NEW YORK (AdAge.com) -- The hospitality industry has taken a beating in the recession, reportedly one of its deepest slumps in decades. And while we're starting to see some blood returning to the economy, wary senior marketers are proceeding with a conscientious focus on the tenets of good marketing.
Such is the case with Philip McAveety, chief brand officer-exec VP of Starwood Hotels & Resorts Worldwide, who oversees all aspects of marketing and brand strategy globally for the company's nine brands, including Le Meridien, Westin, Sheraton, W, St. Regis, The Luxury Collection, Four Points by Sheraton, Aloft and Element. He also heads its loyalty program, Starwood Preferred Guest.
Starwood cut its stated worldwide advertising costs to $118 million in 2009 from $146 million in 2008, according to the company's 10-K regulatory filing. However, Mr. McAveety said the company did not reduce its overall marketing budget during the recession. "We might have changed the balance so that it was more focused on driving customers into the hotel, rather than brand-specific messaging, but we didn't cut," he said. "My feeling is that our job is to actually drive trial and drive loyalty."
Ad Age: The travel and tourism industry's taken such a hit. What marketing moves have you employed to stay above water?
Mr. McAveety: What we had to do was refocus on our core strengths. Our point of difference in the hospitality industry is innovation. We had to do some tough cost-management, but as we looked to rein in costs, it had to be things that weren't guest facing and wouldn't affect the guest experience.
Ad Age: What is the biggest marketing challenge you face in a global context?
Mr. McAveety: The biggest challenge we have in our business is the runway-to-product development is pretty long. When you spend $100 million, $200 million on building a hotel, you're building that for 40, 50 years. Our hotels are at different stages throughout the world. ...
The other big challenge/opportunity is that we have huge generational change. We've got a bit of a changing of the guard in the travel industry right now in terms of who our core customer is. It had been Boomers and Gen Xers, who are in their prime travel period, and Gen Yers are coming into it. ... The other big challenge for us is globalization. Different travelers have different needs. The brands that they see in their local marketplaces are the brands they are going to be looking for when they travel overseas.
Ad Age: Starwood plans to open in October a St. Regis hotel in central Bangkok. But Thailand has been rocked by protests and riots, and thus losing travelers. How is this affecting plans?
Mr. McAveety: Starwood currently operates 13 hotels in Thailand, and despite the recent current events we are on track to open six hotels in the region this year, including The St. Regis Bangkok. We recognize the challenges the tourism industry, and all businesses, in Thailand are facing right now, and Starwood remains committed to the region and are hopeful things will improve in the region by [the fourth quarter].