The current issue of Forbes (link may require subscription) has a report on Starwood boss Steven Heyer’s plan to use his hotels as a forum for other companies to market their products. The eclectic range Starwood has includes Levi Strauss (for uniforms) Starbucks and even Victoria’s Secret. As an accretive strategy it is singularly exceptional and the chain appears already to have reaped riched dividends (an additional $6billion) in revenue with considerably more to be had as the strategy unfolds.
The credit card industry was one of the very first to use affinity marketing to enhance revenues and profits with Citibank being one of the first to link the American Airlines mileage program to its card. Since then, the explosion in affinity marketing has largely missed the hospitality industry. And notably, given Citi’s link to AA, the airlines industry has all but missed the boat (plane) on that one. Airlines may well have seen myriad brands within their equipment as being dilutive but as Heyer notes “if we were to put a big sign in a Westin room that said ‘Buy one, get one free’ and there was a big picture of a roast turkey dinner–I would run from that brand as fast as I could.”
Value added as opposed to more for less is the essence of affinity marketing. In that respect, Starwood is proving itself to be a clear trend-setter. Oddly, the ultimate marketing guru in the airline world (if not the universe), Richard Branson of Virgin seems not to be taken up with the idea. Hard to imagine Bulgari leather seats or the imprimatur of any of the over 50 luxury brands from LVMH Moët Hennessy on a Virgin flight can do anything but push his already soaring stock higher.