What are the challenges in marketing a global brand such as Hyatt in a complex market such as India? Of its 1,440 properties worldwide, 52 hotels are in India and the list is growing.
In this conversation, Deepa Krishnan examines the changes swirling in the Indian travel business while simultaneously explaining the nitty-gritty that distinguishes a successful chain from the also-rans. To watch the complete interview, visit YouTube.
Sreekant Khandekar: You came from Starbucks to Hyatt almost two years ago. What was your first impression of the hospitality business? What makes it unique?
Deepa Krishnan: The two industries are very different, but one thing that ties them together is customer experience. But in most other businesses, the interaction with the customer is for 30 seconds or three hours, perhaps. In our industry it can stretch over two days, which is the average length of stay. It is a very, very intense and deep interaction.
In the case of Hyatt, most of our 52 hotels in India (and Southwest Asia) are managed. It’s almost like looking after 52 business units with their own CEOs and dynamics. That’s unique to the hospitality industry.
Earlier, people went for accommodation. Now they are going for experiences.
Sreekant Khandekar: What are the big trends you see in the hospitality business?
Deepa Krishnan: We are seeing a demand for travel like never before. In 2019, people in India took 2.7 billion trips, and this number is expected to cross 5 billion in 2027. The amount of money people spent on travel was $150 billion, which is going to cross $410 billion in 2027.
After Covid, people seem to have decided that there is no point in postponing things in life; you might as well live it now. What we first saw the millennials doing is now being translated across all generations.
Apart from the numbers, people earlier went for accommodation. Now people are going for experiences. Those experiences range from wellness to luxury to immersive F&B to completely detox experiences where they don’t want to connect to the world.
We are also seeing the rise of solo travel.
There has been a huge rise in solo travel, especially among Gen Z and Millennials.
Sreekant Khandekar:Single travellers? Really?!
Deepa Krishnan: Yes, it’s a huge rise, especially among Gen Z and millennials.
The business has become far more complex and the reasons for travel are becoming more numerous.
Sreekant Khandekar: That’s extraordinary. And what explains this at a social level, you think?
Deepa Krishnan: It has to do with an improved infrastructure and affluence. And, ironically, in a world which is digitally so connected, people are increasingly feeling disconnected with themselves. And hence this desire to travel and reconnect.
The trend has been there for quite some time, but the surge has taken place in the last four or five years.
The other trend that we're seeing, which will never go away in India, is, of course, spiritual travel. We have hotels in places such as Haridwar, Bodh Gaya, Dharamshala and Dehradun, which offer amazing getaways.
So it's becoming far more complex because the reasons for travel are becoming more numerous.
The challenge, therefore, is to identify and differentiate the fad from the trend. We don't want to run after the fad but want to make fundamental changes and go after long-term trends.
Technology has been a great boon because it helps not only with feedback and pricing but also with demand generation, how we talk to clients and making the booking process seamless.
Overall, I really think that India has entered the golden era of hospitality, if I can put it that way – the dawn of India's hospitality era. We have to make sure that we grab every one of these opportunities coming our way and make sure we continue to give our guests a fantastic experience of care.
Most global brands have realised that you have to localise if you want to succeed in individual markets.
Sreekant Khandekar: Hyatt is a global brand, but each hotel property is essentially local with its own local context and culture. How do you reconcile these two opposite aspects of your business?
Deepa Krishnan: Most global brands have realised that while there are global frameworks that must be adhered to – because you do want to talk in one voice – you have to localise if you want to succeed in individual markets. Unless you do that, it's very difficult for consumers to connect to your brand. And that's the strategy that we clearly follow.
Sreekant Khandekar:Aren’t Indian brands such as a Taj or an Oberoi at an advantage when it comes to this?
Deepa Krishnan: Well, we are certainly not trying to run away from our heritage, right? We are a global and international brand, and that's what people love about us. I believe that you have to stay true to your roots.
If you look at the travellers in India, they are well travelled and are, in fact, looking for the best of global and local experiences. That’s an advantage because we have systems, processes, and learnings from markets across the world.
Sreekant Khandekar:You have different target segments for the same hotel property – say, business travellers on weekdays, families on weekends and then customers wanting to hold conferences or weddings. Is it easy to communicate with them distinctly without getting your communication signals mixed up?
Deepa Krishnan: There’s no overlap in our communication. We have a very specific strategy and message for each segment. The power of digital is that you're able to almost get to a segment of one, right? So when you're able to target them very specifically, the answer lies in the communication that you create and the media channels that you employ.
We do not have a ‘one size fits all’ approach at all.
Sreekant Khandekar: In an ideal world, what would you want advertising to do for you?
Deepa Krishnan: Well, advertising is certainly supposed to drive traffic to our websites and convert that into bookings. Having said that, there could be different types of campaigns. There could be campaigns where you're only talking about, let's say, building a brand, where you're essentially focusing on the upper funnel, which is driving awareness and consideration.
But hard-working campaigns are certainly expecting our guests to come to a website to check the rates and, you know, book and then eventually come and experience a brand. That's the mandate for marketing.
Sreekant Khandekar:Hotel chains like Hyatt pick up business from a variety of channels: OTAs (online travel aggregators), tour operators or global systems for corporate travel. But obviously you’d like potential customers to book on your website. That’s a big challenge, isn’t it, considering how powerful these booking platforms are?
Deepa Krishnan:You are right, there are multiple channels. I'll also add one which you didn't mention, which is direct business. A lot of people today will just call up the hotel because they've experienced it in the past.
That's where the strength of our loyalty programme comes in. Globally, World of Hyatt is a very strong loyalty programme. We have more than 54 million consumers or guests, of which 2.1 million are based in India and Southwest Asia, right? Now, 89% of these members book directly throughHyatt.com. And interestingly, Hyatt has almost 33% more loyalty members per hotel than any competitor in India. So, that's a huge strength.
Sreekant Khandekar:How did you manage that kind of success?
Deepa Krishnan:One, a loyalty programme has to really deliver value. Year after year, independent organisations have rated the value of a point that a guest gets on World of Hyatt four to five times higher than what the competition offers.
Two, it goes back to this whole purpose of Hyatt, which is care. And that's rooted in every experience we provide, because it's not enough just to get a guest to your hotel: you have to get them to come back again and again.
And that only happens when everybody in your organisation lives and breathes this purpose.
Sreekant Khandekar: If your loyalty point is so much more valuable than your competition, aren’t you effectively offering a discount?
Deepa Krishnan: In a discount, you are cutting the price even before the customer has experienced your brand. That’s not how loyalty works. Loyalty’s logic is that when customers show love for our brand, it’s our responsibility to return that many times over.
It’s a circular process, and the idea is two-fold. One is to retain the guest, and the other is to ensure that the guest moves to the next tier and gets even more benefits. You start with somebody who's really new at loyalty, and you convert them to an ambassador, someone with irrational loyalty who just can't explain the love that they have for the brand.
For people who are not members, we target the upper, middle and lower funnel. So, it really starts with somebody who's just thinking about a holiday, then thinking about a holiday in Goa, and I want to reach them and get them to think about Brand Hyatt Goa.
There is a strategy for every level, for every channel. But of course, our endeavour is to make sure more and more consumers book directly. It is more profitable and allows us to give guests the best rates.
Sreekant Khandekar: Customer experience in a hotel involves hundreds of employees from every department at every possible location within a hotel. It’s tough getting them all to care equally, isn’t it?
Deepa Krishnan: Yes, it is a tough one.
It really goes back to the fundamentals of recruiting and training the right people and getting them aligned to the larger purpose. It's really important to remind ourselves what the brand stands for.
And that's what all our teams excel at. We train, and we also reward and empower them. And that's why our guests keep coming back.
Sreekant Khandekar: Customer reviews are everywhere. How important are they from your point of view?
Deepa Krishnan: They are critical. We are so blessed that, unlike 15-20 years ago, we get feedback immediately and can fix things that are not working. What is important is how you respond. In today’s world, there is so much data that it’s easy to get lost in it. How are we going to create actionable insights? That is the question.
Sreekant Khandekar: How do you reconcile your long-term marketing plan with the challenge of real-time demand? For example, let’s say there are suddenly a lot of empty rooms that need to be filled.
Deepa Krishnan: There's a two-pronged approach. From a marketing standpoint, we have an annual perspective, and that's really the bedrock of what we want to achieve – the metrics, our strategic objectives, that kind of thing.
Lead times are becoming shorter in our business. The time from the search to the time they come to stay at the property has dropped from six months to even 30 days and sometimes even less than that. Each property is different.
Both the demand generation mechanism and the marketing campaigns which feed into the business metric are very agile. And this is an overlay, of course, on the annual marketing plan, which is more upper funnel and mid funnel.