A Tale of Two Brands (based on a true story) -
Once upon a time in December 2012, there was a hotel asset, it lived in a spectacular location, right on the shore of the Pacific Ocean but alas, it was caught in the middle of an epic battle between The Brand (who managed the hotel) and The Bank (who owned the hotel).
This 500+ room hotel was located in one of the fastest-growing cities in the US. The Brand had a strong presence in this location, and in other metropolitan cities. It was a regular haunt of A-list to D-list stars.
The Brand was strong, but The Bank was stronger. Someone had to intervene. There are very few private equity funds who could have made a bid for an asset in this much legal turmoil. But one did, and it had a very powerful reason to do so. That reason was pure profit. Even without The Brand, there was money to be made from this beautiful princess of a property.
They called for reinforcements – enter my team in shining armor! Our goal was clear: supercharge hotel revenue after rebranding to minimize negative impact from the loss of the brand name.
How did we know we could do it? You see, when the hotel owners, the brand, and/or the management company disagree, something inevitable happens: the hotel loses focus and revenue stumbles. Even with all its advantages, we knew the hotel was not peak performing.
I define a lodging business to be peak performing when the % direct revenue booked is at its maximum possible number. Basically, that means you are selling more rooms directly to your guests than anyone else in your market.
No marketing/revenue management plan can ever be successful without setting goals. In this case, the goal was clear: not to have too much of a revenue drop when the old brand faded away at the stroke of midnight.
Into the Fray The deal was finalized with a really, really big catch. The new owners would not be allowed to use the former brand name. And they meant it: not on the website, not in Pay Per Click ads, Display Ads, not even whispered over the breakfast buffet. Any utterance = massive lawsuit. Pow!
From an online revenue perspective, our first important task was to make sure all the property's digital assets were acquired and accounted for. These included:
1. Domain name
2. Website files
3. Analytics
4. Social media accounts
5. Historical revenue and online marketing reports
At the same time, we had to come up with a unique revenue recovery strategy. We had to match the revenue the hotel was producing as an established brand but without ever mentioning the old brand name.
Let the games begin.
What's My Name Again?
There was no time for custom design jobs. But there was a working website which had been designed by a big box hotel marketing agency. We quickly ripped the site off the browsers and recode it using WordPress. Calls to action and device compatibility were addressed right away. (It's amazing how many simple things are missing from expensive "custom" hotel websites).
For the record, the former management was absolutely in love with their website and vendor. It never ceases to amaze me that when people really like how their website looks, they don't even notice (or care) how poorly it is performing.
Well, no matter. No time for redesign! With the new asset managers backing us on the right usability issues, we deployed the new site in one week. With the keys to the asset in hand, we walked into the hotel with new asset managers for the takeover meetings. The official handover date and time was finalized, and that's when we are slated to go live with out marketing campaign. At the stroke of midnight, our site and campaigns will launch with the hotel's new name. There is one small issue…we do not have a name yet!
Amazing but true. We have taken over the online assets, have a website ready to be deployed, and a marketing campaign ready to be unleashed… as soon as the new owners can agree on a name.
This will be a sobering thought for a lot of brand name aficionados, but the name of the asset was not decided until 8pm on the day of the official takeover. Basically 4 hours before the legal deadline.
Ironically, the name they chose was a common first name. It was the equivalent of calling the hotel "The Larry." The website and all the online campaigns went live with the finalized name. And at 12:15 am EST, the first reservation was booked from London at the hotel we now lovingly call "The Larry."
The Results: 30 Days After Takeover Here's what we delivered in Month 1:
- 48% increase in year-over-year total revenue
- 23% increase in year-over-year web and mobile revenue
Instead of just minimizing the loss of revenue, we helped The Larry come out of nowhere and make 50% more money than it was making as a well-established brand in a major metropolitan beach market.
How did this miracle happen? Well, first of all, it is not a miracle. Brands no longer have the same power in major metropolitan areas. "The Larry" proves that a major brand simply is not required to pull in online bookings, you just have to know what you are doing.
How We Did It There are five things that, when properly executed, can supercharge your new asset's revenue when you are losing the brand name.*
1. Manage Your Rates & Distribution. Value-based pricing is the best practice whether you are a brand name or not. Remember, no amount of online marketing or social media activity will make up for an inadequate rate and distribution strategy.
2. Forget Groups. Probably the worst business you will ever get. Get FIT (flexible independent travelers) or go home. If your asset is in a major metropolitan area, capture direct demand and convert it.
3. Leverage Online Travel Agents. You need and want the billboard effect. The only way to capture that is to get a solid relationship with one of the top OTAs (Booking.com or Expedia, your choice). In the end, if you have to go exclusive with an OTA for top placement, in the words of Nike marketing… Just do it!
4. Budget for Effective Online Marketing. Budget to win, not to skim the surface of your location-based demand. Example: this 500-room hotel post-takeover was spending $40K/month on online marketing. Before takeover, the brand hotel was signed up with a $2000/month marketing package – which was producing nothing. Don't bring a knife to a gunfight. It never works.
5. Know the Difference Between Vendors and Partners. A vendor can be good at carrying out tasks. Do not confuse "doing things" with setting strategy. Rebranding calls for targeted strategy and fast implementation. Every case is unique; you cannot count on someone with 600 clients to give you a winning strategy.
* Also, a tremendous amount of caffeine was consumed in the making of this epic transition.
The End?
"The Larry" had one of its most amazing years in terms of total revenue growth. A lot of asset managers got hefty bonuses, you're welcome. The private equity fund used "The Larry" case study at its global investor meeting, showcasing their strength in transforming underperforming assets in major metropolitan area. "The Larry" was closed for renovations after a super-successful 1˝ years. It is now going to become a brand new concept hotel and residence brand.
Original ArticleVikram Singh, co-founder, Madbooker
Vikram is an expert in hotel-specific technology and marketing, with a strong focus on booking engines, search engine marketing, and online distribution strategy. His latest venture, madbooker.com, focuses on the current ecommerce challenges facing the travel and hospitality industry today. His strategies have helped power some of the biggest and most successful hotel equity turnaround deals in the last decade. A thought leader in the hotel/tech realm, Vikram is a frequently requested speaker at industry conferences worldwide. Former hosts include the US Department of Commerce, Travel Distribution World Asia, Arabian Travel Market, and HSMAI. He is a perennial favorite of audience members everywhere because he emphasizes action-oriented strategies. Vikram also writes the popular hotel and travel marketing strategy blog: www.wordsofvikram.com 
