The hotel industry in the U.S. has had to deal with the challenges of the economic downturn just like everyone else, but some have used it as a time to advance rather than retreat.
A recent story in the New York Times quotes Bjorn Hanson of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University who estimates that the capital investment in existing hotel facilities peaked at $5.5 billion in 2008. He further stated that expenditures fell to $3.3 billion in 2009 and were expected to drop to approximately $2.7 billion in 2010.
He also made the point that the lack of maintenance was beginning to be noticed by guests.
But there are exceptions. Starwood Hotels and Resorts, whose brands include Sheraton and Westin, are planning guest room redesigns in 41 key properties. In addition, Holiday Inn will complete its system-wide, top-to-bottom upgrade started in 2007 by the end of this year. Other top travel hotels are undergoing refurbishments in high-visibility markets.
The article also quotes Kevin Kowalski, senior vice president for global brand management at IHG, owners of the Holiday Inn brand, who states “Research from every recession since the Great Depression demonstrates brands that increased investment on their customer experience and marketing activity during the recession gained market share both during the downturn and during the recovery.”
Kowalski went on to say that the improvements included upgrades to lobbies, guest rooms and bathrooms, as well as new employee training programs, and had already resulted in increased revenue per room of 3-7 percent compared to unimproved rooms.
Finally, the article goes on to say that the challenges in the hotel industry are not over yet and a number of hotels are using these upgrades to help combat rate erosion in an increasingly price sensitive business climate.
The bottom line on all this proves again that there is financial value in maintaining a strong brand. Whether in supporting higher prices, increased market share or protecting existing prices from devaluation. It also reinforces another important point that a brand is much more than a logo, an ad slogan, or even a specific product – it’s the entire customer experience.
Read the entire New York Times article.
And if you want to talk to someone about sprucing up your brand, contact us today by e-mail or phone 903-534-5220.
He also made the point that the lack of maintenance was beginning to be noticed by guests.
But there are exceptions. Starwood Hotels and Resorts, whose brands include Sheraton and Westin, are planning guest room redesigns in 41 key properties. In addition, Holiday Inn will complete its system-wide, top-to-bottom upgrade started in 2007 by the end of this year. Other top travel hotels are undergoing refurbishments in high-visibility markets.
The article also quotes Kevin Kowalski, senior vice president for global brand management at IHG, owners of the Holiday Inn brand, who states “Research from every recession since the Great Depression demonstrates brands that increased investment on their customer experience and marketing activity during the recession gained market share both during the downturn and during the recovery.”
Kowalski went on to say that the improvements included upgrades to lobbies, guest rooms and bathrooms, as well as new employee training programs, and had already resulted in increased revenue per room of 3-7 percent compared to unimproved rooms.
Finally, the article goes on to say that the challenges in the hotel industry are not over yet and a number of hotels are using these upgrades to help combat rate erosion in an increasingly price sensitive business climate.
The bottom line on all this proves again that there is financial value in maintaining a strong brand. Whether in supporting higher prices, increased market share or protecting existing prices from devaluation. It also reinforces another important point that a brand is much more than a logo, an ad slogan, or even a specific product – it’s the entire customer experience.
Read the entire New York Times article.
And if you want to talk to someone about sprucing up your brand, contact us today by e-mail or phone 903-534-5220.
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