Fairmont Hotels puts on ad blitz

When Canadian Pacific Hotels & Resorts bought a majority interest in the U.S.-based Fairmont Hotels chain in October of 1999, CP became the proprietor of many of North America's most exclusive and prestigious hotel properties....

When Canadian Pacific Hotels & Resorts bought a majority interest in the U.S.-based Fairmont Hotels chain in October of 1999, CP became the proprietor of many of North America’s most exclusive and prestigious hotel properties.

While CP Hotels had long flown its flag over Canadian icons such as the Banff Springs Hotel, the Chateau Laurier and the Chateau Frontenac, it now also controlled The Plaza in New York City and the Fairmont San Francisco.

Then late last year, the decision was made to drop the historic CP brand from the chain altogether in favour of the more generic and global expansion-friendly Fairmont. Instantly, Fairmont Hotels & Resorts – with 36 properties and more than 18,000 rooms in the U.S., Canada, Mexico and the Caribbean – became the dominant player in the North American luxury hotel market.

But hardly anyone outside the hotel business knew that.

So, beginning in late February, the chain will launch a massive advertising blitz in magazines across the continent, including Maclean’s, Elm Street, Toronto Life, Vancouver Magazine, Report on Business Magazine, Canadian Business, Forbes, Vanity Fair, The New Yorker, Vogue and almost every travel magazine on North American newsstands.

The goal is to establish the Fairmont brand as the top-of-mind luxury hotel and resort chain on the continent, says Brian Richardson, vice-president of marketing at Toronto-based Fairmont Hotels & Resorts. ‘The biggest challenge we face is just creating a voice for Fairmont in the marketplace,’ he says. ‘We have our work cut out for us in building equity around the brand and reaching awareness levels that are more appropriate for the largest North American luxury chain of hotels.’

While it might seem that Fairmont is putting all its eggs in one media basket by focusing solely on magazine ads, Richardson says luxury hotel patrons represent such a small demographic that the chain can target them with nearly pinpoint accuracy. ‘All the research we did suggests that our target audience [members] are vociferous readers,’ Richardson says. ‘They are reading as many as 15 magazines a week.’

According to Fairmont’s research, this group – defined as affluent baby-boomers 40 to 55 years of age – controls over 52% of U.S. wealth, accounts for about 85% of all luxury sales in North America and has a household income in excess of US$150,000.

Richardson says that since the target group comprises only seven million to eight million North Americans, Fairmont plans to round out its mass media efforts with direct mail and e-mail initiatives and the creation of alliances with other travel-related companies.

The ad campaign itself – which consists of eight different ads to run throughout 2001 – will emphasize each hotel’s history, longevity, location and architecture as well as its status as a landmark in its community.

Following extensive research, Richardson’s team created a five-point positioning document that is meant to provide a point of reference for all future marketing initiatives. It says that Fairmont hotels promise the best address, grand architecture, style that is both timeless and classic, and an unforgettable stay. ‘So that after you’ve stayed with us,’ the document concludes, ‘we will stay with you.’

Since the historic nature of Fairmont’s properties is so essential to its brand profile, some observers have found it ironic that the chain has decided to jettison the CP name. Canadian Pacific, after all, is one of the seminal brands in the country.

Many see dropping the CP name as evidence that the company is turning its back on its Canadian heritage.

But Ann Layton, vice-president of public affairs and communications at Fairmont, says CP’s historic properties – such as the Banff Springs, the Chateau Frontenac and the Chateau Laurier – will retain their names under the Fairmont brand umbrella. And she argues that the new identity is central to the chain’s expansion.

‘We really needed a brand that we could grow outside of Canada. Canadian Pacific Hotels is a great brand domestically, but was not well known outside of Canada,’ she says.

Changing the CP moniker, she says, was essential to the chain’s long-term growth plans because there is little equity in associating Canadian Pacific with properties such as The Plaza of New York.

Lyle Hall, national director of the hospitality, leisure and tourism industry practice at Toronto-based consulting firm KPMG, says bringing together all these prestige properties under one name adds value to the entire chain far beyond that which CP and Fairmont could have brought to the table individually.

‘They have a very strong market presence in Canada. If they’re going to grow, they’re going to grow by international markets, corporate and leisure,’ he says. ‘Now there’s something else to sell. There’s a greater collection of hotels.’

Beside, he says, most people know the Canadian properties by their hotel names. Canadian Pacific as a brand on its own, contends Hall, never held much equity in the hotel business.