ROOMS FOR IMPROVEMENT
ROOMS FOR HYATT HOTELS BOOKS ITSELF FOR MORE BRANDING BY FOLDING “THE TOUCH” TAGLINE INTO EVERYTHING IT DOES.
Hotel service providers have always been challenged with breaking through competitive clutter to reach consumers. Lately, that challenge has become an even taller order.
Over the last few years, a booming economy has fueled the entry of new players of both traditional and non-traditional persuasions. Consolidation has also taken place, creating new collective powerhouses tied to strong economies of scale. And the Internet has changed the way consumers book travel arrangements and the prices they’re willing to pay.
Compound those occurrences with traveler tastes that are simplifying (people are trading five-piece luggage sets for weekend get-away duffels), and what was once a challenge is now a call for reinvention.
But in an industry where rooms, lobbies, and mints on pillows seem identical to many customers, Chicago-based Hyatt Hotels Corp. stands out. Forty-two years after the company opened its first property at Los Angeles International Airport – and 33 years since it transformed the lodging industry with the first open-atrium hotel – the still relatively small chain continues to differentiate itself with innovative services, creative marketing, and a focused, controlled growth plan uninfluenced by Wall Street. (The company is privately held.) If you like your high-class settings to be unpretentious, this is the hotel for you.
Hyatt sets up in gateway locales with architecturally creative properties spread out across three lines of business: namesake properties, Park Hyatt units, and resorts. From a marketing standpoint, the company has done well identifying core customers, playing to their affinities, and keeping communications fresh with regular advertising and promotional programs, all of which are united under the tagline, “Feel the Hyatt Touch.”
The company’s recipe for success has let it ride a wave of industry ebbs and flows without stumbling (gross sales rose 8.3 percent to $3.6 billion in 1999, and gross operating profits have jumped by double digits every year since 1992) while undertaking its largest expansion ever.
Still, the company isn’t immune to the changes sweeping the $100-plus billion hotel category. As a result, Hyatt is rolling out several new initiatives to help it keep a leadership position among the nation’s hoteliers. Major moves began last March with the hiring of Bruce Mainzer as vp-marketing. A 24-year travel veteran who most recently served as senior vp-marketing and sales with Vail Resorts in Colorado, Mainzer quickly took inventory of the company’s marketing vault and came to a conclusion.
“Hyatt needs to step up its marketing efforts to break through industry consolidation and clutter,” he says. “So we’re turning up the volume on all marketing efforts.”
The Trip Begins Mainzer’s team sprang into action last June, turning industry heads with the reintroduction of Hyatt’s Gold Passport loyalty program (which won the travel industry’s Freddie Award for Best Bonus Promotion in ’99). Launched in 1987, Gold Passport for much of the ’90s was the standard for point-based hospitality frequency platforms, and directed how many hoteliers communicated with and rewarded guests. The program doles out typical points as well as perks, putting “members” on separate floors in special rooms, and stroking them further with nifty benefits.
Gold Passport is segmented into three membership levels: Gold, Platinum, and Diamond. Entry-level Gold members get the aforementioned perks, and after several stays move to Platinum members, then Diamond – with each level adding another layer of benefits. “The success of the program has been those special services for members,” says Nan Moss, assistant vp-global marketing alliances and programs. “But we decided it was a good time to reevaluate.”
The relaunched program offers enhancements that give Hyatt’s 4.2 million (and counting) Passport members more benefits and greater flexibility. Key changes include the elimination of blackout dates for all members, and new benefits that give Platinum and Diamond members rooms at sold-out properties. Hyatt, which operates 118 properties in North America and 77 more around the globe, also streamlined the awards structure and eliminated premium periods to make it easier for guests to earn and redeem points. For example, members previously needed to redeem 8,000 to 13,000 points to earn one free night. Now the minimum is 5,000. Points now never expire, as long as members spend one night at a property each calendar year. The program continues to be linked to most major airline mile programs.
Hyatt heralded the revamped program with a bonus-point promotion that ran June 1 to Sept. 1. With their third summer stay, members earned 5,000 to 25,000 points and were upgraded to Platinum status (which normally requires 15 nights).
“When you’re up against a Starwood or a Marriott, you’re up against a lot,” says Richard Barlow, ceo of Cincinnati-based Frequency Marketing, which designed and ran Starwood’s Club International program from 1986 to 1995. “You better do something to give the consumer a sense that there’s something special about your brand.”
Hyatt’s trying. The Passport initiative is the focal point of consumer marketing projects, and is linked to stand-alone programs as well as the promotional initiatives the company orchestrates.
The hotel chain ran a successful Touch effort last summer that gave guests dining certificates, let them check out late, and lowered room rates. Like other hotel chains, it also runs major tie-ins with the Automobile Association of America and links with American Express to bestow room upgrades and other awards to cardholders.
The company’s largest annual promotion is the Night After Nights effort, a winter program that hands free nights to customers who stay at units from November through March. The incentive has worked well in the last few years to fill rooms, generate additional Passport members (customers sign up to participate), and give guests what they really want – free rooms. “We’ve tested merchandise awards before,” says Moss. “But every time we do, we’ve been reminded that what our customers want more than anything is [free] nights.”
Powerful databases managed by Dallas-based RappCollins Worldwide track Night After Nights activity as well as Gold Passport behavior. Using the database, Hyatt mails personalized award letters to qualifying Nights participants each spring and quarterly Passport newsletters with statements year-round. (The database also helps target customers for discount programs such as Hyatt on Sale and Touch Weekends.)
Late Check-Out The corporate-level Hyatt marketing team spearheads advertising and promotional programs for the properties as well as targeted national initiatives such as Meeting Dividends, which is used to entice meeting planners. Other efforts are tailored specifically for business travelers or families. All ads, promotions, direct mail, and Internet campaigns roll out with specific messages and consistent themes.
“This industry is a multi-layered beast. Lots of relationship marketing, national promotions, and individual hotel marketing,” says Karen Seaman, senior vp with Hyatt marketing shop Cramer-Krasselt in Chicago. “Hyatt has done a good job staying focused and making sure all marketing efforts are aligned.”
The chain’s size – one-fifth that of No. 1 Marriott – is considered by its branders to be an attribute, enabling the company to better stay on top of marketing. “Larger brands get benefits from being in so many places, but their ability to capitalize on unique aspects of locations or types of properties is compromised,” Mainzer says.
Mainzer’s group helps individual properties with their own efforts, too. Hotels have marketing people on staff who collaborate with corporate on ads and promotions. Properties will often unknowingly put together similar campaigns that can be merged into a stronger regional program. “Many national [competitor] efforts look different from some of the things their individual hotels do,” says Mainzer. “We want to be consistent across the board. This is one brand and we need to work together.”
Booking in Advance What changes will come in 2001? For one, Mainzer’s group will put what until now has been a “Marketing Made to Order” catalog of print-ad templates online, allowing hotels to visit an intranet and mock up their own collateral. “We’ll have a structure that maintains consistency at the local marketing level, but gives our hotels the tools and choices to fashion their own messages,” says Moss. Hyatt.com will be relaunched as well.
Next, the company will begin separate branding initiatives for its 18-unit Park Hyatt luxury hotels. “We need to convince the customer that Park Hyatt is a separate brand,” Mainzer says. Plans are still top secret, but ads and promotions will pit the properties against Ritz-Carton and Four Seasons. The company is currently in discussions with several “interesting” co-marketing partners, he says.
Hyatt will also continue with cause-related efforts. Each hotel management employee is encouraged to spend two paid workdays each year volunteering in community programs. Last June, the company ran a National Blood Drive for employees.
Initiatives for the resort properties will continue, as will efforts for Camp Hyatt, a kid-tailored program that began in 1989 to offer pint-sized guests games and activities. The company will also hype its Incentive and Promotion unit, which focuses on the sales incentive and business-to-business markets. On the physical side, Hyatt has allocated $1 billion for new properties over the next five years.
Expect aggressive image advertising to break in 2001, as Mainzer begins supporting the branding push with larger media buys. Promotions, he says, will continue at their current level.
Team Hyatt will also begin creating marketing efforts pitched to younger travelers. “There is a younger population coming in,” says Mainzer. “We need to make sure Hyatt means as much to them as it does to the current generation of frequent travelers.”
While much is happening at Hyatt, a lot is going on at rival hotel chains, too. A sampling: Adams Mark Hotels & Resorts recently introduced Gold Mark Rewards, a program that rewards patrons with cash instead of points or miles. Starwood Hotels & Resorts allows guests to earn and redeem points at any of its six brands. (Bass Hotels uses a similar tack.) Hilton’s “Double Dip” points and miles offer has been successful. And Marriott added an upper-echelon Elite level to its frequency program and united its numerous chains under one marketing umbrella.
Seventeen years after Holiday Inn launched Priority Club, the industry’s first frequency program, hotel companies are still figuring out the best ways to reach customers. But Hyatt doesn’t want to just reach them – it wants to Touch them.
