It can be tempting to pursue all avenues when partnering with a third-party brand, but hoteliers advised ensuring the right level of ROI, committing to written terms and perfecting alignment from the beginning.
LONDON—A hotel partnership with a trending product or celebrity might be just the thing to increase awareness of a property, but hoteliers should be wary that the product doesn’t outshine the hotel, sources said.
Chris Ward, CEO and founder of Hotel Makers United Kingdom, a independent and boutique hotel consultancy, said the partner in question often already has a commercial relationship with the hotel.
“Often it begins as a commercial arrangement, before becoming a marketing arrangement,” he said. “They are already partnering, so it might not be a huge step to open up the discussion. Most likely, these are partners that are aligned.”
It is critical for the hotelier to be aware of the details of the collaboration, sources said. That means asking a lot of questions.
“Be clear what you are entering that collaboration for. Discussions have to be started early,” said Laura Sharpe, GM of London’s Ham Yard Hotel, which is part of Firmdale Hotels.
“Are you doing it to make money, or for marketing purposes?” Sharpe said. “Who is providing the product, who is providing the event staff, as doing that further down the line can be messy? Again, sort this all out early so as not to damage any relationships.”
Ward said hoteliers should step back a bit from their business before considering partnerships, regardless as to whether they are one-off deals, a series of events or some other form of joint marketing.
“After all, you are saying to the world, I am aligning myself with ‘x, y or z,’” Sharpe said, who added she receives as many partnership requests from third parties as her hotel initiates partnership conversations.
Ward said it is important to look at the brand values of each potential partner, understand what their customer base is and determine if the idea is a win-win.
“Do the research, and it can become a very easy conversation,” he said.
Hoteliers and their employees should also define their properties’ values.
“Concentrate on who you want as your guest. Pick the wrong partner, and it is difficult to extract yourself,” Ward said.
Justin Salisbury, founder of the Artist Residence brand, which has four hotels in the U.K. and another in the pipeline, said his goal is to partner with businesses and products local to his properties.
“We’re a small company, two or three people in marketing, who do a great job, but it can take away from the rest of the business,” Salisbury said. “In terms of where we might see buzz, the marketing team probably look at their Instagram following first.”
Scale should also be a factor in considering brand partnerships, Ward said.
“Be realistic about your own business. National and global brands partnering with a single hotel might not work,” Ward said.
He added that to get access to a national brand, it is possible to work instead with local suppliers.
“In a tourism hot spot, it’s possibly easier,” he said. “Hotels can be wonderful backdrops, and even if the partnership simply shows off your hotel behind a product, chef or artist, then that can be worthwhile.
“Dormy House was popular with partners. It is a champagne hotel anyway, so it is hard to work out what the ROI on it is. You are using another brand to set out your own stall.”
A partnership for a well-known drinks company or a chef might see the hotel as a “junior partner” in the deal, sources said, so hoteliers have to constantly weigh the benefits likely to come their way.
Sharpe said she knows the kinds of partners that work best with her property.
“You do face a danger of diluting the message by having too many messages,” she said. “It also is never free. It can be time-consuming, and the majority of time it is not going to make money.”
Some concerns should be raised as to how much time can be allocated, sources said.
The general consensus was that vehicle-related partnerships often are more difficult to organize than drink-related ones.
Another pitfall is maintaining exclusivity, Sharpe said.
“If they approach you, then they probably will come in with a pretty clear idea, but do not be scared to ask for exclusivity,” she said. “That will help stickiness and make something that is yours. If flattery is such that if it is a success, then yes it might be used by someone else.
“If it is a great concept your partner will want to partner with others, and that is another conversation,” she added.
Salisbury said one successful partnership he has helped arrange was at his Brighton hotel with local chef Dan Kenny from restaurant The Set.
“We are talking about making this more permanent,” he said.
Sharpe said one of her most successful partnerships is with drinks company Sipsmith.
“It partnered with us for a pop-up in a space we did not use—the roof—in January,” she said. “This started as a one-off, but after only 28 days, there was a waiting list of more than 4,000.”
Sharpe said she has worked with partners where alignment did not materialize.
“We did one with a third-party supplier, and it did not quite have the right message,” she said. “They wanted to staff the event, which went against what we wanted to do, and then there were discussions as to how the money is split up. It taught us what the level of control we needed would be.”
But it can be difficult to forecast the possible negative outcomes of partnerships, Salisbury said.
“No one spends much time at the beginning of a partnership talking about what would happen if things go wrong,” he said.
Ward said other problems come from partners not wanting to spend cash and challenges concerning contract wording, tax implications and redemption, if that is involved.
While Ward said hoteliers should not be afraid to have an event contract, Sharpe said such documents make it more difficult to abandon plans halfway through.
Other considerations are to use the larger creative team of the partner, stage tests of the events to controlled groups, develop face-to-face relationships with the partner and organize regular meetings of the key players.