attracting the new generation of hotel travelers

Attracting the New Generation of Hotel Travelers

The Solutions GroupTeam: Mike Wahl, Sabrina Fruehauf, Antonio Martinez, Lea VandeZande, and Shane Mooney

Client: Best Western International

Order of Business

1. Our Team

2. Reasons for being here?

3. Statement of Purpose

4. The Research

5. Facts, Evidence, Results & Recommendations

Why are we here?

76

46

7580

0

20

40

60

80

100

Tradnl Boomer Gen X Millenial

Population

Meet the Millennial’s

Demographics

Born between 1977 – 1999

76 million (new baby boom)

Proven & Cutting Edge Marketing Tools

• Perceptual Mapping

High quality consumer insights into a brand’s current positioning.

Provides direction in satisfying the wants of consumers better

• Conjoint Analysis

Identifies the extent to which a consumer values a particular attribute in his/her purchase decision

Using math to uncover value system behind preference judgments

Recommendation 1: Make More Adult Friendly

Business Travelers Leisure Travelers

Leisure Travelers

Leisure Travelers Business Travelers

21% 31%

6% 4%

• Free WiFi - top-rated perk for business and leisure travelers

• Add adult friendly featureso Hotel baro Business centero Gymo Concierge service

• Minimize family-friendly featureso Poolo Kids play areao Hotel restaurant

Recommendation 1: Make More Adult Friendly

96%

60%

56%

39%

Top Consumer Touchpoints

Recommendation 2: Improve Perception of a Clean, Friendly Hotel for Guests

• What customers prefer: clean hotels that have a feeling of home and friendly staff

• Customer perception of Best Western: opposite of preference

Business Travelers

Leisure Travelers

Recommendation 2: Improve Perception of a Clean, Friendly Hotel for Guests

How?

• Communicate through marketing and advertisingo The customer's "home away from home"

• Implement corporate wide training for all staff members (at individual hotel level)o Emphasize importance of a clean and friendly hotelo Encourage staff to take the guest journeyo Discuss what your guests expect and how to meet those expectationso Increase expectations

• Evaluate progress - secret shopperso Management shares results with staff

Give guidance, recognition, enforce expectations and reprimand

• Incentivize management and staffo Make it a competition and provide rewards (free hotel stays, gift cards,

etc.)

Recommendation 3: Increase pricing

Price vs. Preference

Hotel Rates

Business Travelers Leisure Travelers

Income and Marital Status

$0- $50,000

$50,001 - $75,000

$75,001 - $100,000

$100,001 - $125,000

Above $125,000

Recommendation 3: Increase pricing

Hotel rates from hotel.com (check in 11/9/12, check out 11/10/12)

Hotel rates from hotel.com, requested for 11/9/12-11/10/12

Recommendation 3: Increase pricing

• 83% of Business travelers make more than $ 50,000 a year (in leisure, it’s more than half of the people surveyed*)

• Most people are single (81% among Leisure, 69% among Business travelers) with over 90% having no children in both segments

Married 19.1%

Not married 80.9%

Marital Status of Leisure Trav-elers

$0-$50,000

$50,001 - $75,000

$75,001 - $100,000

$100,001 - $125,000

Above $125,000

Annual income distribution of Business travelers

Recommendation 3: Increase pricing

How?

• Phase it into your communication with customers

o Pay more for revamped image of Best Western hotels focused on cleanliness and staff friendliness

o Increase in price goes with an increase in quality

o Increase advertising for “Best Western To Go” App 38% of Business Travelers use their mobile device to book travel 21% of Leisure Travelers

Recommendation 4: Launch "Free Night" Loyalty Program

Leisure Travelers

Leisure Travelers

Leisure Travelers

# of nights to earn free night

29%

# of nights to reach “elite status”

29%

Program expiration date21%

Elite room upgrades7%

Elite amenities6%

Elite check-in bene-fits2%

Elite perks6%

Overall Feature Importance

Leisure Travelers

Recommendation 4: Launch "Free Night" Loyalty Program

Elite Perks

Elite Check-in Benefits

Elite Amenities

Elite Room Upgrades

Program Expiration

# of Stays to Earn Free Night

# of Stays to Reach Elite

• A program designed for less frequent hotel travelers

• Program details:o 5 nights earns you a free nighto No expirationo No other benefits

• Simple, attractive program

• Solution for 60% of the guests

• Real, attainable benefits for the consumer

• Low cost for Best Western

• Industry-first program

Recommendation 5: Launch " Best VIP " Loyalty Program

Business Travelers

Business Travelers

Business Travelers

Type of hotels stayed at during the past year

Business Travelers

Recommendation 5: Launch “ Best VIP” Loyalty Program

How?

• Select the attributes with the highest value for the consumers

• Find attributes that provide an opportunity to satistfy the consumer more with less

• Combine attributes and value to determine the best loyalty program for this target market

“Best VIP "Loyalty program

Best VIP Loyalty Program

# of nights required to earn a free night 10 0.24

Program expiration date 3 years 0.25

# of annual nights to reach “elite status” 25 0.27

Complimentary amenity free internet 0.2

“Elite status” room upgrades upon availability 0.2

“Elite status” benefit complimentary drink 0.09

"Elite status" check in/out benefits 0.08

Total TPU ( Customer happiness) 1.33

Other elite loyalty programs

Hilton

Expiration time 1 year 0.07 # of nights required to earn a free night 5 0.03 # of annual nights to reach “elite status” 50 0.12

Late check-out 0.08Express check-out, and check-in 0

“Elite status” benefit complimentary drinks at minibar 0.09Executive Floor Lounge Access 0.04

Free internet 0.2Space-available upgrade to a preferred room 0.2

Total TPU ( Customer happiness) 0.83

Marriott

Expiration time 1 year 0.07 # of nights required to earn a free night 5 0.03 # of annual nights to reach “elite status” 75 0.07

Late check-out 0.08Express check-out, and check-in 0

“Elite status” benefit complimentary drinks at minibar

0.09

Executive Floor Lounge Access 0.04

Free internet 0.2Space-available upgrade to a preferred room 0.2

complimentary amenity welcome bag 0.07Total TPU ( Customer happiness) 0.85

Project Recap

• Family-friendly = Opposite of Milennials’ Preference

• Improving Perceptions of Cleanliness

• Raise Room Rates. Milennial Stereotype: “Inexpensive = bad”

• What New Leisure Travelers Want

• What New Business Travelers Desire

Appendix

Business Travelers Free Amenities

Great for Families

Reasonably Priced

Brand I Prefer

Feeling of HomeFor Business TravelersFriendly StaffCleanRewards Loyal

Customers

Sheraton

Comfort Inn

Best Western

Holiday InnHampton Inn

Marriott Hilton

Hyatt

Leisure Travelers Free Amenities

Great for Families

Reasonably Priced

Brand I Prefer

Feeling of Home

For Business Travelers

Friendly Staff

Clean

Rewards Loyal Customers

SheratonComfort Inn

Best Western

Holiday Inn

Hampton Inn Marriott

Hilton

Hyatt

CA Business travelers

CA Business travelers

Regression Statistics

Multiple R 0.40383014 R Square 0.16307878 Adjusted R Square 0.14799912 Standard Error 1.41869981 Observations 792 ANOVA

df SS MS F Significance F Regression 14 304.729798 21.76641 10.814486 9.43942E-23 Residual 777 1563.875 2.012709 Total 791 1868.6048

CoefficientsStandard

Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 3.01 0.19524213 15.40434 6.371E-47 2.624311202 3.3908403 2.624311202 3.390840313x1 0.92 0.12348197 7.484837 1.944E-13 0.681844636 1.1666402 0.681844636 1.166640212x2 0.41 0.12348197 3.312961 0.0009659 0.166693121 0.6514887 0.166693121 0.651488697x3 0.66 0.12348197 5.337548 1.237E-07 0.416693121 0.9014887 0.416693121 0.901488697x4 0.38 0.12348197 3.067556 0.0022331 0.136390091 0.6211857 0.136390091 0.621185667x5 0.92 0.12348197 7.454162 2.416E-13 0.678056757 1.1628523 0.678056757 1.162852334x6 0.28 0.12348197 2.239316 0.0254176 0.034117363 0.5189129 0.034117363 0.51891294x7 0.17 0.12348197 1.349725 0.1774974 -0.075731122 0.4090645 -0.075731122 0.409064455x8 0.06 0.12348197 0.521485 0.6021779 -0.178003849 0.3067917 -0.178003849 0.306791728x9 0.07 0.12348197 0.582836 0.560173 -0.170428091 0.3143675 -0.170428091 0.314367485x10 -0.10 0.12348197 -0.82824 0.4077888 -0.344670515 0.1401251 -0.344670515 0.140125061x11 0.19 0.12348197 1.533778 0.1254913 -0.053003849 0.4317917 -0.053003849 0.431791728x12 0.22 0.12348197 1.809858 0.070704 -0.01891294 0.4658826 -0.01891294 0.465882637x13 -0.01 0.12348197 -0.06135 0.9510954 -0.249973546 0.234822 -0.249973546 0.234822031x14 -0.06 0.12348197 -0.46013 0.6455492 -0.29921597 0.1855796 -0.29921597 0.185579606

CA Leisure travelers

intercept. # of nights required to earn a free night 5# of nights required to earn a free night 10

. # of nights required to earn a free night 15 # of annual stays to reach “elite status” 25 # of annual stays to reach “elite status” 50 # of annual stays to reach “elite status” 75

Program expiration date never Program expiration date never 3 years Program expiration date never 1 year

“Elite status” room upgrades free suite upgrade upon avalability“Elite status” room upgrades free upgrade to best available non-suite room

“Elite status” room upgrades none complimentary amenity free internet

complimentary amenity free breakfast complimentary amenity welcome bag

"Elite status" check in/out benefits express check in"Elite status" check in/out benefits none

"Elite status" check in/out benefits 8am check in and 4 pm check out“Elite status” benefit complimentary drinks at minibar

“Elite status” benefit Free airport shuttle service “Elite status” benefit access to executive lounge

0.00 0.20 0.40 0.60 0.80 1.00 1.20

CA Leisure travelersRegression Statistics

Multiple R 0.40383014 R Square 0.16307878 Adjusted R Square 0.14799912 Standard Error 1.41869981 Observations 792 ANOVA

df SS MS F Significance F Regression 14 304.729798 21.76641 10.814486 9.43942E-23 Residual 777 1563.875 2.012709 Total 791 1868.6048

CoefficientsStandard

Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%Intercept 3.01 0.19524213 15.40434 6.371E-47 2.624311202 3.3908403 2.624311202 3.390840313x1 0.92 0.12348197 7.484837 1.944E-13 0.681844636 1.1666402 0.681844636 1.166640212x2 0.41 0.12348197 3.312961 0.0009659 0.166693121 0.6514887 0.166693121 0.651488697x3 0.66 0.12348197 5.337548 1.237E-07 0.416693121 0.9014887 0.416693121 0.901488697x4 0.38 0.12348197 3.067556 0.0022331 0.136390091 0.6211857 0.136390091 0.621185667x5 0.92 0.12348197 7.454162 2.416E-13 0.678056757 1.1628523 0.678056757 1.162852334x6 0.28 0.12348197 2.239316 0.0254176 0.034117363 0.5189129 0.034117363 0.51891294x7 0.17 0.12348197 1.349725 0.1774974 -0.075731122 0.4090645 -0.075731122 0.409064455x8 0.06 0.12348197 0.521485 0.6021779 -0.178003849 0.3067917 -0.178003849 0.306791728x9 0.07 0.12348197 0.582836 0.560173 -0.170428091 0.3143675 -0.170428091 0.314367485x10 -0.10 0.12348197 -0.82824 0.4077888 -0.344670515 0.1401251 -0.344670515 0.140125061x11 0.19 0.12348197 1.533778 0.1254913 -0.053003849 0.4317917 -0.053003849 0.431791728x12 0.22 0.12348197 1.809858 0.070704 -0.01891294 0.4658826 -0.01891294 0.465882637x13 -0.01 0.12348197 -0.06135 0.9510954 -0.249973546 0.234822 -0.249973546 0.234822031x14 -0.06 0.12348197 -0.46013 0.6455492 -0.29921597 0.1855796 -0.29921597 0.185579606

Do you stay in hotels at least 2 nights per year for business travel?

Do you have a college (4 year undergraduate) degree?

Are you between the ages of 22 to 35?

During the past year, how many nights have you stayed at a hotel?

Which of the following hotels have you stayed at during the past year? (Select all that apply)

Which of the following social media platforms do you use? (Select all that apply)

Which of the following travel websites have you visited in the past year? (Select all that apply)

Which of the following sources do you read for entertainment or news? (Select all that apply)

For which of the following reasons do you use your mobile phone device? (Select all that apply)

Which of the following television stations do you watch daily? (Select all that apply)

Which of the following hotel loyalty programs do you currently belong to? (Select all that apply)

Which of the following devices do you own? (Select all that apply)

Which of the following TV programs do you watch regularly? (Select all that apply)

Please indicate your age range.

Please indicate your gender.

Please indicate your annual household income. (Optional to answer)

Please indicate your ethnicity.

Please indicate your marital status.

Including yourself, please indicate how many people are in your household.

Please indicate how many children you have.