Brand Health Check: Premier Inn

LONDON - Celebrity-led ads have done little to improve the budget hotel chain's fortunes

Brand Health Check: Premier Inn

Lenny Henry has a track record of enjoying himself in hotels - as tabloid-readers with long memories may recall. The comedian fronts the  £9m year-long campaign to promote the ‘quality, comfort and value' of staying at Premier Inn, foll­owing a £13m brand overhaul.

However, it seems that the public has not been inspired by his fun-filled antics. Premier Inn's poor sales have dragged down parent company Whitbread's overall financial results, which otherwise showed growth in its Costa Coffee chain and pub brands, such as Beefeater and Brewers Fayre.

Despite slashing weekend prices in an attempt to raise occupancy levels, and introducing a £58 honeymoon deal that included a two-night stay includ­ing dinner, breakfast and a gift hamper, Premier Inn posted a 9.4% fall in revenue per room.

The chain is also hoping to grab a bigger share of the business market, and Whitbread chief executive John Parker has claimed that business travellers are trading down toPremier Inn from more expensive three- and four-star hotels. However, he also acknowledged that he had yet to see ‘substantive signs of improvement in the economic environment'.

Given this picture, what else can Premier Inn do to capture the public imagination? We asked John Hiney, managing director of Carlson Market­ing, whose clients include the De Vere luxury hotels and leisure brand, and Tony Effik, chief strategy officer at Publicis Modem, which works on budget airline easyJet's account.

 

John Hiney managing director, Carlson Marketing

A senior client recently told me that this year had been the toughest he could remember - all the pleasure of the job had disappeared. Added to the tighter budgets, harder targets and longer hours, there was the need to stay in ‘rougher' hotels when away on business.

Now, he frequently gives up precious family time to stay on the side of a motor­way with a mixed bag of disgruntled busi­nessmen and weary holidaymakers.

True, it's only one of a number of difficult business decisions that have had to be taken over the past 18 months, but it's one that really grates.

Despite revenues per room being down 9.4%, Premier Inn is still ahead of a market that has seen an overall fall of 12%. Its price discounts, intended to appeal to the dual audiences of business and leisure travellers, have led the chain to benefit from the people downshifting. However, discounting in tough times means the company will take a long time to return to required room rates when the green shoots of recovery appear. So, where next for Premier Inn?

Remedy

  • Reinforce broadcast advertising by targeting business and leisure audiences separately, with relevant, tailored messaging.
  • Finance directors are motivated by price, but guests will only return because of quality in terms of room, service and comfort. Ensure that the overall experience is positive.
  • Add real value - consider business and leisure loyalty programmes to rein-for­ce the brand's benefits, long term.
  • Position the chain as the sensible choice for all - now and in the future. Give guests who have traded down clear reasons to choose Premier Inn again.

Tony Effik chief strategy officer, Publicis Modem

It is in tough economic times that consumers reassess high-cost brands.

Last year, we started to see a rise in sales at deep discounters, as consumers traded down and the financial outlook appeared more bleak.

Unlike those budget retailers, however, Premier Inn has not been able to take advantage of the downturn.

Instead, Britain's biggest hotel brand has experienced a decline in bookings, and it has slashed its room rates through­out the summer months.

Lenny Henry is a legend, but Premier Inn's broadcast campaign hasn't done the trick so far. The problem isn't Lenny - it's that the campaign has got him saying all the wrong things.

The advertising seems to suggest that, if a star like Lenny can stay at a Premier Inn, then they are good enough for anybody.  However, in a cyclical business, the problem isn't just about paying less - it's about whether you should go at all.

It has used the wrong frame of reference, and has not made it clear when people should be using their service - either for business or pleasure.

Remedy

  • Stick with Lenny. The investment has built up equity.
  • Change the frame of reference to show that , even in the recession, people don't need to alter their business practices or lifestyle to stay at a Premier Inn.
  • For the non-leisure audience, drama­tise the benefits of travel and face-to-face business.
  • The honeymoon promotion was a great idea. Own more scenarios like this for other types of leisure travel, such as anniversaries and romantic weekends away.