Hotels

Exclusive: Luxury 2.0 in the hotel landscape

Daisy Melwani

Daisy Melwani

It’s one of the most overused terms in travel, but what does it really mean to consumers when staying at so-called “luxury” hotels?

We get the lowdown from InterContinental Hotels Group (IHG) chief operating officer Australasia, Japan, Korea & AMEA Franchising, Karin Sheppard.

“Beauty is in the eye of the beholder” or so the saying goes; but can it apply to luxury experiences and commodities? According to IHG’s Sheppard, it does.

“Luxury is kind of an individual thing, and it’s something you need to define as what makes you feel enriched and therefore, makes you feel like you’re in a luxurious environment,” Sheppard shares with Travel Weekly in an exclusive interview following her panel appearance at the HotelsWorld Conference last week.

While hotel design style varies largely within IHG’s portfolio, ranging from the pinnacle of its five-star leisure and business hotel brand – InterContinental, to the group’s relatively newer “boutique” range of Indigo hotels that have started to spawn across Asia, to the funky Kimpton Hotels it purchased last December to fill a diversity void in the US hotel landscape (and with it, came a cult-like following of loyal guests), Sheppard said “there’s an intrinsic link to quality when you talk about luxury and attention to detail”.

“If you think about it from a design perspective, luxury can exist on many forms, it can be a very contemporary design style, or classical.”

“The whole sense of craftsmanship and in many cases the heritage or story telling in what you’re experiencing, kind of supports what feels like luxury – because it feels like you’re getting something truly unique and special that’s just for you,” Sheppard explains.

Sheppard likened the experience to that of resurgence in customisation of high-end handbags, which she says gives the sense of individuality and therefore, “access to something bespoke, which inherently feels luxurious”.

But how does can this apply to a 500-room hotel? Sheppard says luxurious experiences should begin before the guest arrives.

“That’s where from a brand perspective, like if we take InterContinental – where we can help what happens behind the scenes in terms of access to information, for example, we’ve just given our hotels a platform for knowing more about our most loyal guests,” Sheppard says

“By giving them the information to tell them more about you as you arrive at the hotel, whether it’s a 200 room hotel or 500 room hotel, we’ve made it easier for that front desk agent to interact with you.”

“The more we can collect data on our customers and make it accessible to our hotels, the more they can deliver that personalised experience,” Sheppard said, citing an example of how a simple acts of service such as knowing guests’ preference for a certain type of tea, can elevate a stay at an IHG property over rival chains.

resort3

However, Sheppard says it ultimately boils down to staff on site to take on board customer service expectations.

“It then becomes about making sure the people that are delivering that (service) have the right philosophy and attitude, and that they truly enjoy delivering a personalised experience rather than just being transactional,” she said.

“So it’s a two part process, (combining) the intelligence and knowledge together to enable the people that interact with the guests, then to make sure that they as individuals are obviously trained, but also come from a nature where they want to be hospitable and make you feel special.”

On whether price sways customer loyalty to a brand, Sheppard says it is “value over price” when it comes to IHG guests, topped with good service.

“I think value always plays a role whether you’re a selecting a service hotel or shopping for a luxury hotel,” Sheppard said.

“Particularly at the luxury end of the market, you can take price sensitivity out – that doesn’t mean that luxury travellers are oblivious to price – they are not.”

“Having said that, what we do know is that from our global loyalty programme, once you have a connection with a brand and you trust the brand, that gives value in its own right.”

“You become less price sensitive because you know that the brand is for you and will deliver on its promises, and particularly if you return to the same hotel, you start to have an emotional connection with the people looking after you.”

However, according to Sheppard the loyalty rules apply for most generations, except millennials, who are driven toward instant gratification. In a bid to respond, IHG overhauled its traditional loyalty scheme to include allowing points to be used to redeem goods, at a lower ratio than what it would take to accumulate redemption for a hotel stay.

“Traditionally they can save up to have a night at a hotel or fly on an airline, right now there’s a catalogue for rewards – to buy an apple watch or Nespresso. Having said that, it’s still hugely popular to redeem points for nights in hotels as it’s a great experience,” Sheppard said.

On customer trends, Sheppard reveals guests are now happily choosing to “trade off” on travel experiences, compromising on low cost flights, for example, to spend big on hotel stays.

“You also see more and more people deciding where they want to trade off on the whole travel experience, so the whole emergence of low cost carriers, meant that people willingly travel on a LCC to a resort destination and spend very liberally in a luxury resort because they are placing their money where they think they’ll get most value,” Sheppard said.

SEE WHAT PEOPLE ARE SAYING

One response to “Exclusive: Luxury 2.0 in the hotel landscape”

  1. …. yes karin, i definitely agree with you…. luxury is an individual thing…. but sorry to say, good value is actually a state of mind of also the beholder… worse, added value doesn’t sell according to latest surveys and reliable stats…… so when you say ‘value over price’, ok, allow me to be frank, that’s an illusion…

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