January 10, 2009

How The Mighty Have Plummeted

Following our Brandest Plans Client Workshop on Thursday, I found myself marvelling with a couple of clients at the news that the D4 group of hotels in Dublin's exclusive district is offering a number of rooms at €20 per night.

(Actually, €20.09 for those of us watching the cents - or seeking some rationale for the price point: 2009 as it's a special 'new year price offer').

Now for those of you unfamiliar with our city's exclusive district (don't be shy, I'm only an occasional blow-in myself), the D4 hotels include the former Berkeley Court and Jury's Hotels, two venues where well-heeled punters laid their equally well-groomed heads for hundreds of euros in those crazy, hazy Celtic Tiger days of yore. At least twenty four months or more ago, if my failing memory serves me well.

I'm not sure that I've witnessed such extraordinary devaluation of currency in my own lifetime. We hear dramatic tales from other (unstable) countries or eras where wheelbarrows piled high with big denomination notes (a million lira, anyone?) were abandoned by debtors outside the shops of those they owed money to when they realised that the wheelbarrow was likely to be worth more than the mountain of loot that sat perched on top.

An article in the following day's Irish Times talked of other major players who were leaping over the self-same cliff (the exclusive Ashford and Dromoland Castles dressing up €58.33 rooms as 'two nights bed and breakfast for €87.50 per person per night, with a third night thrown in for free'. Now that's creative accounting.

Whilst there's an argument for suggesting that these hotels are simply responding to market conditions, what does it say about the prices they were charging when we were falling over ourselves to spend our money? And about the real value of their brands?

Maybe it's a simple matter of life or death for the business in which case I'm not inclined to be too unsympathetic, but how are they ever going to recover their sense of value in the minds of their customers?

Experience from other times and places suggests that quality brands bravely hold their value even in difficult times. And emerge on the far side stronger than ever (if briefly a little lighter in the wallet).

But perhaps the real problem lies in the tendency of opportunists and number-crunchers who masquerade as hoteliers to think only in terms of heads on pillows and the currency of bed-nights?

Surely a hospitality brand is about much more than that?

3 comments:

Alex Gibson said...

Gerard,

Could'nt agree more - the reality is that his can, at best, appeal to a transient market and almost certainly repel any loyal customers they may have had ( take a look at the Sindo article and my take on it at my blog also).

Paul Lanigan said...

People buckle, brands don't.

Gerard Tannam said...

I think you're right, Paul. When the going gets tough, people need something greater than themselves to believe in and in the world of business it's brand spirit that pulls them through.