Combating the commoditization of the hotel product with partnership marketing

Interview with Stephanie Hilgers, director - partner marketing, Swissôtel Hotels & Resorts
By FFP Online Correspondent, Ritesh Gupta

It was in mid-2006 when Swissôtel Hotels & Resorts appointed Stephanie Hilgers as director, partner marketing.

Hilgers was tasked with the conceptualization and execution of global partner marketing strategies with existing partners, as well as driving the development of new partnerships with lifestyle brands of similar brand attributes and positioning.

Assessing her stint after a year or so, Hilgers is quite pleased.

“It has been a great opportunity to be able to start setting up a new area of expertise. My main goal to renegotiate existing contracts and start negotiations with new partners has been achieved,” she said.

On what was on her agenda, Hilgers said: “Focus had been to setup the department and to structure partner marketing to have a consistent and uniform message throughout the company, as well as to our partners and customers. We have met the expectations and are well prepared to offer professional partnerships to our existing partners and attractive opportunities to new ones.”

Earlier this year, when Swissôtel decided to re-launch its loyalty program Club Swiss Gold, the company also decided to focus on finding partners within the travel and lifestyle industries.

Hilgers shared information on how such plans have progressed along with her impression of how partner marketing is progressing as a tool in the hotel industry. Excerpts from an interview with FFP Online:

FFP Online: How do you assess the significance or role of partner marketing from the hotel industry perspective, especially in the context of building bonding between guests and hotels?

Stephanie Hilgers: This certainly depends on the role partner marketing is supposed to play in an organization. It can be a tool to drive brand awareness, to offer guests complimentary or unique value-adds or to have access to new markets where the company is not represented yet.

Partnerships can give you the competitive advantage but can also be a necessity to be able to survive in a highly competitive market environment.

FFP Online: What major changes have you witnessed as far as partnership marketing is concerned? What is driving these changes?

Stephanie Hilgers: The move from “competitive advantage” to “me too” partnerships has increased the importance for professional management of this area.

The trend toward commoditization of the hotel product requires differentiators where selected partners who support or supplement your product can make the difference.

FFP Online: Some say partner marketing provides outlets that a hotel/destination could not have paid for on its own. It allows for creativity and buzz, and projects to the traveler how the alliances make sense. What’s your take on this?

Stephanie Hilgers: A lot of times PR value is of more impact than the actual revenue you drive from those partnerships. And, commoditization of the hotel product is no longer a trend, but a reality. Looking for alternative routes, together with the partner to compliment each other and to offer additional services/value-adds to our guests can be of key advantage and success.

FFP Online: From the consumers’ or guests’ perspective, how do you ensure they find value in your partners? What are their preferences and usage criteria?

Stephanie Hilgers: This is key for a successful partner marketing strategy and would need to be determined by each company individually.

FFP Online: In the case of airlines, it is being said that airlines institute a variety of redemption and other programme fees in order to control costs and dramatically increased the mileage cost of a free flight-- moves that are received poorly by customers. What, from Swissôtel’s perspective, do you especially take care of (working in tandem with marketing team and partners) that consumers’ don’t end up with indifferent experience when it comes to redemption?

Stephanie Hilgers: We try to only offer redemption on products and services where we as a company are 100% sure that we can meet, or better, exceed expectations. We work in an industry where the key driver is our human resources. If we agree to offer services our colleagues in operations are not able to provide, we create failure and frustration on both sides- with the guest as much as the colleague. We will lose trust in the product and brand, the partner and the business.

FFP Online: What do you think is critical to partner marketing considering the fact as a member of Swissôtel’s programme an airline FFP is not able to earn hotel points or redeem miles at your properties?

Stephanie Hilgers: FFP members are able to redeem miles or points at our properties, depending on the partner. Redemption and conversion of miles/points can be very expensive and as a company you have to make a decision whether it supports your strategy (sales / loyalty-wise).

FFP Online: You mentioned Swissôtel has a few redemption partners though this does not go along with your loyalty programme. How does it work and with which companies do you opt for such partnerships?

Stephanie Hilgers: Members can redeem their miles/points by staying with us. Partners reimburse in hard currency. We select those partners by relevance to our customers.

FFP Online: In the credit card arena, Swissôtel has partnerships with American Express, DBS and MasterCard. How do you differentiate your offerings?

Stephanie Hilgers: We work on offers with market relevance – most of those offers are managed on a more regional basis – and therefore “needs/wants” vary. The differentiator is usually the benefit or value-add the members receive at our properties.

FFP Online: Hotel companies are aggressively expanding their partners varying from ones within the travel industry to telecoms, etc. What are Swissôtel’s plans for the same? Other than airlines and credit cards, which other industries do you think are attractive for partnerships?

Stephanie Hilgers: Our strong belief is that a partnership is only of value if you “live” it. We will not massively expand the partner portfolio but, other than travel partnerships, will have a selective look at partners supporting our vision.

FFP Online: What new opportunities have emerged in the hotel industry to strengthen partner marketing? How do you view these opportunities going ahead?

Stephanie Hilgers: The trend toward commoditization of the hotel product is a fact of life, due to a dramatic shift to the online channel and its complete price transparency, price-focused online marketing, third-party online intermediaries, rate parity across all channels, and best rate guarantees.

Working hard against further commoditization of the hotel product and services is one of our main objectives. We are working on a unique value proposition to the hotel customer, utilizing a differentiated approach to key customer segments. Partner marketing will help us with this demanding task.

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