Recession Lesson: Throw Out Your Old Algorithms

Q&A With John Wallis, Global Head of Marketing and Brand Strategy, Hyatt

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NEW YORK (AdAge.com) -- After 28 years at Hyatt, John Wallis was named head of marketing at the hotel chain in November of last year. Resigned not to let the recession limit Hyatt's marketing activity, he launched a massive marketing effort. The campaign, which is intended to introduce its redesigned loyalty program, awards three winners -- one from North America, Europe and Asia -- of an essay contest 365 free nights at any Hyatt hotel worldwide; another 30,000 people will win one free night. More than 87,000 people, 79% of which were customers, entered an essay.

John Wallis, global head of marketing and brand strategy, Hyatt
John Wallis, global head of marketing and brand strategy, Hyatt
Ad Age: What has the past year been like for Hyatt?

Mr. Wallis: Like everybody else, we have been totally walloped. The way we look at our business is from Sept. 16, 2008, when Lehman Brothers went under, Corporate America stopped traveling, and on top of that, we had a situation in the beginning of the year with AIG where there was a lot of negativity about even having business meetings. So our transient business and group business got hit in a manner we hadn't seen before. We had seen [setbacks] before but never one that moved so quickly on a global basis.

Ad Age: How have recessionary pressures affected your role, responsibilities and the expectations placed upon you?

Mr. Wallis: The current economy has increased the importance of marketing within our company, because we have all agreed that in an uncluttered market, we have a great opportunity to increase market share. For me, at the end of the day, it's all about brands and how you're positioning your brand and how you're creating value for your brand and trying to avoid being tied up in the commodity of business and instead being in the brand-building business.

Ad Age: In March, you shepherded one of the company's largest global marketing efforts called "The Big Welcome." The combined spend for print and online was $6 million. What have you learned from this campaign in terms of what works for you and what doesn't?

Mr. Wallis: Based on the data we now have and are reviewing, you will find us spending a much higher amount of our dollars on online marketing than print going forward. We did certain interactive banners that were a tremendous success. I'm not certain if going forward we might spend more money on banner advertising than we will on Google search advertising. That's still up for grabs, but it allows us now to have a very good comparison of what creates the better marketing ROI, especially in our industry, where we have such a strong online component of bookings. But at least now we are able to judge what's working.

Ad Age: Why launch one of the biggest marketing efforts in company history now?

Mr. Wallis: We wanted to go back to the consumer because after January and February everywhere you turned people were saying don't stay in hotels. It also came to a state where it was illegal to stay in a hotel. But it was not only to go after our customer base but our competitive base as well. And even more than that, it was to tell our own individual hotels that we are out there talking to our customers and marketing, not hiding. We are not going to cut our marketing budgets, we are here, come and join us. So you had this combined effect of customer satisfaction and loyalty, employee engagement and a big marketing initiative, which tied back straight into operations, customer loyalty and both customer and employee engagement.

Ad Age: How will you build off this effort?

Mr. Wallis: We are going back into the market in September big time with another effort that will be just about the same scale. It will be a crime to have created what we have done and then rest on our laurels. I have to tell you I think we are taking the right approach, but we have a long way to go.

Ad Age: Has one part of the marketing mix increased in importance during the downturn?

Mr. Wallis: The company that better understands its analytics can gain market share. We are spending a lot of time really focusing on what our customers are telling us both by stay pattern and by stay behavior. From Sept. 16 onward, you could throw away all of your old travel databases and algorithms because so many people who used to travel lost their jobs.

Ad Age: Have you shifted marketing spending to reflect that?

Mr. Wallis: It has shifted dramatically and it will continue over time because our goal is to become a database driven company that's in the hotel business.

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