Chapter 8 Marketing to Business Travelers The business

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.

Business Travelers

New products and services for the business travelers o o Business floors In-house services In-room workstations Entire hotels designed specifically for the business traveler n n n 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)

Important Trend o o The introduction and growth of extended-stay properties First Introduced n n o 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. n n Choice’s Mainstay Marriott’s Towne. Place Suites

Statistics on Business Traveler Market (U. S. ) o o 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

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

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

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

o No-frill travelers (36 percent) n n n 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 o La Quinta, Red Roof Inns, Hampton Inns, and Holiday Inn Express o Some amenities (free breakfasts, free local telephone calls, and dataports in rooms) o Guest are not paying for large lobbies, room service, and other services and amenities they do not use. o Consistency: The same services and amenities at every property in the chain.

o Cost-plus Travelers (34 percent) n n n 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. o The availability of hospitality suites or lounges at which to meet peers, and no-cost amenities are important. o 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

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

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

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

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

o Executive Floors n n n 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

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

Business Centers o o 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

Other Services o o o Health and Fitness Centers High-tech Amenities Other Special Amenities n 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 n Intercontinental Hotels Groups: Priority Club n Hyatt Hotels: Gold Passport n Starwood: Preferred Guest n Marriott’s Rewards, Ramada’s Business Card, and Hilton’s Honors. n Discounts, premiums, and special hotel services.

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

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.

Trends o o o 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 n 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

o Finding Local Corporations n n n o 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 n n Business publications and directories Travel publications State industrial commissions Mailing list brokers National trade conventions

o Direct approach to finding business travelers n n n o 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 n n n Corporate travel managers Secretaries’ clubs Travel agents Tour operators Real estate agents and relocation services Independent hotel representatives in key feeder cities.

o Target business travelers through n n Advertising (see Exhibit 3, 4) Promotion at trade shows Public relations Publicity