Peninsula hotel Marketing Plan
•Executive Summary Set in the heart of the “Magnificent Mile”, The Peninsula Hotel Chicago is ideally situated for visitors to experience all that the city has to offer. On the doorstep of Chicago’s premier business and shopping district, the hotel is located in the center of the city’s most exclusive shops and steps from the historic Water Tower. The Peninsula Chicago has 339 luxurious and spacious guestrooms and suites furnished in a magnificent classical style. The Peninsula Hotel property is renowned for its convenient and strategic location within the city.
Also synonymous with the brand are the high level of personal service guests receive, and the comprehensive business facility available in luxurious settings. The Peninsula Chicago is targeting rich businessmen, repeat executives and leisure travelers by offering them great discounts in order to bring the occupancy and revenue up for the second quarter of 2011. By analyzing the marketing environment and completing the SWOT analysis the hotel can create specific strategies in order to meet the marketing objectives. The action plan will organize and distinguish the activities during the second quarter within the marketing team.
Peninsula hotel Marketing Plan Essay Example
Our marketing plan is structured to enable us to achieve the strategic goals we have set for ourselves in terms of increasing overall revenue as a result of differentiating our products and services from the competition. Our marketing team will ensure that the plan is implemented to the best of their ability and with the highest levels of efficiency and accuracy. All figures will be monitored on an ongoing basis in relation to projections versus actual. The ongoing plan will be altered or manipulated as necessary in order to react to and, wherever possible, anticipate external changes to the environment. II. Environmental Analysis
•The Marketing Environment Competitive Forces Five Star Alliance classifies Peninsula Hotel as the only hotel in the Super Luxury category in the city of Chicago. The Peninsula Chicago, a Five-Diamond and Forbes Five-Star award-winning hotel, sits along the Magnificent Mile in downtown Chicago. The 339-room property blends The Peninsula’s exemplary “East meets West” graciousness and trademark sophistication with Midwestern hospitality. Ample indoor and alfresco dining options are offered to delight the most demanding pallets, and The Lobby is the perfect location to enjoy traditional afternoon tea and weekend evenings of jazz.
Another highly acclaimed feature of The Peninsula is its spa. At The Peninsula Spa, guests are treated to ESPA holistic treatments, complemented by an extensive offering of amenities, including an indoor pool with stunning views of the city, relaxation lounge with fireplace, fitness center, yoga room, and ‘Naturally Peninsula Spa Cuisine’. Having acquired these prestigious recognitions, does not excluded The Peninsula from having any direct competitions. For discreet and gracious service, one can always count on The Peninsula main rival, The Four Seasons.
Despite being classified under classic luxury category by Five Star Alliance, The Four Season has won other highly praised awards like Conde Nast Award Winner, Travel & Leisure Award Winner, Mobil Award, Andrew Harper’s Hideaway Report survey, for the sixth time in 10 years. Having said that, due to the specific target market or niche (which will be further explained in this paper), this classic beauty does not necessarily appeal to the younger generation. This is a challenge shared by both hotels, The Peninsula and The Four Seasons.
Built in 1929 as the Medinah Athletic Club, an exclusive men’s club for members of the Shrine Organization, Intercontinental is a beautifully ornamented historical tower with an unmatched location that opens to North Michigan Avenue. Unlike The Peninsula and The Four Seasons, Intercontinental hotel is historic yet hip, refines yet comfortable, cultures yet casual. In spite of the image, a young business traveler who is still untested or have not experience Intercontinental Hotel before would have a more grandeur point of view of the hotel.
A traveler as such may opt for Trump International Hotel for its youth appeal. Unlike the heavy masonry facade of Intercontinental Hotel, the Trump Int. is a soaring composition of polished stainless steel with gleaming tinted glass. The architecture is meant to resonate with the Donald Trump Empire which is larger than life. This could be a blessing or a curse for Trump as a brand. To create a brand base on legacy, can mean that it might just be temporary. Ultimately, time will test the brand longevity behind the product and service.
Another hotel with less contrivance is Park Hyatt. Integrating understated elegance with contemporary luxury, Park Hyatt Chicago is a seamless blend of warmth and innovation is a sophisticated atmosphere. The stunning lobby feels like a sleek, modern art gallery adorned with paintings by famous German painter Gerhard Richter’s and furnished by famous Chicagoan architect Frank Lloyd Wright and Le Corbusier. Some might say that it is evident that Park Hyatt Chicago is portraying an image that is coined by most boutique hotel by customizing to a certain ecstatic and taste.
A more typical example of an elegant boutique hotel in Chicago would be Elysian Hotel. The entire concept of Elysian hotel is based on the glamour period of the 1920s and 30s. The overall architecture palette of dramatic black and white serves as a beautiful backdrop of this hotel. Located in the rich neighborhood of Gold Coast and away from most Chicago attraction can be a selling or losing point of Elysian Hotel. •Boutique hotels possess a major competition in the future as the current demographics seeks for something unusual, eclectic and fresh. •Product positioning will be expensive for peninsula.
Other boutique hotels like The James and The Wit would further lower their prices because they can afford to do it as it costs less for them to do so. Economic Forces The general economic condition of the country is poor. The country is in the midst of recovering from the worst economic recession of recent history. The financial industry and real-estate turmoil has spilled into almost every industry in the country; this is no different for the hospitality industry. Furthermore, the city of Chicago is infamous for having the highest taxes in the country and highest gasoline prices in the country as well.
Consumers are having a difficult time making ends meet and staying up-to-date with their current debt and financial obligations. While government officials remain optimistic, consumers are hurting financially and seem pessimistic on the outlook of the near future. Political Forces / Legal and Regulatory Forces In March 2011, the Legislative Action Summit (LAS) will be held in Washington. Congress, with over 100 new members this term, will have the opportunity to meet and hear from the lodging industry’s top executives along with the American Hotel and Lodging Association (AH&LA).
The purpose of the LAS is to create relationships and educate lawmakers on the importance the lodging and hotel industry has on the economy: annual sales exceeding $127 billion and travel-related wages over $186 billion. Also important to note, nationally, the travel and tourism industry is one of the top ten employers in 49 states: including Illinois. Illinois state taxes are one of the highest in the nation; city taxes (the taxes Chicago imposes) are the highest of any city in the country. Gas prices in Chicago also ranks number one in the country. In 2009 travel volume fell 13 percent compared to 4.
3 percent nationally. However, hotel-motel tax receipts were up nearly 7 percent in 2010 and industry executives believe it will rise another 2 percent in 2011; Elmhurst-based hotel consultant Ted Mandigo agrees with this estimate. Signs of recovery have been observed, mostly with the spending of the wealthy. Luxury hotel business and luxury social scene catering has held steady during the recession and shows signs of slow improvement while the corporate market has faltered. Chicago’s hospitality industry depends on both local and visitor markets. Hotel occupancy rates in the city are rising from the tough times of 2009.
Further evidence of recovery can be seen by the resurrection of plans to construct a luxury hotel at McCormick Place. At the Peninsula Chicago, five Christmas tea buffets for children were held rather than the previous two, due to high demand. Plans to develop a luxury hotel in the former IBM building at 330 N. Wabash Ave are also being revived. Still, industry executives believe a hospitality industry comeback will likely be drawn out and take time. With the debt the city is in, the financial landscape continuing to look unstable, and a Mayoral election around the corner, caution must be exercised.
Technology Technology is changing the way we live our lives and do business; the same goes for the hospitality industry when it comes to technology. In-room check-out and financial balances viewed on the television are common. Blackberry has launched an app to help managers manage rates when they do not have access to a computer (RTSuites being the popular App). Online bookings have increased as much as 25 percent in some hotels due to video features online such as Vbrochures and virtual tours.
Sales and Marketing departments have had significant increases of visitors to their websites that feature “Video Syndication” as well as positive customer feedback on the use of technology on their website. Mobile technology seems to be the focus of many hotels on the technology front: Apps for Blackberry, Smart Phones, and the IPad have grown exponentially. A growing focus has been placed on social media outlets as well; which has gained the attention of hotel executives and marketing departments throughout the hospitality industry. Socio-cultural
It is important for hoteliers to bring the generations together and begin to serve their different habits, patterns and needs. •Offer choices that give customer options rather than pre-determined packages. Create experiences versus tours. This allows individuals or multi-generational groups to determine what best works and appeals to them. •Adopt a universal design approach that includes lower beds, brighter lighting, larger fonts, and walk-in showers that are all easier to use, yet hip, cool and high-tech so that younger consumers are drawn to their design.
•High-tech guestrooms must become the norm rather than the exception. Today, it’s all about Internet access, wireless environments, and flat-screen TVs on the walls. But hoteliers must strive to keep up with the relevant technology that is not only expected from the business traveler, but also the leisure and younger sets. The continual widespread adoption of technology by the public will continue to have impact on the consumer expectation of their hotel experience.
•While there will be an increase in health travel offerings targeting the aging population such as medical spas, the offerings should also include elements of adventure, spirituality, or stress management that will appeal to younger markets. •And finally, consider creating a panel of half a dozen or more people from different age and cultural groups who are willing to talk with you on a regular basis about their concerns and experiences, while giving you honest feedback on your products and services. Sustainable Group
International Hotels Environment Initiative (IHEI) and Accor = revealed that 90% of hotel guests preferred to stay in a hotel that cared for the environment Regulation of the tourism industry by governments in the form of planning restrictions, mandatory =Environmental Impact Assessment (EIA) and laws relating to business practice has exerted pressure on hotels to adopt sustainable environmental practices. NGOs and other pressure groups = Tourism Concern, World-wide Fund for Nature (WWF), Equations and Friends of the Earth have also exerted pressure on hotels to become increasingly concerned about their environments.
•Target Market The Peninsula Chicago counts with 339 luxurious rooms and suites with amenities such as marble bathrooms and 50” plasma televisions which positions the hotel among the most luxurious in the city. It holds a remarkable reputation and has won awards such as the Mobil Five Star and AAA Five Diamond recognition. Room rates at the Peninsula Chicago vary according to season and availability but they can go all the way from $395 to $8,000 per night. To complement the experience, the Peninsula counts with acclaimed wine and dine establishments and amenities well suited for each population cluster that is being targeted.
In order to better understand the manner in which the Peninsula has picked its market, we first must identify, analyze and understand their product and firm. In addition, it is necessary to identify a segment of the population that is best suited for the operation and finally we must identify all gaps or missing targets. To identify the target market for the Peninsula we need to understand the benefits offered by the firm and connect them with a specific segment of the population to whom these benefits are akin.
When a specific population decides to purchase a hospitality experience it is mainly to satisfy the following needs: comfort, prestige, price, recognition, attention, romance, quiet and safety. Once the benefit has being paired with the needs that are being satisfied, then the target market has being properly identified. Identification The Peninsula Hotel is a five star, five diamond award winning hotel in Chicago. It is located downtown in the famous Michigan Avenue or The Magnificent Mile. It is a luxury hotel targeted to a very small cluster of the population, the most privileged one.
The Peninsula goes forward to offer one of the most exclusive and prestigious lodging in the country dividing its attention into four groups in order to best suit their specific needs and wants. The four groups are as follow: 1. Business Travelers: The Peninsula Chicago offers a great venue for prestigious business travelers as it is located in the center of economic and financial districts in the city. Also, the hotel offers amenities such as free Internet and high technology rooms to complement the business traveler’s stay and make it most comfortably.
Together with offering a number of characteristics that facilitate making business, the Peninsula also offers a series of amenities to take care of the wellness of the traveler. Such amenities are the spa and the fine dinning award winning facilities at the hotel. The Peninsula offers outstanding accommodations that best suit all kinds of business travelers. The productive, the entertainer, the stressed one, or which ever the kind, the rooms, spa, fitness center, meeting rooms, and dinning facilities at the hotel are efficient enough to make the traveler feel exceptionally well treated.
The Events and Meetings part of the operation offers elegant spaces through out the hotel to carry out flawless business meetings. The hotel also offers private offices and board rooms with exceptional views of the windy city. 2. Leisure Traveler: The Peninsula Chicago offers a sense of luxury and graciousness derived from its Asian heritage. The operation as a whole encompasses luxury and elegance that is transferred to the travelers through all the hotel facilities. The Spa, wellness center, fitness center, cafe, restaurants and bars offer the most exclusive leisure travelers a delightful experience when visiting Chicago.
For leisure travelers, The Peninsula offers a program especially designed to best attend all the needs of the traveler and families. The Peninsula Academy is a program that offers an insight into the most delicate side of the Asian culture. A chef, a tea ceremony and a kids program are part of this academy offered as a way to give out the most personalize experience to the guest. 3. Family Travelers: The Peninsula welcomes travelers with families and offers a complete stay capable of successfully satisfying travelers of all ages.
Aside from the preciously mentioned The Peninsula Academy, the hotel also counts with large suites with up to three bathrooms, such quality is highly important when traveling with children. The concierge at the hotels offers information regarding transportation and advise on to where to enjoy family leisure time in the windy city. Another exclusive feature are the amenities such as video game consoles, crayons, books, cribs and baby sitting arrangements, and others which are especially created for the comfort of parents traveling with children.
4. Dinning and Entertainment: This hotel counts with four different restaurant, a bar and a cafe wine bar. All establishments offer an above average food that has being awarded throughout the years all together with the recognized Chefs cooking it. 5. Celebrations: Another big percentage of the Peninsula’s main target is the cluster population within its target market that wants to host an event. The venue at the Peninsula offers a luxurious environment to host elegant parties. All celebrations can be further divided into four occasions: a.
Weddings: The most demanded celebration hosted at the hotel are weddings which start at a rate of $50,000 regardless of the number of guests. All dining menus can be chosen from the four restaurant and bars at the hotel. Together with the booking of a venue for the wedding, benefits such as a personal wedding planner, special rates for guests and complementary changing rooms for bride and groom are included. The hotel counts with four venues for wedding celebrations. b. Meetings: Corporate meetings are the largest percentage of the meetings hosted at the hotel. The spacious rooms well distributed in 2 floors create a sensation of privacy.
Also, all parts of necessary for a meeting are given by the hotel, such as audio-visual equipment. c. Events: In this section all the rest celebrations are embraced at one, here all birthday parties and bar mitzvah among others are offered the same benefits as weddings and meetings. Those benefits being: personal planner, accommodation, special rates, etc. d. Venues: The luxurious Peninsula offers four different venues inside the hotel to host all types of celebrations. III. SWOT Analysis A. Strengths The Peninsula is one of the few 5 star hotels in Chicago and with that not only comes high status but high standards of service and food.
The Peninsula offers personalized professional service that other hotels cannot measure up to. Guests that are looking to be pampered and have an extraordinary experience look to stay at hotels such as The Peninsula. This works in the favor for The Peninsula because this hotel is known for its exquisite standards and guest service. Another strength of The Peninsula is its prime location. It is located on Michigan Avenue in the heart of the Magnificent Mile. The guests who can afford to stay at the Peninsula hotel would not settle for a destination anything less than perfect.
By having this prime location it permits the hotel to cater fully to any need the guest may have. One of the most important strengths is that they are consistent and recognized globally for their hospitality. According to an article by the Preferred Hotel Group, The Peninsula Chicago was rated #16 for ‘Top 100’ in the world and #2 for Top 100 hotels in the United States. (2010, Preferred Hotel Group Press Release). By being honored with these ratings The Peninsula Chicago is able to say they are one of the best in the business and can back it up.
By having these ratings they will attract guests who are looking to stay at a hotel for just the name. All of these strengths combined is what allows The Peninsula to attract guests and meet their needs. B. Weaknesses One of the major weaknesses of The Peninsula is their high cost which then leads to an overall smaller target market. Especially in an economic downturn there are less people who are willing to pay the high cost so business overall at The Peninsula will suffer. Along with high cost comes a high expectation. This unfortunately can work as a weakness for The
Peninsula because if they were to underperform they may lose money and loyal customers. Also, in these tough economic times The Peninsula has been forced to lower their costs in order to bring in business. This allows for a mixed target market which may skew the appearance of The Peninsula when the economy recovers. The knowledge of these weaknesses allows The Peninsula to understand the importance of high guest service as well as having a specific target market no matter how small it may be. C. Opportunities Consistency within service and performance Consistency is a great opportunity for the hotel to gain loyal clientele.
If the customers experience outstanding service this will influence them to come back or seek out the same brand when travelling to a new location. Negative consumer’s experience will make them stop coming back to the same brand. One of the opportunities would be to create special rates or packages in order to attract consumers. Bundled packaging and promotions are great which provide bargains. Since the Peninsula Chicago offers spa services and dining, it could be a possibility to create a bundled package to incorporate hotel stay plus one of the spa treatments and some of the dining options. Awareness of the upcoming holidays
In April, May and June there are holidays such as Easter, Mother’s Day and Father’s Day, so these days will be an opportunity to for some potential revenue. In addition, wedding season starts in the end of month of April, so this is something to focus on and expand on for luxury brands. Facebook Advertisement/Social Media Hotel brands must approach using Facebook as a valuable asset. Target markets can be reached with extremely low effort and high effectiveness. Social Media sites such as Facebook are able to do this by capture user provided data that creates a niche consumer. The concept of a condo-hotel
Offering a five star living for potential consumers is a new way to attract a new target market. Lately five star hotels are joining forces with real estate developers, so the owners of luxury residential properties have access to the spa, bellboys walking the dog, guaranteed reservations in restaurants, or 24/7 room service. Negotiation on prices with suppliers Just like the hotel market is competitive so are those that supply the hotel. Now is the time to bulk up on supplies and negotiate with them or find others willing to satisfy hotel needs at a highly competitive cost. Narrow the market focus
Target the guest segments that are still most likely to travel and pay a premium for the luxury experience. Marketing to the previous guests and loyalty club members with special offers is a great way to reinforce the special bond the hotel already has. Providing comprehensive new edge service Technology and partnerships have made it possible to provide services in a one stop shop. The Peninsula could start offering services such as car rental, restaurant reservations, or sightseeing venues all within a kiosk. It’s a small gesture but many guests would recognize the convenience and foresight in service provided.
D. Threats The current economic conditions have caused customers to watch how they spend their money. The fact remains that their prices are quite high as well. It has also caused price wars between luxury hotel brands. In order to combat these, Peninsula needs to stay unique with their service and bundling their hotel packages with other amenities offered i. e. The Spa. This will give the guest a more unique experience and a sense of better value for the money. Corporate spending has either been reduced or eliminated by many organizations which have affected how much and where money is being spent on lodging.
With as many rooms that are vacant they can reassess corporate rates and offer creative discounts for booking in advance or volume discounts. Competition from other hotel brands, like Four Seasons, Elysian, Park Hyatt, and Trump entering the market will try to take away customers with creative ideas and in general become a new product offering within the market. Reevaluating current loyalty programs and promotion of reduced rates for returning guests to show customer value will help combat this. In accordance with the above, there is also a high risk that there is a
surplus of room availability. Consumers with have more choices and ability to choose hotels due to competition luring them away with similar marketing tactics. Terrorism has become a major factor in the decision for individuals to travel. Chicago has continually become the focus of such threats. Emphasizing the hotels ability to handle these situations and having highly trained security personnel on site bring peace of mind to guests. E. Matching strengths to opportunities/ converting weaknesses to threats
The Peninsula has many strengths that can be matched to its opportunities that will then create capabilities. The Peninsula is clearly known for its high status and high standards of service these strengths matched with the opportunity of marketing for upcoming holidays and special deals allows The Peninsula to increase awareness not only about their property to a wide variety of people but about the services that they can offer. Due to the state of the economy it may be difficult to completely change the weaknesses into strengths but it is a long process that can begin now.
For instance, The Peninsula has been dropping its hotel rates allowing for a mix of demographics and since they originally have had a smaller target market broadening this has skewed the image of the hotel. By keeping the price at an appropriate rate, and when the economy improves raising the rates completely, The Peninsula will be able to keep their dominant high profile status that allows them to attract certain guests who stay just for the name. There are a great number of factors in today’s environment that has created numerous threats for The Peninsula.
With The Peninsula being within the luxury hotel sector the most obvious threat is the state of our economy and the high end pricing structure they currently have. As consumers watch how they spend their money the choices they make will be based on what brings the most value. To turn this threat into an opportunity, The Peninsula can start offering promotions or bundling of services/amenities in their hotel packages. This will help attract new clientele while giving an opportunity for existing customers to try these services and possibly retaining them to be repeat users of them.
Another effect of the weak economy is that there is less spending by corporations on lodging. In order to counteract this result The Peninsula can reassess how they calculate corporate rates by offering discounts based on volume or booking in advance. Since there are vacant rooms on a higher scale than normal this would help fill them and possibly spread the word to other businesses due to the word of mouth from partners of the corporations taking advantage of the newly assessed rates. Although it is tough to run a company in hard times it will not stop competition from entering the market.
It would help in this situation to create a feeling of loyalty from customers by offering reduced rates for returning guests or reevaluating current loyalty programs. Unfortunately, the times have created a fear of terrorism and with The Peninsula situated in large metro cities it is a cause for concern. The Peninsula will be able to create confidence in guests by instilling within them that they have the proper personnel and procedures to handle or prevent any of these situations IV. Marketing Objectives
•Increase non-member guest visits to The Peninsula Spa by ESPA featuring the hotel’s 10 year anniversary in Chicago by April 30th, 2011 by 5%. •To increase events sales revenue by 7% in the month of April through June •Increase weekday occupancy by 6% compared to the second quarter of 2010 •Increase revenue at The Terrace restaurant by 5% for the second quarter in comparison to the second quarter of 2010 •Increase online bookings by 3 % in the second quarter of 2011. V. Marketing Strategies •Target Market The target market for the Peninsula Chicago is divided upon five categories.
Their operation can be suited to satisfy the following: first class business traveler, high class tourist and leisure traveler, traveler with family, event celebration host and wine and dine connoisseur. Consequently, their target market specifications vary according to each category. With the five objectives listed above we have focused on both business and leisure travelers. By targeting our strategies and communication mixes to business and leisure travelers there may be overall improvement in the second quarter of 2011 compared to last year’s second quarter.
Although the Peninsula’s Target Market is very well differentiated and specifically analyzed accordingly to their wants and needs in addition to demographics and behavior, it is still of high importance to go more in depth in order to understand the customer’s justification for usage of the product and the overall operation. Demographics at the Peninsula Chicago Race Age Income Education Geographic Business Traveler Mostly white, unless Geographic’s change 35-55 70,000-400,000 Masters, PhDs Worldwide Leisure Traveler Mostly white, unless Geographic’s change 25-65 70,000-400,000
College Graduate Worldwide Psychographics and Product Usage according to Behavior at the Peninsula Chicago Interest Activities Opinions/Attitudes Usage Rate Loyalty Business Traveler Business Politics Public affairs Work Relaxation Wine and dine Strongly opinionated. Passionate about his or her interests. High High depending on the perks offered by the Hotel or competitors, accordingly Leisure Traveler Travel Entertainment Health and well-being Sports Travel Outdoors Attractions Spa Wine and Dine Very relaxed, looking for a positive source of energy and enjoyment of their free time High
Moderate Competitive Set Chicago is highly populated with hotels. The amount of luxury hotels within the Chicago loop is fairly large. Therefore, they all share the same geographic position and closeness to the major attractions and entertainment venues in the city. Also, all of the luxury hotels offer amenities out of the ordinary. In addition to their location, the hotels physical appearance is generally very luxurious offering top of the line appliances. Being all so similar in concept, the characteristics that differentiates them among each other is their service quality.
In the Chicago area the luxury hotels competing for the same or fairly similar target market are the following: Elysian Hotel, Trump International Chicago, The Ritz-Carlton Chicago and The Four Seasons Chicago. •Marketing Mix Increase non-member guest visits to The Peninsula Spa by ESPA featuring the hotel’s 10 year anniversary in Chicago by April 30th, 2011 by 5%. •Pricing strategy- Re-attract potential customers who have previously used the facilities as periodic guests by reducing membership fees from $1,500 to $750 for individuals and fees for couples from $2,000 to $1,000.
-Communication mix: Personal selling to people that are already members in order to get them to come in and spread the word. Referrals from current members will include a $100 ESPA gift card for both parties. •Promotion strategy- Further attracting local (greater Chicago area) residents by promoting a 10th anniversary 10 day private membership at The Peninsula Spa by ESPA for $110 including (including use of fitness facilities and half-Olympic length swimming pool. Referrals from current members will include a $10 ESPA gift card for both parties.
After purchasing the ten day membership, if a guest would like to sign up for a traditional membership, the $110 will be applied to the initiation fees or the first month’s membership dues. -Communication mix: An ad will be placed on the website in order to attract new customers and remind the current of new opportunities. A PR blitz will also be done in magazines to inform the public about the 10th Anniversary promotions available. I would like to only use Vanity Fair and Vogue (Full page, glo