THE BERKELEY LONDON
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THE BERKELEY LONDON
The Berkeley London luxury hotel has delighted guests with its welcoming atmosphere and sense of style for over a hundred years. In the heart of London’s Knightsbridge, with Sloane Street and Hyde Park on the doorstep. Wilton Place Knightsbridge London. SW1X 7RL T: +44 (0)20 7235 6000
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ABSTRACT Luxury has been always associated with superior quality and desire. Especially this could be evident in the hospitality industry, where 5* Luxury hotels are competing amongst each other for the right to be called the best out of the bests. The aim of this report is to consult the hotel named The Berkeley on the marketing strategies, which could potentially attract new market segments that are interested in luxury experiences. Moreover, an overview of the London 5* hotel market will be presented and various marketing technics will be used in order to thoroughly understand how millennials could be attracted.
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CONTENTS
About Us
p. 8
Media Analysis
p. 38
Introduction
p. 10
Millennials - Shaping the Future
p. 40
Maybourne Hotel Group
p. 14
Millenials & Social Media
p.42
Claridge’s Hotel
p. 16
Millenials Lifestyle
p. 44
Connaught Hotel
p. 18
Insight
p. 46
The Berkeley Hotel
p. 20
Conclusions
p. 52
Target Market
p. 24
Marketing Strategy Proposal
p.54
SWOT Analysis
p. 32
Bleisure App
p. 56
The Path of Purchase
p. 36
References
p. 62
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ABOUT US
M&YA International Consulting group works with a diverse portfolio of clients on some of the most innovative central hotel projects in London. We are a group of passionate and inventive problem-solvers, ready to help realise visions and contribute our own. As a marketing consultancy we have developed long-term relationships with many succesful companies, for example The Berkeley, The Connaught, and The Claridge’s Hotel. We have advised on a great number of other projects – budget hotels, boutique hotels and 5-star hotels – across the UK. We create ideas that challenge industry norms and practices are what bring us together to make the best of every experience. Our mission is to boost our clients’ revenue and profits, so in order to achieve this, we optimise their strategy, marketing, pricing and sales.
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INTERNATIONAL CONSULTING GROUP
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INTRODUCTION Hospitality is one of the most dynamic sectors in the global economy and plays a significant role in many people lives. Nowadays, with the rise of globalization, technological advances and tourism people are able to travel the globe at much faster pace and frequency and reasons for travelling vary from family leisure to the business trips, making the sector to develop even further and create even more supply. Hotel industry is also highly depended on customer satisfaction – the art of attracting and retaining customers. Therefore it could be argued that marketing plays a significant role on this process especially when it comes to the communications and message transmissions. London can be seen as one of these kinds of destinations to which people come due to different reasons, making it’s hotel market very diverse and competitive. In London, you can easily find an offer that will suit anyone Therefore it should be understood how could the luxury hotel industry reinvent itself in the light of new expectations of millennials?
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INTRODUCTION First of all, it would be necessary to introduce the hotel sector as a whole, with all its characteristics, including those, which are common for the marketing of services. In addition to that an overview of the Maybourne Hotel Group will be presented with an emphasis on the Berkeley as a point of departure. Secondly, an analysis will be undertaken, where target market, positioning, segmentation and SWOT of the Berkeley will be discussed in order to thoroughly understand where they are currently standing at. After that analysis of Millennial groups will be undertaken and evaluated in terms of their preferences and expectations. Finally, strategies and suggestions will be introduced, which we believe will be beneficial for the hotel and could be implemented in the future, followed by the conclusions and raise of possible constrains and limitations.
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MAYBOURNE GROUP Maybourne Hotel Group has its headquarters in Mayfair, UK. The Group owns and manages three of the world’s most renowned luxury London hotels, namely Claridge’s, The Connaught and The Berkeley. Maybourne hotels deliver authentic and unique guest experiences geared towards the needs of their guests and their people and have elegant and intuitive service styles specific to the group’s service philosophy
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CLARIDGES HOTEL In downtown London’s Mayfair, Claridge’s has a traditional English style, with impeccable, glamour and highly tailored service. Claridge’s is London’s art deco jewel with its breath-taking rooms and luxury hotel suites. Guests can have London’s finest afternoon tea in the Read Room and Foyer and Michelin-starred cuisine at Fera at Claridge’s, rare spirits at the bar or after-dinner drinks in the Fumoir. These are all hotel’s unique splendour and charm.
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CONNAUGHT HOTEL Connaught is amongst the shops and restaurants of the Mount Street in the heart of Mayfair Village, being neighbour to some of London’s elegant galleries and boutiques, blends contemporary style with classic English character to create the ultimate in sophistication. It is nearby o some of the capital’s most peaceful parks and gardens. It has luxury rooms and suites for every mood, exquisite Michelin-starred cuisine, the charm of the Connaught and Coburg Bars, and Europe’s first Aman Spa.
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BERKELEY HOTEL The Berkeley is luxury and inspiring hotel in leafy Knightsbridge that will suprise and enchant everyone. It is the essence of contemporary chic with stunning rooms and suites. You will be fascinated by the two Michelin-starred cuisine from Marcus Wareing, classic British dishes in the Collins Room, fashionista fancies for afternoon tea at Prêt-À- Portea, cocktails in the Blue Bar and Spa complete with swimming pool. Once in The Berkeley your front lawn is the green splendour of Hyde Park, and your corner store is the singular shopping of Knightsbridge. You can take a refuge from the rush of the city in its 190 rooms, including 55 suites once you enter the hotel. Rooms are elegantly designed in urbane comfort with simple, beautiful details. Room’s furniture is chosen and crafted from luxurious fabrics. Its bathrooms are of Italian marble with original artworks abound.
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BERKELEY HOTEL For serious foodies Marcus Wareing’s restaurant, with two Michelin stars, at The Berkeley is a must-visit destination. This is exquisite modern European cuisine, served in a room complementing the food. Executive Chef Shaun Whatling’s Collins brings together a tempting menu of British classics with its seasonal and well-sourced ingredients from Britain’s most respected producers. The menu reassures you with its heart-warming dishes, combines wonderful ingredients gathered from field, stream, forest and seashore and is served in a relaxed atmosphere. In The Blue Bar award-wining barmen work their magic on a variety of seasonally inspired and classic cocktails. In the bar the buzz of conversation is interrupted only by the occasional sigh of corks being freed from bottles of some of the world’s the rarest champagnes. Finally, The Berkeley Health Club and Spa has rooftop pool and a secret garden. It is also home to the Bamford Haybarn Spa known for its natural and organic treatments. Here you will feel relaxed and rejuvenate yourself whilst gazing across Hyde Park
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TARGET MARKET The Berkeley, with its rich and prosperous history has always been positioning itself as a luxury pillar of London’s ever changing life, and that had a significant impact on the target market hotel’s management is looking for (Stockley, 2017). After an interview with one of the staff members, it was discovered that there is a trend towards customers from the higher income class, aged from 35 to 48, usually young business professionals or the CEO’s. Moreover, the demographics have showed that in the summer times there are more people coming from the middle-eastern countries compare to the other parts of the world. In addition, the hotel is being called a “spot”for celebrities as well as positioning itself as a family-friendly hotel by offering goody bags and concierge services for children events.
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TARGET MARKET During the interview it was also found that customers who are coming to the Berkeley hotel are usually coming to London for both – leisure and business activities. From all of the mentioned above, it could be evident, that current strategy for market segmentation undertaken by Berkeley is defined by focusing on the demographics criteria with an emphasis on income or socio-economic status, as it determines whether or not consumer will be able to afford an offering (Bowen, 1989). In this case, a Lifestage analysis could be applied in order to see that people tend to have different amounts of disposable income as well as various needs depending on their age group. In the case of the Berkeley, the lifestage groups we are looking at are either “Mid- life independents” or “Unconstrained couples”, both of which are characterized by the age group of 35 to 54 and it is believed that in order to attract them different offerings should be made to fit their preferences It was further discovered that the management of the Berkeley has selected a differentiated marketing approach, where it focuses on a few specific segments, which are equally attractive to the business and is tailoring their proposals accordingly.
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TARGET MARKET As we have discussed Berkeley’s segmentation, it is now important to move towards positioning – in particular how the hotel manages to differentiate itself from the other 5* Luxury hotels in the market, who are competing for the same target customers. Brand positioning is an essential process, since it transmits the message or the core idea of the business to the potential consumers and it’s main goal is to create an image in consumer’s mind which will be desirable enough to proceed with the purchasing process. During the research, it was found that Berkeley’s vision of their brand could be described as: “The best hotel in the world to it’s right”. They believe that their differentiation comes from the ability to be the most innovative amongst the Maybourne Hotel Group and they have “different looks” which are attractive to their clients.
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TARGET MARKET Moreover, Berkeley’s management believe that one of their biggest advantages is location, which is in the heart of the Knightsbridge area, the one where luxury indulging experiences could be found. Nevertheless, Berkeley is being very precise and defined about their offerings. They presume that they have already found their niche and know exactly what their customers are looking for and hence are not trying to differentiate in terms of additional offerings such as an organization of various events or discounts. One of the main reasons behind this decision draws us back to the positioning of the service itself, where the main focus is on keeping up with the brand and not ruining the image which was crafted over the many years
With all of that in mind and with the respect to the chosen sub-group of millennials, it could be evident that at the present moment Berkeley is not that much interested in the age of their customers, rather their socio-economic status. As it was mentioned previously, it is people aged from 35 - grey millenials -onwards, who are the most frequent visitors, and therefore it could be argued that Berkeley is being distant from successfully attracting other millennial groups in terms of age, who are also in the high-income class group. It now would be important to evaluate their existing strategies in order to develop plan for further action in attracting millennials. 31
Strenghts
Opportunities
Location
Development of social media
Strong brand recognition
Various events hosting
Wide client base
Innovation
Great variety of restaurants and bars
Offers
High standard service
Improve service quality
Inclusivity
Creation of common areas
Design Innovation
BERKELEY HOTEL
This is a SWOT analysis of the Berkeley Hotel, an analysis of both internal and external environments are vital to improve the hotel, give suggestions for further action, and to develop marketing strategies that may result more attracting more millennials.
Weaknesses No separate marketing department
Rising competition – 2 new hotels
Concentrating on a “niche”
being build in the area
Lack of social media activity
Taste change of new generations
Refurbishment noises
Irrelevancy
Reception area is small and crowded
Consequences of the Brexit
Service inconsistencies 32
Threats
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Strenghts
Opportunities
Location
Innovation
History
Refurbishment
Restaurants
Development of social media
Luxury design
Service quality improvements
CLARIDGE’S & CONNAUGHT HOTELS This is a SWOT analysis of the Maybourne Hotel Group.
Weaknesses
Threats
Lack of innovation
Rising competition
Old stylish rooms
Taste change of new generations
Service inconsistencies
Irrelevancy
Old building and features which may
Consequences of “Brexit”
result inconvenient for guests.
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THE PATH OF PURCHASE In the hospitality business, potential consumers are going through a specific decision making process which begins from recognizing the need to the post-stay evaluation (Baines & Fill, 2010) This process highly varies between different people and in particular between different age groups. Moreover, the process will be affected by many factors such as hotel proposition, personal preferences and information available at the moment of the need recognition. For any hotel it is reasonably hard to measure or estimate how their consumers are deciding whether or not to stay at their hotel and therefore in order to be profitable and being able to attract more and more guests, there is an urging need to understand how the attributes of the service/product are being perceived and their importance for the consumer.
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MEDIA ANALYSIS As it was discussed previously, consumer decision-making process involves receiving and analyzing messages, which are transmitted through the media. Nowadays digital media is playing a significant role in the hospitality business and hotels are trying to engage on different levels by creating specific proposition-oriented messages in order to attract new customers (Vakaris & Neuhofer, 2017). The Berkeley hotel is advertising through various digital platforms as well as social media such as Instagram. Internal public relations team is responsible for uploading content and replying to various comments, reviews and requests. In addition, Berkeley is advertised in different types of printed media and provides their hotel guests with journals featuring hotel information as well as information on things to do in London. It could be also argued that the Berkeley Hotel is one of the most innovative ones among the group and have recently started to pay more and more attention to social media as well as stressing out the importance of constantly checking out the reviews and by these means evaluating their current performance. Since millennial groups usually tend to evaluate the offerings by the use of social media such as Instagram, it becomes clear that the Berkeley is currently aiming to increase their brand awareness amongst new age groups. 39
MILLENIALS - SHAPING THE FUTURE Millennials are also known as Generation Y, a cohort following Generation X. The name Millennials describes a group of young people who where arguably born between the years 1982 and 2002. The characteristics of Millennials vary by the region, depending on the social and economic conditions they were brought up. According to Skentelbery, H (2017), “The name Millennial was originally not associated with any negative stereotypes at all – it was created in 1987 to serve the needs of William Strauss and Neil Howe, two researchers who were looking to identify and discuss the effects of graduating with the new millennium would have on the pre-school classes of children born in 1982.� When it comes to Millennials, the generation is known for their increase use of media, communication and digital technologies. Millennials are generally considered as multitasking extraordinaire because they are fluent in switching tasks which appears to be doing simultaneously. There are lots of studies done which suggests that the brains are evolving with generations. The one possible reason for the negative stereotypes risen around them is that they hold vastly different values than their previous generations.
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MILLENIALS & SOCIAL MEDIA They can be seen walking around shopping malls, roads or social gatherings with their heads down eyes glued to their smartphones. Yeah, those groups of sleepy-eyed teens. It’s a common complaint that Millennials spends a lot of time in social media, with people thinking that they are lazy. It is weird to know how the technologies has been changing the day to day of Millennials. Millennials are highly connected with others because of the use of various social media applications. More than 63% of Facebook and Twitter users get news from those social media platforms rather than traditional social means (Taylor & Keeter, 2010). However, social media is the biggest and highly important tool in today’s world, so using it and familiarising it is advisable but also quality time must be spent for other works. Majority of social media users now are the Millennials which they use for various purposes as everything has become techno-friendly.
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MILLENIALS - LIFESTYLE More then 70% of Millennials want to live in a big city or urban neighborhood in which mostly are young respondents, but some Millennials feels suburbs are the ideal place to live (Fromm & Garton, 2013). Homeownership becomes a top priority for most of the Millennials as a benchmark is already set. When it comes to dream jobs, the majority of Millennials tend to choose Information Technology sector (IT) or Business Entrepreneur. The lifestyle and spending habits of Millennials do not reflect on their financial reliabilities for various reasons. Millennials are more conscious of the environment with the advanced science to determine what is happening to a certain degree. The days of employees spending their entire carrier in a single company is likely to be gone. Millennials would like to change their jobs within 2 years of working in a same company as they’d like to explore different options.
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INSIGHTS After the analysis undertaken throughout the whole report, it becomes apparent that there is a high potential for the Berkley hotel to successfully attract more millennials by harnessing right marketing techniques and strategies. One of the possible strategies for them will be to concentrate on maintaining good service quality and provision of the consumer needs. It is always argued that the best service providing companies are customer “obsessed� and are very performance oriented (Kotler & Keller, 2012) therefore, it is essential for the Berkeley to be consistent with the quality of services they are providing, because millennials value their experience at the hotel over the other factors. Secondly, as an analysis of millennials and the Berkeley hotel has shown, for any person from this generation communications are playing an important role. Millennials are looking for places such as common areas, where they could relax and spend time with their friends and families, as well as enjoy hotel’s atmosphere. Thus, by providing potential clients with the desired attributes, Berkeley could also potentially increase numbers of guests.
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INSIGHTS Personalization also could be a good strategy, which will make customer feel well treated and special. This could be done by asking the guest in advance what is the purpose of their trip and making it special for birthdays or anniversary occasions. As it was previously discussed, nowadays social media dictates its own rules and is affecting most people’s lives, especially younger generations. Berkeley has been constantly updating the contents of their social media pages and is attracting more and more attention to its services. Leading from this, we believe that in order to increase engagement with their consumers, the Berkeley could consider development of mobile application through which power will be given back to the traveler. Millennials are well known for their sense of adventure and exploration and are likely to enjoy the convenience of getting their bookings done through few clicks. Besides from those benefits, the app might feature useful information on local area and hotel itself, which will allow travelers to plan ahead.
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INSIGHTS Statistics has also shown that millennials like to book their trips well in advance as well as that 21% is booking their hotel through mobile phone or tablet (Millennials and Social Media, para 7, 2017). Hence, we can observe a trend towards the use of digital marketing for the emerging markets and adaptations could be made in order to keep up with the segment preferences. Finally, another opportunity for the Berkeley in order to increase numbers of millennial customers could be in terms of provision of various offers and events. Millennials are looking for the best deal for their money and hence an implementation of various offerings such as: “book 3 nights and get 4th one for free�, could be very appealing for guests. Moreover, organization of events such as small concerts or shows will boost entertainment, which is an integral part of millennial’s lives.
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CONCLUSION Research has shown that there is a great opportunity for hotels to attract more customers through the loyalty programs. It is evident that half of the people who have signed for such a program are revisiting the hotel and make a repurchase decision. However, it’s only 14% of millennials who tend to sign up for this sort of program, where older groups of millennials have a slightly higher sign up rate. Therefore, if a hotel will be able to successfully tailor the loyalty program for the preferences of customer, it could increase their profits by substantial amounts as well as make their brand recognition even stronger. Linking this with the selected sub-segment of millennials it also becoms apparent that the higher is the level of their wealth, higher are the chances for loyalty program joining. Furthermore, millennials are most likely to join the program if they have an attachment with brand as well as if they will be able to spend loyalty points on free stays, discounts or perks. Finally, loyalty program also links with the use of media. Millennials prefer to receive information regarding their points via email and share their status on social media platforms. As a result it creates more brand awareness and word of mouth communication takes place. 52
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Our job is to help you do yours, regardless where work takes you...
bleisure
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MARKETING STRATEGY PROPOSAL Millenials are well known for their sense of adventure and exploration, so they have become crafty at creating “bleisure” trips, or combining business travel with leisure travel. The Berkeley Hotel has such a great demand for its services and rooms, but most of their campaigns do not cater to millenials. We are changing this by giving power back to the traveler. The Berkeley’s Hotel campaign Bleisure which not only speaks the millenial language, and increases guest’s loyalty but also empowers the target market and refreshes the hotel brand.
‘‘Sixty-five percent of Millennials reported taking at least one business trip within the last 12 months, and in many cases those trips were opportunities to mix business and pleasure...’’ - Evan Konwiser of American Express Global Business Travel 55
BLEISURE APP Why save points for rewards you will never get? Most hotels do not reap the rewards of traditional loyalty programs.. The Berkeley Hotel is going to change that with its own app called Bleisure. Having cash in your pochet feels better than a pile of loyalty points you nevcer get to spend.
5%
1%
CASH BACK
for your stay at The Berkeley Hotel.
100% HAPPINESS
assured in every guest staying with us. 56
CASH BACK
for every meal at the Maybourne Group.
bleisure 57
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bleisure 58
BRAND INTERACTION This marketing strategy offers The Berkeley’s Hotel guests rewarsd through a cash-back program. This way, the guests can have what they want, and loyalty for the brand around traveling working milennials will start to increase. By using the hotel facilities, services, bar, restaurants and other expenses, the guests have the opportunity, not only to learn about the hotel but also get discounts.
Use Berkeley Hotel services, restaurants and facilities
BOOK A ROOM
EARNS CASH while staying at hotel
& stay in Berkeley Hotel
Shuttle ride
Check in
Check Bleisure App Credit
Spa Massage
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Information
bleisure Free Wifi
Offers & Deals
Places to go
LOG IN
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Share it on Social Media
bleisure 61
REFERENCES Tynan, C. and Drayton, J. (2010). Market Segmentation. Journal of Marketing Management, 2(3), pp. 301-335. Varkaris, E., & Neuhofer, B. (2017). The influence of social media on the consumers’ hotel decision journey. Journal Of Hospitality And Tourism Technology, 8(1). Fromm, J., & Garton, C. (2013). Marketing to millennials : reach the largest and most influential generation of
consumers ever (p. Chapter 3). New York.
Skentelbery, H. (2017). 5 Key Features of Millennials Lifestyle. http://www.warrington-worldwide. co.uk/2017/08/30/5-key-features-of-millennials-lifestyle/, Accessed on 29th of November, 2017 Taylor, P., & Keeter, S. (2010). Millennials a Portrait of Generation Next (pp. 13-57). Pew Research Center. Kotler, P. and Keller K. (2012). Marketing Management (15th ed., pp. 27-32, 290, 297-298, 324-331). Edinburgh: Pearson Education Limited. Future Trends in Hospitality Industry: Millennials and Social Media. (2017). Callboxinc.com - B2B Lead Generation Company. Retrieved 29 November 2017, from https://www.callboxinc.com/b2b-marketing-andstrategy/future-trends-in-hospitality-industry-millennials-and-social-media-rule/ About The Hotel | Claridge's. (2017). Claridges.co.uk. Retrieved 29 November 2017, from http://www. claridges.co.uk/about-the- hotel/ 62
REFERENCES Maybourne Hotel Group - 5 Star Luxury Hotels in London. (2017). Maybourne.com. Retrieved 29 November 2017, from http://www.maybourne.com Star Luxury in London's Chic Mayfair Village - The Connaught. (2017). The Connaught -5 star luxury hotel in Mayfair London. Retrieved 29 November 2017, from https://www.the-connaught.co.uk Baines, P. and Fill, C. (2014). Marketing. 3rd ed. Oxford: Oxford University Press, pp. 40-395. Batra, R., & Keller, K. (2016). Integrating Marketing Communications: New Findings, New Lessons, and New Ideas. Journal Of Marketing, 80(6), 122-145. http://dx.doi.org/10.1509/jm.15.0419 Bowen, J. (1989). Market segmentation in hospitality research: no longer a sequential process. International Journal of Contemporary Hospitality Management, 10(7), pp.289-294. Stockley, P. (2017). Inside the new-look Berkeley Hotel: a classic with a twist. [online] Homes and Property. Available at: https://www.homesandproperty.co.uk/luxury/interiors/design/inside-the-newlook-berkeley-hotel-innovative-glassextension-adds-a-sexy-new-twist-to-worldfamous-a102601.html [Accessed 27 Nov. 2017].
Taylor ShortMarket Research Associate, Software AdviceFebruary 23, 2015. (n.d.). Increasing Millennial Interest in Hotel Loyalty Programs. Retrieved November 29, 2017, from https://www.softwareadvice.com/hotelmanagement/industryview/millennial-loyalty-report-2015/
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