For many years traditional brand marketing approach has been dominant in the luxury hospitality industry. It made sense then, as investing in lavish OOH ads or compelling TV spots insured that hospitality companies would reach as many people as possible, regardless of whether they actually were the target audience or not. And for many major industry players, these years of investment are obviously paying off. Take, for example, any big hotel chain with an established name, like Marriott or Mandarin Oriental, or even a luxury conglomerate like LVMH: their hotel divisions now can easily leverage decades of continuous investment in brand awareness and recognition. Travelers are familiar with these brands, they have certain expectations and they know that these expectations will be met.
But times are changing, and so are the technology and the marketing landscape. And naturally, this brings up the question: Is traditional brand marketing still the best possible investment for the luxury hospitality brands? Does it really make sense to pour an annual hotel marketing budget almost completely into traditional brand marketing, specifically for independent hotel chains, boutique hotels or high-end vacation rental companies?
Let’s take a closer look.
The pitfalls of traditional brand marketing
Clearly, investing in brand development and awareness, especially in the luxury sector is a must. Every hotelier or hospitality marketer wants their business to be widely recognized and easily differentiated from the competition. For example, producing a short breath-taking movie is a great way to create a strong brand narrative, tell an alluring story, captivate the minds of affluent travelers and evoke an emotional response. There is no way around it, and in this sense, brand marketing is here to stay. However, when it comes to the traditional part of it, I wouldn’t be so sure.
Shift to Online
Let’s not forget that there are is a huge generational shift happening right now and that means a change in consumer behaviors as well. Tech-savvy millennials, Gen Z and Gen Alpha are used to experiencing brands online. Even more than that, they expect to engage with businesses either on social media or directly on their company website. It comes at no surprise, that the amount of money hotels allocate to traditional brand marketing efforts (OOH, print, TV or radio) is decreasing slowly but steadily, and has already been surpassed by the budgets spent on digital marketing.
Creative production and promotion costs
Another point to keep in mind are the costs associated with traditional brand marketing. Of course, if we are talking about a business with a massive marketing and advertising budget, adding a couple of print or newspaper ads here and there won’t hurt. However, for hospitality companies with more limited budgets it might be not the right choice. Moreover, in our opinion, it is questionable how measurable and scalable some of these marketing activities truly are.
Limited and insufficient targeting
The whole point of traditional brand marketing in luxury is to reach literally everyone under the sun, to plant that image of a “highly-desirable, yet unobtainable for most” brand. In other words, it is all about marketing to everyone, but selling only to a few. The targeting, in this case, is limited to the type of analogue media at best, compared to the endless possibilities that direct online marketing offers when done online or via direct mail. There is no way to make sure these brand marketing efforts attract “bookers” and not “lookers” or to measure actual ROIs when it comes to budgets. Additionally, traditional media doesn’t allow the same level of personalization and customization as digital ones do, especially if you add automation to the equation.
So what is the alternative?
The “integrated” approach
While we would never advise against brand marketing per se, as it is an essential element to building and growing a successful luxury hospitality business, you should never put all your eggs in one basket. A better and smarter approach would be to combine the best aspects of both traditional brand and direct online marketing. This way as a hospitality business owner or a luxury marketer you can concentrate on getting positive short to mid-term results to fuel the company growth, while pushing a long term vision of developing a recognizable and desirable brand.
Where brand marketing falls flat, direct response marketing thrives: there is plenty of space for customization and creativity (one example would be rich media ads), everything is measurable, can be A/B tested, tweaked and optimized on the go. There is way more creative freedom and control over what the customer experiences on his journey to the sale. Costs associated with online niche media buying and the production of creative materials are usually lower, when compared to ad spend in traditional brand marketing (expensive photo-shoots, anyone?)
And more importantly, this approach goes beyond the “decision” stage. A thoroughly thought through and well designed marketing funnel will not only captivate the attention of an affluent traveler and then incite an action (a direct booking or call-back request for example), but also nurture already existing customers, promote recurring business, and inspire brand loyalty and word-of-mouth, which area also highly important in the luxury hospitality sector.