Aureli forlani pencarelli_sgbed-ancona-2014

Brand management in the hotel industry: from company to network brand.

Opportunities and limits of networking for small-sized hotels

Aureli S. - Forlani F. - Pencarelli T.

Ancona – 17/07/2014

THE 13th INTERNATIONAL CONFERENCEOF THE SOCIETY FOR GLOBAL

BUSINESS & ECONOMIC DEVELOPMENT

Agenda

1. Background and objectives and of the study

2. Literature review

3. Methodology

4. Findings from empirical analysis

5. Concluding remarks



Background

� Importance of intangibles resources in the tourism sector and the hotel industry in particular (Pencarelli and Gregori, 2009; Krambia-

Kapardis and Thomas, 2006; Nemec and Mihalic, 2007; FitzPatrick et al. 2013).

� Brand is a key success factor and source of competitive advantage which leads to revenue (O’Neill and Mattila, 2004, 2010; Hong-

bumm Kima and Woo Gon Kim, 2005; O'Neill and Carlback, 2011).

� Doubts about SMEs’ capability to design and manage a brand (is brand management a too complex activity?)

� Italian SMEs collaborate through consortia, associations, product clubs and network contracts to attract customers; sometimes creating brand alliances (Aureli and Forlani, 2013).



� RQ1 – Do small-sized hotels consider hotel brand a key success factor?

� RQ2 – Do small-sized hotels devote attention to brand management?

� RQ3 – What’s the role of hotels’ networking strategies in brand management?

Research Questions



Literature review:Brand and Brand Management

� Brand is a name, sign, symbol, etc. used to identify the seller’s products and distinguish them from those of its competitors (Kotlerand Scott, 2002) which embodies tangible and intangibles attributes that are relevant for the customer

� Brand management refers to the process by which the brand is laden with meanings and the combination of actions carried out to maintain and improve the brand’s reputation and distinctiveness (Pratesi and Mattia, 2006) :

- Design of the brand identity

- Brand positioning

- Brand Marketing and Monitoring

- Brand architecture



Literature review:Brand usage in tourism

� Attention on how the hotel brand relates to the brand of the chain, association or network the company belongs to and to the brand of the destination (Pencarelli and Splendiani,

2008; Pencarelli, Betti and Forlani, 2009; Aureli and Forlani, 2013).

� When territorial/place brands are consonant with the local business actors’ values and brands, the effectiveness of the marketing policy of these businesses augment and the potential benefits achievable increase



Literature review:Networking strategies among

tourism actors

� Italian hotels are used to collaborate but mainly informally or through consortia, associations and product clubs; whereas abroad we can find large multinationals and multiple brand affiliations (Bailey and Ball, 2006; Lomanno, 2010)

� One of the key benefit of brand affiliation is obtaining a strong brand which translates into higher occupancy rates deriving from customers attracted by the hotel chain brand’s promises

� However individual hotel owners need to be sure that the chain’s branding strategies are appropriate for its property (O’Neill

and Mattila, 2006) -> brand consonance



Methodology

� Focus on the Province of Rimini

� Identification of formal networks through the national dataset of the Chambers of Commerce -> one network contract named “Made in Rimini-Holidays” formed in May 2013 by three hotel consortia (network of networks)

� “Made in Rimini-Holidays” groups more than 100 hotels, which represents about 10% of the total lodging offer.

� Random selection of three hotels for each consortium

� Face-to-face, semi-structured interviews with hotel owners/mangers at each hotel premises

� Topics investigated: HOTEL BRAND; BRAND MANAGEMENT; NETWORK PARTECIPATION



Hotel characteristics



Selected hotels :- are exclusively three- and two-star hotels (50% each)- run by owners- small-sized: with less than 50 rooms (63%) or a number of rooms comprised

between 50 and 100 (37%); employing less than 20 people- targeting mainly Italian tourists (foreigners represent 12% of total guests)

The three consortia are:- “Hotel Tipici Riminesi” (Typical hotels of Rimini) which groups hotels located in

some fractions of Rimini aiming to promote themselves and the territory where they are located emphasizing the local traditions and culture, make joint purchase and offer staff training to the associated hotels

- “Torre Pedrera Hotels” which groups hotels located in a fraction named Torre Pedrera aiming to promote this specific area by providing information about lodging firms, public services and events to both tourists and inhabitants

- “Piccoli Alberghi di Qualità” (Small Quality Hotels) which groups hotels located in Rimini and other nearby cities (Riccione, Cattolica, Misano) aiming to improve their efficiency and combine it with the local culture of hospitality (small family-run hotels with high quality standards)

Findings



11111113Hotel brand popularity (international)

21111114Hotel brand popularity (national)

23224454Hotel brand popularity (local)

54554545Impact of financial resources on brand popularity

43443533Brand as key success factor

RQ1 – Do small-sized hotels consider hotel brand a key success factor?

5-point Likert scale (1= strongly disagree; 5= strongly agree)

- Small hotel owners consider hotel brand an important key success factor whose popularity strongly depends from the amount of financial resources invested.- However, hotel brand is scarcely recognized sometimes even in the local area of Rimini.

Findings



5,00%20,00%5,00%2,50%2,50%7,00%3,00%3,00%Financial investments in promotion (% of annual turnover)

Content management

on FB, Twitter,

Google+; partecipation

to the consortium's websiste and

other local tourism portal

(i.e. Riminibeach)

; seasonal greatings; trade fair

participation

Content management

on Hotel website, FB, creation of

newsletters; limited

advertising on

newspapers

Advertise on free press;

content management

on Hotel website, FB,

Twitter, Pinterest, Google+;

participation to the

consortium's website and local tourism portals (i.e.

Riminidamare)

Content management


Flickr, Twitter,

Youtube; promotion on the local free

press and internet portals

Renewal of the Hotel website;

presence on the tourism

portal "Rimini beach";

presence on OTA

(Venere.com, Booking.com), FB, Twitter

Theatrical setting, use of mascot

representing the summer;

content management


Pinterest, Google+; seasonal greetings

cards; trade fair

participation

Content management


Twitter; presence on Travel web

site (Tripadvisor

& OTA); advertising

on newspapers;

trade fair partecipation

with the consortium

Content management


Youtube; trade fair

partecipation(alone and

with the consortium)

Activities carried out to support the hotel brand

Systematic use of logo in

hotel communication; payoff: "A small jewel just a few steps from the sea"

Registered trademark; familiar and

easy to remember

name; payoff: "Your house by the sea"

Revision of the logo to evoke the sea and summer

(inserting a boat and the

sun)

Revision of historical name to

communicate the concept

of beach and the sea

Revision of historical name to

emphasize hotel's

location by the sea

Improvement of historical

logo and hotel name

from a brand management perspective;

seasonal slogans

NoRevision of the historical name in the

phase of requalificatio

n and enlargement of the hotel

Brand identity system (Logo, Naming, Payoff)

YesYesNoYesNoYesNoNoCreation of a brand identity to communicate the hotel

RQ2 – Do small-sized hotels devote attention to brand management?

Findings



- Creation of a brand identity is rare: three hotels declare to have created it, but they are not always able to describe its components (which are absent) nor they have identified the intangible attributes associated to the brand; moreover hotel name have all historical roots linked to personal owners’experiences

- Management activities are limited to web marketing, social network communication, advertising on traditional media and internet. They are not implemented with the aim to exploit hotel brand but they are more similar to traditional promotional activities.

Findings



Rimini is a large city;

the fraction indicates customers

that the hotel is walking distance from the

beach

Emphasize hotel's

location in the city of Rimini and not in any

of its fractions

Rimini is the hotel location

Rivazzurrabecause it is the specific

hotel's location

Rimini is the hotel location

Rimini has a greater visibility

while Torre Pedrera is small and not well known

To highlight the area around

Rimini and its

characteristics

(tranquillity)

Torre Pedrera is a very quiet place and

its image is more

consistent with the hotel's target

Reasons for the choice of the territorial brand

Miramare -fraction of

Rimini

RiminiRiminiRivazzurra -fraction of

Rimini

RiminiRimini Torre Pedrera –Rimini –

Romagna's Coast

Torre Pedrera –Rimini's

Coast

Territorial (place) brand associated with the hotel

Piccolihotel diqualità

Piccolihotel diqualità

Hotel TipiciRiminesi



Torre PedreraHotels

Torre PedreraHotels

Torre PedreraHotels

Network participation

Hotels’ brand architecture does not emerge as the outcome of an analytical process

Findings



Creating a strong network brand is not a priority in hotels’ networking strategies. Nor hotels seem to question about brand coherence (with one exception)

No, the two brands are placed side

by side

No, high investments are needed to achieve this effect

No, the two brands are placed side

by side

No, however it could be a benefit if it

works like for hotel chains

No, however the network

brand represents

an opportunity

NoYesYes, if the network brand

functions it will prevails

(like for hotel chains)

In customers' perception, the network brand replaces/could replace the hotel brand

21111131Network brand popularity (international)

21111232Network brand popularity (national)

33234552Network brand popularity (local)

Yes concept of co-

branding

NoNoNoNoNoNoNoChanges in brand management derived from/after the collaboration

To inform customers about the quality of

small hotels by using the

network brand; Share experiences

and problems

To increase and

communicate hotels'

quality; to strengthen the whole

category of small hotels

in Rimini

To increase the capacity

of communicati

on; Cost savings; Create

activities and services for

guests (guided tours)

To differentiate

from competitors;

Create events and activities for

clients; Reduce costs

First to enhance the territory, its

traditions and products; Second to

participate in trade shows; Cost savings

Cost saving; Communication and trade

fair participation; Use of the booking portal

Promotion and

commercialization (with

on-line booking); To liven up the fraction of

Torre Pedrera

Cost saving, promotion

and marketing;

More recently also internationali

zation

Reasons for joining formal networks with other tourism enterprises

RQ3 – What’s the role of hotels’ networking strategies in brand management?

Findings

� In hoteliers' opinion the network brand does not increase their recognizability nor it could replace individual hotel brands in the customers’ mind.

� What occurs for hotel franchising chains is considered impossible by the majority of respondents because it would require too much financial resources and it is believed to works only for proprietary chains.

� Hotels communication and hotel brands mainly leverage on the brand of the territory where they are located underestimating the opportunities deriving for synergies with the network brand.

� In conclusion there are several challenges for small-sized hotels at both the organizational and network level and several potential improvements to achieve.



Limitations & Future research

� Results are limited to the case studies here analyzed and the local area investigated.

� Future research steps will involve a greater number of hotels and possible comparisons with medium-sized and large hotels of the same tourism destination could be help identify possible difference due to hoteliers’ personal mindset and managerial approach.



Info and contacts:

Ancona – 17/07/2014



[email protected]@uniurb.it

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Aureli forlani pencarelli_sgbed-ancona-2014

Small Business & Entrepreneurship

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