Business Challenge: How can hoteliers better understand
consumers and identify their needs among business and leisure travelers,
in an effort to help them increase revenue and guest satisfaction?
Solution: Make guests happier by anticipating and satisfying
current unmet beverage preferences.
Introduction
Exceeding expectations. That�s how hoteliers gain success and differentiate
themselves among competitors. New research from The World of Lodging and
Beverages Study helps operators understand how consumers organize and choose
among the lodging alternatives in the marketplace so that they can not
just meet, but exceed their customers� expectations. This research
also shows how consumers organize and choose their beverages within their
Lodging Occasions. Most importantly, the Study shows operators occasion-based
needs of consumers that can be capitalized upon to increase revenue and
help them continue to satisfy guests.
�The
World of Lodging and Beverages Study is an example of how Coca-Cola North
America�s research always goes beyond their area of business in order to
help us, their customers,� said Sue Morgan, vice president, franchise food
and beverage for InterContinental Hotels Group. �This approach adds
significant value by providing another slice of consumer dynamics � resulting
in actionable brand strategic initiatives that can stem from findings in
their research. For example, this Study casts new light on how consumers
view hotel brands by category. Hotel operators need to be aware of
the insights revealed in this research.�
While those in the industry see numerous differentiators and may say
there are several hotel categories, consumers found that most hotels fall
into four main categories:
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Low Cost Providers - Budget-conscious hotels that provide �just
the essentials� at the lowest price available.
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Upscale Service & Accommodations - Plush, luxurious hotels that
provide a full complement of fine amenities for both business and leisurely
escapes.
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Extended Stay Properties � Fully-equipped spacious suites complete
with a kitchen, refrigerator and microwave, making extended stays more
home-like.
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Fun, Family Focused - Family friendly properties that offer entertaining
amenities (like pool, game room, movies) at a reasonable price.
�As a hotel operator, it can be hard to take a step back and evaluate the
state of the industry from a consumer standpoint,� says Therese Gearhart,
vice president of marketing for Coca-Cola North America Foodservice &
Hospitality Division. This new research helps us gain insights into
how consumers truly view the categories of hotels currently available to
them.�
For example, many people within the industry would have a separate category
for luxury hotels, such as the Ritz-Carlton and the Intercontinental, and
other upscale hotels, such as the Westin and the Hyatt. This research,
however, shows that to a consumer, upscale is upscale, regardless of its
differentiating features and well-known brands.
Five Major Beverage Categories
Another key insight gleaned from the Study is that consumers divide
their beverage requirements into five major categories, or Beverage Occasion
Need States, during both leisure and business Lodging Occasions.
They include:
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Relax & Enjoy � 29 percent of consumers are looking for a relaxing
beverage with great taste that is good to slowly savor.
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Pure Refreshment � 23 percent of consumers want hydrating choices
that are healthy and have a light, fresh taste to make them feel like they
are taking care of themselves.
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Light & Smooth � 21 percent of consumers desire a soothing and
easy choice that is low in carbs/calories to help them make a good impression.
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On-The-Go, Popular Pick-Me-Up � 14 percent of consumers are looking
for an energy boost that is carbonated and easy to transport with a sweet,
appealing taste.
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Social Enhancement � 14 percent of consumers desire a treat or reward
that helps them have a good time in social situations or parties.
A Healthy Shift in Consumer Preferences
The largest of the Beverage Occasion Need States within lodging center
on refreshing hydration, low-carb, low-calorie beverages that make a good
impression. This insight reveals that in its simplest form, consumers
organize and choose beverages based upon decisions that mirror individual
lifestyles.
�Consumers are more health conscious than they were 10 years ago and
it shows within this Study,� says Todd Leach, senior channel marketing
manager for Coca-Cola North America Foodservice & Hospitality Division.
�A decade ago, sodas were the most dominant choice among hotel guests.
Today, individuals are making healthier choices at home by selecting fresh
juices and water to hydrate, and those same choices are being made during
their hotel stays.�
Hoteliers can take advantage of the fact that today�s guests are making
healthier choices. For example, although the Study found that 21
percent of Beverage Occasion Need States call for being �Light & Smooth,�
few hotels actively address this preference. Guests are spending
more time in their rooms to take advantage of private settings, upgraded
room environments and high-speed internet access. By providing more
healthy beverage options within the room, such as an in-room hospitality
program with bottled water and fresh juices, hoteliers can gain from the
growing demand for healthy options. Capitalizing on the gap between
current industry offerings and consumer needs can help hoteliers make wise
decisions in the future; a happier consumer is one who will return and,
consequently, this will be more profitable for the hotelier.
The �When and Where� of Beverage Patterns
As important as knowing lodging guests� traffic patterns is knowing
the time of day they are likely to use each of the beverage amenities.
Therefore, the Study outlines the beverage patterns of consumers, such
as when they are most likely to purchase a beverage and where that purchase
will happen. The majority of Beverage Occasions occur during the
morning (6 � 10:59 a.m.), with 40 percent of the purchases being made at
that time. This if followed by the evening (5 � 9:59 p.m.) time frame,
then the afternoon (11 a.m. � 4:59 p.m.) and finally the late evening (10
p.m. � 5:59 a.m.).
A closer look at the Study reveals that during the evening timeframe,
an average of 40 beverages are purchased from a vending machine but only
an average of 28 beverages are purchased from the mini-bar. Operators
could increase the latter number by providing better choices and more variety
within the mini-bar. Bottom line, consumers don�t want to be irritated
when looking for a beverage, so make it easy for them. If a hotel
can do that, a consumer will develop loyalty to the brand for not just
meeting, but exceeding their expectations.
Mixing Business with Pleasure
The Study highlights that while the Business with Pleasure Lodging Occasion
represents almost 20 percent of business traveler needs, very few hotel
chains are meeting this need in the minds of consumers.
�As a society in the 21st Century, we are working more and vacationing
less,� said Drew. �Many people are extending their business trips
to include a weekend stay, so that family members can join them on a mini-vacation.�
This new sector brings about new opportunities that could generate significant
foodservice revenues and profits. Whether a hotel features a pool,
a fitness room or a full-service spa, these amenities offer opportunities
to provide unique refreshments to its guests.
Conclusion
The insights from The World of Lodging and Beverages Study can help
hoteliers meet the challenges posed by today�s industry. Operators
want to build business, increase profit and set a standard of excellence.
Taking a look at their current beverage portfolio can help identify current
unmet needs and highlight where they have the ability to exceed their guests�
expectations.
�In review of this market research from Coca-Cola North America,� Morgan
continued, �there not only exists valuable directionals to increase the
sales volume of the profitable beverage segment for our portfolio of brands,
but it also provides multi-dimensional brand insight. This is another
example of how Coke has always played the role of a valued, strategic business
partner.�
The World of Lodging and Beverages Study was commissioned by The Coca-Cola
Company. This Case Study is one in a series on how Coca-Cola�s Foodservice
and Hospitality division partners with operators to help them achieve business
success. For more information and specific data from the Study, please
call your Coca-Cola sales representative.
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