With all the global disruption in 2016, ranging from Trump to terrorism, there’s a decided shift in the luxury travel industry toward simplicity, balance, human connection, self-discovery, and getting back to the basics of what’s important in life.
That was the biggest takeaway at the International Luxury Travel Market 2016 conference in Cannes last week. Most of the participating brands emphasized human connection and elevated, authentic cultural experiences to better reconnect family and loved ones with each other, and engage people in the local destination. Luxury is very personal in 2016.
Top-tier hotel groups are now aligning their marketing and communications around those themes. The biggest challenge for luxury brands, however, is differentiating and defining their unique value proposition for customers when every upscale hotel is basically saying the same thing.
Arnaud Champenois, SVP brand & marketing at Belmond, summed up today’s consumer expectations in the luxury space, pretty much shared by everyone else at ILTM.
“Luxury consumers are looking for authenticity, true quality, genuine people, real stories, and immersive local experiences,” he said. “At the same time, they make their decisions based on personal values and interests for experiences rather than material goods. So there needs to be a balance between doing things and the good life.”
The “doing things” part, Champenois explained, refers more to active learning experiences that help improve travelers’ understanding of themselves and different cultures. He said that’s where the demand is because travelers are seeking higher levels of engagement to create longer lasting, more impactful memories.
To deliver on that, Belmond is creating travel experiences with an educational emphasis around three touch points: Nature, Culture, and Wellbeing. It’s interesting how culinary isn’t featured in that mix. Instead, innovative food and beverage is embedded in the local experience across all three pillars.
For example, Belmond’s new Hope & Harvest tour in Cape Town takes guests to local townships where they gather for lunch with the people behind a citizen-led vegetable garden collaborative that has scaled nationwide.
“In a world where time is true luxury,” Champenois said, “[luxury consumers] want to better themselves both intellectually and physically.”
Belmond Wants To Double In Size
Roeland Vos, president and CEO of Belmond, outlined an aggressive growth strategy to expand the company’s footprint beyond its present 47 hotels, resorts, small-ship cruises, and historic rail journeys in 23 countries. He said the company wants to contract somewhere between 36-53 new properties though 2020 to drive topline growth and bottomline results, increase brand awareness, and expand the global footprint in under-represented countries, including the U.S.
“We want to identify new destinations with as many as 1,000 potential hotel targets that represent what Belmond stands for as a brand,” said Vos.
To help drive brand awareness to support the ambitious product development, Belmond is launching a new website in mid-2017 that will showcase the new destination experiences as much as the properties.
Aside from that, Belmond’s long-term business strategy is to continue partnering with important properties of all different sizes and shapes in both iconic and emerging destinations. But because the properties are so disparate in nature, the new focus on destination experiences and storytelling is designed to provide a common thread that better conveys the overall brand experience to the marketplace.
Meaning, Belmond is paralleling the shift in luxury consumer demand from hardware to software by slightly repositioning the company around programming as much as product. Although, Vos insisted, “The underlying powerhouse is the individual properties, and we should never lose that.”
The goal is still to lead with hotel and transportation inventory that singularly define their particular destination.
“We’re bringing in the name Belmond but also keeping the wonderful identity that the hotels have anyway,” Vos explained. “For example, the magic sits in the Cipriani. The magic sits in the Copacabana Palace. That’s where the history is. That’s where the heritage is. When you feel it, you feel it under your skin.”
Except layering the Belmond brand onto those hotels has been a challenge in the past, to a degree, because the properties are iconic but the brand is only a couple years old following the Orient-Express rebrand. No one, for example, ever says they’re going to the Belmond Cipriani. Vos admitted he doesn’t, but he thinks the experiential element is a way to tie the Belmond name with the product more decisively.
Although, that’s a considerable ask when all luxury brands are now pushing local immersion.
“Where I think the magic of the brand begins to kick in is when people realize we are creating a kind of a golden thread among those properties,” he said. “If you start recognizing what the experiences are, that if you travel to the Cipriani or Copacabana, you’re getting this Belmond experience. How we’re defining those Belmond moments and those Belmond experiences in the properties is then something that customers will actually start recognizing. That’s where the brand really starts coming to life.”
Ideally, Vos wants to recreate the clustering of different travel experiences, including hotels and cruise/rail, like the company has developed in Peru and Italy. He agreed that’s easier said than done, but he said the demand is growing for multi-modal travel. His main priority, for now, is communicating Belmond’s somewhat unique positioning in the market to owners and customers in order to drive overall growth.
“The differentiator for us is we’re about finding hotels in the sweet spot between 50 to 100 rooms, where we can support owners financially to bring their properties back to life,” Vos said. “The second piece is we’re going into destinations where some of the hard brands are not going to go because their standards don’t fit into what we’re doing. We don’t define luxury by 50-square-meter rooms or 100-square-meter rooms. Our brand standards are different. We define luxury by the exclusive experience that you can get in the destination and nowhere else.”
Shangri-La Asks Guests To Define Loyalty
Shangri-La Hotels & Resorts strove to engage the luxury consumer in 2016 by inspiring them to submit user-generated content explaining their feelings about loyalty.
The company’s “#LoyaltyIs” brand campaign and microsite kicked off with videos of five cultural influencers discussing their attachment to specific cities from Paris to Hong Kong. Their stories are more pointedly about their personal and professional evolution in the destinations, and how the destinations have influenced their life decisions, which is messaging aimed squarely at a more Millennial-age audience.
In four out of the five videos, there’s relatively small focus on the actual hotels themselves.
Then Shangri-La launched additional videos profiling long-term employees and repeat guests who shared their views on the importance of loyalty. One of them is Edward Wa, who has worked as a lobby ambassador at the Kowloon Shangri-La, Hong Kong for 35 years.
“I have to say watching that video gives me goose-pimples and makes my eyes water because he’s still working for us, and I know him well,” said Barbara Pang, SVP of sales & marketing at Shangri-La Hotels. “It’s a very emotional video and it brings out the human side of travel, and that’s how we’re connecting with our customers, by sharing that content.”
With those initial videos in place, the hotel group then launched the #LoyaltyIs contest late last year seeking submissions from the general public for their feelings about loyalty in any context. People like Tuyan Richelle, who got married at Shangri-La Mactan Resort & Spa in the Philippines, wrote: “#LoyaltyIs choosing to love someone you promised your whole being to. It’s not based on feelings, it’s a choice.”
“It’s really interesting to see how the five influencers look at loyalty differently because they come from different cultural backgrounds,” said Pang. “They also really inspired people entering the contest to put in a lot of quality content.”
She explained that the #LoyaltyIs initiative was designed to speak to all consumers across all segments. That’s important because luxury brands are more challenged today to segment customers by age, travel purpose, and other demographic delineations. In order for messaging to resonate with luxury travelers, according to Pang, it has to speak to customers’ values.
To facilitate that, hotel groups like Shangri-La are all investing in new customer relationship management technology to dissect the entire online customer journey to understand how people are engaging with the brand at different touch points.
“We look at customer segmentation now more so than market segmentation, because I think increasingly every customer is different,” Pang explained. “The traditional way of looking at a corporate traveler versus a leisure traveler doesn’t work anymore because they’re blending what they do when they travel. So with customer relationship management, I think you’re looking at different behaviors, and how you’re communicating with individual customers. There’s a lot of talk about that internally.”
By Greg Oates