Marketing Management in the Hotel Industry
Introduction
The image a company portrays can make or break its profit margins and this challenge doesn’t come bigger than in the hospitality and tourism industry, especially the hotels. The hotel industry can be quite slippery in that industry critics could be giving rave reviews today and tomorrow your company is the punch line for jokes on how not to run a hotel. The sudden change of opinions could be down to one or a couple of disgruntled customers. All these can be minimized if your staff is sufficiently trained on how to offer the best service to the customers and how they should conduct themselves when dealing with customer complaints.
Once you set your house in order, then the next challenge is improving the appeal and image of your company through running a comprehensive marketing campaign. This way, you are hoping to woo future customers and also retain the current ones through offering certain incentives. These include running promotions, offering honeymoon packages plus many others. The key here is to make sure that this information reaches your target market and this is something the Fairmont Raffles Hotels International has managed to achieve. It operates a large number of hotels and resorts around the world and its marketing campaign will be the subject of my essay. (Clarke et al: p 63)
Fairmont Raffles Hotels International
The Fairmont Raffles Hotels International is a hotel chain that operates “over 88 hotels and resorts in 27 countries around the world.”(2008). Even though the structure of the company has changed a lot with recent mergers and acquisitions; the parent company operates three main brands of hotels under its wings. These are Raffles, Fairmont, and Swiss Hotels. Its trademark products include the Plaza Hotel in New York and the Savoy Hotel in London. The Fairmont Raffles has already cut its niche in the luxury market but this sector is quite competitive when you throw in the likes of the Hiltons and the Ritz-Carltons. (2008)
As explained earlier, the hotel industry can be quite fickle and a particular hotel can rake in huge profits during the tourist seasons but during the low seasons, they are barely keeping their heads above the water. Reading the market conditions is something the Fairmont Raffles has done exceptionally and some of the packages it has offered hope to attract prospective customers even during the low season. Through sufficient communication and promotion packages, this worldwide brand of the hotel has managed to run an effective marketing campaign that has its brand name almost at the top of the luxury market. (Miller et al: p 370)
Customer Satisfaction
The company’s success can be measured by the kind of reviews it is receiving from satisfied customers. So far the Fairmont Raffles has been doing quite well going by the article that appeared in the BusinessWeek magazine on March 3rd, 2008. Its level of service and excellence was highly appreciated by the guests who used its hotels and resorts. “It scored a remarkable third place overall out of the 50 best providers of customer service” (2007).
The brands high ranking was accredited to a variety of factors. First of all, the 30000 strong members of staff around the world took the responsibility of promoting and marketing the company’s brand. They all underwent extensive human resources programs to motivate them during the delivery of services. (Crotts et al; 18)
Furthermore, the exceptional employees were rewarded for their performance; a reward system that could rival the personalized experiences a guest receives when staying or dining at the hotels. It is a rule that most companies in the service industry overlook. If you want your employees to deliver a certain level of service that you expect of them, you must also treat them with a similar level of respect so that they can reciprocate it to the guest or customer.
With over 5000 voters taking part in this poll, a high score also meant that the marketing strategy being employed was on the right track since a higher number of visitors were passing through its doors. Achieving high guest figures is nearly impossible if the employees are disgruntled and dissatisfied with work conditions. As explained earlier a service industry’s success depends a lot on the image it portrays and its employees are the natural ambassadors for the brand. (Boella: 79)
This fact is further understated when the company was also previously selected as the best employer in “Singapore in 2007.”(2009). It was the company’s fourth successive award in this country and furthermore, it was the only hotel management company to make it to the list. This success was also attributed to the programs implemented by the human resource development. This included the “Pathfinders Career Opportunities program, Destinations Travel program and Raffles Univirtual.”(2009). The pathfinder career opportunities program kept the employees in the know-how as to what vacancies are available in the company. By keeping the process internal, employees were given an equal opportunity to move up the management ladder.
The second program offered attractive services to its employees and this included accommodation, golf, and spa experiences at affordable rates. These services were easily available to the employees and all they had to do was apply online. “Raffles Univirtual was online distance learning program that was prepared in partnership with Cornell University.”(2009) Managers who are undertaking these courses were given sufficient training “in Hospitality Management, Financial Management, Foodservice Management, and Leadership.”(2009)
Selected employees were also encouraged to undertake rather diverse courses so as to appeal to every guest that would be coming to the hotel. This included “wine appreciation and even neuro- linguistic services programming.”(2009) Advertising the availability of such unique services at its premises helped the Fairmont Raffles to cut a niche amongst various travelers in the luxury market.
The measures undertaken above by the hotel have helped to portray it in good light and this has worked in its favor when running the marketing campaign through the various media outlets. Most marketing strategies undertaken by hotels are usually structured in the form of packages that are offered to guests at a discounted rate. The communication outlet selected is usually chosen because it appeals to a particular demographic and a campaign that was launched in one country won’t necessarily be successful in another country. Every marketing campaign should take into account the cultures and traditions in their respective market. (Boomer et al: p 133)Other factors like high and low seasons also play a part. We will therefore look at some of the packages the Fairmont Raffles Hotels have come up with to attract various customers.
Honeymoon Package
The hotel especially before the recent merger had a rich history in hosting fantastic weddings and they hoped to continue with this trend especially now with the added capital that has come in through the merger. They introduced the Platinum Honeymoon Program. Interested couples can have their weddings at the hotel or resort of their choosing. By subscribing to this package, the couples will enjoy the services of a concierge who will be provided by the hotel to assist in the details of their honeymoon.
They will have access to the hotel’s fantastic global locations which include “romantic beaches, adventurous safari options and glamorous city getaways.”(Breslow) The hotel guarantees a similar or even better level of service on the honeymoon as compared to the wedding. The hotel of course is paid 5% of the total cost of the wedding for its services which is quite affordable when you look at the grandiose nature of its services.
The hotel wants to maintain its competitive edge in the weddings sector and also tap into the ever-growing and lucrative honeymoon industry. This will create alternative revenue sources especially in the low tourist seasons but this is not their main goal. Most guests return to a hotel they have used before frequently if it is available. While the common belief has always been the level of service is what draws them back; that usually works for the first-time guests.
What most guests prefer is the familiarity and routine that comes with staying and dining at a hotel they have been in before. If the service continues to be exceptional, the hotel will be at the top of its list. This is a marketing strategy Fairmont Raffles is banking on to secure their future clientele and nothing beats a happily married couple that would be showing up each year for their honeymoon. (Breslow)
Going “Green”
For the eco-savvy traveler who is worried about global warming and carbon emissions, “Fairmont Hotels & Resorts and Lexus have partnered to unveil two Lexus hybrid living suites.”(Joel) This is obviously an ambitious venture even in a hotel of its stature but they hope to appeal to every visitor. The facilities will first be launched at the Fairmont San Francisco and it will be followed by its counterpart in Washington. Lexus has a strong tradition in the auto industry especially in the recent manufacturing of luxury hybrid vehicles.
The partnership is therefore not just a publicity stunt but a serious venture by the hotel to create a luxurious environment that has the least impact on the environment but on the other hand does not compromise on style and comfort. The windows of the individual suites will be designed in a way that maximizes the use of natural light instead of relying too much on artificial light in the daytime. The dishes being offered will also be organically prepared and bio-dynamic. The suites will be priced at $869 per night which is quite steep but that is the price you pay for luxury. Going “green” is the new catchphrase in the business world and it has proved to be something more than a fashion sense; it is now a lifestyle.
Capitalizing on this business opportunity today might only cater for a few interested parties who can afford it. However, the number of people who are conscious about the environment is increasing each day and factors like a hotel’s efficiency in recycling waste products might play a part when choosing their accommodation. The prices are also predicted to come down once the demand increases and the service also becomes widespread. The standards will obviously be set by those who have been in this area the longest and the Fairmont Hotels is looking towards becoming a market leader in eco-tourism.
Conclusion
Consistency is a good thing in the hotel business because it creates room for customer loyalty which in turn has a marked effect on profitability. Attaining the benchmarks set for customer satisfaction should not be an excuse for resting on one’s laurels and wait for the dollars to trickle in. Consistency should go hand in hand with the ability to read market conditions so that the hotel or resort can re-invent itself to fit into the customer’s needs. This is something the Fairmont group of hotels has achieved and hopes to keep on doing well into the future. Before launching an effective marketing campaign, the first thing any player in the hospitality industry should realize is the importance of employee satisfaction in their current jobs. (Sawin: p 23)
Poor human resource skills can contribute to the failure of a business strategy well before the market forces come into play. Another thing is the promotions or marketing incentives being rolled out should not deviate far from the company’s area of specialty.
This way, the respective hotel or resort is fully aware of the market forces that come into play and the particular tastes of the guests. What the Fairmont hotels have managed to do is create this enabling environment first then focused their efforts on marketing the packages we have looked at. The previous challenge used to be how to get the information to the customer but with the expansion of internet services; this obstacle is no longer there with the current challenge is coming up with a marketing strategy that is both unique and attractive to the customer. (Arch et al: p 291)
References
Arch G. Woodside, Drew Martin, (2008) Tourism Management, CABI Publisher, pp 291-298.
Boomer, Lucius Messenger, (1938), Hotel Management: Principles and Practices, New York, Harper, pp 131-133.
Boella M J, (1992) Human resource management in the hospitality industry, Nelson Thornes, pp 78-82.
Breslow Sardone Susan, “Honeymoon Packages at Fairmont Hotels”. Web.
Clarke Alan, Wei Chein (2008) International Hospitality Management, Butterworth-Heinemann, pp 63-69.
Crotts John C, (2000) Buhalis Dimitrois, Global Alliances in Tourism and Hospitality Management, Haworth Press Inc, pp 18-24.
Hospitality News, 2007, “Brand Expansion Remains Top Priority at Fairmont.
Raffles Hotels International”. Web.
Hospitality Directory, 2008, “Fairmont Raffles Hotels International (FRHI)”. Web.
Joel, 2008, “Lexus Rooms With Fairmont to Bring Green Suite to Travelers. Web.
Miller E Jack, (2002) Walker John R, Drummond Karen Eich, Supervision in the Hospitality Industry, Wiley, 4th Edition, pp 369-378.
Miller E Jack, (2002) Walker John R, Drummond Karen Eich, Supervision in the Hospitality Industry, Wiley, 5th Edition, pp 119-125.
Sawin Philip, Madland Denise, Richards Mary K, Steidenger Jana Reeg, A Literature Guide to the Hospitality Industry, GreenWood Press pp 23-29.
R. K. Malhotra, (1997), Encyclopedia of Hotel Management and Tourism, Published by Anmol Publications PVT, pp 17-19.