Lifestyle Experience - Case Study Example

Westin Hotels and Resorts: Operations of a lifestyle experience case study Lecturer: Evaluation of Westin Hotels and Resorts ‘renewal lifestyle’ brand positioning and cultural change Introduction Four years ago, the global brand leader for Westin Hotels and Resorts were afraid that the product strategy was not economically sustainable, although the margins were not declining. The lifestyle experience branding strategy aimed at making Westin attain a service culture that combines sensory, visual, and verbal symbols that elicit relaxation and refreshing voice that facilitates interaction with guests (Frei, Dev & Stroock 1). Although attaining brand loyalty on intangible clues and values is challenging, the intangible symbols and values provide the first impression of the quality of service and reinforce the quality offered by the tangible components of the brand such as the high quality food and bed services. Thesis statement: Westin hotels and resorts managed to attain high market share and margins through lifestyle experience branding strategy and new service culture. According to Kapoor, Paul & Halder (2011), the brand positioning strategy combined both tangible and non-tangible aspects of the service since the hotel managed to purchase the ‘heavenly bed’ that would afford the guests a comfortable sleep. The bed design addressed the previous guest complaints of uncomfortable shower curtains through the dual-headed showerhead and curtain rods with additional elbowroom inches. Furthermore, the bed experience was enhanced through ‘heavenly Crib that included 100% cotton-fitted sheets and mattresses with coils instead of the normal foam mattresses (Frei, Dev & Stroock p 4). Another physical selling point was the workout facility that comprises state-of-the art equipment and Reebok-designed regimens that appealed to travelers. However, other competitors such as Hilton and Marriott countered this approach by upgrading the bed facilities such as duvet covers and pillows thus creating a ‘bed war’. According to bed programs of major competitors in 2005, Sheraton hotels had plus top mattresses with sheets and duvets while Hampton Inn had Serta perfect sleepers tranquility with 200-thread fitted sheets and raised bed head board. However, all major competitors had not implemented the ‘heavenly bed’ that was attracting high audience and market share in the market. The heavenly bed was a game-changer since it has pillow top Simmons mattress with 900 individual coils and blankets that catered for different climates. In this case, the hotel could compete with upper end of the upper scale segment hotels like Omni and InterContinental. An excellent brand positioning strategy must also cater for the intangible qualities of the products that enhance service experience (Kapoor, Paul & Halder, 2011). The positioning entailed creating a sensory welcome program that included lighting design, music, white tea scents and botanicals that would create refreshing feelings for the guests. A breathe program was ideal for sensory renewal and entailed installation of breathing lights while the service culture renewal entails improving the skills and attitudes of the staff. The service culture emphasised on the first guest impressions and friendliness of the staff while interacting with the guests. The staff training on impression enabled the hotel to enhance the customers’ emotional experiences and enhance repeat sales by creating a brand that offers ‘personal, instinctive and renewal’ experiences to the clients. The guestroom service was improved through eliminating costs and enhancing the quality through hotter cup of coffee and upgraded bath amenities since research had shown that guests’ first impression enhances their perceptions of the quality of stay in the hotels and are influence the satisfaction levels (Frei, Dev & Stroock p 7). Although many hotels were offering high quality lotions, shampoos, high-speed internet and flat screen televisions, Starwood decided to go beyond the tangibles offerings in the bed and bath experience in 2004 by implementing measures that would ensure guest convenience, connect emotionally with customers and ensure lasting memorable experiences in the bed and bath service. The idea was to make guests feel special, attain sense of belonging, gain more control, reach their potential and be more understood as per their five human truths (Kapoor, Paul & Halder, 2011). Although the Westin ‘personal renewal’ lifestyle strategy was aimed at attaining higher market share and margins, the challenge was to educate the workforce according to their own language and culture. Westin handled this challenge through excellent training of the staff on communication skills, core values and team issues thus enabling the employees to understand the body language and emotions of the guests. The staff were capable anticipating the guest needs and offering services that would make the guests feel comfortable. This move represented a service culture renewal that was later extended to the associates working for third parties. The excellent training motivated employees through enhancing their innovation, improving the participation in global communication programs and instilling new attitudes that are aimed at satisfying the guests. The management implemented a flexible working environment that granted the associates more decision-making responsibilities through the monthly credit line of $ 500-$ 1,000 that was aimed at meeting the guest needs such as power cord, adapter and hair brush. Accordingly, to ensure high employee retention and satisfaction, the management implemented the workout fitness challenge, the dream Westin that would spur innovation and workplace renewal that would ensure teamwork through engage employees in painting walls with new visual languages and vocabulary. The result was high employee satisfaction and productivity as associates appreciated their time, attention and resources that were focused on their development. Another challenge was handling the high expansion since Westin opened about 41 hotels between 2006 and 2007. In this case, Westin hoped to implement cost-effective innovations that could sustain growth and ensure competitive advantage through differentiation of the quality of services. The consolidated income statements of 2006 indicate that operating costs were increasing while the revenues were stagnant thus suggesting possible decline in overall profitability in the future. For instance, costs grew from $ 5,155 million in 2005 to $ 5, 120 Millions in 2006 while the revenues declined from $ 3, 517 million in 2005 to $ 2, 682 million in 2006. However, the overall net income jumped from $ 422 million in 2005 to $ 1, 043 million in 2006 due to decline in losses in asset disposals and reduction in interest expense. This pay-off was occasioned by prudent management of the finances (Frei, Dev & Stroock p 12). The brand has attained higher market share in 2005 as evidenced by the statistics of December 2005 since it has about 141 hotels and total revenues of $5,977 million compared with Intercontinental that had 137 hotels and annual revenues of $ 3, 495 million. However, InterContinental had a net income of $ 942 million compared to Westin’s $ 422 million suggesting that the focus should shift to cost-management and innovative solutions that will differentiate the services. However, Westin was still leading in RevPar across all brands between 2003 and 2006 indicating that guests were likely to spend more money at Westin than other hotels. The 2006 RevPar of Westin was $ 133.79 compared to Marriot’s $ 109.54 and Hilton’s $ 109.11. Another key contributor of the success of the lifestyle positioning strategy is the visionary leadership of the company since Steve Heyer, Sue Brush and Scott Williams managed to inspire their subordinates to remain committed to the new service culture and vision of the hotel. The leadership style entailed inspirational aspects and democratic ideals since subordinates were encouraged to remain innovative and make decisions based on the customer needs. In this case, high employee training and development fostered high job satisfaction and productivity thus contributing to the achievement of higher market share and margins in the industry (Kapoor, Paul & Halder, 2011). Competition started to be a major concern since other hotels were closely watching the strategies and implementing measures to counter the competition. Although Westin was the market leader in RevPAR in 2006, the customer surveys suggested that the brand was losing ground to competitors. However, the guest satisfaction rate was at 794 and below that of key competitors such as Marriot (803), Omni (809) and Renaissance (804). Although Westin dropped in guest satisfaction survey in 2006, the JP Power Index considered both the intangible element and tangible elements of the service provision and concentrated on six elements that include luxury, food and beverage, hotel services, hotel facilities, costs, reservations, check-in and check-out, and guest room (Frei, Dev & Stroock 16). Hospitality services require a unique brand positioning that caters for the emotional connection with customers through creating unique ambience that offers relaxation and quality services that guarantee the customers a memorable experience (Kapoor, Paul & Halder, 2011). The services are unique since most are intangible and perishable thus requires a customised service delivery by having an unique ambience can differentiate the hotel services thus creating brand loyalty. The physical evidence is also essential and Westin hotels implemented the heavenly bed that offers comfort, workout facilities and stylish rooms that are fitted with wide-range of accessories to meet the unique needs of the guests. The hotel also catered for the process through training the associates on cultural aspects, communication and excellent service delivery. The staff were friendly, jovial, welcoming and willing to help the guests thus enhancing the perception of quality on the minds of the guests (Kapoor, Paul & Halder, 2011). Conclusion Westin hotels and resorts are currently positioned as personal, instinctive and personal renewal brand that offers excellent ambience and allows the guests feel relaxed. The associates cater for guests’ unique personal needs and renewal experience enables guests energize their minds, bodies and spirits thus feeling much better than they arrived and making the stay memorable. Reference: Frei, F.X., Dev, C.S & Stroock, L.M. (2007). ‘Westin hotels and resorts: operations of a lifestyle experince’, Harvard business school, Date May, 07, 2007, pp 1-17. Kapoor, R., Paul, J & Halder, B. (2011). Services marketing: concepts & practices. New Delhi: McGraw Hill Education. Read More