Kimpton’s guiding corporate objective is to increase profits by 14% year-on-year through 2017. The boutique hotel market overall is expected to grow by 7% annually through 2017, with an expected consumer shift towards preferring more “lifestyle” holiday and hotel offerings. Towards this goal, our team identified three broad marketing objectives, including:
- Increase total revenue while remaining in the “Upper Upscale” market class.
- Increase brand recognition and ‘community’ experience association with Kimpton boutiques.
- Maintain high overall customer satisfaction in our market class.
We performed internet research, and customer journey across touch-points. We then went out and did qualitative research with customers to validate (or invalidate) those journeys. We performed in-person interviews with Kimpton customers, travelers visiting San Francisco, travelers in the Bay Area, hotel executives, and visited the Kimpton properties located in San Francisco.
Based on qualitative market research we determined that customers seeking community experiences during their hotel stay are the most promising for Kimpton. Community segment customers are seeking a hotel that reflects and connects with the history and culture of the destination, congruent branding and storytelling, and unrehearsed interactions with staff. Competitors serving the community segment are enhancing personalization and bringing local culture into the hotel in common spaces.
We face some potential challenges in appealing to the community segment:
- Hotel customers broadly are looking for something more predictable.
- Can our diverse properties really deliver a community experience consistently?
- We have no clear channel communicating to “Community” seekers. On the other hand, we are positioned to serve the community segment due to our high level of personalized customer service, our established offerings that build connections between guests and with the staff, and an inclusive culture that enhances our community presence.
We proposed to roll out four strategies to capture the community experience seeking segment.
- Create moments of heightened community experience intensity throughout the duration of the guests’ stays.
- Align the hotel experience with the client’s expectation of the destination by adding authentic touches and facilitating connection with local culture.
- Deliver consistent, personalized service with a touchpoint that connects the guest with history and the local culture.
- Define “boutique” with meaning that appeals to the community segment by creating experiential expectations for each property and leveraging the mystique surrounding the word.
Proposed tactics to actualize these strategies are focused on three key areas:
- Further market research (quantitative).
- Social media and online communication, aggregation and guest services.
- Redesigned experience and service offerings within the hotel spaces.
The proposed tactics will be rolled out in 5 properties in San Francisco over the next year. Each tactic will be piloted in the hotel spaces over an initial period of 2 months. Total cost of these activities is $49,000 in Year 1. Expected profits of $120,000 in Year 1 in each of the five pilot properties. If the target is achieved, we propose full rollout of the marketing strategies in at least 60 properties by Year 3. Full rollout is expected to cost $3 million and is expected to generate profits of $36 million.