JWT’s AnxietyIndex is designed as a place to discuss how brands and consumers are responding to the global recession. With daily content updates, AnxietyIndex.com includes contributions from around JWT’s network, offering a truly global perspective.
Dubai’s hotel industry has been hard-hit by the downturn. In the first half of 2009, revenue per available room fell as much as 35 percent compared to the previous year, according to a report from STR Global and Deloitte & Touche Middle East. (By contrast, hotels in the 22 Middle East cities surveyed experienced an overall drop of 17 percent.)
In the midst of Dubai’s hotel price wars, one approach stands out. Taking a cue from Priceline’s “Name your own price” option, the Monarch has launched a “Name your price for luxury” online auction. The process is simple: Just enter the five-star hotel’s Web site and bid on a room, a spa treatment, a meal or the entire package.All bidders get a 5 percent discount at the Mizaan restaurant.
At the least, the tactic is likely to help generate traffic to the Monarch’s spa and restaurants. And, most important, it manages to achieve three things: connect with consumers by engaging them in the auction game; create a memorable experience in contrast to a clutter of bland promotions; and build a database where participants are matched with their preferred hotel experience. Faced with a crisis, it’s always wise to look sideways from time to time.
While Czech tourism was expected to decline this year, the traditional wine-growing region in the south is seeing more visitors. Some of this is due to more Czechs taking staycations (saving money by sticking to their home country instead of traveling abroad), but vintners believe that certification of wineries in the area has also helped. The certification logo—a visual pun on a tulip as a wine glass, using the colors of the Czech flag—guarantees the quality of wine cellars, accommodations in the area, restaurants with wine themes, etc. As many as 71 percent of certified facilities have noticed more tourists compared to last year.
At a time when anxiety and fear are prevalent, there’s a demand for safety and security. Cautious consumers want assurance that they’ll get a certain level of quality for their money. With a third-party guarantee of quality, they’re more likely to feel that it’s OK to treat themselves.
How much are consumers willing to sacrifice for an affordable vacation? Certainly, first-class seats, high-season bookings and fine dining. But how about a bed in their hotel room? A “Survivor Package” created by the Rancho Bernardo Inn, a luxury resort near San Diego, allows guests to camp out in a stripped-down room (i.e., no bed, no linens, not even toilet paper) and pay just $19 a night.
The more amenities added, the more guests pay, up to $219 for a regular room. Adding a bed is $20 more; for a bed plus toiletries (but no lights, linens or AC), shell out $59. The promotion, which quickly sold out, had drawn 240 reservations at the $19 rate and 116 at the $39 rate as of mid-August.
While this is an interesting tactic that’s garnered buzz and customers—no easy feat at a time when occupancy rates are way down, especially for higher-end hotels—it seems better suited for a down-market brand. The resort is unlikely to win much repeat business from guests who paid bottom dollar. And for an upscale hotel, this feels terribly kitschy and ultimately too off-brand. Photo source
Frequent flyers can now enjoy unlimited trips for a month on JetBlue’s “All-You-Can-Jet” Pass, which hasn’t launched yet but is already garnering attention. For just $599, the Pass will let you fly to 50-plus of JetBlue’s designated cities (domestic and international) as often as you like, from Sept. 8 to Oct. 8, 2009.
Of course, the deal only pays for itself if you plan to travel multiple times between those choice cities within the month.
However, both the veteran traveler and those who’ve never before sampled the jetset lifestyle may have good reason to consider the Pass. In these stressful times, multiple escapades can provide some relief.
Now let’s just see if any hotels will make similar offers.
On holiday in one of the most remote places in India, I was surprised to meet a number of people who were there on a long break, having no job to rush back to. Their stories were similar: They used to be expats working in London (from Australia, New Zealand, the U.S., etc.), they were made redundant (expats tend to be the first to go), and before going back home, they’d decided to take an extended trip—something they’d always wanted to do but never had the time for. They stay in guesthouses or do home stays; eat in local eateries; take long-distance buses rather than fly or hire taxis; go on meditation treks and walks. They’re on relatively modest budgets and things aren’t always comfortable, but the experience, they say, is very fulfilling and inspiring.
Such “gap year” travel, along with doing volunteer projects overseas, is apparently booming. Although in general travelers have greatly cut back on overseas holidays during this recession, people are being forced to re-evaluate their priorities and values—so while spending more to make the most of one’s limited holiday may no longer be viable, investing in a long break now seems like a good way to spend one’s limited money. People will spend on what’s meaningful.
Being made redundant is obviously something you’d rather avoid, but the people I met looked as though they’d gained much more than they probably would have were they still employed, at least from a life-fulfillment point of view.
With banks all over the world in a precarious situation, Citibank has found a way to enhance its performance in Bahrain. In a somewhat unexpected twist, Citibank is leveraging consumer loyalty in the airline business to push its own products by joining forces with Gulf Air: Members of Gulf Air’s frequent flyer program will be rewarded with miles for buying Citibank investment products. It’s as simple as that.
With the arrival of the summer travel season, such a promotion could not have come at a better time. For Gulf Air, this is an opportunity to use what it’s learned about its best customers to create a stronger communication strategy. And in terms of building brand loyalty in a recession-sensitive industry, Gulf Air is not only broadening customer experiences, it’s giving its brand adopters a new benefit to doing business with the airline. Looks like a win/win for both brands in the region.
Hit by the double whammy of the economic downturn and the N1H1 flu outbreak, hotels chains in Cancun came up with an innovative idea: the flu-free guarantee campaign. Guests who have symptoms within 14 days of their departure and can produce the blood tests to prove it will get a free vacation a year for three consecutive years.
Desperate times call for desperate measures: Consider that in May, 80 percent of cruises and hotel reservations were canceled in Mexico; Mexican airports reported a 50 percent drop in traffic. Tourism here employs more than 2 million people and accounts for about 8 percent of the economy. Foreign tourism earned Mexico $13.3 billion last year. Mexico’s tourism minister has estimated that the swine flu could cost the economy around $2.3 billion.
In times of uncertainty, people want safety and guarantee. In this case, the uncertainty concerns not only their finances but their health—and this guarantee works on both levels. It seems to be working: Hotels that are part of this expect to see 90 percent occupancy.
Royal JordanianAirlines has just launched a marketing initiative that’s not about free upgrades or price reductions. Its “Get to Know Your World” competition is simply about consumer engagement.
The mechanism is simple enough: Every Tuesday for eight weeks, Royal Jordanian is publishing ads featuring a photo of a well-known landmark. Contestants must enter the name of the corresponding city on the airline’s Web site. The prize: free tickets with Royal Jordanian to these very places.
The results: Royal Jordanian drives traffic to its site, gets consumers to interact with its brand, generates word-of-mouth and stimulates demand. In this recession-sensitive industry and in this part of the world, where brand-driven contests are not the norm, this effort is spot-on. Today’s prospective passengers are not being drawn in by bargains and promotions. Royal Jordanian is opting for a differentiating and less gimmicky approach, one that has greater potential to further brand loyalty. After all, when offers are comparable, the power of the brand can make all the difference.
Here’s an attempt by P&O Ferries from the U.K. to encourage people to take a holiday because they’re having to work so tirelessly during the recession. The TV advertisement, which is part of a full campaign, focuses on a dog groomer accompanied by the line “Because you’ve been working like a dog,” a florist with “Because Britain isn’t blooming” and butcher with “Because you haven’t sold a sausage all year.” All dreadful puns, but we get the message.
The PR for this campaign states that it is trying to put some pride back into Britain. The interesting thing here is the generic promotion of holidays, which many people will be deferring as a luxury. The nudge from P&O is that a holiday is important reward for all that hard work, and it needn’t be too expensive. As the recession pits category against category as much as brand versus brand, this seems like a relevant message, if very difficult to brand.
Bogotá Despierta (Bogotá Awake) is a clever program designed to promote local retailers to slumbering shoppers. On certain holiday weekends, including Christmas, St. Valentine’s Day and, most recently, Mother’s Day, the entire city puts itself at the service of commerce. Shopping malls and the city’s biggest commercial areas extend their hours until midnight, and they put on concerts and give prizes and discounts to shoppers. The city plays its part, providing added police and public transportation services.
The impact is huge. According to the economic research unit of FENALCO (the National Federation of Commerce), which created the program, Bogotá Despierta not only generates more sales but promotes employment and tourism. That’s what I call being “awake” in a time of crisis.
With banks all over the world in a precarious situation, Citibank has found a way to enhance its performance in Bahrain. In a somewhat unexpected twist, Citibank is leveraging consumer loyalty in the airline business to push its own products by joining forces with Gulf Air: Members of Gulf Air’s frequent flyer program will be rewarded with miles for buying Citibank investment products. It’s as simple as that.
Bogotá Despierta (Bogotá Awake) is a clever program designed to promote local retailers to slumbering shoppers. On certain holiday weekends, including Christmas, St. Valentine’s Day and, most recently, Mother’s Day, the entire city puts itself at the service of commerce. Shopping malls and the city’s biggest commercial areas extend their hours until midnight, and they put on concerts and give prizes and discounts to shoppers. The city plays its part, providing added police and public transportation services.
