Brand is the major source of long-term differentiation in hospitality sector, says expert

This idea – a part of new approaches to building hospitality and other service brands – is featured in a hospitality brand-management guidebook, “Brand Bites”, written by James Stuart, managing partner of The Brand Company, an Asian hospitality brand-management consultancy.

Stuart said that for service organisations, brand was the major source of long-term differentiation.

Products, services and processes can be copied, but the brand guides a unique style of delivery – through service attitude, interiors, dining concepts, health and wellness initiatives, and other things – which is much more difficult for others to replicate, he explained. Therefore, the brand is what turns the offering from a commodity into something distinctly compelling, and this is what drives price premiums over the competition.

He added that in the early years of hotel development in developing markets, it was possible to sustain higher margins simply by having a superior product.

For example, when budget hotels came along they were more consistent, generally cleaner and better located than the older guest houses. So they were different by being better.

But in more mature markets ‘better’ isn’t enough, because the competition is greater and there are likely to be several brands competing at the same level of quality and standards. That’s when the brand kicks in.

Without it, the more competition there is, the more invisible a product becomes. DNA cannot be copied, he stressed.

“Brands are driven by a clear centre-point – sometimes called a brand DNA – that guides and shapes all a brand does, and the way it does it. Yet, the brand needs to evolve: to innovate. If there are too many rules and restrictions about how the brand must be expressed (sometimes called ‘brand standards’), it makes it difficult for the brand to adapt to changing circumstances.

“So, while the brand DNA must be rigorously adhered to over the long term, the manner of delivering against its promise and spirit can and should change, to make sure it stays sustainably fresh and relevant,” he said.

For operators who already have good products and services, Stuart said that relying purely on product and service would not work over the long term. There is so much product copying and leap-frogging that to think “stay ahead by always introducing new product advantages” is deluded.

Even Apple knows that, which is why it has carefully shaped and nurtured a distinct brand positioning based as much on how the brand ‘feels’ as much as what it provides. Customers are equally in love with Apple through an emotional connection with the values of the brand as through the function and form of the products, he said.

In the service brand space, Singapore Airlines is one of the most innovative brands in the sky, yet much of what sustains its success is the delivery of a distinct style of service over the last 42 years, expressed through “Singapore Girl” and “A Great Way to Fly”, he said, adding that importantly, these advertising tag-lines are reflections of the reality of the passenger experience.

Too often, marketing claims made on behalf of service brands are fanciful nonsense and bear no relation to the reality the customer experiences. All that this will lead to is a sense of frustration when it is discovered that what was promised was not delivered.

Successful service brands must be built on the mantra of “don’t make promises you can’t keep”, said the branding expert.

Building brand online

According to Stuart, building a brand via online or social-media channels sometimes seems to represent a misplaced sense that because something is accessed through a computer or mobile device, it meets the principles of effective brand-building.

The fundamental requirement – whether online or in person – is to build a brand based on a unique truth and to establish relationships with customers, he emphasised.

Online space has enabled a much faster, widespread awareness of smaller, newer brands. The Upper House in Hong Kong has only been open for five years, yet is the leading hotel in terms of revenue per available room night in the city. They do almost no advertising, but rather rely on their customers to do their marketing for them, he said.

Last year, for example, it was voted TripAdvisor’s “Asian Hotel of the Year”, and it continues to retain TripAdvisor’s No-1 spot amongst Hong Kong hotels. All of this has been achieved by realising that service brands are built by developing uniquely compelling realities and distinctive guest relationships, rather than through marketing hype.

The online space has also brought guests and brands much closer together, even when the guest is outside the property, he said.

“It’s as important to think of relationship-building online as it is in the hotel, yet too many hotels still see the online space as an arena for reservations (the booking engines) rather than as a powerful relationship and brand-building tool.

“Social media provides rich opportunities to create and sustain dialogues with guests, so service companies shouldn’t just think of an app or a blog as something cool, but something fundamental in building awareness and understanding of, and loyalty to the brand,” added Stuart.

Brand management for Thai market

The big challenge for Thailand is how to succeed in a more mature market, he said. Take Phuket, Koh Samui, Pattaya or Bangkok, for example, which are awash with brands at all price levels.

To succeed, operators have to be utterly distinct from other brands. A number of studies of Phuket and Khao Lak have found so much of the resort ‘product’ to be highly commoditised. While the design differs between each, the functionality of the brands is very similar.

They mostly offer a passive array of “snooze-inducing services and environments, designed originally with Westerners in mind, for whom relaxing means grabbing a book and heading for the hammock, cocktail also in hand”, he said.

But, with increasing numbers of Chinese, Russians and Indians flocking to the Kingdom, things are going to have to change, because many of them don’t think ‘doing nothing’ is relaxing, particularly the Chinese.

They want to learn, to explore, to get under the skin of a place, to socialise, to find something truly authentic, he stressed.

Those Thai brand creators who leave the safety of the mainstream and have the foresight to develop distinct and inspiring brands targeting the new and changing array of customer segments, will be those that succeed, he added.

Thai success stories

This year, TripAdvisor’s customers ranked 20 of the top 25 hotels in Thailand as resorts. Only five of them are in Bangkok, one of them being The Siam in Dusit district.

They have avoided the temptation to imbue the property with an overdose of ‘Thainess’, yet it’s appropriately still present, said Stuart.

Neither have they followed the worn path to ‘grandeur’ or ‘trendiness’. Although some describe their hotel as ‘boutique’, it’s an unfortunate label for a brand that has been imaginative, bold and relevant in thought and deed.

This is not about it being ‘better’ (although the product and service quality is exceptional), but about it being different in a way that makes sense for a group of style-conscious travellers who like their hospitality neither traditional, not faddish, he explained.

As to any other points relevant to service companies in Thailand, Stuart said that while the attributes of Thainess are rightly world-renowned, service brands need to take care not to think of this as something they can own. Too many Thai service companies reflect various time-honoured country traits as the centrepiece of their brands, and by doing so become tired replicas of each other, particularly in the resort space.

Thainess is a natural part of any Thai brand, but it should be used judiciously and as a natural underpin to local brands, not as the main event, he stressed.

Otherwise, “they’ll end up like the orchids being sold at Suvarnabhumi Airport: they look gorgeous, but it can be difficult to tell them apart”.