At the depth of the global recession, Shangri-la Hotels decided to expand worldwide. But it had to do so without any price-cutting or undermining its brand. The solution combined a fresh proposition and an effective execution strategy.
Shangri-La, an Asian-based luxury hotel group, decided in 2009 to challenge the top global players in the category. With luxury hotel sales dropping because of the recession, this was a tall order, requiring the sale of 10 more room-stays per hotel per night to meet its target. But it had to do this without undermining its luxury credentials and weakening the brand just when it needed to be strongest. Outside Asia, Shangri-La was an unknown quantity to premium business travelers, who have deeply ingrained habits, reinforced by loyalty programmes. Shangri-la identified these travelers as one key audience; the other was its 66,000 staff. It came up with a proposition that strongly resonated with both audiences: that at the Shangri-la guests were treated not as kings, but as kin, or family. It made staff proud, while business travelers received it with a sense of relief. But it required a sophisticated communications strategy involving all employees. The proposition was translated into principles of staff behaviour, staff training was redesigned, and customer interactions monitored and measured.
The campaign beat its business objective by more than fourfold. Sales volume in both room-nights and revenue per rooms increased substantially and well ahead of category growth.