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Chapter 8 Marketing to Business Travelers

Chapter 8 Marketing to Business Travelers.

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Chapter 8 Marketing to Business Travelers

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  1. Chapter 8 Marketing to Business Travelers The business traveler market accounts for about half of all room revenue, so it is a very important market for most hotels. Upscale properties realize about 60 percent of their business from this market segment; mid-level properties, about 45 percent; and economy properties, about 35 percent.

  2. Business Travelers

  3. New products and services for the business travelers • Business floors • In-house services • In-room workstations • Entire hotels designed specifically for the business traveler • Wingate Hotel (http://www.wingatehotel.btinternet.co.uk/) • Holiday Inn Select Hotels (http://www.ichotelsgroup.com/h/d/sl/1/en/home) • Sheraton’s Four Points (http://www.starwoodhotels.com/fourpoints/index.html)

  4. Important Trend • The introduction and growth of extended-stay properties • First Introduced • Marriott’s Residence Inns (http://marriott.com/residenceinn/default.mi) • Hilton’s Homewood Suites • Hot niche is extended-stay properties targeting the middle-income business traveler market. • Choice’s Mainstay • Marriott’s TownePlace Suites

  5. Statistics on Business Traveler Market (U.S.) • 92 percent of all business travelers spent at least one night away from home on their most recent trip; • 73 percent stayed in hotels or motels; • The average length of stay was 4.3 nights; and • More than half paid $50 or more per night for their accommodations; 11 percent paid $100 or more per night

  6. Preferences regarding the selection of a hotel • Convenient location • Clean comfortable rooms • Room rates and amenities • Recommendations of friends and colleagues • Previous experience with the property • Facilities • Frequent traveler programs • Approximately 50 percent of all business generated by this market segment and are more easily targeted.

  7. Frequent Business Travelers • Characteristics • 21 nights a year away from home on business • Largely on sales trips • Use hotels or motels 76 percent of the time. • Managerial, sales, or professional positions • Well-educated (67 percent hold four-year college degrees) • Affluent (67 percent earn over $35,000 per year, while 44 percent earn more than $ 50,000 annually). • Largely male. • An increasing number of frequent business travelers are women. • Women tend to use in-house food and beverage services more than men do.

  8. Factors of Hotel Selection (MasterCard Survey) • Restaurant on premises (32 percent) • Quality service (22 percent) • Room appointments (14 percent) • Sports and recreational facilities (14 percent) • Ambience (11 percent) • Entertainment on premises (10 percent) • Prior knowledge (10 percent) • Safety and security (3 percent) • Three distinct groups of frequent Business travelers • No-frills travelers, cost-plus travelers, and extroverted-affluent traverler.

  9. No-frill travelers (36 percent) • Middle- to upper-management men and women premarily interested in clean, comfortable, and quiet room at a fair price. • Little interested in hotel-sponsored social events. • Limit-service hotels • La Quinta, Red Roof Inns, Hampton Inns, and Holiday Inn Express • Some amenities (free breakfasts, free local telephone calls, and dataports in rooms) • Guest are not paying for large lobbies, room service, and other services and amenities they do not use. • Consistency: The same services and amenities at every property in the chain.

  10. Cost-plus Travelers (34 percent) • Extremely cost conscious, often to the point of forgoing convenience in favor of a lower room rate. • Typically salespeople and middle-management executives • More interested in being sociable than no-frills travelers. • The availability of hospitality suites or lounges at which to meet peers, and no-cost amenities are important. • Doubletree Club Hotels, Marriott, Hilton, Holiday Inn, and Ramada • More loyal and brand-oriented than the other two groups. • More apt to belong to frequent traveler programs

  11. Extroverted-Affluent Travelers (30 percent) • Generating higher sales per room than either of the other two groups. • Typically young and affluent • Either professionals, top-level executives, or self-employed. • Travel agents or corporate travel managers book their reservations. • They demand the best in amenities and service. • Not concerned with saving money (either business or pleasure trips) and demand fashionable properties. • Influenced by the suggestions of friends and colleagues than any other group. • Four Seasons, Ritz-Carlton, Hyatt, and Starwood’s W. Hotels.

  12. Women Business Travers • Has grown at a phenomenal rate • 1 percent in 1970; 45 percent today. • 50 percent of business meeting attendees and 51 percent of all meeting planners • Preferences • The cleanliness and attractiveness of properties for 86 percent of women, but 50 percent of men. • More loyal repeat guest than men. • Features must be provided • Security • Comfort and service • Convenience • Facilities

  13. Meeting the Needs of Business Travelers Women-only floors, executive or business floors, business centers, health and fitness centers, high-tech and other special amenities, in-room refreshment centers, frequent traveler programs, and all-suite/extended-stay properties.

  14. Executive or Business Floors • Different types of travelers • Build new properties designed specially for a targeted group • Modify existing properties to accommodate the needs of particular segments: more cost-efficient solution. “a hotel within a hotel.” • The Sheraton and Hilton chains offer Tower Sections • Hyatt develop a Regency Club • Marriott created a Concierge Level

  15. Executive Floors • To provide a secure, comfortable environment in which to meet peers, conduct business, or relax after a busy day. • Areas in which business travelers can work as well as special lounge areas where cocktails and continental breakfast are served. • Women business travelers prefer these floors because they can meet clients in a more private and secure lounge area rather than in their guestrooms or the hotel’s public lounge

  16. Example • Hilton Towers Concierge Class • Holiday Inn Crown Plaza’s Club Executive Floor • The Ritz-Carlton’s Club Level • The Club Floor at the Biltmore Hotel in Los Angeles • Special promotion: • Direct mail, Press release, Other forms of publicity, • Advertisements in magazines and newspapers such as the Wall Street Journal to reach upscale business travelers (see Exhibit 2) • Word-of-Mouth referrals and personal calls on corporations.

  17. Business Centers • Offer secretarial services, fax machines, modems, and photo-copying equipment, computer rentals, administrative services, and even private offices. • Outsourcing the business center services in hotel: Kinko’s, Office Depot, Pitney Bowes, and Executive Express to offer business services

  18. Other Services • Health and Fitness Centers • High-tech Amenities • Other Special Amenities • Newspapers, free coffee and tea, express check-in and check-out, and free cellular phones or beepers, etc. • In-Room Refreshment Centers: Minibars • Frequent-Traveler Programs • Intercontinental Hotels Groups: Priority Club • Hyatt Hotels: Gold Passport • Starwood: Preferred Guest • Marriott’s Rewards, Ramada’s Business Card, and Hilton’s Honors. • Discounts, premiums, and special hotel services.

  19. All-Suite/Extended-Stay Properties • A homelike atmosphere • Residential-style housing • Price • Reduced relocation stress: offering grocery-shopping services, arranging for baby-sitters, and providing orientation activities. • Hawthorn Suites • Homewood Suites

  20. Reaching Business Travelers In today’s competitive market, you cannot rely on repeat guests or word-of-mouth referrals to reach business travelers. You must actively solicit specific business-traveler market segments.

  21. Trends • Over 60 percent of business travelers make their own reservations • Growing number of these reservations are being made via the Internet. • Developing a Web site • Dedicating a portion of your Web site to business travelers, and advertising on sites frequented by business travelers can be effective ways to reach potential business guests

  22. Finding Local Corporations • Office building locator boards • Chamber of commerce listings • Competitors’ function boards • Local newspaper articles • State and regional publicity materials • Finding business travelers throughout the nation • Business publications and directories • Travel publications • State industrial commissions • Mailing list brokers • National trade conventions

  23. Direct approach to finding business travelers • Sales letters, telephone calls, and personal sales calls. • Use a sales blitz with collateral materials, follow-up information, and personal contact. • Everybody sell programs • Other sources to contact business travelers • Corporate travel managers • Secretaries’ clubs • Travel agents • Tour operators • Real estate agents and relocation services • Independent hotel representatives in key feeder cities.

  24. Target business travelers through • Advertising (see Exhibit 3, 4) • Promotion at trade shows • Public relations • Publicity

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