The World of Lodging and Beverages Study
A Look at Beverages, With a Twist
New Research Provides Insights to Help Hoteliers
Increase Revenue and Satisfy Guests
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?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:
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:
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.
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
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.
|Also See:||Global Update: Who’s Where and Doing What / The Boutique Search Firm / August 2006|