Ritz-Carlton Winter 2017

The Ritz-Carlton

Yichi Huang, Beka Knackstedt, Caroline Mickley, & Farley White Alessandro Cannata LXFM 730

Table of Contents Executive Summary.........................................................................................................4 Brand Overview

Hospitality Timeline............................................................................................5-6

Ritz-Carlton Timeline.........................................................................................5-6

Ritz-Carlton Overview...........................................................................................7

Ritz-Carlton Gold Standards.................................................................................8

Brand Strategy........................................................................................................9

SWOT Analysis....................................................................................................10 Prism....................................................................................................................11

Brand Equity Pyramid.........................................................................................12 Market Analysis

Market Overview.................................................................................................14

Market Size.........................................................................................................15

Competitive Landscape.......................................................................................16

Core Competencies and Competitive Advantage...............................................17

Key Success Factors..............................................................................................17

Growth Potential and Opportunities..................................................................18 Target Consumer Demographics......................................................................................................20 Psychographics.....................................................................................................21

Consumer Behavior.............................................................................................22 Products and Value Proposition

Goals and Objectives...........................................................................................24

Strategy Overview................................................................................................25

Unique Selling Proposition.................................................................................26

Brand Positioning Statement...............................................................................27

Brand Positioning Chart.....................................................................................28

Price/Accessibility Matrix....................................................................................29

Luxury Ingredients...............................................................................................30

Marketing Mix................................................................................................31-35

Mock-Up Advertisements................................................................................36-38 Conclusion..........................................................................................................40 2

Executive Summary As a brand, Ritz-Carlton has always stood for classic luxury hospitality. From exotic resort properties to traditional urban accommodations, the Ritz has created a culture of luxury and exceptional service, creating customer loyalty unlike any other brand. In today’s changing travel industry, however, these traditional selling points may not be enough to stay ahead of competitors. Globalization and digitalization have created easy access to travel, booking of accommodations, price comparison, and procurement of amenities, and a new set of hospitality players and disruptors to industry has been unleashed. Most notably, short-term vacation home rental giants such as Airbnb, VRBO, and Onefinestay have created a new market for travel rentals with all the comforts and amenities of home, as opposed to a traditional hotel room, with a comparable price tag.

By 2025, the luxury hospitality industry’s key players, including Ritz-Carlton, will need to evolve to the changing demands of the market and consumers’ growing expectations. We are proposing that Ritz-Carlton create a line of branded residential rentals, in an effort to compete with the industry’s new set of competitors, none of which are offering branded rentals that are associated with and managed by a hospitality expert such as Ritz-Carlton. If the branding, management, and ownership is all maintained by a luxury company with a reputation for exceptional service, as well as high brand equity, such as Ritz-Carlton, a very successful business model could be created. Enter “Maison Ritz,” the future of Ritz-Carlton - branded condominiums and houses that are owned, operated, and managed by Ritz Carlton. In short, Maison Ritz can do everything that Airbnb does, but better, and in a more targeted and service-oriented manner. This will not only bring an element of excellence and customer service to an area of lodging that previously has had none, but will secure Ritz-Carlton’s future as the nature of travel evolves worldwide.

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Hospitality Trends Through the Ages 1900s: Hotels are filled with classical design features. Guests would have been greeted with large winding staircases, a large wooden front Desk, red carpets, and touches of gold everywhere.

1920s: The “roaring” 20’s is the first boom in the hotel industry. People now have access to more leisure time and paid vacation from work. The first industry “motel” is created with a stay costing $2.50 per night.

1910s: Hotels start to add many guest-focused features such as fireplaces, built-in radios (electricity was standard after 1912), and ladies’ vanities. This adds to a more sociable atmosphere that went along with the times.

1940s: The economy begins to boom again when World War II began.

Occupancy rates grow to over 90%. The war creates many jobs, and people are now able to take paid vacations.

1930s: During the Great Depression, many hotels went bankrupt and had under 50% occupancy. Hotel rates jumped from $2.00 to $5.60. Hotels still managed to add new features, such as phones and areas for children.

1960s: Hotels introduce mini bars, and small ways to drive up revenue costs.

We also continue to see an increase in guest amenities such as vending machines, ice machines, and small bathroom toiletries in guests’ bathrooms.

1950s: Cars change the nature of travel, and many more amenities for women are added into hotel rooms, such as sewing kits.

Fun Fact: Chocolates on hotel bed pillows also began during this time.

1980s: Hotels begin to allow payment by credit card, and in 1983 the first electronic key card access for rooms was used. The 1980s also focused on family oriented amenities, giving parents options for supervised kids’ activities.

1970s: Televisions become standard in every hotel room with added bonus channels like HBO. Hotels add neon signs to entice customers and mention amenities. Uniquely shaped bathtubs can be seen in some hotels.

2000s: Technology is key, but allowing consumers to work easier on the go.

Free wifiis a main feature for hotels, and flexible spaces for work meetings.

Video-coferencing in work spaces is a major breakthrough in these spaces.

1990s: Hotels start creating websites so that consumers can book rooms online.

Business travel increases, leading to business centers and access to computers being provided. Top amenities were free food, liquor, and breakfast.

Present: In addition to the amenities of 2010, hotels are also becoming more pet friendly, allowing families to travel much easier with all included family members. Hotels are working to ensure every room has a “good view.”

2010s: Guest expectations are high with more amenities becomings standard.

Hotels are also keeping up with trends such as electric car charging stations, phone charging stations, bathroom updates, and more.

Ritz-Carlton Through the Ages 1898: After over 25 years working in the hotel industry in Europe, Cesar Ritz opens the Ritz in Paris, as well as controlling interest in nine other hotels and restaurants.

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1965: The Ritz-Carlton Boston hotel owners, Cabot, Cabot and Forbes, create the iconic logo still in use today, with the crown symbolizing royalty and the lion representing wealth.

1927: The Ritz-Carlton Boston is the first property built under the new management. Cities to follow include Pittsburgh, Boca Raton, and Atlantic City

1911: The Ritz-Carlton brand expresses intentions to expand to the United States. General Manager Albert Keller buys and franchises the name in the US. The first hotel is located on Madison Avenue and 46th street in New York City

1940: By the end of the Great Depression, The Ritz-Carlton Boston is the only hotel in the company’s portfolio left operating.

1998: Ritz-Carlton Hotel Company is acquired by Marriott International

1983: Ritz-Carlton Hotel Company, LLC is founded

2015: Ritz-Carlton unveils “New Blue” re-branding

2001: First Destination Club Property opens at Aspen Highlands, CO

2016: Marriott International (RitzCarlton’s parent company) acquires Starwood Hotels and Resorts in industry-changing merger

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Ritz-Carlton Overview

Ritz-Carlton Gold Standards

Ritz-Carlton is a luxury hotel group headquartered in Chevy Chase, Maryland, USA. The brand currently owns and manages 91 properties in 30 countries. These properties are comprised of both traditional urban hotels and resort properties. The company also offers private residences, generally located within their urban hotel properties, as well as destination club properties, which are private residences managed by Ritz-Carlton on the grounds of resort properties, often with shared ownership.

Ritz-Carlton describes its corporate philosophy by using the term “Gold Standards,” which include the Motto, Credo, Service Values, and Employee Promise, all of which are steeped in the brand’s hallmark commitment to service. First and foremost is the brand’s motto. Ritz-Carlton’s mission statement or motto is simple yet all-encompassing of the brand’s philosophy: “We are ladies and gentlemen serving ladies and gentlemen.”

Ritz-Carlton currently acts as a privately-held subsidiary of Marriott International. The company maintains autonomy, with a separate office and corporate staff that is operated exclusively by Ritz-Carlton.

In addition to the mission statement, Ritz-Carlton also prides itself on its credo, a statement of service values that all employees must adhere to in all operations of the brand: “The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambiance. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.”

Aside from the motto and credo, employees also are expected to uphold the Ritz-Carlton Employee Promise and Service Values, a set of operations values that contribute to productive culture and service excellence within the company’s properties, with the goal of increasing the sense of luxury and mystique of the brand. Finally, the company has created what it refers to as the Sixth Diamond. The Sixth Diamond refers to an additional hospitality element, aside from the industry-standard five diamonds, that the brand aspires to. This sixth element is comprised of Mystique, Emotional Engagement, and Functionality.

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Brand Strategy

SWOT Analysis

Unique Revelation Ritz-Carlton is known for their classic refinement and commitment to service, which remains at the forefront of their business. The company focuses on three fundamentals: Location: Each property in each unique location should be luxurious and reflect the local flavor.

Product: focusing on becoming a lifestyle brand rather than a hotel brand through expanding services offered People: Employees are highly trained in customer service and any Ritz-Carlton employee is allowed to spend up to $2000 on meeting any guest’s needs without seeking managerial permission.

S

Strengths -Employee Management Program - Excellent customer service -Global responsibility program -Brand loyalty -Property locations

Brand Rituals At the Ritz-Carlton, you are not just a reservation number, but a name. You are not only treated as a lady or gentleman, but called as such. Ritz-Carlton is not in the business of hotels, but rather in the business of creating a memory. This memory is the brand’s top priority, which all circles back to customer service being the highest priority. Additionally, each location holds an all-staff morning meeting daily, in which stories are shared about exceptional customer service and opportunities for improvement are presented to the entire staff. This allows for the employees to revel in each other’s successes, while constantly learning from each other’s experiences.

Lexicon Since Ritz-Carlton’s inception, service lexicon has been a core element of the brand. Founding CEO Horst Schulze gave each employee a handbook covering the Ritz-Carlton language, and many of the phrases are still in use today. This carefully chosen language is designed to convey “Ritz Style,” or the brand’s core identity embodied by each employee, the human component of the Ritz-Carlton service values. For example, instead of saying “you’re welcome,” employees are encouraged to say “my pleasure,” and instead of “yes” or “okay,” staff are taught to say “right away.” Both of these choices reflect commitment to service and prioritizing the guest’s needs over all else. Additionally, staff are discouraged from using negative language, avoiding the word “no,” instead focusing on “what I can do for you.” Instead of saying that a property is booked, employees say “fully committed,” conveying a sense of value in the brand and commitment to customers instead of pushing clients away. In addition to the standard Ritz-Carlton language, staff are encouraged to develop a “personal lexicon” for more memorable client interactions.

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O

Weaknesses -Fluctuations in lodging prices and demand -Inability to control supply in response to changing demand -Conservative design -Under the Marriott umbrella, brand has lost depth -Strong reliance on North American market -Lack of commitment to older properties

Opportunities

Threats

-Expanding global market -“Store in Store” style retail -Increase in spa treatments and other amenities -Localization focus in property development -Increased technological innovation -Increase of private residences business model -Creation of Ritz Carlton branded and managed rental properties

-Increase in operation costs -Cannibalization of business with Marriott acquisitions -Rise of third-party booking sites means easy price comparison against competitors -Increase of luxury home rentals through Airbnb, Vrbo, etc.

-Geopolitical instability

W

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Prism

Physique: - Luxury Hotels - Top Locations - Unique Design - Breathtaking water views

Personality - Luxury - Trendy - Healthy - Relaxed

Relationship - Friendly - Long-lasting - Loyalty

Culture: - Commendable customer service - Values: Employees have been trained to uphold precise standards - Standards of service based on the Boston Landmark Hotel

Reflection: - Successful business travelers - Luxurious - Finest luxury experience - Decrease stress and relax - High standard of living

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Brand Equity Pyramid

Ritz-Carlton

Self-Image: - Comfortable - Creative and energetic - Optimistic - Romantic

Heritage Excellence

Employee Empowerment

Locations Facilities

Exclusivity Customer Service

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Market Overview

Market Analysis

The luxury hotel market experienced growth of about four percent in 2016. This market is now focusing on the millennial generation after a decrease in travel has occurred due to geopolitical factors. A major disruptor to the luxury hotel market is the influx of web-based accommodation booking sites, including but not limited to, discount sites and Airbnb. These disruptions are causing hotels to diversify their offerings to include better amenities. The two main reasons for travel are business and leisure, both of which are accurate within the luxury hotel sector. The reason for traveling differs by region with Asian and European travel’s primary purpose being business, while Latin America’s, the Middle East’s, and North America’s travel is attributed more to leisure. The Ritz-Carlton regions are divided as follows; North America consists of the United States and Canada; Europe is divided as Turkey, Russia, United Kingdom, France, Germany, Belgium, Ireland, Italy, Spain, and Austria; Latin America includes Mexico, Chile, Puerto Rico, Virgin Islands, Aruba, and the Cayman Islands; The Asian region is considered to include China, India, Malaysia, Singapore, Thailand and Japan; Middle East & Africa are included together within the regional map and include the countries of Bahrain, Qatar, Saudi Arabia, United Arab Emirates, Oman Israel and Egypt.

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Competitive Landscape

Market Size The luxury hotel market is predicted to reach $195.3 billion USD in spending by 2021 according to Euromonitor reports. This report is consistent with the projected annual growth rate of 3 to 4% for the luxury hospitality market. In accordance with the Ritz-Carlton regions, Mexico experienced the most growth with spending increasing to the billions. Notable increases also occurred within the countries of Bahrain, Chile, Austria, The Cayman Islands, Canada, and Germany.

Bain and Company Report, 2016

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The competitive landscape for Ritz-Carlton is divided into two different markets, one being leisure travel and the other being business travel. In the leisure travel sector, the top competitors are ITC Hotels, Waldorf Astoria, and the Park Hyatt. ITC Hotels is a luxury hotel group out of India with a focus on sustainability and customer service. These hotels are green technology based, and based on the Indian market, these hotels are a part of accessible luxury pricing in the hospitality market. The Waldorf Astoria also competes with Ritz-Carlton within the leisure market. The Waldorf Astoria is a part of the Hilton hotel group and has a competitive advantage in part because of event services. The pricing is comparable to the Ritz-Carlton. Another competitor with comparable pricing, is the Park Hyatt. In terms of urban locations, the Park Hyatt is the Ritz-Carlton’s closest competitor, focusing on customer experiences and spa services.

In the business travel market, Ritz-Carlton’s two main competitors are the Four Season and the Westin. The Four Seasons, a Canadian hotel group, is focused on the business traveler in terms of traditional services and specialized spa services for travel companions. The Four Seasons have both resorts and urban hotels, with rooms at varying price points and service-driven business centers. The Westin group is also owned by Marriott, Ritz-Carlton’s parent company, as of September 2016. The Westin hotels and resorts cater toward business travelers offering corporate and government rates to incentivize travelers, as well as availability for conferences. The hotels also offer twenty four hour business centers.

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Core Competencies and Competitive Advantage The core competencies represent the personality, ability, knowledge, skills factors of the brand. The Ritz-Carlton emphasizes personalized services and insists on a high staff to guest ratio of 3:1. By providing sufficient resources, the hotel’s management ensures that the staff are not over-strained so that the high level of customer care expected from them is not compromised. Staff are encouraged to interact with guests to get to know each guest’s preferences and needs, and to deliver personalized services. They are also trained to observe and attend to the smallest needs of guests.

Key Success Factors In the luxury hospitality industry, a number of key factors contribute to a brand’s success. Heritage and a sense of history are highly attractive to consumers, as hospitality is such an experience-driven industry. Employee empowerment and service are also key factors that make or break a hospitality brand in the luxury sphere. In addition to service, consumers desire a wide range of luxury-grade amenities, with various options to choose from.

The Ritz-Carlton brand is steeped in heritage dating back to the first hotel. Caesar Ritz began defining the brand in 1898 with the first hotel opening in Paris. After this, the brand expanded and franchised in the United States, bringing the services from the European hotels. Employee empowerment is a success factor for the brand on the basis of customer interactions. Employees are empowered to make guests feel comfortable while also spending up to $2000. Employees are then recognized for exemplary services rendered during meetings.

Customer service is a top priority of the brand. Each guest is treated with the utmost respect and only addressed by his or her name. Additionally, the brand is known for world-class amenities within its properties.

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Growth Potential and Opportunities Ritz-Carlton’s growth potential and opportunities can be conveyed with the following four initiatives, some of which the brand is already undertaking.

Expand Destination Resorts and Private Club Properties Ritz-Carlton is currently working to add more resort and private club properties in targeted areas, recently announcing a focus on Australia and the South Pacific. The projected growth rate of the Australian lodging industry is 7.3% through 2010, and tourism to the South Pacific has seen a significant rise in recent years, with five of Euromonitor’s Top 10 City Destinations within Asia and the Pacific.

Create Luxury Retail Developments in Conjunction with Hotels and Resorts The brand has indicated a strong focus on integrated luxury retail within and around its properties in recent reports and statements. With their existing properties, the brand is working to bring luxury retail development to nearby areas. With new and planned hotels and resorts, the brand is collaborating with luxury retail developers to integrate these retail areas into the properties, including a planned luxury shopping center being built in conjunction with the Paradise Valley, Arizona development, as well as a planned collaboration with a property in San Diego with Whole Foods.

Increase Private Residences in Targeted Urban Areas With many millennials choosing to raise their families in urban areas as opposed to suburbs, and with many retirees choosing to move back into cities from the suburbs, the need for luxury urban housing is clear. RitzCarlton has announced its intentions to increase the number of private residences within its urban properties in selected areas to address this need.

Branded Rentals With vacation home rentals on the rise as opposed to hotel rooms, the brand can create its own line of branded residential rentals in targeted urban areas, as well as resort areas. Having a strong sense of luxury branding and management will prove a competitive advantage over traditional and online booking and rental companies.

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Demographics

Target Consumer

AGE Secondary Education

Millennial Generation 25-45

Salary of over $200,000

Social Classes A&B

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Psychographics

Consumer Behavior

Geography:

Spending:

The target consumer in 2025 will not be restricted to one particular region of the world, as Ritz-Carlton is a globalized company with properties all over the world. These consumers do, however, live in urban areas, specifically First and Second Tier cities, with a substantial amount of culture and global influence.

Ritz-Carlton’s target consumer in 2025 will be mainly millennials, many of whom came of age during the global financial meltdown of the late 2000s. This has created a savings-oriented behavior pattern within this target market, leading to strong desires for value, even among luxury consumers. Due to the global reach of Ritz Carlton and the constantly changing nature of global politics, these consumers are sensitive to changes in exchange rates, and plan international purchases accordingly. Because these consumers grew up in a globalized world, they have a strong desire for globalized luxury, but appreciate localization of retail and experiences, for which they are willing to pay more.

Work and Leisure: These consumers are high-level professionals in their work. They in the middle of their careers and have worked their way up to management and executive positions. They are very hard workers, often with little free time on their hands, and they desire the ability to “blow off steam� during the rare occasions when they take time off.

Leisure travel is a preferred method for doing so, although they also travel for business as well. These consumers are high functioning and enjoy being occupied at all times, creating a strong desire for experience and activity in their leisure activities.

Interests: The target market in this case is highly driven by the pursuit of new experiences and adventure, which results in a strong affinity for travel. Additionally, they enjoy being on the cutting edge and being part of new sociocultural trends, as well as exploring exotic destinations. These consumers are highly social, and enjoy staying connected with friends and family via technology and social media. They also enjoy sharing their lives and experiences on various social media platforms.

Beliefs: Unlike previous generations, this highly ambitious target market is more focused on careers and self-improvement than on having a family. They tend to wait longer to get married, if at all, and many simply prefer having a longterm partner. Many are choosing not to have children, and those who do tend to have fewer children and do so later than previous generations, as they want to advance in their careers and experience adult life without children.

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Technology Usage: This target market has always been highly connected, and can be described as smart phone super-users. They are easily reachable on a variety of devices, including smart phones, laptop computers, and tablets, and enjoy having and using the latest technology. They also value both convenience and innovation in technology, and are quick to purchase or use technology that makes their lives easier.

Media Consumed: This group of consumers prides itself on being well-informed of global and national events. They frequently read reliable news publications such as The New York Times and Wall Street Journal, as well as more cultural publications such as Vanity Fair. Digital media is the platform of choice. This market also are heavy users of social media, as they desire the ability to stay connected and show their friends what they are doing.

Travel Patterns: The target market in this case does an increasing amount of travel for both business and leisure, domestically and internationally. They are frequent users of rewards and loyalty programs while traveling. As they tend to be value-conscious, they compare prices across various websites and apps, even in the luxury sphere, to ensure that they are getting the best price possible. Additionally, they love to show their friends where they are traveling and what they are doing there over social media, as they view experiences and travel as social stratifiers, more of a status symbol in some cases than luxury goods.

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Goals and Objectives The goal of this proposed brand extension is an increase in Ritz-Carlton’s market share. Additionally, the company seeks to address the changing nature of the hospitality industry and amenities offered due to the arrival of sites such as Airbnb and Vrbo.

These sites allow travelers to book an entire home or apartment, complete with private amenities outside the normal range of hotel room offerings, often at a comparable price to a hotel room.

Products and Value Proposition

Ritz-Carlton will seek to achieve these goals by creating an expansion of both urban and resort properties into a completely new business model: branded residential rentals, or “Maison Ritz.”

Unlike home rental booking sites, which do not possess any sort of ownership or branding, Maison Ritz will be owned and operated by Ritz-Carlton.

These rentals will include private bedrooms, living spaces, and kitchens, in which guests will be allowed private luxury and the comforts of home.

In addition to privacy, guests will have full access to Ritz-Carlton’s hotel and resort amenities and concierge services.

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Unique Selling Proposition The selling platform for Maison Ritz will closely follow current industry leaders such as Airbnb and Onefinestay.

Ritz-Carlton will focus on creating a separate web platform where guests can book online, and within the existing company app. Additionally, guests will have the option of calling Ritz-Carlton’s booking line and booking a Maison Ritz property over the phone. Guests will choose from private residences on resort properties and condominiums in urban properties, each tailored to the specific market. Although the Maison Ritz rentals are not necessarily on-site in relation to the hotels, customers will have easy access to amenities using the ((Chime)) app, which has proven highly valuable to the brand for use with hotel guests. The ((Chime)) app will give them access to services such as the nearest Ritz-Carlton Spa, 24/7 access to concierge services, gyms and personal trainers, car services, and grocery delivery. With Maison Ritz, guests will also have the option to bring family pets and personal staff, creating more of a home-away-from-home experience.

Strategy Overview The implementation of the Maison Ritz business model will occur first in existing markets. These existing markets will allow for a better understanding of the local market and tap into the current, familiar consumer before expanding into a differentiated and unknown market. In urban areas, apartments or condominiums will be purchased in an existing building near a Ritz-Carlton hotel and will be remodeled in accordance to the location. In resort areas, the company will construct a limited quantity of luxury homes on resort grounds where space is available. This business model will be tested in targeted urban areas first and will then spread to a select few resort properties.

Maison Ritz Website Mock-up

While the primary focus of these new rental properties will be for use by guests, the apartment style living will be available for both permanent and long-term stays. Guests will be allowed to purchase units, which will marry both the Ritz Carlton customer service promise, and private luxury.

In order to promote Maison Ritz, the company will expand its digital media promotions, hoping to reach a slightly younger, more modern consumer that will be on the rise during the next ten years. The company will also differentiate marketing between its two business models: traditinal hotels and Maison Ritz. Each will have specific advertising campaigns targeted geographically.

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((Chime)) App Example Screen

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Brand Positioning Chart

Brand Positioning Statement In the business of luxury hospitality, Ritz-Carlton is known for excellent quality customer service and select locations. The business and leisure traveler desires a private and exclusive escape from the everyday. Maison Ritz adds the heritage, exclusivity and the concierge to your private vacation rental. So, the only thing left to do is to “let us stay with you.”

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Marketplace

Target Areas: Vail, Paris, London, Miami, Dubai, New York, Bali, Chile, Grand Cayman, Bahrain

London, Los Angeles, Miami, New York, Paris, Rome

New York City, Los Angeles, Philadelphia,Washington DC, and London

More than 70 cities across Asia, Australia, Europe, and the Middle East.

Regional: London,UK

Americas, Asia Pacific, Europe and the Middle East

Accommodation Styles

Branded apartment style, short and long term rentals

Luxury home rentals

Extended stay apartments

Hotel residences and extended stays

Hotels and residence rentals, short and longterm stays

Luxury hotels and resorts offering residential stays

Mobile App

((Chime))

Bringing their expertise and cutting-edge technology, including keyless App for check-in)

No

Frasers Rewards mobile application

Athenaeum Club mobile app

No

Services

Events, weddings, dining, concierge, spas, resort amenities

Private dining experiences in rentals, booking assistance

Restaurant reservation service, secure transportation service

Target Market

Business and Leisure Travelers

Business Travelers, Couples, Families

Business Travelers

Residential Private and cuisine program, corporate events, kids’ club VIP private dining, reservation services Business Travelers

Events, weddings, bespoke dining, spas, resort amenities

Business and Leisure Travelers Leisure Travelers

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Price/Accessibility Matrix

Luxury Ingredients

Purpose -Niche monopoly -Excellence

Luxury Price Point

Easy Access

People -Heritage -High Human Content -Social Stratifier

Exclusive

Price -Ultra Pricing

Affordable Price Point

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Placement -Poly-sensuality -Private

P

Promotion -Reserved -Discreet

Product -Excellent in quality -Limited output -Unique know-how -Sublime aesthetics Alessandro Cannata, 2017

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Marketing Mix: Product With Maison Ritz, customers will be given a selection of properties in which to stay. These properties will be elite units in both urban and resort environments. Initially the units will be apartment or condominium style within the urban markets. These units will be within the same building and will be renovated to show the RitzCarlton aesthetic along with a local twist. After implementing the urban units, the brand will focus on creating luxury houses within the grounds of resort properties. Maison Ritz will provide all of the comforts and amenities of home, including the ability to bring staff and pets along, with the added amenities of a Ritz-Carlton property.

Maison Ritz Resort Rental Mock-up

Maison Ritz Urban Rental Mock-up 31

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Placement Initially, Maison Ritz units will be targeted in the brand’s largest markets, focusing on Vail, Dubai, New York, Bali, Chile, Grand Cayman, and Bahrain. The placement of these units will vary by property type. The resort property units will be scattered throughout the resort while the urban properties will be within close proximity to the current property, but in a different building altogether.

Purpose The purpose of Maison Ritz is the extension of excellence into hospitality, especially within the niche market of private and luxury rentals in both urban and resort markets, as well as to help Ritz Carlton maintain current market share and status in a changing industry.

Pricing

People The target market for Maison Ritz is the elite business and leisure traveler. This consumer market has high to king resources. While traveling, this consumer prefers the luxuries of home, as well as freedom and privacy, which can be accomplished with the apartment style amenities and superior concierges services provided by Maison Ritz.

Maison Ritz’s pricing strategy is within the range of ultra pricing. This pricing is justified by the exceptional customer service and location of the units. Pricing is determined by the location and size of the rental unit.

Since the units are not purchased or contructed yet, a price can not be specified, however, between the range of $400-34,000 USD per evening is consistent with current hotel room rates. These rates are to be determined by the market value and the location of the rental.

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Marketing Mix: Promotion The promotion of Maison Ritz is discreet since the target customer’s satisfaction and exclusivity is a top priority.

Initially the product will be introduced to current customers through marketing campaigns and introduction at the main hotels. This information will also be introduced through direct marketing campaigns. Maison Ritz will have the same heritage as the brand’s main properties, with the added prestige of additional privacy and exclusivity.

Introducing Cesar Cesar, named for Ritz-Carlton’s iconic founder, is a new marketing element that will be used in advertising and promotional materials for Maison Ritz. Alluding to simpler times and inspired by the Plaza Hotel’s Eloise, Cesar imparts both a sense of nostalgia and a sense of being home with your family, in this case the four-legged members. His image will be used in vintage Ritz-Carlton inspired advertisements, and well as more whimsical promotional materials aimed at families.

Mock-up Advertisement (Pictured Right) In this advertisement for Maison Ritz, Cesar is featured laying under a vintage armchair, conveying history, heritage, and a sense of domestic comfort. Based on a Ritz-Carlton advertisement from 1943, this advertisement celebrates the brand’s sense of history and tradition while introducing both a new character and a new business model.

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Introducing Maison Ritz-Carlton.

All the comforts of home, enhanced with concierge services.

Not Your Grandparents’ Experience Introducing the Maison Ritz-Carlton. A place where you can be yourself... in private. A branded rental experience where privacy and concierge services are second to none. Experience the Ritz in a whole new way.

Let us stay with you.

In the above mock-up advertisement for Maison Ritz, an image is borrowed from a 1959 Cadillac advertisement.

The advertisement alludes to the heritage and classically glamorous style of Ritz-Carlton, while boldly introducing a completely new business model.

In the mock-up advertisement for Maison Ritz pictured on the right, the privacy aspect of the brand extension is being highlighted and promoted, as well as the sense of personal luxury. Conveying a slightly sensual theme, the advertisement appeals to a newer, younger clientele, and uses almost opposit marketing tactics as the other mockup ads.

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Celebrate The Maison Ritz-Carlton - a place where every party can be a private party. Celebrate your latest accomplishments, big or small, in one of our branded luxury rentals - where everything is at your fingertips and at your doorstep.

Call 845-865-6532 for more information

Conclusion While Ritz-Carlton has been a major player in the luxury hospitality industry for almost a century, the nature of the industry is rapidly evolving. Consumers, more value-conscious and experience-focused, desire more from their accommodations while traveling. While traditional luxury hotel amenities are undoubtedly appreciated, consumers’ desire for the comforts of home while traveling has become more important. Online home rental companies have developed in order to capitalize on this shift in desires, and if traditional hospitality companies do not adapt, they will quite simply be left in the past and be unable to compete.

Maison Ritz is Ritz-Carlton’s entry into the new phase of hospitality.

This new model will allow the brand to compete not only with traditional hotels, but with vacation rental companies as well. This new business model will expand the brand’s portfolio and ensure that the company offers something for everyone. Maison Ritz provides the brand with the ability to create a new niche in the hospitality market, as well as continue to meet and exceed customer needs for years to come.

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The Ritz-Carlton

Yichi Huang, Beka Knackstedt, Caroline Mickley, & Farley White Alessandro Cannata LXFM 730

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