Mora

Well as a "Marketeer with a weird mind" you probably shouldn't forget that exclusivity tends to make products more attractiv rather than unattractive.

Exclusive clubs hardly ever tend to make their criteria for membership known to everybody. Reaching a VIP level with any service provider makes people feel special and that's what you want to achieve. And to have many more strive to reach that level and than feel rewarded when they finally get to it. The Hyatt Courtesy Card is given out on completely unknown criteria (at least from what I have gathered about it so far) and I don't think that many FT members would therefore consider it an unattractiv top-tier level.

Your "marketeer" idea of a Leisure RA seems completely unreasonable from my "accounting" point of view.
Just a few examples:

- Based on your idea a mere 26 "Leisure RA's" that book a 14 day vacation each could easily block a properties top suite category for a whole year whilst only paying for a category 2 levels below (oh and I forgot that that rate should also be on a F&F level). That could possibly mean that a customer that would pay full price for the top-level rooms for 14 day would need to be turned away.

- Capacity in prime leisure locations: I would assume that prime leisure locations like Bora Bora would be in extrem demand from "Leisure RA's". How would you like to sort that problem without having a huge amount of unhappy leisure RA's who all will whine that their status is completely useless as they can't use it cos the category of room they want (which would of course be the top-level with only paying 2 levels less + adjusted to a F&F rate) is hardly ever available. I can hear people scream "Fraud" already...

And the list goes on and on...

If you want to target a new group of customers with a new marketing idea it's vital to keep in mind that you don't scare all other groups of customers away.

uk1

Good points. Some of the detail in the initial idea is improvable- although I still see the opportunity as being large and something along the lines I suggest as a possible opportunity.

Perhaps one of the issues that makes my suggestion difficult to accomodate and see as "different" is the use of the title Royal Ambassador Leisure. I'm not bothered about the idea of excusive clubs at all - that only generally matters to people that are unsuccessful and aspirational and but like to pretend. It's just a club you can buy to get some mutually beneficial benefits. If I'd been clever enough to call it something entirely different is might have prevented some reactions constantly comparing it or seeing it as a rival to the current programme.

I agree there is a potential issue with the top suites but I don't believe for the normal suites and mini-suites that are already pretty inexpensively available and available in reasonable number.

Ensuring it isn't overpowering is quite simple. You restrict the number for a while to a see how it runs before you increase.

Good points .... thanks.

Mora

You are more than welcome! I love creative ideas!

In this case however I think one needs to consider if there really is a market segement that you can open for IC with a product like this or if it would bring more trouble than revenue.

I for one do believe that many RA's are technically already in the Leisure RA segment you defined. They spent a lot of nights - often through business related travels- at IC properties with which they obtain regular RA status. Many then use their status that they obtained through business related travel for their leisure travels e.g. to get to a top-level room at leisure locations for less than the regular asking price through upgrades. That's where your high revenue all year round customers (regular RA's) would be in direct competition for the best rooms with the new market segment of the "Leisure RA" or whatever you would like to call it. Reduced capacity and competition for the best rooms can easily lead to unhappy customer in both segments than and drive away business instead of generating more.

I think that a concept like the one you suggest only makes sense if IC would operate a substantial number of large capacity hotels in leisure destinations that you struggle to fill all year round.

With the benefits you suggest and the reality of the current IHG hotel portfolio I would price a product like the "Leisure RA" in the price range of 2000-3000 USD minum per year in order to minimise the impact and to maximise the revenue.

uk1

There most definitely is a market segment. I agree it could be small. I don't know how big. I'm one and I've met a few others. It's a possibly a small segment - hence it could be both attractive to ICHG on a marginal costing/revenue basis for times when some properties find occupancy tough and not be disruptive to the business segment.

I also say that as a person who has been guiding both a six star (so called) cruise line - independently owned and very independently managed by a single bloke with attitude - who agrees with me against his own management team that there is blue sky above heavy discounting for quality. And coincidently also a cruise travel agent who is clueless about how to add value to what is becoming a decreased cruise sale commision of around 5% plus matching marketing funds etc. So there's a niche for people with time and cash. Edited to add as it makes no sense without the comment: And many of the cruises leave from places like Istanbul, Athens, Nice, Rome etc ie all IC locations.

The one element I'd pick to counteract (in my mind) the complete misunderstanding that somehow RA's are the unbridled Royalty worth as much as many delude themselves into thinking is that a lot of them gain RA from very low corporate rates as well as company rebates etc. The gap between leisure customers and corporate customers isn't great as many non-corporates might presume. And of course they cancel at the last moment and often leisure customers pay whether they arrive or not sometimes. In fact it's possible that leisure customers often pay more than many RAs per night.

I'm thinking about how you increase their (leisure customers) visits. And also as we know, business travellers are lonely and drink the mini-bars dry and leisure customers have wives who nag and tell them not to drink any more because they want to go out and they don't want you to snore. It's the great unwashed like I was and to a degree are who are running their own businesses that pay full rates - and I think leisure is somewhere in between.

What seeded this idea was both me and my pillows and things, and a year or so ago I met an old mate on the same flight to Cannes via Nice from Heathrow. Highly successful CEO prone to funny hats and jolly japes. He had an expensive appartment on the Croisette and I was in the Carlton. We met up. He complained about how much time and cash it was costing him for what was 20 to 30 nights in his appartment and he saw my suite at the Carlton. I explained the RA scheme. He was speechless. He said he would pay double and sell his flat. I didn't have the heart to tell him about the flat I was stuck with in Nice because I now knew I preferred Cannes - but that's a different self-disclosure.

There is a small market for people that don't want the obligation of a second home - or homes - have worked out because of their maturity where they like to visit regularly - but would like to have a scheme that feels a bit like the RA programme but for which they pay would be prepared to pay an up front fee. The details in my mind are fuzzy and flexible but I know it's there and there is a market for which ICHG could fill their pockets and provide a targetted product and help fill the hotels when business customers are largely back at home.

Mora

I totally understand what you mean but as I said with your "wish list" of perks we are talking about a membership fee in the region of 2000-3000 Dollars rather than 350-500.

The "Ultimate Access" level of the Leading Hotels "Leaders Club" is kind of the thing you have in mind for IC only with even more perks. That programm offers free continental breakfast for two, guaranteed availability in participating hotels, guaranteed upgrade at time of booking (but suites remain in the discretion of the hotel), free internet access, priorty for early-check/late check-out considerations, 1 free night after 5 stays booked via the Club - and this is priced at a yearly fee of 1200 USD. Add the perks you have in mind and you'll be in the price range I mentioned. I yet have to meet somebody who purchased the "Ultimate Access" by the way.

I do agree that leisure customers pay more per night sometimes. But the heavy discounted company rates you are talking about do not just appear out of nowhere but they are based on the amount of revenue a company generates. So the overall yearly spent of a "business travel" RA on discounted rates may well be higher. Besides that - a leisure traveller who spends as much time at IC's as you envisage would probably qualify as an RA anyway

uk1

Perfectly understand the Corporate rate algorithm - I'm sure many of us was one once. But it isn't simple. The cost of product provision is identical - it just promises volume at a highly knocked down revenue.

A the actress said to the bishop - I think we've agreed there's a market - we're now just haggling about the price.

benzemalyonnais

I think UK1 is a little bit frustrated because he spends out of his own pocket and doesn't get anything, when others stay frequently on other people's $$ and get it all.....

I kind of feel the same way - my work pays, but I can't exactly just say..'oh I'd like the IC HK on my next stop'...they give me a limit and I rarely can stay at an IC. So..I won't make RA. Even when I travel on my own dime, I can't make RA, and I do that about 30-50 nights a year, maybe half of those in IC's. I'm not going to keep spending and spending and spending to make RA only to not get it, so yes, I'd LOVE the requirements to be posted. I travel all over China, and most frequently not to the big cities, so I'm stuck in a CP or a HI. If they'd just make some sense out of it, then I'd be a lot happier.

I think this is a reasonable idea. I'd sign up

uk1

Thanks - yes - saying frustrated is putting it stronger - I feel slightly differently to that.

IC currently have in many ways the worst of all worlds. They don't publish the RA criteria and the criteria is based on nights occupancy not revenue. So many RAs spend considerably less in hotels than I have done. IC get some of my revenue but could get triple.

And all this baloney about it being by "invitation" ie sort of "conferred as an honour" is rubbish and a part of the hoodwink. Basically it isn't an OBE or knighthood or an invite from the Queen to a Garden Party at Buck House for g*d's sake. It is a commercial transaction where one side is asking the other side to commit themselves to loyalty and spending without that other side knowing when they will get the return they seek. It's sort of barmy.

They have a criteria and when you meet it you're in. There's no taking soundings off of other members. No "black balls". No committee meetings to discuss character. People can buy it on ebay; give them and receive them; and when you meet the unpublished criteria - you're in. If IC published the criteria they would earn more money I promise! What IC don't currently have is this great big lump of potential customers that they'd love to acquire but don't because those customers want the certainty of eaning RA when they meet the criteria either through the current scheme with whatever nights formula it is - or even better as in my scheme through purchase directly to IC.

So far as the current scheme goes - nothing to stop the criteria changing regularly to end up with the 1% or so. And yes it would make the criteria tougher because they'd be more people in the pool competing to be within the top 1% if the criteria were published. And if it were revenue at least the people in the pool were spending the most money rather than staying the most nights which is entirely different.

But back to my idea which is a different thing to RA. An entirely different scheme aimed entirely at Leisure customers perhaps even staying exclusively in ICs. To repeat it - I used the term "Royal Ambassador Leisure" to give a feel as to what the benefits might be like but it's a different scheme with different customers largely staying at different times.

Thanks again.