Hospitality

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Marketing Plan

St. Regis, New York

New York University

School of Professional Studies

Marketing Strategies

Professor Ronald Castro-Sanchez

December 14, 2015

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Table of Contents I. Executive Summary…………………………………………………………………..03

II. Situational Analysis

a. Overview.………………………………………………………………..........04

-Property overview……..………………………………………………..04

-DMO overview……..…………………………………………………...06

b. Brand Positioning………...…………………………………………………...12

c. Marketplace Analysis…….…………………………………………………...16

d. Competition…………………………………………………………………...20

e. Market Dynamics………...…………………………………………………...23

f. Marketplace Insights……...…………………………………………………...30

g. Target Market Analysis…………………….…….…………………………...33

-Customer Analysis.…………………………...………………………...33

-Consumer Insights….………………………...………………………...35

h. SWOT Analysis…….………………………………………………...….…...39

i. Marketing Mix Analysis….……………………………………….…………...44

III. Objectives………………………………………………………………………..58

IV. Goals……………………………………………………………………………..58

V. Attracting Younger Demographic..…………………………………………....…59 a. Advertising…………………………………………………………………...59 b. Partnerships………………….………………………………………….....…75 c. Lobby Redesign……………………………………………………….…...…78

VI. Emerging Chinese Market Segment………………………………………………82 a. Advertising…………………………………………………………………….83 b. Public Relations……………………………………………………………….86 c. Sponsorship Marketing………...…………………………………..………….86 d. Partnerships……………………………………………………………………87 e. Service Recommendations…………………………………………………….89

VII. Marriott Acquiring Starwood……………………………………………………...90

VIII. Conclusion..…………………………………………………………….…..……...91

IX. Works Cited…………………………………………………………………….….93

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EXECUTIVE SUMMARY

New York City is a world-renowned destination city visited by both leisure and business

travelers throughout the year. NYC & Company estimated that the city welcomed 54.3 million

visitors in 2013, with this number increasing each year since 2000 (Euromoniter: Passport. City

Travel Briefing). The St. Regis, New York City is a luxury hotel located in the Midtown region

of New York City; the property is an icon of luxury hospitality and owned and operated by

Starwood Hotels & Resorts. Winning the 2015 AAA/CAA Four Diamond Lodging Awards, the

Concierge's Editor’s Pick Awards, and the 2014 Forbes Travel Guide Five Star Award, the St.

Regis is known for its timeless elegance and luxurious service. The St. Regis, New York City

prides themselves in consistently delivering high value, luxurious customer service to their

guests, as their primary target market are high-income customers who travel for both business

and pleasure.

The following paper will describe the current business model and marketing strategy

initiatives of the St. Regis, New York City. Through the market research of the St. Regis, we

identified potential marketing gaps that the hotel can leverage on in order to become more

successful. By examining the current market trends and marketing strategies of the St. Regis, we

developed three potential objective and goals that the St. Regis can implement. Namely, they can

capitalize on the current reputation with their affluent Chinese customers. By actively pursuing

the Chinese market, they can facilitate future growth and sales in this emerging travel segment.

In addition, a large percentage of The St. Regis’s customer profile is 35-60 year old affluent

travelers. Therefore, the second objective is to expand their demographic market to a younger

guest, while still maintaining their traditional, classic, old world charm.

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PROPERTY OVERVIEW

Starwood Hotels and Resorts has 57 hotel properties. One of which, The St. Regis, New

York City opened over 100 years ago on September 4, 1904. The hotel is positioned in the

luxury hospitality market, offering elegant and personalized services with an old-world vintage

decor. Their core values that they strive to achieve is to be uncompromising, bespoke, best

address, and decative. The St. Regis brand includes hotels and resorts around the world.

Therefore, it is a recognized brand for international travelers coming to NY.

Classic Elegance

The St. Regis New York features the most chandeliers of any hotel property in America

and includes elaborate gold encrusted crown molding throughout; these features create a timeless

and elegant atmosphere. The property offers 171 guestrooms and 67 suites that have been

completely remodeled recently, featuring modern artwork, glamorous mirrors, vibrant fabric, and

classic marble bathrooms. Some suites include themes: Dior, Bentley, Tiffany, and Imperial

Suites. The suites not only provide glimpses of the brand partners, but also include particular

amenities unique to the specific suite (Silberstein, A).

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Tiffany Suite Bentley Suite

Dior Suite

The rooms are not the only feature in a hotel as luxurious as The St. Regis. The marble

lobby includes detailed paintings on the ceilings and the signature gold encrusted ornamentations

throughout. There is the well-known King Cole Bar, accompanied by a full-service restaurant,

serving exceptional international cuisine and is also credited with creating the Bloody Mary; the

King Cole Bar is a popular attraction to hotel guests and New York City tourists.

Other accommodations include a library that is available for meetings and events, a full-

service gym equipped with locker rooms and steam rooms, a ballroom, 24-hour concierge, and a

spa. The ballroom, located on the St. Regis Roof, provides beautiful decor with chandeliers

throughout, a great attention to detail, and noteworthy views of the city. The hotel concierge and

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butler service are also available to provide assistance for hotel guests. All of these aspects of the

St. Regis helps it keep the timeless ambiance of classic, old world elegance while being ultra-

luxurious. Guest comfort and satisfaction is always considered (Wittorp-Dejonge, M.)

Location

New York City is known for having an ultra-competitive luxury market; the city includes

almost every known luxury hotel brand. The St. Regis New York, the flagship location for the

brand, is located in the heart of New York City’s Midtown district just blocks away from Central

Park. Its location on the corner of Fifth Avenue, a street well-known across America for its

expensive shopping, further helps the St. Regis emanate the high-class philosophy. In addition,

it is steps away from two major tourist attractions in New York City: Rockefeller Center and the

Museum of Modern Art. In addition to being in Midtown New York, they have access to

business in the surrounding area as well as short commutes to the financial district. It is also a

great space to have client meetings as they do have sixteen thousand square feet of meeting

rooms at the hotel.

DMO OVERVIEW

New York City is a world renowned destination city visited by both vacation and

business travelers throughout the year. Tourists visit New York City’s many museums,

attractions, restaurants, hotels, theaters, entertainment and shopping. Being an international

business hub, numerous meetings, conferences, and conventions are hosted in New York. Being

a popular tourist destination, it makes sense that the city needed its own marketing organization:

New York & Company (Wolf, Delta News Hub). New York’s marketing and public relations

companies’ main objective is to generate demand and sales for local businesses, including the St.

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Regis, New York. The New York & Co. brand attracts all forms of travelers to New York City

by appealing to its more common elements, which are accessible to a majority of market

segments. New York & Co. rely on a plethora of mediums, including internet marketing, and

print media throughout the world.

The St. Regis, New York City however is not a direct beneficiary of the typical NYC

destination marketing. The average tourist is unlikely to choose the St. Regis or an ultra-

luxurious hotel for their stay, as their main objective of travel is sightseeing and the experience

of New York culture, and a mid-tier hotel (or lower; i.e. AirBnB) is sufficient for meeting these

exploratory needs. The classic elegance, prime location, and old world style that the St. Regis

capitalizes on, attracts its customers to the finer, more luxurious offers of New York City.

However, the image of New York City that does coincide with the St. Regis would be found in

the fine dining, high end shopping, Broadway shows, and entertainment opportunities. Affluent

families, whether international or domestic, and business travelers would certainly connect with

the image of New York that is elite, grandiose, and Wall Street-esque. Fashion showcases, movie

stars, and even financial publications directly and indirectly supply their own unique form of

DMO marketing that addresses this elitist niche.

New York City travel and tourism is affected by the seasonality factors, mainly the

luxury segment within which the St. Regis hotel operates. The graph below illustrates the change

in occupancy that can be seen throughout the year within the competitive set St. Regis is in.

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Therefore, seasonality hotel campaigns executed by NYC & Co. in partnership with

booking.com, and winter getaway and the perfect summer campaigns can help this segment to

recapture some of its lost demand. Moreover, Sunday night stay programs, which highlight all

the activities the city has to offer on Sunday nights can help this segment as well as the entire

market, as Sunday nights are known to have large amounts of unused inventory. Additionally,

NYC & Company’s marketing campaign “The Signature Collection” brings together the finest

hotels in New York City under one website, creating a one-stop website for affluent travelers

when looking for places to stay in New York City. This gives luxury brands such as The St.

Regis the opportunity to compete with the finest brands in the city. (Euromonitor International:

Passport. City Travel Briefing)

Furthermore, NYC & Company's campaign to attract international tourists who spend

more and stay longer can open up an opportunity to create more demand for St. Regis. NYC &

Co. has taken initiatives to enhance relationships with emerging nations such as Latin America,

India and China through its network of 17 international representative offices serving 28 global

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regions. Among these nations, visitors from China has seen the most amount of growth in year

2014; +19.4%. NYC & Co. aim to attract more affluent Chinese visitors who are looking to stay

for a longer period of time can certainly be utilized by St. Regis hotel. This will be further

supported by new policies that are set to be implemented to offer visa extension programs for the

Chinese visitors. Furthermore, St. Regis hotel was the first luxury brand to enter the Chinese

market. Therefore, they carry an extremely favorable reputation with affluent Chinese

consumers. These factors combined create a competitive advantage because of the perks that are

available to the Chinese travellers. (Euromonitor International: Passport. City Travel Briefing)

St. Regis is located in Midtown Manhattan, which is the single busiest business and commercial

district not only in New York but also in the US. Located at 2 East 55th Street the St. Regis, New

York City is geographically located within the furthermost west part of East Midtown

Partnership (highlighted area is considered East Midtown).

The East Midtown Partnership encompasses the distinct, varied, high-end community of

hotels, shopping, dining, entertainment, businesses and art/design. The St. Regis’s exclusive

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customers identify with the leading arts, dining, and entertainment that the East Midtown

Partnership has to offer. In specific, the prominent decorative arts merely blocks away from the

St. Regis offer New York City with some of the leading interior design and decor retailers in the

world. In addition to the arts, the partnership includes high end shopping such as Bloomingdales,

Saks Fifth Avenue, Bergdorf Goodman, Dylan’s Candy Bar, and Maserati-Ferrari. Furthermore,

the East Midtown Partnership includes many banks and financial firms such as Bloomberg and

Paul Weiss.

The St. Regis guests can indulge in all of these various high scale activities that the hotels

prime location has to offer. The diverse high end shopping that the partnership has attracts the

leisure tourists to the St. Regis. In addition to the shopping and arts, the various banks, financial

firms, and real estate firms located merely blocks away from the hotel attract the business guests

to the St. Regis.

According to Passport, Travel City Briefing: New York City, hotel lodging accounts for

the “largest share of tourism expenditure” (Euromonitor International: Passport. City Travel

Briefing).

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(NYC & Company)

With the rising international demand and marketing effort, it is likely that demand will

increase for luxury marketing, particularly with Chinese and other international

guests. Furthermore, the article states that New York City will have forty seven new hotels

within the next two years. However, the St. Regis and all five star, five diamond hotels will have

to remain competitive with updating, modernizing, and redecorating. With lodging dominating

the tourism expenditure of New York City, the St. Regis has a firm grasp on high quality product

and service that is uniquely positioned to satisfy guests from around the world.

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Moreover, with the rise of international guests, high end cruise lines such as Royal

Caribbean, Celebrity, and Cunard bring thousands of passengers into the city weekly. These

passengers need hotels rooms upon arrival and departure and make New York City their cruise

extension destination with many guests desiring five star, five diamond accommodations. With

cruise ship terminals in the West Side, Brooklyn, and New Jersey, hotels are the recipient of a

steady stream of weekly guests before and after their cruise departure.

BRAND POSITIONING

Positioning can be defined as: “the process of determining how to differentiate a firm’s

product offerings from those of its competitors in the minds of consumers” (Reid and Bojanic).

Positioning is “not to create something new and different, but to manipulate what’s already up

there in the mind, to retie the connections that already exist” (Reis and Trout). The St. Regis

brand seeks to be “uncompromising in its pursuit to deliver the very best to a clientele that

expects nothing less” (Starwood’s Official Website).

The positioning strategy includes the following steps: determine the ideal mix for

consumers, measure consumer perceptions of available services, look for gaps in coverage and

select a desired position, and develop a strategy for obtaining the desired position (Reis and

Bojanic). Before positioning the product or service, it is important to segment the market and

identify a specific target market and the mental or psychological space that the service occupies

in the mind of the consumers (relative to the competition on its key attributes). A successful

positioning strategy is clear, distinctive, and favorable.

The St. Regis’s legacy, landmarks, and tradition create a successful brand positioning

strategy and position in the market. The target customer of St. Regis looks for a unique luxury

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experience. The hotel offers a unique selling proposition by promoting a unique element of the

product-service mix and outstanding services to fulfill this need and to appeal accordingly in the

target customer’s minds.

St. Regis positions the brand at the intersection of modern and traditionally elegant (old

world elegance meets contemporary luxury). The St. Regis New York has a timeless traditional,

elaborate aesthetic appeal to a high class customer. To the extent that that traditional, old world

elegance will never go out of style, the St. Regis New York will continue to have a large

customer base. The hotel decor is classic and detailed, but The St. Regis also delivers

contemporary luxury as demonstrated by the combination of a flat screen TV and Bose Sound

System rests on top of a traditionally lavish, guided armoire. The Beaux Arts architectural style

blends a classically luxurious feel to the St. Regis’s aesthetic. The hotel is ornately decorated and

appointed with molding, intricate detailing, and ornate decorations giving it a lavish feel

(Wittorp-Dejonge, M.).

The hotel brand positions itself with the idea that staying at the St. Regis New York is not

merely a place to stay, but rather an experience that will enhance the customer’s trip. The St.

Regis creates this competitive advantage and luxury product by adhering to traditional rituals

that resonate with the St. Regis experience in the consumers’ minds not just as a luxury

experience, but also as a timeless tradition that appeal to its loyal customer base. The St. Regis

offers many unique services that exemplify their luxurious atmosphere and experience and also

helps them stand out among its competitors. These unique rituals include: Evening Tea, Butler

Service, Bloody Mary Menu, and the Evening Ritual.

Afternoon Tea

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A staple of the St. Regis around the globe is their “daily afternoon tea;” afternoon tea was

a tradition that started in England in the early 1800’s, being the focal point of entertainment

during the time. Each St. Regis property has afternoon tea available for guests each

afternoon. This tradition has become part of the distinct experience that guests are able to

appreciate.

Bloody Mary Menu

Another unique tradition of the St. Regis is the Bloody Mary, with each St. Regis

property having its own signature version of this drink. The St. Regis New York Bloody Mary,

“the Red Snapper,” was created at the King Cole Bar in 1934 by Fernand Petiot, the bartender at

the time. Guests are able to enjoy the legendary Bloody Mary today and it has remained the

most popular St. Regis beverage for the last 75 years.

Butler Service

The St. Regis provides butler service for all guests to add to the level of service available

to guests. The butler service has been a distinct accommodation in the St. Regis brand for over

100 years and is not included in many other luxury hotel brands or chains. The butler service is

one of the most successful service experiences that guests have at the St. Regis.

Evening Ritual

Furthering on the entertainment aspect of the guests at the St. Regis, a unique experience

is the evening ritual. The evening ritual is when the hotel fills with music and entertainment

performers. The entire performance embodies the elegance of the hotel as it takes place in the

beautiful ballrooms. These rituals in addition to the luxury amenities and world class services of

the St. Regis New York creates a unique position in the minds of their consumers. These

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directly relate to their brand as an exclusive luxurious hotel as well as keeping the international

traveler in mind as only fourteen percent of St. Regis properties are actually located within the

United States.

Furthermore, The St. Regis has several more ways they differentiate themselves from

their competition. The hotel boasts the largest amount of meeting space than any other hotels in

that area as well as the most number of suites amongst the same hotels. The property also hosts

weddings, banquets, Bar/Bat Mitzvahs, and retail showcases. Being in the luxury hotel market,

St. Regis has the space and ability to capitalize on these events as well as one of the biggest and

most well-known ballrooms in its competitive set.

After developing the ideal mix for consumers, it is important to measure the target

consumer’s perception of these services. Below is the perceptual map created for the St. Regis

hotel, in comparison with its competition set. The St. Regis ranks high in both the desirability

and luxury aspects as the brand would assume. Also listed in the same sector of the grid is a

main competitor as described by the St. Regis New York, The Ritz-Carlton, proving that they are

competing for like-minded travelers and that the everyday consumer sees the two brands as

similar when it comes to these two aspects.

Perceptual Map

(Source: Euromonitor International)

After identifying consumer perception towards the hotels products and services, the study

looked at gaps in coverage. St. Regis has identified few gaps in the luxury hotel market. St.

Regis target customers look for exclusive amenities and experiences.

MARKETPLACE ANALYSIS

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The historical performance of the Manhattan Lodging Review (HVS) demonstrates that

the hotel market has a direct correlation with the economic environment (Bagley and

DeMillerat). The graph above shows that during periods of recession. There is a dramatic

decrease in demand for Manhattan hotels; when the economy is thriving, there are spikes in

Manhattan hotel sales. Knowing this information and the volatility of the market, the St. Regis

has to closely monitor the economic environment in the United States in order for them to better

assess what rates they should charge and more efficiently budget for forecasted demand.

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Uniquely, as shown by the table above, when there is an overall decrease in the demand

for hotels, the luxury class, as opposed to the upper upscale, upscale, and upper midscale, is not

affected as drastically (PWC. Manhattan Lodging Index: Second Quarter 2015). This is due to

the fact that most of the their customers’ spending habits will not be affected by the economy.

Luxury travelers tend to be traveling for leisure rather than business; they are looking for an

experience rather than merely just a place to sleep. Due to this behavior, it would seem that their

spending habits would be more consistent than the business traveler. A business traveler can

change their trip itinerary or choose to stay at another hotel if the cost suits them better because

they are looking for the more economical option.Additionally, within the past six years, the

supply of hotels has increased by 30%. This added 21,737 rooms to the hotel industry market.

This is due to the low barriers of entry that that industry has (PWC. Manhattan Lodging

Index: Second Quarter 2015). The influx of options will drive the price down, which will cause

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RevPAR to remain stable in the short term and will actually hurt the entire hotel industry. Supply

is exceeding demand, which causes this price drop and forces hotels to pursue other avenues for

success. This is partially why the St. Regis is focusing on brand loyalty. They do not want their

customers to switch brands to a newer, up and coming brand of luxury hotels in New York City.

They attempt to maintain this loyalty through their Starwood Preferred Guest program that they

pride themselves on. This is a program designed to ensure customer loyalty by providing benefits

to members at different levels of eligibility. This could range from earning points towards a free

night to room upgrades and complimentary internet. Through the program, the hotel seeks to

make the stay as pleasant for the customer as possible in hopes of retaining them as a guest in the

future.

Even with the increase in supply, transaction activity has remained strong in Manhattan.

Buyers are still spending large amounts of money on assets and sellers are still trying to

maximize their returns. Due to the large numbers of investors from Asia and the Middle East,

there is continuous downward pressure on capitalization rate. The fall out of this is an increase

in the valuation of hotels in Manhattan. In 2014 and the luxury hotel segment, the capitalization

rates were just at 3%. This is due to Manhattan being viewed as one of the most popular

destinations and investment banks all over the world consider it to be an extremely low risk

market. The increase in supply will actually help maintain these low capitalization rates because

with the increase in supply that has been seen in the past couple, years more available hotels will

be available to add to their portfolio.

Habitually, Manhattan has had a positive, favorable supply and demand dynamic because

tourism will always be high in New York City. Therefore, occupancy rates have been high as

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well. In particular, overall occupancy levels have continued to grow and are at an all time high.

At the close of the second quarter, the occupancy rate for Manhattan hotels has been around 87%

(HVS). Some factors that could have caused this include the growth of travel through

globalization, increased security of areas in New York, and the rebuilding of low-income

neighborhoods. These combined with New York City maintaining its status as the business

center of the world enables the rate to remain high as there is a constant influx of travelers.

As illustrated in the chart above, there has been a switch in the marketplace for high price

rooms being more acceptable (Bagley and DeMillerat). This could be attributed to the changing

nature of the hotel market where hotels are attempting to become all-inclusive, and are therefore,

charging higher rates. Higher rates are becoming the norm, which has allowed hotels to reap

greater benefits from each customer, which is directly related to the overall rise in the hotel

industry.

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In conclusion, after evaluating the economic impact on the hotel market, ADR, and the

overall demand and supply levels, it seems that the Manhattan hotel industry has a solid

foundation for growth in the long term.

COMPETITION

The hospitality industry is highly competitive; there are a multitude of options available

for travelers in New York City. The direct competitive set for the St. Regis New York includes

the following luxury hotel properties: the Four Seasons Hotel New York, The Peninsula New

York, the Ritz-Carlton New York Central Park, the Mandarin Oriental New York, the Baccarat

Hotel & Residences, The Plaza Hotel, and Langham Place. These properties were selected as

competitors based on location, level of service, design and amenities, target markets, and the

STR class segment.

Four Seasons Hotel New York

Located on East 57th Street, the Four Seasons Hotel New York is steps away from

Central Park and Madison Avenue. Noteworthy architect IM Pei is responsible for the original

design of the property. The luxury hotel property offers great customer service and attention to

detail. Amenities include a spa and gym, a “forest-like” restaurant setting, and spacious hotel

rooms and suites with a neutral atmosphere. Guests can also enjoy the TY Bar, including a

notable cocktail menu using fresh, local ingredients and house-infused vodka. Rooms are

spacious but arguable dated. The 52nd-floor penthouses offers one of the best views of the New

York skyscraper skyline currently available. The property is located in a greatly noisy and

overrun area of the city but continues to be somewhat of a hideaway for customers.

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The Peninsula New York

Located on Fifth Avenue, this landmark hotel is a short walk away from Central Park and

is an ideal location for Fifth Avenue shopping. Amenities include a noteworthy rooftop bar and

terrace with city views, an award-winning fitness center and spa, glass-enclosed pool, and

sundeck. The hotel includes 3 noteworthy dining options and restaurants: Salon De Ning

(Chinese cuisine), Clement (Contemporary American cuisine), and the Gotham Lounge (named

after the property’s original name). The hotel also offers a limousine transfer service to and from

New York’s main airports. Guests included reviews that commented on both the guestrooms and

bathrooms being large and there being friendly reception staff and housekeeping.

Ritz-Carlton New York Central Park

Located at 50 Central Park South, the Ritz-Carlton Central Park is a Marriott

International property with high service standards. The property is an elegant 1930s townhouse-

style hotel with a strong customer loyalty program and offers many amenities including a chic

bistro, lobby lounge, and a dedicated concierge service. The Ritz-Carlton background is

complete with many traditions, including Afternoon Tea at the warm and comfortable Star

Lounge and feeding the Central Park carriage horses at noontime daily.

Mandarin Oriental New York

Located above Columbus Circle at the Southwest corner of Central Park, the Mandarin

Oriental New York is a luxury hotel property with a strong loyal Asian customer base. The hotel

features an American eatery and lobby lounge that provides snacks, specialty cocktail bar, and

indoor pool and spa. The property includes both guestrooms and suites, as well as

condominiums. The hotel is located inside the Time Warner Center; this building also includes

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The Shops at Columbus Circle, upscale dining options, Time Warner’s headquarters, CNN

studios, meeting and office space, and a performance hall for Jazz at Lincoln Center.

Baccarat Hotel & Residences

Located on West 53rd Street and across from the Museum of Modern Art, customers of

the Baccarat Hotel & Residences experience a sophisticated atmosphere, with modern and

traditional influences. The hotel was designed by Skidmore, Owings & Merrill, with the

building being inspired by a Baccarat crystal Champagne glass. The new decor features

gleaming crystals throughout and a great attention to detail, adding to the luxurious feel. The

property also offers a modern French cuisine restaurant and bar, fitness center, indoor pool,

business center, event space, and chauffeured car service. The Baccarat boasts that they are able

to provide everything a customer wants and everything a customer needs.

The Plaza Hotel

Located on Fifth Avenue, The Plaza Hotel (containing guestrooms and

condominium/apartments) is a luxury hotel with a “castle-like exterior.” The hotel property is

opposite Central Park and includes French-style rooms and bathrooms. The hotel is considered a

Historic Hotel of America by the National Trust for Historic Preservation. The Plaza Hotel offers

hotel rooms, suites (including a powder room, butler pantry, and city views), and

duplexes. Amenities include noteworthy dining and bar options, a shopping mall, a Grand Ball

Room, butlers on each floor, and the Plaza Food Hall. The hotel has a great historical

background and has been used in popular culture numerous times (these include films, literature,

and television). The most popular is arguably Eloise, the girl that lived on the top floor of the

Plaza.

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Langham Place

Located on 5th Avenue, Langham Place is a luxury suite hotel and skyscraper. Previously

The Setai Fifth Avenue (renamed in 2013), the building is one of the tallest buildings in New

York City. The art-deco style hotel is in close proximity to Times Square and Grand

Central. Rooms feature Italian influences and have wood accents, making it welcoming and

comfortable. Amenities include a hair salon, luxury spa and fitness center, and Mediterranean

restaurant.

MARKET DYNAMICS

Market dynamics include the changing supply and demand which creates price

changes. Seasonality and days of the week attribute towards St. Regis hotel rate changes.

A custom Smith Travel Research trend report was generated. The report takes into consideration

six Upper East Side and Midtown hotel properties, including the St. Regis, that were identified as

direct competition of the property in focus. In comparison to the last year, the luxury hotel

market is performing with a lower occupancy rate, prices and revenue. The demand in the market

has also fallen slightly. YTD September -15 demand is -0.3%. However, the supply has

increased within the market, YTD September -15 is 6.3%. Collectively, only the supply factor

has increased within the market, while occupancy, prices, revenue and demand have fallen when

compared with the previous year.

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Source: STR, New York: NY, Selected Properties.

Occupancy

In comparison to the previous year, the market occupancy signifies a decrease in rooms

occupied. The YTD average up until Sep -15 is -6.2%, while the moving 12 month average is -

4.7%, (Oct, 14-Sep, 15). The year to date September-15 occupancy rate is 68.8%, when

compared to 73.3% for September last year, once again it is evident of a decrease in number of

rooms occupied. This occupancy decline can be attributed to many factors. The increase in

market supply, (6.3% YTD - Sep 15) is one of these contributing factors. Furthermore,

occupancy variations can be observed through the months. Occupancy is at its highest in

September with 78.3% while it's the lowest in the month of January with a 49.7%. This can be

attributed to the seasonality nature of the hospitality industry in New York City. However, it is

important to note that occupancy percentages do not vary significantly through the weekdays and

weekends, with the lowest rates being Sunday’s ( 61.9%) and highest being Wednesday’s

(76.4%). (STR, New York: NY, Selected Programs).This factor highlights the success of many

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strategies implemented by St. Regis New York and their competitors to appeal to business and

leisure travellers alike. (Silberstein, A.)

Source: STR, New York: NY, Selected Properties.

12 Month Occupancy (%)

Sun Mon Tue Wed Thu Fri Sat Total Month

Oct – 14 67.5 79.1 86.0 81.5 74.5 72.3 80.2 77.2

Nov – 14 64.8 72.8 76.8 78.6 74.3 77.2 77.8 74.4

Dec – 14 75.6 76.3 76.7 79.5 78.9 84.9 88.9 79.9

Jan – 15 40.4 44.0 51.3 54.0 55.1 50.7 52.6 50.0

Feb – 15 55.9 55.7 62.0 64.2 60.6 62.2 67.2 61.1

Mar – 15 60.1 72.5 78.3 78.2 74.3 71.8 76.3 72.8

Apr – 15 52.2 62.7 71.8 73.0 68.4 64.5 66.2 65.9

May – 15 70.0 76.2 84.4 83.6 74.8 71.2 74.0 75.9

Jun – 15 57.9 69.5 75.5 82.4 71.5 62.5 66.8 69.7

Jul – 15 59.8 74.4 81.7 74.8 71.0 68.0 68.8 71.2

Aug – 15 63.8 68.9 74.0 77.7 71.6 71.2 74.4 71.4

Sep – 15 71.6 73.5 80.5 84.6 79.9 78.0 79.9 78.6

Total Year 61.9 69.1 75.3 76.4 71.0 69.3 72.5 70.8

12 month occupancy

Weekdays Weekends 7 Days (Av. Per Day)

Oct - 14 77.7 76.3 77.3 Nov - 14 73.5 77.5 74.6 Dec - 14 77.4 86.9 80.1 Jan - 15 49.0 51.7 49.7 Feb - 15 59.7 64.7 61.1 Mar - 15 72.7 74.0 73.1 Apr - 15 65.6 65.4 65.5 May - 15 77.8 72.6 76.3 Jun - 15 71.4 64.7 69.5 Jul - 15 72.4 68.4 71.2 Aug - 15 71.2 72.8 71.7 Sep - 15 78.0 79.0 78.3

YTD 7 Days (Av. per day)

Weekdays Weekends

Jan - 15 49.8 49.0 51.7 Feb - 15

61.1 59.7 64.7

Mar - 15

73.1 72.7 74.0

Apr - 15

65.5 65.6 65.4

May - 15

76.3 77.8 72.6

Jun - 15

69.5 71.4 64.7

Jul - 15 71.3 72.4 68.4 Aug - 15

71.7 71.2 72.8

Sep - 15

78.3 78.0 79.0

Total Year

68.5 68.6 68.1

26

Average Daily Rate

The average daily rate of the competitive set has decreased in the past year. The YTD, up

until Sep -15 ADR of the market is -3.8%. However, there is significantly less variation of ADR

through the weekdays and weekends. The weekday ADR (12 month moving) is $891.7 while the

weekend ADR is $908.6.

However, the same cannot be said about the ADR variation throughout the months of the

Year. ADR reaches a high of $1219 per day in the month of September, whereas through

27

January - March it reaches low of $700. This once again, can be attributed to the seasonality

factor of the New York Hospitality Market.

ADR Sun Mon Tue Wed Thu Fri Sat Total Month

Oct – 14 1,036.18 1,028.93 1,028.65 1,000.02 1,027.17 1,039.18 1,023.74 1,025.36

Nov – 14 993.33 973.25 1,018.44 1,070.27 1,121.33 1,112.55 1,054.73 1,049.25

Dec – 14 1,005.94 1,040.88 1,098.53 1,106.10 1,094.20 1,205.57 1,183.21 1,105.86

Jan – 15 713.65 721.80 725.86 720.23 790.79 756.50 745.85 743.28

Feb – 15 729.11 727.77 709.90 714.99 742.02 768.44 743.57 733.85

Mar – 15 693.99 708.54 711.30 703.26 720.59 704.85 688.52 704.76

Apr - 15 873.17 875.22 878.40 899.74 900.34 923.76 868.03 889.72

May - 15 927.00 960.37 955.60 969.86 970.57 959.86 925.48 951.80

Jun - 15 852.61 848.98 862.44 872.20 874.11 851.67 861.49 860.84

Jul - 15 739.68 795.42 741.69 732.87 773.14 754.77 728.31 752.63

Aug - 15 730.20 743.15 748.54 687.90 731.69 716.91 731.05 727.35

Sep - 15 1,220.46 1,252.22 1,203.65 1,206.54 1,195.18 1,222.04 1,235.44 1,217.87

Total Year

886.75 896.04 904.91 909.48 916.74 928.04 908.94 907.63

Source: STR, New York: NY, Selected Properties

12 month ADR

Weekdays Weekends 7 Day (Av. Per day)

Oct - 14 1024.2 1031.5 1026.3 Nov - 14 1035.3 1083.6 1049.1 Dec - 14 1069.1 1194.4 1104.9

Jan - 15 734.5 751.2 739.2 Feb - 15 724.8 756.0 733.7 Mar - 15 707.5 696.7 704.4 Apr - 15 885.4 895.9 888.4 May - 15 956.7 942.7 952.7 Jun - 15 862.1 856.6 860.5 Jul - 15 756.6 741.5 752.3 Aug - 15 728.3 724.0 727.1 Sep - 15 1215.6 1228.7 1219.4 Total Year 891.7 908.6 896.5

YTD 7 Day (Av. Per day)

Weekdays Weekends

Jan - 15

739.2 734.47 751.2

Feb - 15

733.7 724.76 756.0

Mar - 15

704.4 707.54 696.7

Apr - 15

888.4 885.38 895.9

May - 15

952.7 956.68 942.7

Jun - 15

860.5 862.07 856.6

Jul - 15

752.3 756.56 741.5

Aug - 15

727.1 728.30 724.0

Sep - 15

1219.4 1215.61 1228.7

YTD 842.0 841.26 843.7

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RevPAR

The YTD RevPAR for the competitive set is -9.8% when compared with the previous

year. Similar to the ADR of the competitive set, RevPAR does not vary significantly throughout

the week. However, RevPAR varies significantly throughout the year with a high of $954.1 in

September and $368.4 in January.

RevPAR

Sun Mon Tue Wed Thu Fri Sat Total Month

Oct - 14 699.42 813.72 884.80 815.36 765.00 751.61 821.19 791.50

Nov - 14 643.46 708.41 782.51 841.40 833.26 859.15 820.26 780.58

Dec - 14 760.36 793.76 842.30 879.81 863.44 1,023.84 1,051.65 883.11

Jan - 15 288.63 317.70 372.12 388.92 435.61 383.86 392.22 371.87

Feb - 15 407.47 405.51 440.47 459.27 449.38 478.07 499.85 448.57

Mar - 15 417.23 513.67 556.65 549.97 535.48 506.01 525.10 513.03

Apr - 15 455.54 548.38 630.70 656.76 615.48 596.27 574.91 586.15

May - 15 648.60 731.38 806.42 810.47 726.33 683.44 685.12 722.07

Jun - 15 493.70 590.38 651.40 719.07 625.18 532.64 575.18 599.73

Jul - 15 442.54 591.69 606.29 548.03 549.19 513.46 501.18 536.14

Aug - 15 466.21 511.79 554.26 534.51 524.24 510.48 543.62 519.42

Sep - 15 873.55 919.90 968.59 1,020.74 954.85 953.67 987.44 956.81

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Total Year 548.91 619.32 681.23 694.87 651.16 642.96 659.20 642.65

Source: STR, New York: NY, Selected Properties.

12 Month RevPAR

7 Day (Av. per day)

Weekdays Weekends

Oct - 14 793.0 795.7 786.4 Nov - 14 784.1 761.8 839.7 Dec - 14 887.9 827.9 1037.7 Jan - 15 368.4 360.6 388.0 Feb - 15 448.6 432.4 489.0 Mar - 15 514.9 514.6 515.6 Apr - 15 582.6 581.4 585.6 May - 15 727.4 744.6 684.3 Jun - 15 598.2 615.9 553.9 Jul - 15 536.1 547.5 507.3 Aug - 15 520.7 518.2 527.1 Sep - 15 954.1 947.5 970.6 Total Year 643.0 637.4 657.1

YTD 7 Day (Av. Per day)

Weekday Weekend

Jan - 15 368.4 360.6 388.0

Feb - 15 448.6 432.4 489.0 Mar - 15 514.9 514.6 515.6 Apr - 15 582.6 581.4 585.6 May - 15 727.4 744.6 684.3

Jun - 15 598.2 615.9 553.9 Jul - 15 536.1 547.5 507.3 Aug - 15 520.7 518.2 527.1 Sep - 15 954.1 947.5 970.6 YTD 583.4 584.7 580.2

30

However, according to the Director of Marketing at St. Regis NY, their RevPAR, ADR

and Occupancy levels have increased from last year, whereas all of their competitors have not.

However, the particular data needed to prove this hypothesis was not made available to us, as

they are confidential to each property. (Silberstein, A).

MARKETPLACE INSIGHTS

Marketplace insights can be drawn through industry insiders that publish current market

trends. Some of the insiders are Travel and Leisure, World Travel Awards, Digital Luxury

Group, Luxury travel expert, and Inter Alia STR Global. These companies use a combination of

statistical analyses and analytical evaluations to determine the best performing hotels overall.

One factor that needs to be highlighted is that weekend vs. weekday prices (ADR) and revenue

(RevPAR) do not vary significantly in the competitive set. This illustrates the success of their

marketing strategies, which is to appeal to elite business travelers as well as leisure travelers the

same. However, as mentioned in the above section, seasonality can be observed in terms of

months.

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It can be observed that this trend is partly due to the nature of the target customer of the

hotels in this competitive set. The luxury leisure travelers opt for more tropical vacations during

the periods of January-March, as they have the means to afford it. Furthermore, these hotels also

lose much of their corporate business as elite corporations opt to hold their conferences in other

locations such as south Florida and California. This observation was made partly in conjunction

with the city data which reflects a drop in corporate business through January-March as well as

city data from locations such as Florida and California which experience a boom in their hotel

group sales during these months. Another reason is that this is the beginning of the business year.

A main point of a conference is to improve on your previous quarter’s results. The year just

started, so those results have yet to come to fruition; the companies are still operating in Q1, so

there is not much to discuss should they choose to hold a conference (STR, New York: NY,

Selected Properties).

During the month of December, RevPAR and ADR experienced the highest variance

between weekdays and weekends. According to the Marketing Director of St. Regis, the first

two-three weeks of December is usually the busiest time of the year for their hotel as well as

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their competition. This can be seen with the highest occupancy rates in December which is

80.1% for the competitive set. This, according to her, is due to the volume of holiday shoppers

the hotels host during these weeks. This phenomena is known as Shoppers Weekends, where the

entire City of New York welcomes thousands of visitors. These shoppers consist of more

families that tend to travel on weekends. Furthermore, the ADR for the month of December is

significantly higher than most of the months. It stands at $1105 per night, 56% higher than the

lowest month (March) and only second to that of September. This reflects how these hotels have

taken advantage of the increase in demand with increase the prices.

Source: STR, New York: NY, Selected Properties.

Furthermore, even though ADR and RevPAR doesn't vary significantly during the week,

it is important to highlight their weakest and strongest days. As illustrated in the graph above,

Sunday has consistently been the weakest day for the competitive set. This can be an opportunity

for them to run specials or promote more people to travel on Sunday. This is where campaigns

conducted by NYC & Co. to improve Sunday night occupancy can be utilized. On the other

hand, on a day like Tuesday or Wednesday, where their occupancy reached the highest, they

would want to have their best customer service members staffed because they know they will be

at full capacity.

33

CUSTOMER ANALYSIS

Brands that want to sell a product or service to consumers need to choose a target market

taking into consideration the strategy, objective, or vision of the company. This allows for the

company to create a clear, successful marketing strategy and account for the needs and wants of

that certain target through a personalized message rather than a generic mass message aimed at

all types of consumers. It is more effective to yell at a small group of people, so to speak, than to

whisper to a large group. By tailoring the company marketing efforts towards a specific group, it

allows the ability or effect of yelling at that segment. In other words, getting the point or

message across clearly.

The St. Regis New York does this by using a concentrated market segmentation

strategy. Segmentation is defined as “dividing up the market into distinct groups of buyers with

distinct wants, characteristics, and behaviors and who therefore require distinct products.” The

St. Regis’s target customer is an affluent, highly educated, 35-60 year old, who usually split their

time between business and vacation with their families. Many are of Asian ethnicity, Middle

Easterners or Americans who enjoy the experience of staying at a luxury property and the

benefits that come with it.

Geographic

The St. Regis is appealing to the international customer, specifically within Asia and the

Middle East, as well as Americans due to its location. This is because Asians and Middle

Easterners account for a significant portion of the St. Regis’ customer base (Wittorp-Dejonge,

M). Out of the fifty-seven hotels under the St. Regis brand, both existing and in the development,

thirty properties are located in these two regions. With the New York location being the flagship,

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the hotel uses this opportunity to draw a large portion of people from this area of the world. With

New York being a major tourism and business hub within the United States, they also target

domestic customers with their marketing strategies.

Demographic

Being a luxury brand of hotels, the St. Regis appeals to both affluent men and women

between the ages of thirty-five and sixty years old. Often times customers are attracted through

business travelers who stay in the hotel and return with their family as a result of the

unforgettable experience (Wittorp-Dejonge, M). These business and leisure travelers are either

engaged or married with an annual income of $400,000 and above. This would allow for them to

fall in the A and A+ income ranges with a subsequent appreciation for the luxury and

experiences (Silberstein). With this level of net worth, most of St. Regis’ target customers have a

minimum of a bachelor’s degree.

Psychographic

The individual in the St. Regis’ target market places a high importance on timeliness, as

they are extremely busy individuals. They are constantly going from one activity to the next and

often do not have time to get everything accomplished. This is why the world-renown butler

service is of the utmost importance to the hotel and part of what makes it so successful. If there is

anything that the customer does not have time to do, such as buying a birthday card, ironing their

clothes or unpacking a suitcase, the butler can take care of it for them. The target customer also

places a high value on family and stops at no expense. The hotel talks about many of their

business travelers who return with families or significant others and want to give those people

the best experience possible no matter the cost. (Silberstein)

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Behavioral

The St. Regis target both business and leisure travelers alike. Regardless of the purpose

of the trip, the customer that the St. Regis targets is a frequent traveler often enrolled in their

loyalty program (Euromonitor, Trends in Hotel Loyalty Programs). The program segments the

market based on the customer level of loyalty to the brand and Starwood; they offer different

products or services to customers with different levels of loyalty. This allows for the customer to

keep coming back in order to maintain or improve their loyalty standing.

Benefits Sought

The traveler who stays at the St. Regis New York is more concerned about the

experience that they are going to have at the hotel rather than the price. Due to their high annual

income, they are willing to pay more for the luxurious amenities and world class service that

they will receive as it is viewed as a necessity. The location of the hotel is important as it

determines what the guest will be able to indulge in while staying at the property. The hotel is

surrounded by upscale shopping and only a few blocks from Central Park, arguably one of the

best parts of Manhattan. The St. Regis New York’s location is pivotal in attracting new

customers and retaining old ones alike.

CONSUMER INSIGHTS

Due to the global network of the St. Regis brand and the fact that many of its customers

are members of their Starwood Preferred Guest program, loyalty plays a huge role in the hotel as

it does with the average consumer. According to Euromonitor, hotels attribute 30% of their

occupancy to loyalty program members and Starwood alone says one customer out of every two

that stay with them are members (Euromonitor, Trends in Hotel Loyalty Programs). The hotel

36

wants them to join because it has been proven that it is easier and cheaper to retain an old guest

than to attract a new one.

According the “Loyalty Schemes in Tourism” Mintel article, if a member is satisfied with

the SPG program, then they will more likely have a higher average spending at the hotel in order

to acquire more free nights. However, this is causing a decrease in profit from St. Regis’s

current members. Inspire of that, when consumers feel like they are not being treated well at

other companies, they view the St. Regis as a high quality and they seek to switch over to the St.

Regis. This allows them to have a gain overall.

Hotel loyalty is not the only thing picking up pace in the hotel industry, online travel is as

well. Booking vacations through online sources such as Expedia or TripAdvisor is becoming the

norm for a majority of Americans. Hotels need to make sure that they are infiltrating the Internet

market with their advertisements. In addition, they need to stay up to date with reviews and

ratings on such sites in order to ensure that negative word-of-mouth does not become prevalent.

The following graph illustrates my point of just how popular using websites to book trips is

becoming (Euromonitor: Passport, City Travel Briefing).

37

Source: Euromonitor

There are opportunities and trends that have been identified in the market and that should

be considered by the St. Regis New York to add to the success and growth. In the new age of

social media and increasing technology, marketplace insights are heavily monitored through

reviews on social media. A company such as TripAdvisor, who is a leader in facilitating reviews

and collecting data, has a large say in persuading customers to choose different hotels. They have

a large amount of market insight because they have direct customer reactions to the products. To

most, yelp will be enough to cause someone to not choose a place as well as facilitate

consideration in the minds of the consumer. Also, in terms of social media, negative content

must be monitored because this could be detrimental to prospective customers. Social media

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provides an up to the minute direct insight as to how customers are reacting to new procedure,

new policies, and new renovations.

St. Regis Four Seasons

The Peninsul a New York

Ritz- Carlton New York Central Park

Mandari n Oriental New York

Baccar at Hotel

The Plaza

Rooms 238 368 235 259 244 114 282

Location 2 E 55th St. East 57th St.

700 5th Ave.

50 Central Park S.

60th St. W. 60th St.

West 53rd St.

768 5th Ave

ADR (Oct - 15)

$895 $975 $895 $995 $945 $900 $945

Star Rating

5 Stars 5 Stars 5 Stars 5 Stars 5 Stars Not Avl. 4 stars

Trip Advisor Rating

4.5 stars #31 of 469

4.5 stars #90 of 469

4.5 stars #56 of 469

4.5 stars #35 of 469

4.5 stars #46 of 469

4.5 stars #77 of 469

4.5 stars #138 of 469

Harvard Business Review recognizes TripAdvisor as the largest travel site in the world,

operating in 24 countries and 16 languages, with listings for over 455,000 hotels, in over 71,000

destinations worldwide. It has over 40 million reviews from 35 million unique monthly visitors.

(Teixeira, T & kornfeld, L.). The St. Regis has the highest TripAdvisor rating amongst this group

of hotels. It is currently ranked number 31 among 469 hotels in New York City. It is also

important to note that the St. Regis received the lowest percentage of negative reviews on this

website. This included the categories of terrible, poor and average on the website. The St. Regis

had only 7% of all comments falling into these three categories. The rest ranked as very good or

excellent. This is in part due to their exceptional service and attention to detail. None of the

39

hotel’s competitors had less than 10% negative reviews and the highest percentage was The

Plaza with 20% (TripAdvisor, October 2015).

40

SWOT ANALYSIS

Strengths:

-Landmark Status (Traditions, Rituals)

- Convenient Location

-Unique services/accommodations

-Personal offerings (tailoring customer

experiences)

-Brand Loyalty & Loyalty program

- Large meeting & Event space

- First luxury hotel brand to enter the

booming Chinese market

-Excellent customer ratings

Weaknesses

-Reputation of being too old and

arrogant- “stuffy”

-Attracts less young affluent consumers

-Segment their target market to a much

smaller population

-Spa Renovation

-Historic Landmark (many regulations to

follow when renovating)

Opportunities

- Incentive programs - Sunday nights

- Fix pricing mix - manipulate pricing to take

advantage of their position among

competitors

-Designer Suites

-Differentiate themselves from other hotels

(adding amenities such as breakfast and

airport transportation for suite guests)

Threats

- Competition (including Internal

Competition)

-International political environment

- Strengthening of US Dollar

- Recent development of Financial

district

41

Strengths

The St. Regis New York has many strengths, including: high service standards, great

heritage and history, being part of the Starwood Hotel portfolio, unique services, and having a

strong brand reputation and image.

Unique accommodations and services include: having butlers available on each floor,

beverage service, garment tailoring and pressing, and the highly efficient concierge and service

desk. Furthermore, St. Regis looks to customize each and every guest stay according to his or her

personal preferences. The marketing director of St. Regis New York describes this as, “There are

no guest demands that are too high or low for us, we will attempt our very best to fulfill every

unique request of our guests in a highly efficient and timely manner” (Silberstein, A). St. Regis

New York also participates in Starwood Preferred Guest Loyalty program, which allows them to

benefit from the large number of the Starwood brand’s loyal customers.

Moreover, St. Regis has large meeting and event spaces when compared to its

competitors. They currently hold 15 rooms and 16,000 square feet of event space.

The St. Regis brand was also the pioneer in developing luxury properties in

China. Having this initial presence before other brands and other luxury properties, the brand

has strong loyalty throughout Asia. (Silberstein, A).

Finally, it is also important note the customer satisfaction ratings of the St. Regis New

York hotel. The latter part of the paper analyzes the TripAdvisor ratings of the hotels in the

competitive set and according to this analysis it was found that St. Regis has the highest

customer satisfaction ratings among its competitors. Furthermore, St. Regis New York was also

42

named one of the Top 10 Best Hotels in New York City (#9) by Condé Nast Traveler Readers'

Choice Awards. (Best Hotels in NYC: Readers' Choice Awards 2015)

Opportunities

The St. Regis properties worldwide through SPG have an incentive program where

reward points are transparent among all markets. Because of this, the opportunities are there for

them to capture different markets abroad. The opportunity is that with the incentive program, the

customer base is more likely to remain loyal regardless of the market they are travelling to.

Furthermore, incentive programs that specifically address their low occupancy nights,

especially Sundays, are a big opportunity for St. Regis New York. For example, on Sunday’s

they could offer “bundled packages”, that combines the room night with a complimentary

champagne or programs such as Fourth Night free, (Thursday-Monday) which combines the

weekend factor and encourages guests to stay that extra night.

Another opportunity is that the St. Regis New York has a strong Middle Eastern customer

base. This is a big opportunity for St. Regis New York, as this is a market they can potentially

dominate. If these Middle Eastern customers are comfortable with the brand, then they are more

likely to stay in the St. Regis on business or leisure. (Silberstein, A)

Weaknesses

Because the St. Regis is trying to maintain a high loyal elitist brand and customer base,

they segment their target market to a much smaller population of people. For example, the

average middle class 20-30 year old business traveler would not typically consider the St.

Regis. This is due to the St. Regis marketing strategy and the customer that they are trying to

connect to, who are individuals among the ages of 35-60.

43

On the same note, the St. Regis has a reputation of being “stuffy” and “your grandfather’s

hotel” due to its old world charm and emphasis on timeless luxury (Wittorp-Dejonge, M). This

causes younger people to not want to stay at the hotel and to look elsewhere. Although the

renovation in 2013 attempted to, and somewhat did, make the hotel more modern, it still does not

appeal as much to the younger demographic. This issue is heightened by the younger

generations’ lack of loyalty to any brand; most of them look for convenience and cost rather than

looking at a hotel as an experience. St. Regis is trying, however, with several different strategies

to change this, in addition to the renovation.

Another weakness is that they do not have a clear marketing strategy surrounding their

image as a true business hotel or an exclusive leisure hotel.

Furthermore, despite being a strength in many occasions, being an iconic historical

property, can also be a weakness for the hotel in certain instances. For example, Maria Wittorp,

the Chief Concierge of the hotel described the many challenges the property had to overcome

when they were planning renovations to the building. Not only is it protected by many historical

property laws that forbid severe alterations, but they also have many more regulations to follow

when renovating these buildings.

At the moment they have another weakness: the spa is closed until well past the New

Year. What sets this weakness apart from the others however, is that they have turned it into a

strength. Should a guest desire a spa service, the hotel will set up an appointment in a guest’s

own hotel room through a mobile app. This not only circumvents the problem of the spa being

closed, but also makes the experience more personal and convenient for the guest.

44

Threats

New York City includes many luxury hotel properties; these properties are catering to

similar markets, creating a strong threat for the St. Regis, New York. This competition also

includes internal competition within Starwood Hotels and Resorts (i.e. W New York and The

Luxury Collection). In addition, with the recent increase of development in the Financial District,

many business travelers are choosing to reside as well as hold conferences there instead of the

Midtown region. The financial District is not only more affordable, but also closer to Wall Street

for business purposes. Because of this, it is necessary that the St. Regis has a strong competitive

advantage.

Another threat is political awareness and political tensions internationally. For instance,

the St. Regis has a large influence in the Middle East and if political tensions continue to rise,

they would most likely see a decline in travelers to the area.

Based on Euromonitor, The Travel and The Sharing Economy, consumers are more

comfortable staying in a stranger’s accommodations. Because of this, people are willing to stay

in a low-cost, short-term accommodation instead of staying in a traditional hotel. Therefore, this

is a direct threat to the hotel industry. However, we do not see this affecting St. Regis

particularly as the target market cater to is different.

Economic landscape in America and the value of the dollar is another potential threat for

the St. Regis New York City. If the general price level increases, and the dollar keeps

appreciating compared to international currencies, then St. Regis will see a decline in demand for

leisure travellers from abroad, because consumers will be less likely to vacation in America as it

becomes more expensive for them.

45

MARKETING MIX ANALYSIS

Product

The St. Regis New York is marketing a service or experience (usually intangible), rather

than a product (that is tangible). As explained in the SWOT Analysis, positioning and

competition sections, the property has a strong competitive advantage, differentiating from the

competition and other hotel properties.

F&B product

The focal point for the Food and Beverage aspect of the St. Regis is the King Cole Bar..

Serving International cuisine, it is open for every meal of the day, including tea time, and is a

popular locale for guests to meet up with friends or colleagues. The bar is specifically known for

their “Red Snapper” cocktail which is a modern day Bloody Mary, and they credit themselves

with inventing the famous drink.

King Cole Bar

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Meeting & Event Space

An aspect that sets the hotel apart from other members of its competitive set is its large

amount of meeting space that encompases 15 rooms and 16,000 square feet. The largest space,

the ballroom, is located on the highest floor and has sweeping views of the city. It can hold up to

300 guests and is mostly used for weddings although it has hosted numerous gatherings for the

world’s elite, political and social alike. The decor is adorned with vaulted ceilings and gilt

chandeliers with gold ornamentations throughout. It is the perfect place to make memories that

will last a lifetime.

Main Ballroom: St. Regis

Price

The St. Regis receives daily STR reports from its competitive set and as such uses daily

pricing of its hotel rooms. The hotel is able to see whether it is performing above or below its

competitive set and if its ADR is drastically above or below the comparable alternatives. They

have a strategy review every Wednesday to consider these numbers to make sure that the hotel is

operating where it wanted to with regards to their competition. Based on that, the hotel can

47

adjust its prices accordingly (Silberstein, A.). As is with the rest of the hotel industry, Sundays

have the lowest ADR and consequently RevPAR due to it being the least busy day of the week.

(Source: Official Websites of the Competitive Set)

Source: Official Websites of the Competitive Set

According to the Marketing director of St. Regis and STR data for the competitive set, St.

Regis has the highest occupancy ratings on Tuesday and Wednesday nights. This is owing to the

large number of business consumers they cater to. (Silberstein, A). Therefore, to analyze St.

Regis’s pricing strategy, their daily rates (Sunday-Saturday) were collected for a period of a

month. From this information Average daily rates for each day of the week was computed.

Analyzing the following data it can be determined that St. Regis employs a “demand driven

pricing strategy” to determine their rates.

St. Regis Daily Rates ADR (Oct 15- Nov 15)

Sunday 680 795 808 808 772.75

Monday 895 716 851 851 828.25

Tuesday 945 680 1045 1045 928.75

Wednesday 945 855 1045 1045 972.5

Thursday 765 940 851 851 851.75

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Friday 731 808 808 731 769.5

Saturday 770 896 808 731 801.25

Source: Official Websites of the Competitive Set

The use of this strategy can be identified in the following occasions. The hotel tends to

price January, February, March, June, July and August lower than other months. This is due to

the seasonality of hotels and the months at the beginning of the year seeing a large drop in

business travelers and corporate meetings at the hotel. Summer months attract more tourists; the

typical New York City tourists during the summer are middle class families visiting for their

summer vacation. These travelers would not necessarily stay at the St. Regis, nor are they in

their target market, and for that reason summer months feature a lower ADR than one may

expect. Around Memorial Day and Labor Day business trips tend to increase and more business

travelers frequent the hotel; as a result the St. Regis adjusts their pricing strategy

accordingly. The St. Regis’s pricing strategy reflects the fact that the first two weeks of

December are the busiest two weeks of the year in New York City . In addition, the St. Regis

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will adjust prices according to their predictions for certain groups. If an event was taking place

in the city that was going to attract a substantial amount of high income families, the hotel may

raise the price for double rooms and lower it for king rooms. The influx of families into the area

would create a higher demand for the double rooms, so the St. Regis would respond in a way that

will boost their sales.

Place

The property currently utilizes a wide range of distribution channels to sell hotel rooms

and suites. Customers can book online through the St. Regis website or by calling the hotel

directly which is required for booking suites. These bookings are identified as direct bookings by

the hotel. Other distribution channels include online travel websites, such as Expedia.com,

Hotels.com, or use travel agents. Travel agents often include certain accommodations or

“packages” such as complimentary breakfast or a free night with the purchase of x amount of

nights. The St. Regis New York understands that many international customers use travel agents

to book their stays.

According to the Marketing Director of St. Regis Hotel New York, the breakdown of the

booking channels can be illustrated as below.

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Source: Silberstein, A

Promotion

The St. Regis New York’s promotion strategy involves using publications,

advertisements, social media and travel agencies. According to the Marketing Director at St.

Regis New York, the most effective way to reach their target audience is through high-class

publications and advertisements, without guerilla marketing (Silberstein, A.). One such example

is advertisements that are placed on high society magazines, as illustrated below.

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Source: Conde Nast’s W Traveler

Source: Modern Luxury - Manhattan Magazine

The Armarium chalet campaign launched in partnership with Armarium focuses on one-

of-a-kind retail experience where highly coveted designer apparel can be rented on location at

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the St. Regis New York. This shop serves as an introduction to Armarium, a new luxury retail

concept, which is set to launch in early 2016, which will allow clients access to high-fashion

pieces on a borrowed basis through an invitation-only mobile app and within New York

City. This on site location was launched during this year’s holiday season, (November 2015)

targeting the holiday consumers.

The Armarium campaign, starting model Giorgia Tordini highlighted the halls of The St.

Regis New York in the back drop and its exclusive partnership with St. Regis New York. This

campaign is currently being featured on coveted magazines such as Du Jour, WWD and Conde

Nast.

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Furthermore, St. Regis also uses its Bi-annual magazine, “Beyond” to target current

guests. This magazine is a portfolio wide publication for the St. Regis brand. It incorporates

editorial content with a soft push for the brand as well as luxury brand advertisements from

Cartier, Gucci, Christian Dior and others. This helps the hotel relate to the interests and values of

its consumers.

Changes: Marketing Campaign and Renovation

The St. Regis New York is known as a historical landmark and hotel, with it being a focal

point in the history of New York. To continue the success of the property, the brand launched a

new advertising campaign and the St. Regis New York underwent a 90 million dollar renovation

in 2013. The new multimedia advertising campaign was inspired by vintage advertising and

fashion photography, wanting to use the momentum gained from the renovations to appeal to a

demographic that exemplified their target market. The campaign capitalized on the elegance and

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luxury embodied over the years as well as with an old world, vintage decor. The marketing

campaign is targeted for 35-60 year old affluent families who enjoy traditional elegance.

Accordingly, in the upcoming year, the majority of print advertisements will be switched

to digital advertisements in hopes of targeting the Millennials while some advertisements will

still remain in print for the older customer base. The hotel is also attempting to increase its

social media presence for the aforementioned reason as well as to accommodate for

growth. Furthermore, if the content on social media is shrewdly observed, this strategy is clearly

visible. Words such as “New Era of St. Regis” is constantly used to draw attention to the new

image they are attempting to position in the minds of the consumer. One such example of

incorporating social media is the St. Regis Facebook and Instagram pages which promote their

newest offerings and events beings held at St. Regis New york in partnership with organizations

such as New York Fashion Week.

Facebook is also being used by St. Regis New York to offer their guests exclusive access

to events taking place around the city. Illustrated below is a perfect example of this.

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St. Regis New York also utilizes social media as a platform to promote their newest

offerings. One such element that is constantly featured on their social media is their designer

suites. Through this they are attempting to create customer awareness as these are relatively new

addition to the hotel that many consumers are not aware of.

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The St. Regis, as a brand, performs its social media engagement initiatives impressively.

The Social Business Index by Sprinklr, which ranks the social brand health of more than 35,000

brands around the world, has named St. Regis hotel number 2 in the hospitality industry. Their

competitors, The Ritz-Carlton and The Four Seasons are ranked number 4 and 19 respectively.

Furthermore, the St. Regis Brand executes many advertising and promotion activities to

promote the brand as a whole. One such example is taking up the banner and side-panel

advertising space on American Express Publishing’s “Departures” Web site to promote its new

Grand Tour packages to an ultra-affluent audiences. According to Steven DeLuca, vice president

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and publisher of Departures, New York, “Luxury brands benefit from advertising on

Departures.com because they are gaining access to our coveted audience of American Express

Platinum Card and Centurion members who are seeking the highest-quality goods and services

and primed to spend on these products and experiences.” Furthermore, luxury brands such as St.

Regis benefit from being around other luxury brands. The St. Regis and Departures Magazine

customers are like-minded and therefore, the St. Regis places their promotions there. (Carr, T.)

The brand also created an old-fashion vintage marketing campaign. This campaign

demonstrated St. Regis efforts in targeting the baby boomer generation; this population is

interested in the vintage, classic design and architecture features. This campaign is also elegant

and luxurious, targeting the 35-60 year old affluent travelers. Women often make the purchasing

decision for the generation, as the campaign targets women, in particular. St. Regis is targeting

the customer wanting elegance and exclusivity.

The hotel itself does not conduct a variety of promotions that are location specific.

Location-specific promotions mainly take the form of printed advertisements in high lifestyle

magazines as illustrated above.

Instead the hotel works closely with travel agents in offering certain promotions to

customers. Many of their guests book online or through travel agents and at times can qualify for

promotional deals, such as a third night free, through them. The occasional package could be a

family package in the case multiple rooms are purchased or a package where a guest pays the

first night at full value (for a suite) and the second night is offered at $4, which was the original

price when the hotel opened in 1904.

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OBJECTIVES

After conducting the situational analysis, there are opportunities for growth and

expansions for the St. Regis New York. The following positioning and communication plan

presents the St. Regis New York with strategies to expand clientele: attract and expand to

younger demographics and capitalize on the emerging segment from China. With this plan, the

St. Regis New York will strengthen leadership in the luxury hotel segment and attract new

customer segments. This objective is presented with a low-risk, high-reward strategy.

The hotel property should want to attract young professionals (25-35 years of age)

because the St. Regis currently has little to no reach in this demographic or generational cohort.

Therefore, any positive reaction from growth within this market would result in unforeseen

revenues and large gains. St. Regis should also increase the reach with the Chinese market. With

the emerging upward trend of Chinese travelers worldwide and the St. Regis already having a

strong reputation in China, dominating this market share in order to have a consistent flow of

international travelers would increase the customer base of the St. Regis.

GOALS

● Younger Customers: The goal is to have 10% young customer increase in the next year,

aged 25-35 years old. Luxury hotels such as the St. Regis do not normally attract this

target. Because this number has been so small in the past, a 10% increase, while it

appears daunting, is feasible for the hotel property. This target demographic would

account for single and married customers alike, but not families as they have different

wants and needs than those without children.

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● Chinese travelers: The goal is to increase the St. Regis New York’s occupancy by 15%

during the week of the Chinese New Year and achieve greater than 6% growth in their

Chinese Revenue Stream. Last year the hotel had an average occupancy of 61.1% in

February with 60.6% (STR Report) on a Thursday in that month, the day that Chinese

New Year fell on. Increasing occupancy by 15% for this week will allow our overall

occupancy for February to increase by around 5% and be on par with the busier month of

April. As for the latter half of the goal, last year in New York City there were 56.4

million visitors and of this there were 12 million international travelers. China, excluding

Hong Kong, was the fourth largest international market for New York City bringing

745,000 tourists into the city or 6.2% of the total international tourists (“NYC Statistics”).

Translating this number to the St. Regis, it would require the hotel to have an average of

eleven hotel rooms a night occupied by Chinese travelers.

ATTRACTING YOUNGER DEMOGRAPHIC

A recommended positioning and communication plan seeks to attract and expand to a

younger demographic. This recommended plan includes advertising, partnerships, and redesign

features.

ADVERTISING

The St. Regis New York currently exerts minimal advertising efforts that are specific to

the property and location. Instead, it is the beneficiaries of many marketing and advertising

campaigns executed by the St. Regis brand. Upon observation it can be seen that these brand

specific advertisements do not speak directly to the location based experience and therefore are

not as effective. Therefore, advertising methods and platforms that specifically address the

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younger generation (Millennials) should be adopted by St. Regis New York in order to reach the

aforementioned goals and objectives.

The report titled “Generational Differences in Luxury Consumers Use of and

Engagement with Media Platforms” states that while magazines are useful for engaging with

most affluent consumers, affluent Millennials engage more with advertisements on smartphones

and affluent baby boomers engage more with advertisements in newspapers. For ultra-affluent

Millennials, smartphone advertisements ranked No. 1 in engagement, followed by

advertisements magazines and websites. 82% of Millennials reported being interested in mobile

advertisements, while 60% were engaged by advertisements in magazines and websites. The

report also stated that 45% of ultra-affluent Millennials reported seeing advertisements on

Facebook or other social media in the last 30 days. (Shullman Luxury and Affluence Monthly

Pulse)

Accordingly, these facts need to be taken into consideration when determining the best

advertising platforms to reach these young affluent Millennials. As a result, the use of following

advertising platforms would help aid St. Regis in attracting young affluent consumers.

Social Media Instagram, Facebook

Advertising on Smart phone Apps JetSmarter, PrivateFly, Bloomberg App

Print media/Magazines Elite Traveler, Niuyue Magazine, Shanghai

Travelers Club magazine

Websites Robb Report, Bloomberg.com

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St. Regis New York Application

According to a survey by ComSocre, “Next-Generation Strategies for Advertising to

Millennials” apps continue to dominate the time spent with reaching 90% of mobile minutes in

June 2015, up from 86% share in Q2 2014. (Next-Generation Strategies for Advertising to

Millennials). The following graph breaks down mobile internet consumption by app and browser

categories.

Source: Next-Generation Strategies for Advertising to Millennials

This clearly indicates the growing engagement consumers are building with mobile apps.

Accordingly, it is proposed that St. Regis New York launch a new and redesigned app to appeal

to the younger consumers as well as a Chinese version of the same app to appeal to emerging

Chinese market. The previous version of the St. Regis New York app is no longer operating and

this aforementioned version was static and non-personalized. The Proposed version of the St.

Regis New York App will include the basic hotel app features such as browsing resort amenities,

a complete guide to the city, guest rooms, in room dining, Butler and concierge services.

However, the proposed app for St. Regis will also include some unique features that will help the

property appeal to the young, affluent consumers. According to the HVS Report, “Top 10 Trends

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of The Next Generation of Travel: The Millennials” Young crowds are impatient and they prefer

immediate service (Lee, Teresa).

Image: Proposed St. Regis New York App

These customers expect a relatively speedy check in and check out process, especially

young affluent consumers (Lee, Teresa). St. Regis New York only has one check in desk which

is staffed with three team members at their busiest times. Furthermore, St. Regis New York does

not have sufficient space in the lobby for guests to wait while check-in; this issue will be

addressed separately under redesigning section. Therefore, launching a mobile app that allows

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these consumers to check in before arrival and check out with ease and a whole array of

personalized services, would undoubtedly increase customer satisfaction.

After a customer makes the reservation, the confirmation email that is sent will include a

link to the St. Regis New York App. This email will describe the benefits of downloading the

app, which will be discussed in detail below. This email will also include a special code, which

upon downloading the app, users can input to synchronize all their reservation details and their

schedules without the hassle of a lengthy login creation process.

Furthermore, upon opening the app, it will prompt two questions for the user. First, it will

ask the user permission to send personalized push notifications for the duration of their stay. If

the user was the select yes, the second question will prompt them to pick their areas of interest

such as activities, dining and local events. By doing so, the app will ensure only personalized and

relevant notifications are sent to the user. The app will also take into consideration the time of

the day when sending these suggestions. For instance, if the guest were to pick local events, the

app will generate a push notification containing a carefully curated list of local events suggested

by the hotel concierge.

These push notifications enable the hotel to connect to guests by anticipating and meeting

each user's needs even before the guest is aware of the need. Effective use of this feature takes

into account the user's behavior and location to supply personalized notifications based on the

individual's particular preferences. For instance, if the guest were to provide their flight

information during making a reservation, the app will use a Google flights and maps API to

determine when their flight has landed and send a push notification welcoming the guest to New

York City. Then it will inquire the customer if they would like a Car service/taxi to be sent to the

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airport to pick them up. By doing so not only St. Regis will anticipate the customer needs but

they can strive to exceed the guest’s expectations. Furthermore, the google maps API integration

will enable the hotel to be prepared for the guest arrival and therefore will streamline the check

in process smoothly. In order to maximize the efficiency and effectiveness of this feature, it is

suggested that St. Regis New York partner with a company such as UberLux. The app therefore,

not only will send the arrival push notification but will also have a separate function where

guests can order car services throughout their stay.

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Young consumers also prefer texting as opposed to speaking with personnel. Therefore,

the proposed app will include a chat option, where the customers could chat real time with a

concierge or a butler, depending on their need.

According to HVS “Top 10 Trends of The Next Generation of Travel, The Millennials”.

Millennials reject a cookie cutter journey. They look for authentic local experiences. According

to the report 78% of Millennials indicated that they prefer to learn something new when

traveling, while 70% stated they expect special places to offer immersive experiences that are

interactive and hands-on (Lee, Teresa). Therefore, the app will include a guide to of local

activities that are updated each week. These local activities will include events that are

happening each week within the city. Not only will the app notify the guest of these events but it

will also enable them to get special access to these events through the fact they are staying at St.

Regis New York. In order to effectively roll out this feature, the hotel must establish partnerships

with high end nightclubs, events and other luxury service providers within the city. Some of

these recommended partnerships and their benefits will be discussed in the latter sections.

Furthermore, the app will also include local dining options. This will include a curated

list of restaurants that is suggested by the hotel. This section of the app will also integrate guest

reviews from Zagat. Not only will it include these options but it will give the guest the option to

book the particular restaurant by continuing to OpenTable or by sending an alert to the concierge

team through the app.

Moreover, the app will also include features such as notify housekeeping when to service

the room, notify bell desk to pick up luggage from room, browse and order room service menu

items. Finally, the app will also include a language-translation feature to facilitate spotty

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communications between international guests and St. Regis team members. These new features

and the St. Regis New York App will be advertised to the target market through features on

social media, magazines, websites and other platforms which are discussed in latter sections.

The St. Regis accommodates 43,690 guests per year (with 70.8% occupancy). The goal is

to have 20% of these guests download the new application, with that being around 8,000 people,

within the first year of the application introduction.

Social Media

Staying socially connected is important to Millennials as they grew up in a culture of

constant technology. A 2015 Affluent Millennial Reach study revealed that 39% of affluent

Millennials consider social media as a must have. This number is higher than any other segment.

Accordingly, it is evident that social media is an effective platform to appeal to young affluent

Millennials (Winning Affluent Millennials).

Source: Winning Affluent Millennials

Furthermore, 88% of affluent Millennials visit at least one social network per week, with

Facebook being the predominant (Winning Affluent Millennials).

Moreover, it revealed the following most heavily used social media sites by consumers

within the age group of 18-34. Accordingly, it can be concluded that Facebook and Instagram

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would be the most effective social media platforms for St. Regis New York (Winning Affluent

Millennials).

Source: Winning Affluent Millennials

Social Media Campaign: “SuiteDreams” #SuiteDreams #St.RegisNYC

Accordingly, a Facebook and Instagram competition would help St. Regis New York to

target these young affluent consumers. The goal of this competition is to attract the young

affluent crowds who are price conscious and are looking for the best value for their money. The

report Millennials lowest spenders, but most common luxury shoppers talks about how

Millennials need to be convinced of the value of a product (Cardamenis, Forrest)

This social media competition is exclusively designed to create exposure by marketing

the unique suite experiences to the young affluent in combination with the 4$ per day promotion

of St. Regis, where when a guest stays a number of days the next day is $4 a day which was the

original price of a room when it was established in 1904. This experience includes, Dior,

Bentley, Tiffany Suites and their other signature suites. The suites not only provide glimpses of

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the brand partners, but also include particular amenities unique to the specific suite. For example,

if a guest in the Bentley Suite, a signature Bentley is available for use within 10 blocks of the

property. The Tiffany suite is accompanied with an appointment with Jean Schlumberger, a

jewelry designer with Tiffany & Co., to tour the jewelry workshop and schedule a private

shopping experience. According to Harvard Business Review, bundling is persuasive in several

markets, and it works in most cases. Hence, the bundling of services and bundling of prices will

make the consumer feel as they are getting value for their money.

This competition will encourage guests to document their suite experience through social

media, Instagram and Facebook to enter a chance to win a free three night stay in a signature

suite of their choice at St. Regis New York. Furthermore, this competition will help St. Regis

New York address one of their weaknesses that is particularly affecting them when reaching a

younger audience; the stuffy image. Even the new multimedia advertising campaign launched by

St. Regis New York highlighting the million-dollar renovation in 2013 consisted of pictures

fashion photography featuring mainly models. Therefore, this campaign will make the ‘people’

aspect of the story a centerpiece of their marketing campaign as it will document real people and

their real experiences at the hotel.

One of the main ways St. Regis New York will benefit from this is the exposure they will

receive from the numerous post from the guests. When a guest who stays at a suite post their

pictures on social media their friends will inevitably see these posts. This is the exact target

market that St. Regis is attempting to penetrate. Furthermore, the partnerships with Bentley,

Tiffany and Dior will ensure that these posts will be visible to the customers who purchase these

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products and engage in their respective social media accounts. These are also segments that

appeal heavily to St. Regis New York.

The social media exposure that the hotel will receive over the course of these three

months should allow for the number of Facebook likes and Instagram followers on their

respective pages to increase. The goal is for the Facebook likes to increase by 20% or 2000

people and Instagram to gain 10% or 1000 new followers during the course of the competition.

Image: Proposed Social Media Competition

This competition will be advertised beforehand and during, in the official social media

platforms of St. Regis New York. Furthermore, guests will be notified of the competition

through the St. Regis New York app as well.

Website Advertising

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According to a research conducted by Forbes Media, the following websites were ranked

as the highest utilized among affluent individuals. Forbes.com which consists of Forbes

Magazine, Forbes Life magazine, Forbes website & etc. and Bloomberg.com which consists of

Bloomberg TV, Bloomberg Website, App and Bloomberg print magazine were ranked as the top

two platforms. However, among these two platforms median consumer ages range from of 30-35

for Bloomberg.com and 40- 45 for Forbes.com (Forbes 2015 Media Kit). As a result,

Bloomberg.com would be the most effective platform to appeal to the young affluent consumers

for St. Regis New York.

Source: Forbes 2015 Media Kit

Bloomberg

Bloomberg Media has many platforms that St. Regis New York can utilize to place their

advertisements. Out of these, Bloomberg mobile app and Bloomberg website would be the most

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effective ways of reaching the affluent young Millennials, as it follows the trends young affluent

consumer trends as highlighted in the report titled “Generational Differences in Luxury

Consumers’ (Shullman Luxury and Affluence Monthly Pulse). Bloomberg app has 18.6mm

Active monthly visitors and a total of 48.2mm app downloads. It also has 198.6mm Monthly

page views. Similarly, Bloomberg website attracts 20.5mm worldwide monthly desktop visitors.

According to the report “Maximizing Digital Advertising in a Customer-Centric

Marketing Strategy” advertisers are gaining more and more customer engagement through the

use of digital advertisements through interactive content such as video and image galleries

(Wilson, R & Wood, J.).

These interactive components could be anything ranging from a video that plays in the

background as a consumer scrolls down the app or even an image gallery that let consumers

browse the collection without disrupting the content on the Web site. Then, a click-through on

the banner ad took users to the St. Regis New York web site to view the specific content. An

example of this is illustrated below.

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(Proposed sample advertisement for Bloomberg)

Because so many young people use Bloomberg, it is an ideal way to attract the

demographic. The St. Regis could partner with them from a Public Relations perspective in order

to attract the younger generations to the hotel. Bloomberg would run St. Regis ads in all of their

publications, as listed above, with the hopes of attracting younger clientele.

Robb Report

Robb Report and Conde Nast Traveler are luxury travel and lifestyle sites. Conde Nast’s

audience median age is 40-50 years while Robb Report’s audience median age range is 30-40

years. Furthermore, the average median household income range for a Conde Nast customer is

$95,000-100,000 while the average median household median income range of a Robb Report

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consumer is $350,000-375,000 (Robb Report Media Kit). Accordingly, Robb Report was

selected as an online advertising platform for St. Regis hotel New York. Robb Report attracts a

discerning audience who share the same appreciation and aspiration for quality, fine design, and

exclusivity. The Robb Report provides daily reviews and opinions on the latest happenings in all

luxury industries and settings. This is provided through robbreport.com, robbvices.com and the

daily newsletter Robb Report Insider. The unique combination of high standards combined with

spending power and influence makes the Robb Report audience the ideal target for the world’s

top luxury brand such as St. Regis

JetSmarter and PrivateFly

The JetSmarter and PrivateFly are Private Jet Charter Networks that connects passengers

and private air carriers seamlessly through their mobile apps and website. JetSmarter currently

holds 3,000 private jets, while PrivateFly holds around 7,000. These apps and websites attract

likeminded consumers who are in search of luxury products such as St. Regis. Here, in app

advertisements and banner advertisements can be placed in the app and website respectively.

Elite Traveler

Elite Traveler is a magazine that is distributed worldwide in private jet terminals, on

private jets, on mega-yachts and in first-class lounges around the world. Elite Traveler magazine

and website are often used by elite travelers to make key purchasing decisions regarding

accommodations, events, dining and other services.

With distribution aboard private jets, mega-yachts, first-class international lounges, and

other high-end venues in more than 100 countries, Elite Traveler Can enable St. Regis New York

to reach this high-spending market not only in United States, but around the world. Furthermore,

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each issue reached more than 630,000 wealthy consumers in the ultimate luxury settings (Elite

Traveler Media kit).

Facebook

Furthermore, actions such as limiting the number of posts on social media, but posting

better quality material for the readers can get better engagement from the consumers. Another

aspect to keep in mind with the use of any social media platform is that young crowds are

impatient and require immediate feedback. Therefore, it is important to have a dedicated team

monitoring social media activity at all times.

Moreover, integrating a calendar of events held by the hotel and in the local area into the

hotels official Facebook page can help the hotel appeal to Millennials who are looking for

authentic local experiences.

PARTNERSHIPS

There are two popular reasons that people venture into New York City: business and

pleasure. Whether a person or their company is paying for his or her business trip, it is going to

be about proximity to pre-planned activities and convenience rather than the experience. A

business traveler may not have time for a Broadway or concerts whereas leisure travelers do. The

younger generation, Millennials or Generation-Y, also fall into these two categories, but the key

to turning them into loyal customers will be to aim efforts at leisure travelers in this segment.

These young leisure travelers tend to be price conscious individuals. If they are going to pay

more than they could at a different hotel, they want the experience and the amenities to be worth

it; they want an experience like none other. This is why partnerships are not only a way to

differentiate the St. Regis from its competitive set, but also to attract these younger consumers.

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Leveraging contracted partnerships with different companies is an effective method and strategy

to create awareness and drive business from the new targeted demographic population.

Many people in this demographic population are visiting the city for the first time and

want the whole experience of the glamourous New York City that appears on television. To

account for these individuals and attract them to our hotel, the St. Regis should partner with

Dior. The package, available upon request, would allow for the hotel guest to have a complete

makeover and to wear a cocktail dress or suit by the fashion designer. While this is similar to the

perks of staying in the famed Dior Suite, it would be available to any guest in the hotel. The

guest would simply tell the hotel that they would like this package upon making their reservation

and the hotel would factor it into their room price. The guest, in actuality, would be paying a

small fee for the service, but because it is already factored into their room rate, the guest would

perceive it as being a free perk of staying at the St. Regis. The hotel could use a portion of these

extra revenues generated to pay Dior for their partnership. As with the App mentioned earlier,

the hotel would have an exclusive arrangement with a handful of trendy clubs around Manhattan.

Customers participating in this experience could then attend these clubs as a VIP without paying

the extra fee that they normally charge and would be factored into the room rate as well. This

would be offered exclusively to the St. Regis and could attract more young people to stay at the

hotel.

Another way to attract the demographic that we are seeking is to organize a partnership

with the media conglomerate of NBC Studios located a few short blocks away down Fifth

Avenue. The network has live shows airing seasonally in the city such as The Tonight Show

Starring Jimmy Fallon and Saturday Night Live. The Tonight Show consistently attracts the most

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viewers in the younger demographics as well as has the youngest median age of late night

television (Adgate). This can be attributed to his foray into the field of YouTube, used by the

vast majority of the younger generations, and posting his comedic sketches on this platform; by

doing this he stays relevant to the crowd being targeted. These events not only appeal to the

younger demographic that is suggested for aiming to attract to the St. Regis, but also are

extremely difficult to obtain tickets to. One has to enter into a limited lottery or stand in line

outside of NBC Studios early in the morning the day of the show in order to hope to get tickets.

The St. Regis could implement a system that the special guests of the programs stay at the hotel

in return for 2-4 tickets to that night’s show or dress rehearsal. This would successfully attract

the younger generations who hope to see a live version of their favorite show while in town

without the hassle of waiting in line for a non guaranteed ticket.

Keeping with the trend of exclusivity, another partnership that could work to the St.

Regis’ benefit would be to partner with the Polo Bar. Young people love to be social and build

relationships. This partnership could provide just that. Zagat listed the Polo Bar, across the street

from the hotel property, as one of the “toughest tables in New York City” (Dobkin). Although

there is a bar as well as a restaurant in the establishment, customers are required to have

reservations for both. A St. Regis partnership could allow for their guests to have an exclusive

happy hour with guests getting discounts on their drinks while being able to mingle with other

guests. The Polo Bar currently does not have a happy hour, so this would be exclusive to guests

of the hotel. In order to not greatly interfere with the establishments business, they could open

half an hour earlier and have the happy hour from 4:30 to 5:30. The reason for partnering with

the Polo Bar rather than the King Cole Bar located in the St. Regis is that the Polo Bar attracts a

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younger customer. Hopefully with this partnership, the hotel can attract the younger

demographic that they are seeking to. In addition, Polo could have a great influence if the St.

Regis creates their very own Polo sure. Furthermore, the Polo suite will still attract the target age

range while benefiting the exclusivity that the hotel is trying to maintain. In addition to an annual

fee paid by the St. Regis for this privilege, the St. Regis would offer to sponsor the New York

Fashion Week after party for Polo by Ralph Lauren.

Another possibility for the partnership with Polo would include a polo themed suite

similar to the Dior Suite, Tiffany Suite and Bentley Suite. It would feature certain amenities

unique to the Polo brand and have the same look and feel of the lounge across the street. The

customer would be allowed to have private access to the polo store after hours for a special

shopping experience and be able to select a complimentary perfume or cologne of their choice as

a result of staying in that particular suite. In addition, the customer staying there during Fashion

Week would receive tickets to the brand’s fashion show free of charge. In order to judge the

effectiveness of the suite, the St. Regis would monitor the occupancy of the suite carefully. After

the first year of it being completed, the hotel will need to look and ensure that its occupancy is on

par with the occupancy of the other themed suites. This should be slightly higher than the overall

occupancy of the hotel as they are special suites with exclusive amenities.

LOBBY REDESIGN

After conducting the situational analysis, it was found that for the St. Regis to

successfully compete against the other five star hotels in the Midtown East district, they need to

appeal to a younger customer. A key area that has been identified that could provide benefit for

this goal was a side room next to the lobby that currently serves minimal purpose. If the St. Regis

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would remodel this room to a social lounge, specifically tailored to 21-31 year old working

professionals, they would attract a younger customer base.

To attract this younger customer, the remodel includes a room with a more communal

social atmosphere with a circular sofa with a circular table. A large circular club sofa would be

more of an inviting, community themed atmosphere than the current table and chairs they have

now. From this point, the St. Regis would have flexibility to cater the events to whatever they

determine most effective. This would keep the contact with the customers and build

relationships with them to consider staying the St. Regis in the future. Even though the St. Regis

would be catering to a younger customer through this event, they could still uphold their

traditional hotel values with their butler service formally serving the guests drinks and appetizers

from the already existing bar adjacent to their restaurant.

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In addition to this potential redesign of the unused room, there is empty space adjacent to

the front desk check in. This is another opportunity to create a social space by placing two to

four couches and one to two tables in this unused space. These additions will fill the void that is

currently there because there are no current areas to gather communally, which is something that

young customers desire. By creating a lively environment in the lobby and the adjacent room, it

also could enable customers who usually leave at a certain time to stay longer or for people who

are there at the social event to stay past the promotional time. This would in turn increase other

income for the St. Regis, outside of their room sales.

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A weekly Friday happy hour from 4:00-6:00pm including open bar and appetizers for

anyone staying in the hotel or anyone who is a preferred member. The event would also welcome

friends and family of the customers or members. There would be an increased presence of butler

service to impress the younger crowd of the traditional luxurious hotel value. By conducting

these events, they are in constant contact with their key customers in order for them to be more

inclined to stay at the St. Regis in the future.

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EMERGING CHINESE MARKET SEGMENT

The Chinese population have built a global reputation of being “big spenders.” Changes

in the government (as described below) have created more travel opportunities for this

population. A development strategy in China is significant given its promising potential and

being considered an emerging market. New York City welcome 12 million international traveler

in 2014 (56.6 million travelers total), with China being the fourth largest international market.

Knowing this information, the St. Regis New York marketing plan to target and attract this

emerging market can be developed. This marketing plan includes advertising, public relations,

and service recommendations.

In China, the government sets the exchange rate. This allows for the those in power to

have the ability to make changes constantly depending on the desired effect. Previously, the

government set the rate low in order to ensure that their exports would be cheaper than other

countries (Thompson). Now, however, there is more emphasis and value placed on investments

rather than trade and thus until this past quarter, the government has increased the exchange rate

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of the Yuan over the past two years (Wang). The Yuan is not undervalued for the first time in

over a decade. This increase allows for a more enticing economy for outside investors while also

allowing for and encouraging more Chinese travellers to travel internationally in the coming

year. Historically, the Chinese tended to be price conscious as a country and have the one of the

highest rates of household saving, upwards of 30%, in the world (Economics: Key tables from

OECD). As the younger generations grow up though, there is a more Western mentality of less

saving and more spending. It is also important to note that these younger generations are more

likely to spend more depending on the quality of a product or service which will help the St.

Regis (Qiu). Having Chinese be more willing to travel over the past few years makes them even

more of an emerging segment in the population.

Chinese visitors, whether for business or pleasure, must obtain a visa to travel anywhere

in the United States. The process mandates a $160 fee along with an interview for adults but not

children or senior citizens. The U.S. does have a visa waiver program for 38 countries, but China

is not on that list and citizens must obtain a visa (Apply for a U.S. Visa).

ADVERTISING

St. Regis Application

Advertising methods and platforms that specifically address emerging Chinese market

should also be adopted by St. Regis New York in order to reach the aforementioned goals and

objectives. The suggested app will also be available in Mandarin in order to cater to the growing

Chinese market and to reach the goal of achieving greater than 6% growth in their Chinese

Revenue Stream. According to the article Understanding Chinese consumers by China Business

Review, Localization is the key to attracting affluent Chinese consumers (Qiu, Y). Therefore,

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this app will also integrate the special room service menu which is catered specifically to the

Chinese guests, which will be discussed in detail under the service recommendations section.

Image: Proposed Chinese version of the St. Regis App

Niuyue Mag

The world Niuyue stands for “New York City” in Chinese. This magazine attracts the

next generation of Chinese travelers who are between the ages of 20 to 25 and affluent.

Accordingly, the magazine features urban and stylish articles covering the most exciting aspects

of New York City. Furthermore, the magazine also Feature high end hotels and covers exclusive

events and exciting nightclubs in New York City. Having the St. Regis New York feature in the

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magazine can help the hotel to reach these young, affluent and growing Chinese consumers

(China Elite Focus).

Shanghai Travelers Club Magazine

Shanghai Travelers Club Magazine is China’s first informational newsletter completely

dedicated to international luxury travel and written entirely in Mandarin Chinese. As a result, the

magazine has become the number one reading material for Chinese world travelers of the highest

net worth. This luxury travel magazine features a wide variety of travel related material ranging

from private jets, super yachts, private islands, exclusive hotels, resorts and spas around the

world. Therefore, placing advertisements in this magazine or collaborating with the magazine to

write an article/feature on St. Regis New York can help the hotel in attracting these wealthy

Chinese travelers (China Elite Focus).

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PUBLIC RELATIONS

Public relations is used to spread information between an organization and the public. It

is necessary to keep the public and media aware of what is happening at the hotel property. The

positioning and communication plan created for St. Regis New York includes sponsorship

marketing and partnership suggestions to communicate information about the St. Regis across

more platforms (in connection to the emerging Chinese market).

SPONSORSHIP MARKETING

To sponsor something is to “support an event, activity, person, or organization financially

or through the provision of products or service.” Sponsorship by Elong and Wahaha is described

below. In years past Chinese tourism has been mainly done in groups. This could be tied to the

strong family values and respect for elders that the citizens of China as a country possess. With

the emergence of Travel Agencies however, it has become more and more common for Chinese

to travel individually. Hotels will have to work harder in order to get the Chinese consumer to

work directly with them rather than a travel agent and for this reason, it would be in the St.

Regis’ best interest to sponsor a Chinese travel agency.

Elong: A Chinese Travel Agency

In order to capitalize on their Chinese market, The St. Regis should seek a working

relation with Elong. Elong is a Chinese travel agency, specializing in Chinese operations but is

currently expanding to international hotels. It would be a very successful working relationship

because Elong would gain more users and the St. Regis would have a respective Chinese brand

name associated with them. Therefore, the St. Regis’s customers from China would feel more

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comfortable and inclined to stay at the St. Regis. This would increase likelihood that a Chinese

traveler will stay at the St. Regis by more than 50%.

As part of this sponsorship, Elong could have a working station desk inside the hotel.

This could lead to more up sales for the St. Regis. In addition, the St. Regis could run specials on

the Elong website in order for the Chinese market to be aware of promotions and reduced rates.

This would enable the Chinese market to be more aware of the St. Regis, New York City and

increase occupancy amongst Chinese customers.

Chinese New Year and Wahaha

Wahaha has been the Chinese leader of soft drink providers for the last eleven years.

Securing this established brand as a sponsor would attract many Chinese customers because of

the familiarity with the iconic Chinese product. In particular, they could run their sponsorship

activation around the Chinese New Year. The St. Regis could promote this event as a week-long

experience in the week of February that the Chinese New Year occurs. This would be an

effective way to get Chinese Customers to travel to New York City. Wahaha would help with

maintaining the Chinese traditions and creating a positive Chinese culture within the hotel. Also,

Wahaha products could be found in the bar, mini bar, and the restaurant. In addition to having

this as a one-time event, Wahaha could be a full time sponsor, with their products seen

throughout the hotel.

PARTNERSHIPS

A partnership is defined as: “A legal form of business operation between two or more

individuals who share management and profits. The federal government recognizes several types

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of partnerships. The two most common are general and limited partnerships” (Merriam-

Webster).

Asia Miles

Asia Miles is Asia’s leading travel and lifestyle reward program. Customers get rewards

based on points or miles earned. These miles can be redeemed at different good and service in

the following categories: Flights, Hotel and Holiday Packages, Wine & Dine, Leisure & Sports,

Electronics & Accessories, Household & Other Merchandise, Gifts, Flowers & Hampers, Car

Rental & Transportation and Health & Beauty. St. Regis can build a relationship or partnership

with Asia Miles, offering special accommodations to the program's highest ranking customers

which tend to be those that travel internationally often. Asia Miles would receive a percentage of

the sales St. Regis receives from the customers referred by the company. This partnership would

be beneficial to Asia Miles and the St. Regis, gaining customers from each outlet that could

results in new long-term and loyal customers.

YouKu

China has some of the strictest censorship laws in the world when it comes to the internet

and what can and cannot be viewed by its citizens. Due to this, it is difficult to advertise through

popular forms of social media that United States citizens are familiar with such as Facebook.

China does however have social media of its own however, and through that the St. Regis can

expand their marketing efforts towards the Chinese. One of such websites is Youku Tudou Inc.,

commonly referred to as YouKu. It is similar to YouTube in the sense that it is a video hosting

service that can be accessed by the internet, but focuses more on professionally generated videos

rather than user generated ones. Because it is in China, the website has to run in accordance with

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Chinese censorship laws and is monitored daily. That being said, Youku is one of the only video

providers in China and is arguably the best. The St. Regis partnering with this company would

give the hotel more exposure in this country as well as enlightening the customer on the aspects

unique to China that the hotel has to offer.

Service Recommendations

Travelling internationally can be intimidating and overwhelming too much of the global

population. There are cultural difference and language barriers present for Chinese travelers in

the United States and New York City. Knowing this, different service recommendations are

presented to the St. Regis New York to attract this population and create a comfortable,

welcoming environment. These recommendations include having employees fluent in the native

languages, having translators available for business purposes, and having a menu, in the guest’s

native language, available with common Chinese food items, such as an assortment of Chinese

pastries, upon request. An example of this would be for teatime, to offer traditional Chinese tea

in addition to the English one normally served.

A key factor to take into consideration when attempting to market towards the Chinese

market is the aging population. Every year the proportion of elderly to young people in China

increases and it does not seem to be slowing down soon. This is in part due to the fact of China’s

one-child policy. This policy is now causing there to be less women of childbearing age and thus

providing for a drastically lower birth rate than China has had in the past. Right now, over half of

the world’s elderly reside in this area of the world (The Most Surprising Demographic Crisis).

The St. Regis needs to tailor its marketing efforts in China to reflect this and account for this

segment of the Chinese population.

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Source: The Booking Institution

Many of the aforementioned advertising strategies are aimed at attracting this segment of

the Chinese population. Advertisements in Chinese lifestyle magazines will hope to reach this

segment as do ones in business class magazines as people in this age range are far more likely to

travel in this section than younger people are. Many of the service recommendations cater to this

segment as well by upholding the high service standards that the St. Regis has while

accommodating for Chinese traditions and making them feel less overwhelmed with the

international travel experience as a whole.

MARRIOTT ACQUIRING STARWOOD

For the past few weeks, there has been one main question in the hospitality industry: who

will acquire Starwood? This Fall, Starwood announced that they were going to begin accepting

offers to buy out their company. Due to financial issues, the company had to find someone to

acquire them within sixty days. There was much speculation over who would be the hotel

company’s saving grace some of which being Hyatt, Jumeriah and a Chinese company that was

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not disclosed in reports. After weeks of speculation, Marriott and Starwood came out on Monday

November 16 and informed the world of their merger. Its relevancy to the project at hand is

unending as The St. Regis is a Starwood property and will be going through many changes in the

coming year as it becomes part of Marriott along with the rest of the company. Although it will

still be several months until it is finalized, there are many aspects that bring about questions for

the industry. How the loyalty programs of both companies will merge is on the forefront of

everyone’s minds. They are two of the largest loyalty programs in the business and the main

concern is whether Starwood’s loyalty program will diminish in value when combined with

Marriott’s. Currently one out of every two guests that stays at a Starwood property is a member

of its loyalty program. The proponents of this merger cite The Ritz-Carlton acquirement as

reference. Marriott has had tremendous success with that brand and keeping it separate from the

rest of the Marriott corporation so as to not diminish The Ritz-Carlton from being one of the best

luxury brands. Whether Marriott will be able to do this with The St. Regis and other luxury

properties under Starwood, as well as other Starwood properties, remains to be seen; everyone is

going to have to wait and see what happens when the merger is finalized in 2016.

CONCLUSION

Objectives and goals were identified through a situational analysis of the St. Regis New

York; these objectives and goals were aimed towards gaps found. There would aid the St. Regis

property in being the best that it can be and increasing its market share as much possible. The

following positioning and communication plan aimed efforts and detailed strategies towards

attract and expand with the younger demographic and capitalize on the emerging Chinese

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markets. With targeting these cohorts, the St. Regis New York is able to explain clientele and

build on the success as a brand and hotel property.

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