Orient-Express Hotels has announced plans to operate all of its hotels and travel experiences under a new brand name, Belmond, effective March 10.
Behind an initial US$5 million branding investment, which will be supplemented by another US$10 million over subsequent years, is the goal to help consumers better connect the dots between the individual properties, stimulate increased stays across the portfolio and, therefore, grow revenue. At the same time, a cohesive brand strategy is expected to help drive development and third-party management opportunities, according to President and CEO John Scott.
Scott told HOTELS Magazine that research over the past year has revealed repeat business to individual OEH property has been strong, and as high as 23% to 28%. However, crossover visits to other OEH properties was only in the 3% range, and by wrapping an umbrella brand around the collection of 45 travel experiences he thinks the company can double crossover business that alone could result in two additional occupancy points. “One occupancy point is worth as much as US$8 million in gross revenues,” Scott said. “If we are able to increase that and attract new consumers we can get an even greater uplift. In addition, we have calculated that crossover visitors outspend first-time visitors by up to 13%.”
Scott added that he expects to see some tangible benefit of the rebranding this year, and much more next year and through 2018. “It is probably three years to get deep penetration on a new brand,” he said.
The initial investment will include new website platforms, re-engineered customer relationship management tools and the company’s first ever large-scale print and online media advertising campaign led by Ralph Aruzza, chief sales and marketing officer.
As part of the branding execution process, the Belmond name will physically appear above each individual hotel name. At the same time, Scott said the Belmond brand will not be “flashing on the building,” adding that while it will be subtle, it is not a sub-brand. “It will be Belmond with a new icon on top, but respectful of individual property names,” he said. “The biggest challenge is internally and recognizing that this is not a migration to a chain approach. Belmond helps consumers connect the dots and facilitates understanding of the broader collection. But it doesn’t take away, for example, from the Copacabana Palace, The Cipriani or The Ritz Madrid.”
Scott said this move also will help with the company’s growth prospects. “We have been approached by owners who want to see a more brand-forward approach and the ability to become a part of something bigger, and the Belmond brand will enhance that story,” he said. “Where we will differentiate again from chain-like luxury competitors is in the fact that many owners have existing names they don’t want to lose. They have the advantage of having both with us.”
While Scott, would not commit to any pending deals, he said there is “more to come and I expect to announce some positive momentum on this front this year.”
As part of this deal, the company will retain its long-term license agreement with SNCF, the French transportation company that owns the Orient-Express trademark, for the Venice Simplon-Orient-Express train. At the corporate level, the company will migrate away from the Orient-Express Hotels Ltd. name and ticker symbol over the course of time, according to Scott, with the initial focus on consumer facing initiatives.
“I told the team today that we will continue to operate in way that makes us distinct,” Scott said. “Our properties are one of a kind and we will celebrate that core element that makes us a success and separates us from luxury chain brands. But Belmond will enable us to communicate with one voice that we are more than one property or train. We are a global collection of unique assets, and if you like one, you will like the rest and can experience the world with Belmond.”