To address guests' needs for luxury - marketers of high end hotels need to truly understand the nature of the luxury experience, and how the traditional perception of luxury differs from modern luxury.

A quick look at hotel brand advertisements in business publications shows an almost pathological need for hotel brands to position their brand in the luxury category. Although a few mass brands such as Motel 6 realize the advantages of being the Wal-Mart of hospitality, many brands such as Holiday Inn have struggled as they tried to move up the "segmentation" scale.

By not truly understanding the concept of luxury and how it fits into the lives of their guests, hotels end up playing "brand catch-up",  developing two or three tier pricing and suppressing margins. Most importantly, they are unable to build a clearly differentiated brand.

Asking the Question: "If that's all it is, what is the experience?"

BC3 developed the brand essence for a well-known chain of luxury boutique hotels. To do this, we needed to understand what luxury is, how is it perceived and what attributes or triggers make it work. We also wanted to understand whether the traditional luxury experience was changing for modern travelers.

To answer these questions we conducted interactive consumer workshops in major North American travel destinations. Participants were high-end business travelers of varied ages. Travelers discussed their experience of luxury, their expectation of luxury and their valuation of luxury generally, without being restricted to travel or hotels. These findings were then used to explore the specifics of luxury in the hotel context.

Defining Luxury and the luxury experience

Fundamentally, luxury can be defined as "waste". Luxury is "that which is simply not necessary at any level". It transcends functionality and adds a superfluous element. But in the end, as we will see, luxury that is not experienced is like the sound of one hand clapping – its very existence is questionable.

Even though luxury is the anti-functionality, we need to understand the relative nature of functionality in order to fully grasp the concept of luxury.

A simple analogy is the hot bath. To many people, a hot bath is functional. It is an unnoticed part of routine: personal hygiene. However, these same people may also view a hot bath as a luxurious escape- a moment of peace at the end of a tiring day. Thus the same person can experience a hot bath as both a functional routine and luxurious treat- even on the same day and often in the same place. The differentiating factor is not the activity, but the mind-set that informs the activity.

This helps us understand that luxury has different meanings and connotations under different circumstances. It is strictly experiential and to be truly experienced it requires the subject to be in a "luxury state of mind". This insight is critical in developing products and services for which guests will be willing to pay a premium and will also feel they received great value.

The Benefit of Luxury

From a consumer perspective, the benefit of luxury is ethereal and experienced at an emotional level. Luxury provides a heightened sense of enjoying life. Therefore, the hotel needs to consider not only how they can heighten this sense of enjoyment but also, and importantly, how can they ensure the guest is in the mind-set to experience luxury.

This duality is clear when talking to mid-level business executives who have attended a convention. Very often the convention is held in a luxury hotel. However, when asked about their accommodation, executives generally report in functional terms: nice, close, quick check-out… However, these same people when asked about a vacation experience spent at a reasonable but lesser hotel will report the hotel as fabulous, huge room, wonderful food, etc. The differentiating factor lies not in the product, but in the mind-set of the experiencer. The "benefit" of luxury, as it turns out, is so ethereal as to be nothing more than a distracting idea. Marketers need to focus on the experience of luxury and how to effectively and consistently trigger this experience.

The Nature of Luxury

In effect, luxury is an experience by the interaction of stimuli with a receptive state of mind. This suggests that stimuli will have different effects depending on the receptivity of the experiencer; and they do.

An example: for a sales executive, the business stay in a five star hotel may be experienced as functionally excellent. However, the same room may be experienced as lavish luxury when paid for personally and experienced on the weekend.

This implies that the experience of luxury is active and conscious. The person must be aware of the luxurious experience and must be prepared to accept it. They must be in a luxury state of mind.

Luxury cannot happen without both these factors. For example:

Luxury is luxury when:

• The person is open to experiencing it as luxury and recognizes it as such, e.g. flying first class on vacation

Luxury is not luxury when:

• The person does not know it is a luxury, e.g. pate foie gras served at a convention lunch buffet.
  Or
• they are not in the luxury mind-set and not receptive to experiencing the stimuli as luxury, e.g. driving the kids to soccer practice in the Rolls because the SUV is being repaired.

Luxury is not a one-way street. Hotels do not "provide" luxury; guests "experience" luxury. The hotel offers stimuli, the guests bring the mind-set. To be successful, a luxury brand must not only provide the stimuli but also make sure they are experienced as luxury – in other words, ensure that the luxury stimulus and the luxury state of mind harmonize to create a differentiated and relevant luxury experience.

Categories of Luxury

This luxury harmonization can be created by first understanding the nature of luxury stimuli. By defining luxury as "that which is non-functional" it is possible to view luxury in four distinct categories:

1. Costly and therefore enjoyed infrequently

Cost is obviously the most common luxury stimulus. Paying more for a quality shirt may be a functional issue if the shirt fits better and lasts longer. However, paying more for a custom made shirt made by an Italian designer is clearly luxury.

Frequency, or rather the lack of frequency, is also a fundamental determinant of luxury. The person who orders 12 of the luxury designer shirts each season is less likely to experience each shirt – or any of the shirts -- as luxury. It has become commonplace: even though the stimulant (the shirt) is the same the experience has ceased to be one of luxury.

2. Requires time and therefore enjoyed only infrequently (intrinsic luxury)

The cliché of the luxury of time seems to hold true. Small, inexpensive personal activities such as "the luxury of being alone with my family" are mentioned almost universally. This intrinsic luxury cannot usually be provided by an external source- it comes from within. However, the ability to enjoy it can be provided. A hotel that assists with functional details may provide the time for a guest to enjoy an "intrinsic luxury experience". As an example, information on the fastest route to the airport saves time and allows the guest to enjoy a relaxing breakfast.

3. Externally defined status or prestige (extrinsic luxury)

Luxury brands are sometimes dependent on the endorsement of others. This extrinsic luxury depends on what the person believes others believe about the product or event. For example, a traveler may perceive that telling others that they stayed at the Four Seasons Hotel will make the listener think differently about them. In this case, the brand must be strong enough to support the dynamic.

It is also important to note that the same experience could also be viewed as functionally necessary. A business traveler may need to stay at the Four Seasons to establish credibility. Then the stay becomes an expensive (and possibly enjoyable) functional activity, but it is unlikely that the traveler will focus on the luxury experience when recalling the trip.

4. An aggregation of small "extras"

These extra activities often receive the most attention at many luxury hotels. There is an attempt to cause a guest to say: "they even had…a little bottle of French cognac next to my bed at bedtime!" This is the area where hotels tend to battle: amenities, amenities and amenities.

Luxury and Amenities

A guest paying $600 per night is unlikely to treasure a small bottle of shampoo, regardless of its brand. In US hotels, shampoo, conditioner and soap are functional amenities, never luxuries. A high end branded shampoo or soap is, in actuality, nothing more than an expensive, functional amenity. True luxury might be an entire range of personal products so the traveler does not need to bring any with them. But the guest would need to know of this service in advance. In this case the hotel, by providing these amenities would be delivering an intrinsic luxury experience, simplifying the journey and lightening the travelers load.

It is important to realize that being a luxury hotel is not as simple as ensuring the availability of functional necessities such as bathrobes, coffee makers, soaps and chocolates on pillows -- these simply define an effective functional hotel. Luxury requires a greater understanding of the guest. Only an understanding of the duality of the luxury experience will ensure competitive differentiation. A competitor can always provide more or better chocolates, but the way in which the chocolate is presented, the manner in which the hotel manages the guest's mind-set can build meaningful differentiation at a luxury level.

At the same time, however, amenities must be provided to be competitive. The trick is to determine a context in which as many of these amenities will be experienced as luxury as possible.

The Luxury Mind-set

As with luxury stimuli, the luxury mind-set can be managed if it is clearly understood. It is most easily understood in terms of four distinctive states of the luxury mind-set:

1. A priori luxury

The experience is known to be luxury, e.g. eating caviar is known to be a luxury and as long as the person knows it is caviar it will be enjoyed as a luxury regardless of the execution. The state of mind is determined by pre-existing (or closely delivered) knowledge

2. Predisposed luxury

The person enters the experience with the predisposition that it will be luxury because of what it is: a vacation, a celebratory dinner, etc. This accounts for the high "luxury rating" vacations receive relative to business trips.

This predisposition can often come from the brand itself – Patek Philippe watches or Dior outfits are luxury primarily because that's what the brand is – they are not known for exceptional quality (although they have to deliver the highest quality as a matter of course) nor for their prestige (as most people would not recognize them); they command super premium prices because those who buy them are predisposed to see them as luxury items.

3. Anticipatory luxury

"Luxury receptor cells" can be triggered by a convincing announcement that that which is about to be experienced is luxury. Traditional grand hotels orchestrate guest arrivals with doorman, porter, bell-hops, receptionists, assistant manager, etc. These grand arrival circuses are not just luxurious waste, but make the guest anticipate a luxury experience. In this case, expectation most often determines experience.

While anticipatory luxury can be built by creating these expectations in advance of the event, it is best to trigger luxury receptor cells as close to the delivery of the stimulus as possible. A welcoming letter from the Hotel Manager in the room, on the bed, talking about the thread count of the sheets will ensure that the guest experiences the linen as luxury.  


Advertising Luxury

Given that luxury is abstract and dealt with exclusively in emotional terms, it is difficult to communicate it in a rational way. Therefore, advertising for luxury brands must bypass the rational, logical mind and enter the emotional area of active cognition. Simply put, to communicate luxury, the advertising itself must be luxurious. To be effective it must trigger the feeling of the luxury experience at the time it is seen.

It is no accident that the masters of hotel luxury, Four Seasons Hotels, also wrote the book on luxury advertising. Four Seasons famous series of ads featured small, elegant pictures of hotel details in a vertical strip surrounded by white space and very little copy. Much of the ad served no functional purpose and even the photograph showed non-relevant, yet aesthetically pleasing details of the hotels. Readers immediately understood at the pre-linguistic, experiential level, that this company understood luxury and did not need to elaborate further.

A more recent campaign for Park Hyatt Hotels also communicates luxury immediately and convincingly. The advertising does not tell what the hotels do but rather expresses the luxury of the brand in the purity of its design. The reader is pre-disposed to experience luxury when visiting.

Applying These Principles

Our clients have created stand-out luxury properties by applying these principles. They have developed luxury services and amenities. Operationally, they have developed conversation training programs to help Front Desk employees understand guest priorities and how the hotel can alleviate stress points. By understanding individual guests' needs, they are better able to cross-sell and up-sell hotel facilities, while managing, and merchandising, the luxury experience.

Rather than promoting summer leisure discount packages, the chain has developed customized added value programs. Guests select a personalized combination of luxury (i.e. non-functional) services or amenities from a "menu" of a priori luxury options – this guarantees that each guest will enjoy a relevant, luxury experience.

Public space décor is distinguished by interesting, significant art pieces. By providing well crafted and high written descriptions of the pieces, this art predisposes guests to the luxury experience of the hotel.  

Advertising is based on insights into how consumers perceive their own relationship to luxury and how the brand can meet their needs. The ads deal with "the luxury you, the guest, experience", not "the luxury we, the hotel, deliver", and is crafted in such a way as to trigger the experience of luxury and create a visceral expectation of luxury.

Success in the Luxury Business

As we have seen, luxury can be managed and used to build successful brands. However, brand builders must determine from a business point of view whether they should be building a luxury brand or a truly effective functional brand. The answer to this question is dictated by the nature of the target market and the realities of the bottom line and will determine how to develop and differentiate the offering so the brand will attain lasting value.

This article is based on a paper first published in the Cornell Quarterly in 1999.

Laurence Bernstein has been fine tuning the art of converting features, attributes and benefits into dynamic, experiential brands for over 20 years.

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