Press Releases - 2003
Joie de Vivre Hospitality's Hotel Matchmaker® Frequently Asked Questions
Chip Conley, Founder and CEO of Joie de Vivre Hospitality, talks about why the company created Yvette, the Hotel Matchmaker, and the revolutionary implications for the hospitality industry.
INDUSTRY IMPLICATIONS OF ONLINE BOOKING
Question: Why is the introduction of Yvette, the Hotel Matchmaker, so important to the hotel industry?
In the past two years, the hotel industry has experienced its most tremendous structural change ever in terms of its travel distribution model. The traveling public has quickly migrated to booking their travel purchases online because they realized that a "hotel supermarket" (like Expedia or Hotels.com) allowed them to efficiently tap into the post-9/11/01 discounts that were popping up in the travel industry. This new method of distribution has led to an "efficient market" which drives down hotel room rates in sort of a reverse auction format as hoteliers realize that in order to fill empty rooms they have to place product on the shelves of these supermarkets at discounted prices. To make matters worse, the fastest growing segment of the travel websites is the Expedia and Hotels.com "merchant model" which charges the hotels a 25% commission on each room sold off their shelves. So, the hotel industry is suffering from lower occupancy and average rooms rates and dramatically higher commissions from this new distribution model. The big hotel chains consider it the most catastrophic change in the hotel industry in decades. And, while booking online makes lots of sense for airline tickets and rental cars which are basically commodity products, it poses challenges for choosing a hotel which is a more personalized product (you sleep with the product, shower with it, and have a more prolonged and deeper experience with the product). Yvette solves this by personalizing the hotel booking experience and driving consumer business to our own website for booking rooms, which means we don't have to pay the big commissions to the hotel supermarkets.
Question: Why is this new web launch important to Joie de Vivre?
No American metropolitan hotel market has ever suffered as large of a drop in revenue as San Francisco/Silicon Valley has in the past 3 years. And with 24 Bay Area hotels (more than any other hotelier), Joie de Vivre is particularly vulnerable since all of our hotels are in this depressed region. Fortunately, more than 80% of our hotels gained market share in 2002 versus their local competitors, but we've seen our hotels become more and more reliant on Expedia and Hotels.com. We have a great relationship with both of those companies and will continue putting our hotel product on their supermarket shelves, but we realized a few months ago that our only salvation toward better profitability was to drive more consumers to our website, www.jdvhospitality.com. And, the only way we could do that (other than through normal website optimization which has become a standard trick of the trade) was to create the coolest little boutique shop (our website) with the most personalized shopping experience to compete with the more generic supermarkets (Expedia and the like). Additionally, we're offering a low price guarantee for our customers which means that our cool little shop matches the prices of what a customer might find at the hotel supermarkets. This price parity means that a customer doesn't have to shop multiple websites to find the best price - all they have to do is come to our site to be assured the lowest price.
Question: Tell us more about the trend toward online booking of hotel reservations.
The statistics are remarkable: (1) Today, two-thirds of Americans who travel use the Internet either for research or to book their travel. This number grows to 75% for frequent travelers (5 or more trips annually); (2) Between 1997 and 2002, the number of American travelers who used the Internet to book their reservations grew from 5.3 million to 39 million annually; (3) Women represent 53% of the online travel researchers and 56% of the online travel bookers (these numbers have grown substantially since 2001 and are part of the appeal of the psychographically-based personality test of Yvette); (4) By 2005, 23% of all domestic travel will be booked through online channels...this compares with just 2% three years ago. This trend is even more pronounced in a region like the Bay Area where travelers coming to visit us tend to be more sophisticated and tech-savvy.
Question: Why do consumers love using the Internet for travel planning and purchasing?
There are many reasons including the 24-hour-a-day access, convenience, reliability and visual nature of the content, access to last-minute discounts and travel information, and the ability to engage in competitive shopping. This is why travel ranks as the largest e-commerce category on the Web.
Question: How does this new Joie de Vivre website compare to the consumer experience on Expedia or Hotels.com?
It could be compared to the difference between buying shoes at Niketown versus Foot Locker. The hotel supermarkets provide the most plentiful supply of product at the lowest prices, but the experience can feel relatively generic. Lee Thomas, one of the executives at Yamamoto Moss (a well-known Minneapolis-based brand strategy and design firm), recently wrote a paper entitled "Why Leisure Travel Companies Should Infuse Hospitality into their Web Strategy." In it, he writes that travel companies should try to transform the "cold, technical channel which is web booking into a warm, inviting place where brand-loyal guests feel nurtured and gratified." I read this groundbreaking paper as we were putting the finishing touches on Yvette and got a huge smile on my face because that's exactly what we're trying to do. Our online experience should be as memorable and personalized as our hotel experience. Joie de Vivre won the "Experience Stager of the Year" award in Las Vegas in 2001 from the authors of the best-selling book, "The Experience Economy," beating out Disney, Cirque du Soleil, and Ian Schrager Hotels so we've always been focused on creating a compelling guest experience, but now we're just making sure it starts with the potential guest's first experience with our website.
MASS CUSTOMIZATION
Question: How does the Hotel Matchmaker tap into Joie de Vivre's roots as a boutique hotelier that's been around since 1987?
Since our start when I bought a run-down motel in San Francisco's tough Tenderloin district, our approach to creating hotels has been very niche-oriented. Each time we create a hotel, we imagine a magazine that helps define the hotel. For example, for that first hotel which became The Phoenix, my goal was to create a cool and funky hotel for young people and traveling musicians. We chose Rolling Stone magazine as the brand personality we wanted to emulate and came up with 5 words that describe the hotel we wanted to create: "funky, irreverent, adventurous, cool, and young-at-heart." Everything we did in creating that hotel - from the art in the guest rooms to the unique services we offered - came back to those 5 words. This approach has helped us create soulful little landmarks full of character and we've learned over time that the guests who tend to fall in love with a certain Joie de Vivre boutique hotel would use those same aspirational words to describe themselves so the hotel is a mirror for the customers. The hotel provides an identity refreshment for the customer. That's why we've built such loyalty from our Joie de Vivre guests. In thinking about how we were going to upgrade our website, we took all of this into account and it led us to creating the personality test that drives the Hotel Matchmaker process. This psychographic approach (versus demographics) is the direction that American marketing is heading in. But in some ways, our lack of a singular product type like W Hotels or Ian Schrager had historically worked to our disadvantage as it's hard to describe a Joie de Vivre hotel other than to say each one is different. Introducing Yvette, the Hotel Matchmaker takes this brand problem and turns it into our greatest marketing weapon: the fact we have a hotel for every personality.
Question: Why will web customers prefer this method of booking a hotel?
It's more fun. The fact that Yvette serves up 5 hotels, 2 locals, and 6 things to do that match the personality of the customer (based upon the quick test they've taken) is so cool. It taps into a successfully marketing strategy called "mass customization," the opportunity for customers to feel that a product or service has been created almost solely for them. Peter Yesawich, the culture and trend-spotting guru of the hospitality industry, has found in his surveys of travelers that nearly 40% of Internet users would be willing to pay 20% more for customized products or services. He goes on to say, "If ever there was an industry that benefits from personalization, it is the hotel industry." This finding is good news for an industry which has seen plummeting hotel room rates. Serve up a customized product in which the brand is a mirror for the customer and you will be rewarded with higher room rates. If consumers make decisions with their head and commitments with their hearts, I think we've found a way to capture the hearts of our potential hotel guests.
Question: How accurate are the results? Has the Hotel Matchmaker been beta-tested?
We've had all kinds of people take the test and have been amazed at the accuracy of the results. Of course, it depends on the mood of the person taking the test, but Yvette gives a couple of helpful hints about how to take the test in the most effective manner.
CREATING YVETTE
Question: Why did you choose a cartoon character like Yvette to launch the Hotel Matchmaker?
First of all, I have to compliment JdV's Creative Services department since they had so much to do with creating Yvette and refining this new approach to our website. When we determined in early 2003 that we needed to do something audacious and creative to draw customers to our website, I brainstormed with our VP of Creative Services, Rob Delamater and Brand Marketing Director, Sandy Baldonado. Rob was persuasive in his belief that we needed a character to take customers through the personality test. Our graphic designer/art director William Ulrich created Yvette whose personality matches the company - she's quirky, eclectic, stylish, in-the-know, and friendly. We chose a French name because of the name of our company and we chose a woman because we believed that a large percentage of the people taking the test would be women. We have big plans for Yvette as she's a perfect ambassador not just for Joie de Vivre, but also for the San Francisco Bay Area.
Question: How did you arrive at the 5 questions associated with the personality test?
At first, we planned to list about 40 adjectives and let the customer choose the 5 words that best describe themselves. Frankly, that process didn't create matches that are nearly as good as what the 5 questions have done. These 5 questions deal with all kinds of aspects of your life: how you connect with others, your outside interests, your ideal habitat, how others see you, and the kind of people you admire. As a whole, these 5 questions help capture the essence of who you are - at least in the moment you're taking the test and based upon the kind of person you want to be on your trip to the Bay Area.
Question: Does Yvette replace the travel agent?
Not necessarily, in fact, we believe that travel agents can use Yvette as a tool to help their customers find the perfect hotel. The truth is, though, that consumers are using travel agents less and less for leisure travel in the era of the Internet. But, Travelocity can't replace the kind of insight a travel agent might have about linking you with the right hotel for you. Given the shrinking influence of travel agents in helping facilitate consumers' travel decisions, Yvette is being introduced at just the right time.
Question: Tell me more about why you chose locals and "things to do" to highlight.
When I travel to a place I'm not familiar with, I'm most interested in talking to locals who live there to learn about the hidden treasures that most tourists never see. You can find these in guidebooks or maybe magazine articles, but those suggestions aren't necessarily tailor-made for me. As we developed the personality test, we realized that we didn't have to limit the consumers' connection to just our hotel matches, but that we could match people to locals and things to do in a fashion like no website has ever done before. We have 34 locals who have taken the test and are profiled on the site. When you take the test, you're matched with two of them who have the most similar personality to you. They tell you what they love about the Bay Area and what they would do on the "perfect day" - it's almost like you've come to visit them and they're going to help be your tour guide. As for the list of "things to do" I bet even locals will enjoy taking the test and seeing which unique activities will be matched to their personality. The Bay Area is such a remarkable playground for enjoying life - it was very easy coming up with the nearly 120 things to do on the list.
Question: Which "things to do" come up when you take the test?
Well, first of all, most of the time, my face pops up as one of the two locals-that's good news as it means I'm not too schizophrenic. The activities that show up most for me on my results are things like Glide Memorial Church's Sunday morning gospel choir celebration, Karma Moffett's Tibetan Bell Ceremony, traveling to bucolic West Marin, and walking down the charming Filbert Steps on the east side of Telegraph Hill. These happen to be some of my favorite things to do in the Bay Area so the test seems to work.
Question: Explain how the nuts and bolts of the personality test works.
It's very simple and very complicated. Without giving you too much detail, there are four matches being created based upon the 5 words selected: (1) the customer, (2) the hotels, (3) the locals, and (4) the things to do. Each of the latter three has been assigned 5 personality attributes so based upon the test results of the customer, he or she will be matched with these other three categories. This meant that we had to strive for diversity - we had to have at least a couple of "quiet/gentle" hotels, we had to have a few locals who consider themselves "hip or cool", and we had to have activities that were "welcoming/friendly" or "adventurous/active". One of my greatest joys was coming up with the list of diverse locals and things to do - it helped me reconfirm that the Bay Area's diversity is one of its greatest strengths.
STRATEGIC DECISIONS
Question: Who are the other companies who you collaborated with to launch this new phenomenon?
We're very fortunate to have our web designer, Paper(media), located just a block from us as we spent an incredible amount of time with them in concepting and creating this new website. They are extremely talented and represent the kind of Internet savvy folks we're lucky to have here in the Bay Area. Additionally, we created a strategic marketing alliance with Avant-Guide publishing which produces sexy guide books ("insiders guides for urban adventurers"). We are giving away a copy of their new San Francisco guide to all guests who book a room on our website. By doing this, we can assure our guests that they not only have a compelling experience booking the room at a price that at least matches the lowest price on any other website, but they also get a $20 value added with this book.
Question: Why have the big hotel chains been so slow in creating their own compelling web experience to combat the insurgent Expedia and Hotels.com?
To date, the Hiltons and Marriotts of the world have had two primary responses to the new travel websites. They said they would offer price parity on their own websites which means that booking a Hilton is no more expensive on Hilton.com than it is on Orbitz. While that may be reassuring to a Hilton loyalist, when you consider the supermarket metaphor you realize that these big chains have only addressed half of the reason that customers are flocking to the third-party travel websites (the lowest price part). The other reason customers are moving in that direction is because Orbitz and Hotels.com offer a plentiful choice of various products while the Hilton store only offers Hilton rooms. The chains believe that their other initiative - the growth of an alternative travel website called Travelweb that is owned by the big chains - will help solve their problem. But, Travelweb is just trying to beat Expedia at its same game. Yes, Travelweb does offer some operational improvements for the hotelier (and of course better margins since it's owned by the chains), but how is Travelweb going to wrestle customers away from the loyalty they've created with Expedia or Hotels.com. Frankly, it shocks me that the big chains have done nothing to take the consumers' eye off of price. Neither of these initiatives focus on improving the shopping experience for the customers, they're just another way of playing the same game that Expedia has already perfected.
Question: Will other hoteliers follow suit with their own version of Yvette?
I hope so as the salvation for the hotel industry is to remind consumers that their choice of a hotel is very personalized and the process of choosing a hotel can be fun. The less we look like a commodity, the more control we'll have in terms of our pricing. It will be difficult for any company to exactly replicate our Hotel Matchmaker program as: (1) we've trademarked the name "Hotel Matchmaker", (2) there are few hotel companies that can say they have a hotel for every personality, (3) most companies don't have such a concentration of hotels all in one market, and (4) few hotel companies will be as creative as we were in introducing matches with locals and things to do. I'm enthused that this little initiative of ours is getting such attention in the industry and hope that it inspires other hoteliers to innovate their own solutions to this revolutionary time in our industry.
