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Hilton, Marriott Form Partnerships to Improve Luxury Brands
In April, Hilton International announced a "luxury manifesto" involving video interviews with executives it calls "industry influencers" in the retail, fashion, publishing and culinary fields. It is posting these on the Facebook pages of its Waldorf Astoria and Conrad brands, and basing policies and services on executives' comments.
As the luxury hotel segment "emerges somewhat from the recession, it is looking for ways to enhance the luxury experience that do not involve spending money on the plant, or on increasing staff," said Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. "These could be nontraditional ways, including tie-ins with luxury products that have an image value or the potential for guest service enhancement."
According to Smith Travel Research, revenue per available room for United States luxury hotels reached a peak of $204.68 in 2007, then fell 5.4 percent in 2008 and a far steeper 23.2 percent in 2009. Mr. Hanson said that represents the greatest decline the segment has experienced.
Although revenue per available room for luxury hotels jumped 8.9 percent last year and is expected to rise an additional 10 percent this year, Mr. Hanson says he does not expect it will fully recover to 2007 levels until possibly 2014.
Although Smith Travel Research said demand for luxury hotels in the United States rose 12 percent last year, Mr. Hanson said much of that was because of discount rates. He also said demand had been significantly outstripped by growth in supply, up 20 percent from 2008 through 2010.
Such growth is one reason Marriott has created the JW Marriott partnership program: Marriott is opening three such hotels this year and six next year, mostly in Asia and the Middle East. When 13 more planned for completion by 2015 open, the 27-year-old brand will have 77 hotels in 29 countries, 65 percent abroad.
Also driving the partnership, said Mitzi Gaskins, vice president of JW Marriott, is "some confusion" by guests between the more downscale Marriott and JW Marriott brands. (The company's most upscale brand is Ritz-Carlton.)
"We're making an effort to drive awareness among luxury consumers. One way is through our partnerships," she said. "We want to align ourselves with people in a space relevant to our consumers. Our goal is offer unique experiences and knowledge to our guests."
Executives of the partner companies will provide information about their areas of expertise to JW Marriott customers, through content on the brand's revamped Web site and in a new in-room quarterly magazine.
Christie's is displaying works it will auction at JW Marriott hotels; it began auctions at the JW Marriott Marquis Miami last December, and this week will show Beatles photographs at the JW Marriott Grosvenor House London. Christie's also is creating city guides for hotel guests in six cities. And Aromatherapy is developing a signature scent, spa treatments and bath amenities for the brand.
Marriott, which manages or franchises JW Marriott hotels but does not own them, is spending $500,000 on the partnership program, which is to last two years, Ms. Gaskins said.
John T. A. Vanderslice, global head of luxury brands for Hilton Worldwide, said he had come up with the "luxury manifesto" to learn about "the changing face" of the luxury market "from its respected leaders." It is "experiencing a reincarnation postrecession, but no one single vision of luxury has emerged," he said.
Executives he has interviewed for the Facebook videos include the designer Tommy Hilfiger , the restaurateur Danny Meyer, and Stephen I. Sadove, chief executive and chairman of Saks Fifth Avenue. Conversations with them and others have inspired Hilton to revise its staff training and to offer "transformational experiences" to guests, like gladiator training at the Rome Cavalieri, and dog sledding at the Waldorf Astoria in Park City, Utah. Mr. Vanderslice declined to disclose the cost of Hilton's program.
There are 24 Waldorf Astoria hotels, with nine in development, while there are 16 Conrads, with 17 in development. Hilton, which describes Conrad as its "global contemporary luxury brand," manages all but one of both brands' hotels, and owns the original Waldorf-Astoria.
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