Embracing the Role of Romance in Luxury Marketing

Romantic love and a night at the opera might seem the stuff of chick flicks and cheap paperbacks sporting Fabio’s bare chest. But one expert says luxury marketers should pay heed to both subjects if they want to build deep and lasting relationships with their clients.

This article originally appeared in Skift New Luxury, for which I am the editor.

A luxury hotel’s relationship with a guest is a fragile and many splendored thing.

“Luxury is like love,” suggested luxury branding expert Dr. Daniel André Langer. “When we go for a luxury brand, it’s like falling in love. We are not deciding on rational points like functional value, but on a strong emotional connection.” Because of that, the founder of Équité, a luxury, lifestyle and consumer brand consultancy, said high-end brands have to understand the emotional nature of their appeal, first by defining it, and then by swooping in to woo the consumer.

Courtesy Hyatt Hong Kong

Any relationship at the luxury level has to start with developing a distinct brand journey. In the hospitality world, said Langer, “most hotels provide us with a category journey, but nothing is brand-distinctive. All are giving me the same journey and brand names are interchangeable. When that happens, then customers have no reason to pay a premium.” In essence, the brand’s rooms become just another commodity.

So what’s a hotel company to do?

Langer said brands should be defining key attributes and then developing distinct brand journeys around them. “Ask what do we sell? What do we inspire? This is the most fundamental task,” said Langer. “Saying you sell ‘dreams and experience’ isn’t enough. All luxury brands do that. A brand needs to be specific about which dream it sells and which experience. It needs to be defined in every marketing detail, it has to be actionable for every staff member, and surely it has to do something different than what any other brand is doing. Then, no one else can replicate the brand.”

Once luxury brands develop a brand-distinct experience strategy, it has to design a customer journey that reflect the brand proposition at every touch point. That’s why proper staff training is essential. “Service must be based on the defined brand experience,” said Langer. “The staff must understand its role in bringing the brand positioning to life. If it doesn’t know its role, and if staff is not empowered, the whole effort will collapse.”

“The difference between an okay experience and a premium one is in the human factor. It’s making the customer feel special. It’s seamless service. It’s a conversation, knowing who the guest is. Absolute personalized service is what creates the luxury experience and this is what hotels don’t get right. They rely too much on design and a brand name and a loyalty brand, and they forget the most important thing–human interaction.”

That human interaction creates an emotional connection, which ideally, should be felt at every brand property. For example, Langer gave a shout out to Andaz Hotels by Hyatt. While locations may vary from city center to resort, Langer said the brand has created a customer journey that’s all about care and relaxation.

In particular, Langer cited that time he walked into the Andaz Tokyo, soaking wet from an unexpected downpour. The staff greeted him warmly by his name, told him not to worry about checking in and served him hot green tea. They even took pains to dry and clean his luggage. “It was that personal touch,” he said, “They knew who I was and they empathized. They took care of me.”

Having experienced similar service at Andaz properties from Scottsdale to London, Langer is a brand loyalist. Call it love.

KEEPING THE SPARK

Just like a real life relationship, though, maintenance is required. “Once a brand has a love relationship with us, it’s up to brands to nurture, strengthen, and maintain that relationship,” said Langer. If it becomes routine, or a consumer feels taken for granted, “the relationship can easily cool off, and the customer will move on to another brand. Even worse, if customers feel they were cheated, they won’t leave silently. Instead, their love will turn to hate.”

What can cause the dramatic break-up? “All it takes is one negative touch point to damage a customer’s relationship with a brand,” said Langer. “That’s why training people is critical. Proper luxury training must include fundamental insights about luxury and make clear the role of each individual in providing the branded luxury proposition.” He compared the situation to an opera performance. “If we are listening to an opera, the people in the orchestra and on stage have to be in sync. If one musician is off-key, everything is ruined.”

A lack of brand-wide consistency can also nullify a relationship. If someone who is devoted to a particular brand while visiting New York City has a bad experience with that brand in another locale, he or she may decide to stay elsewhere during the next stay in the Big Apple. It’s a matter of one bad apple spoiling the whole bunch.

Why can this happen? “A dramatic breakdown in experience within the same brand can be one of the weaknesses when hotel groups in the luxury space try to grow quite fast. My suspicion is they are not training sharp enough…especially compared to first locations.”

Consumers at the luxury level are likely to have stronger emotional reactions to subpar situations than the average due to their high expectations and the amount of money invested. “If someone makes me pay $300,000 for a car or $1,000 a night for a hotel room, and then I feel neglected, I am not just going to have a neutral response. Maybe the customer is willing to forgive one or two things, but after that, they don’t come back.”

California Leads U.S. Destinations in Marketing to The Middle East

In the effort to attract high-spending tourists, states often look overseas. That’s a good idea — international visitors typically spend more than domestic travelers. But certain international markets present a more complicated consumer landscape than others. That’s what Visit California has discovered as it starts wooing more travelers from the Middle East.

This article originally appeared in Skift New Luxury, for which I am the editor.

While international tensions simmer, Visit California is extending an olive branch to the Middle East. The action is part of Visit California’s initiative to drive ultra-luxury travel to the state.

The Middle East is one of the fastest growing outbound tourism regions in the world, according to UNWTO’s Tourism Towards 2030. Outbound travel from the region has quadrupled during the past 20 years. The region also delivers big spenders. Per capita outbound tourism spending from the countries of the Gulf Cooperation Council (United Arab Emirates, Saudi Arabia, Kuwait, Oman, Bahrain and Qatar) is 6.5 times higher than the global average.

People living in GCC countries are also responsible for 60 percent of Middle Eastern travel to the United States. That’s why, when it comes to high-end product, this is a logical market for American luxury marketers to approach.

Beachside in Santa Barbara

"A few years ago, we launched a super-affluent initiative. This market is very attractive since it falls squarely within the nexus of the KPIs we are trying to develop,” said Caroline Beteta, CEO of Visit California.

In 2018, California welcomed approximately 259,000 Middle East visitors. In 2019, 264,000 Middle Eastern travelers are forecast to visit the state and by 2022, growth in travel from the Middle East is projected to approach 300,000 visitors. Last year, GCC visitors stayed in California an average of 13.5 nights with a mean spend of $2,422 per visitor. That compares with the Chinese at $1,968 and the British at $1,360.

However, California’s net growth from the region has been down the past two years. According to Beteta, the state started experiencing “a significant drop-off from GCC after the Trump travel ban went into effect.” James Bermingham, chairman of Visit California’s Board of Commissioners and executive vice president of operations for luxury hotel and resort management company Montage International, says that fact helped spur the state to action.

“Travel bans and equally some of the rhetoric coming from the U.S. was off-putting for many travelers from the region,” he said. “So we decided as Visit California that we wanted to correct the declines, to send out a message to the GCC that California is an extraordinary destination and that all are welcome here.”

UNDERSTANDING THE MARKET

While Visit California has been attending the Arabian Travel Market, the region’s premier travel trade show, for the past four years, it decided it needed to take another step to increase the state’s visibility in the market.

In April, Visit California embarked on its first diplomatic mission in the region to explore the potential for business. Beteta, Bermingham and the chief executives of ten of the state’s destination marketing organizations took part in meetings and networking events in Abu Dhabi and Dubai, designed to help the group understand the GCC’s nuances.

The first lesson learned is that the market is very complicated. The regional population includes both nationals and expatriates. In the United Arab Emirates, 81 percent of the population is expat, while Saudi Arabia is more reflective of the region writ large, with a little more than a third of the population being expat.

“These are two very different markets, with different styles of traveling,” said Leona Reed, associate vice president global marketing for Visit California.

For example, expats are more likely to opt for less-expensive luxury accommodations (no, that’s not an oxymoron), while the nationals prefer five-star all the way. The expat will be more likely to do a self-drive holiday, while nationals prefer their vacation cars equipped with drivers. Nationals may take religious practices into account while traveling, while the expat is less likely to deal with such matters.

These differences mean dual strategies will run concurrently in each market, one aimed at expats and one at natives. But there are other things to consider as well.

Our challenge is figuring out how to market to region holistically when each country has nuance in terms of destination and experience preference,” Reed said.

For example, Visit California research found that Kuwaitis are more well-traveled than other Middle Eastern nationals. Qatar nationals and those from the United Arab Emirates are more conservative travelers. Saudi nationals get education abroad and are more sophisticated travelers. Generally, nationals from Gulf countries tend to opt for a more classic, hands-on style of luxury. And they are bigger spenders than expats.

Aside from their tendency to spend, the market presents other factors that make it extremely lucrative. GCC travelers go on long vacations, in part to escape hot Arabian summers. Trips to the United States average 28 days, according to the U.S. Department of Commerce. The family-market segment dominates GCC leisure travel and most Arab families are large. Three-quarters of GCC nationals belong to households of five or more. Moreover, many family groups bring along extended members of the clan, and also their staff.

UNVEILING THE STRATEGY

After doing the research, Visit California is unveiling a two-year market strategy aimed at creating strong relationships with strategic trade, media and airline partners in the GCC, and at educating California destinations about the nuances of travelers from this area.

“Establishing representation in the market is the biggest objective for this year,” said Beteta.

At the moment, Visit California has on-the-ground representation in 13 foreign countries and this baker’s dozen account for 87 percent of the inbound international traffic.

After that, it’s a matter of getting the product right for the market. According to Visit California’s research, travelers from the Middle East are looking at destinations which are safe for Muslims, as both real and perceived safety have become a high priority at destinations with high levels of services. They also opt for places which consider their unique needs.

Poolside at Ritz-Carlton Bacara 

The provision of Halal food is by far the most important service that a Muslim traveler requires, Reed said. At the very least, she added, food outlets trying to appeal to this market will have to ensure all ingredients are clearly labeled.

There’s also the matter of prayer. According to the Pew Research Centre report, 63 percent of Muslims perform the five daily prayers. To cater, facilities frequented by Muslim travelers need to be equipped with prayer rooms.

It’s also about providing the right kind of luxury. “Luxury for this market is about being treated with a lot of deference. Exclusivity and pampering are key. This market is all about old luxury – it’s less about experience and more about luxury product,” Reed said.

Bermingham added, “There’s a maturity to their affluence, and with that comes a higher level of understanding and a much higher expectation of service.”

Providing both the appropriate products and service levels for this market will take significant training and implementation. That’s why Visit California is focused on taking the steps needed to reduce the gulf between existing product and the demands and needs of travelers from the GCC.