Leading Hotels, a marketing and sales organization for more than 340 independent hotels, disbanded its in-house agency and moved its $5 million account to the newly formed shop. Company executives felt the group could improve its marketing services -- such as research, media planning, direct marketing and Internet management -- by teaming with Yesawich Pepperdine. A unit of EPB Communications, Yesawich Pepperdine will manage the new venture.
Leading Hotels holds a 51% stake, while Orlando-based Yesawich has the remaining stake. The new agency will have affiliate offices in Beverly Hills, Calif.; London; New York; and Orlando.
LMS hopes to lure individual hotels -- which may or may not be part of the Leading Hotels network -- as clients. Members for the five-star global hotel organization range from Hotel de Crillon in Paris to the Beverly Hills Hotel.
LUXURY MARKET AGENCY
Company executives also want to build the franchise as a broad luxury market agency, working with advertisers such as Jaguar Cars North America or LVMH Moet Hennessy Louis Vuitton. Luxury-oriented companies would be presented with unique marketing prospects, including the facility to tap into Leading Hotels' expansive customer database or the opportunity for in-room promotions.
"We've got a built-in audience of the most affluent customers in the world," said Yesawich Pepperdine President-CEO Peter Yesawich.
LMS executives said the luxury marketing challenge is to create brands with a modern feel, yet still have the distinction of "old money."
Leading Hotels seeks to do that with its own brand marketing: "a more modern, contemporary look, but still able to hold onto the five-star panache," said Lori Sachs, LMS managing director.
Driving the need to stay cutting-edge are shifting demographics that show people are becoming wealthier at a younger age. A survey of 500 affluent U.S. travelers released by Yesawich Pepperdine shows 60% of respondents between the ages of 35 to 54.
But the wealthy are not free spenders, the survey shows. Seventy percent said they are more interested in buying things that are comfortable than stylish. And keeping with the khakis and polo shirt chic of the new economy, a mere 14% said they prefer designer brands that are easily recognized or well-known. "You don't dial up the flash," Mr. Yesawich said. "You dial it down and speak to people in a way that's more personal to them."