their suitability and core values.
TT: That's a tough time to ask that question as right now, every hotel commercial team in every hotel is fighting tooth and nail for the same limited pool of business available. With that comes the need to be more creative, more innovative and more unique than ever however, and for a marketer this is challenging and incredibly exciting in equal measure.. It's a chance to push boundaries, throw caution to the wind and test new initiatives, sometimes unearthing a gem whilst at times learning from mistakes. We've certainly experienced both in the past 10 months. We've also developed the ability to pivot more sharply than ever in today's climate, to target new audiences, shift channel focus and create new revenue streams. The new learnings and aptitudes will set us in very good stead for the future
PE: Controlling your own disruption, so that you can innovate quicker than your competition. It's also the most fun part.
Hospitality is a parity-led business, we all sell beds and buffets, so how do we change the model to remain differentiated, and appealing to our guests? Innovation is the key. I recommend businesses run an innovation program each year to try to force disruption in their own product, service, experience and even business plan, because that is where the commercial, revenue generating opportunities of the future lie.
What advice do you have for those students leaving hospitality schools, or coming from other industries, and joining the commercial world of hotels?
MM: The main piece of advice I would give is to consider where your strengths and passions lie. If you love to tell stories and build relations with people and have an assiduous eye to detail, MarComs (public relations and marketing) will suit you well. If you are passionate about strategy and get excited about data and insights, e-commerce or revenue is a natural fit. Working in hotels is an incredibly rewarding and diverse career, with the opportunity to travel, meet people from around the world and constantly develop and diversify your skills across a multitude of sectors.
I'd also like to take the opportunity to recommend our brand-new hospitality school the AIHM. AIHM is an international hospitality institute founded by Minor Hotels, one of the world's fastest-growing hospitality companies, in academic association with Les Roches, a global leader in hospitality education based here in Bangkok and soon, Chonburi.
TT: I imagine there'll be a degree of apprehension amongst many of that audience right now! What I would say to them is not to worry, and in fact on the contrary, to be very excited.
Travel may not return in the same way as we knew it, but it will certainly return, and the commercial world of hotels is evolving into a more dynamic, more innovative and exciting place than ever, as a result of the various forms of industry disruption. The key to success will be the ability to really understand your current and future customers. Data and insight will inform the customer experience and human touch, so leverage it to step into the customers' shoes and deliver the experience they need, or indeed the experience they don't even know they need yet.
PE: The commercial side of hospitality is now based in a digital world. Whether it's the media we use, the intelligence systems we employ to set rates and manage distribution, or the analytics we gain from our activities, we're all digital based businesses. So whatever your specialism - from branding to sales - being digitally savvy is essential.
The challenge for those entering the Commercial Department today is how to balance digitisation with the fact that every hotel is a celebration of humanity; the joys of travel and exploration, of seeing something up close, tasting an exotic dish, meeting a new friend... and not just seeing it all on a screen. If you can find the balance that personalises every experience perfectly for every guest, I believe that you're on the right path to building a profitable brand.
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