Why Resort Manufacturers Are Becoming a member of the In-Housing Development in 2021
Much like the rest of the travel industry, hotel executives are well aware that a new calendar year won’t magically bring about a complete rebound from the hardships of the pandemic. To survive until that recovery arrives, they’ve gotten creative with their offerings, pitching drive-to destinations, day passes for work spaces, and even selling their own branded pillows and robes to travelers dreaming of their next vacation.
Even though the pandemic hasn’t changed the basic business model for travel brands, it has altered their relationships with creative agencies, which will continue to look different going into 2021. For one, budgets have tightened and ad spend has shriveled as the industry saw occupancy levels hit Great Depression-era low points at the outset of the pandemic. U.S. occupancy is still down more than 37% compared to 2019 but at least rooms are open, a stark contrast to April when occupancy hovered at around 10%. A vaccine will be critical to breathing life back into the hospitality industry, but it could take years before business travel and conferences are back in full swing.
With so much uncertainty, Marriott and Hilton have are both looking to bolster their own internal creative agencies, hoping to make the companies—and their combined 50 brands—more nimble heading into the new year.
After a restructuring back in October, Marriott is hiring for two leadership positions to head an internal creative agency and an internal content team that’ll help the brand “elevate” the role of content creation and to leverage the brand’s own channels. Previously, the brand had one person overseeing both departments.
“We believe we need to find a core narrative instead of chasing things month to month,” said Brian Povinelli, svp of brand, loyalty and portfolio marketing at Marriott International. “Going forward, we’re separating that into two distinct teams and doubling down on each, with the goal of bringing it all together with a unified go-to message strategy.”
In execution, Marriott’s own channels, which include loyalty communications and social platforms, will be driven by the brand’s internal resources, while paid advertising will be led by a combination of internal teams and creative agencies. Currently, among Marriott’s brands only the Bonvoy loyalty program has an “active relationship” with 72andSunny, which led Bonvoy’s global holiday campaign.
The other brands are “currently evaluating agencies and the work ahead for the new year,” said a Marriott spokesperson.
Benefits of a marketing team that already knows you
The move toward in-housing is a trend that’s not exclusive the travel sector. In 2018, 78% of the membership of the Association of National Advertisers reported having some form of an in-house agency, and that figure is expected to increase as brands navigate a post-pandemic advertising industry.
But does it actually save brands money? Povinelli said that in some cases, yes.
“It’s all about how well you’ve resourced for certain skillsets,” Povinelli said. “What we’ve tried to do over the last 12 to 18 months is have it be much more of a collaboration.”
Hilton has been undergoing a similar transition that began in 2019, but was sped up this year. (The company also saw its CMO Kellyn Smith Kenny leave over the summer, a position it has not yet filled.)
“The business moves too quickly and the complexity of the business is such that we need our own in-house capabilities,” said Mark Weinstein, Hilton’s svp and global head of marketing and loyalty. “This moment reminded us is that it probably is less important to have agencies on retainers for everything, and more important to have stable, specialized capabilities that are ready to go that know us and we know them.”