Hoteliers, retail brands partnering for profit
23 JUNE 2014 6:48 AM
Hotel companies are driving awareness by partnering with brands outside the travel space.
REPORT FROM THE U.S.—Some hotel executives are turning to well-known brands outside their industry to drive awareness, image and bookings.
Homewood Suites by Hilton, for instance, has a float in the Macy’s Thanksgiving Day Parade. TownePlace Suites by Marriott branded its closet with the Container Store. And the Affinia 50 in New York is promoting juice-cleansing company Love Grace.
Discussions with marketing managers and a brand analyst revealed several points of consensus about partnerships:
- Brands should be chosen carefully so they share similar demographics and values;
- mutual benefits are a must—whether they be money, exposure or awareness; and
- potential benefits can be enormous, but there are pitfalls to be avoided.
“At the end of the day we want to get our message out,” said Christian Kuhn, VP of marketing for Homewood Suites. “A partner with a big audience is a great way to reach as many people as possible. Something like 45 million people watch the (Macy’s Thanksgiving Day Parade) and compared to advertising on, say, Super Bowl, it’s a fraction of the cost with a phenomenal number of impressions.
“It’s generally about driving awareness,” he added. “The hotel space is very crowded, and when you throw in (online travel agencies) and other channels out there, our job is to find a way to stand out.”
TownePlace Suites partnered with The Container Store to brand its closets. This was the first non-travel partnership for the brand, according to Loren Nalewanski, VP of global brand management. The extended-stay brand is installing Container Store’s elfa closet system into all new and renovated hotels. The system includes rods, drawers and shelves. In turn, there will be TownePlace Suites collateral at Container Store checkout counters.
”We see it as a game changer, an element of surprise in a midrate extended stay,” Nalewanski said. “The closets will be standard for all new and renovated properties. Also, guests who would like to own the closet elements can buy them and get free shipping to their homes.”
“Brand partnerships can be productive and positive, but they have to be done right,” said Julie Cottineau, CEO of BrandTwist, a branding specialist. “Container Store and TownePlace Suites seems like a great example of a win-win because it makes sense on a consumer level. They’re trying to solve a problem and make it better for consumers. They are introducing appealing touch points. Hotel brands frequently feel they have to solve a problem on their own, but in this case the brand is leapfrogging that effort and borrowing equity from a very well-known brand that’s an expert in its field.
“Partnering is a great way to bring more people into your fold,” she added. “You don’t have to own every moment. A lot of brands are becoming curators, introducing their customers to other brands that they might like. I think that’s a strong role for brands.”
Marketers agree the starting point is consumers—what they might want or need out of a partnership.
Nalewanski approached The Container Store with the belief that closets could be improved and branded.
“We went to them in the midst of a brand redo,” he said. “We started by just looking for something colorful for our closets but decided to go with the whole closet system, a closet as good as you have at home or would want to have at home.”
In Homewood’s case, the company was contacted by Macy’s which, according to Kuhn, is always looking for brands that fit with the parade and was interested in the Homewood mascot, “Lewis the Duck” for a float. For the cost of the float and sponsorship, Kuhn said, “we get a choice of the entertainer (it was Megan Hilty in 2013), a 15-second introduction by Matt Lauer (the parade host) and 45 to 60 seconds of the singer with the Homewood float on the screen. Lauer is a very enthusiastic announcer, and the message is very brand-specific.
“We work closely to understand where our consumers are as far as age, gender and the rest,” he said. “We want to find someone that has similar demographics and, just as important, similar values as a company. The relationship has to be true to the brand, the brand’s passion and what the brand stands for.”
Homewood finished its first year of a three-year deal for the parade. Kuhn said the company is interested in continuing the relationship.
Starwood Hotels & Resorts Worldwide is a serial player as far as partnerships with many travel industry companies but also The Chicago Cubs, a race car team, the US Open and many more.
“(We) look to partnerships that can create revenue and increase share of wallet with our guests,” said Mark Vondrasek, senior VP of distribution, loyalty and partnership marketing.
“We’re looking at organizations that can help us provide unique experiences and access that create stickiness with our guest, leading them to think about Starwood when they are staying under our roof or enjoying their everyday lives,” he said.
Partnerships also should complement a hotel brand’s size and scope. Denihan Hospitality Group’s Affinia 50 in New York recently launched a partnership with Love Grace that offers juices either individually or as part of cleansing packages to guests.
“We try to look at up-and-coming companies to partner with,” said Cole Hernandez, director of marketing at operator Denihan. “If we were a bigger brand we could go after bigger names, but this makes sense to us. It brings something new and exciting to our guests who are getting a New York experience from a company based in New York.”
Profit and promotion
Every partnership is different. Sometimes money changes hands either for sponsorship (Homewood/Macy’s) or the purchase of products (TownePlace/Container Store). Sometimes they’re cross-promotional. And sometimes services or other benefits are exchanged.
No matter the arrangement, the goal should be mutual benefit.
“You have to be honest with your partner,” Hernandez said. “You ask them what they want out of it and tell them what you want. Sometimes it’s about revenue, but in our case it’s about awareness for Love Grace and about enhancing the guest experience for us.”
Most arrangements are legally contracted, but in the case of Affinia 50 and Love Grace a verbal agreement sufficed because of the smaller size of the companies and the limited nature of the arrangement. However, Hernandez said, “They agreed that since the juices have expiration dates to refund us fully for any unpurchased product for two months and then buy back 50% after that. That took our fear away.”
“When partnerships fall short it feels like a forced marriage,” branding specialist Cottineau said. “It feels gratuitous, like nobody was thinking about the customer but only about the possibility of an appealing partner. Partnerships might give you short bursts of attention but can also be quite costly if they’re not sustainable.
“What I like about the TownePlace-Container store deal is that it hits the consumer while they are at the hotel and in the process of traveling. Storage is one thing modern travelers are thinking about.”
Hotel executives should do their homework before entering into a partnership—not after, she said.
“You are risking your brand’s reputation because your partner will be a reflection on you. At the same time if you do it in a smart way it can really open things up as far as your reach,” Cottineau said.
Nalewanski, for instance, said his office is filled with samples of Container Store products that he is considering for use in hotels.
“We have already made the iron/ironing board caddy from Container Store a standard and there are so many other possibilities, especially in the kitchens and bathrooms,” he said. “We see this relationship continuing to grow and expand.”