Situational Analysis of Kimpton Hotel

Monaco Philadelphia (Part C)

Yusuf Baxter and Nailah Smith

STHM 3396 (002) – Marketing in Tourism and Hospitality

Temple University

05/03/18

Table of Contents

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1.0: Executive Summary..................................................................................................................2

2.0: Introduction...........................................................................................................................3-5

2.1: Mission and Vision....................................................................................................5-6

3.0: Current Target Market...........................................................................................................6-9

4.0: Internal Analysis..................................................................................................................9-12

4.1: Amenities and Facilities........................................................................................10-11

4.2: Employee Experience............................................................................................11-12

5.0: External Analysis...............................................................................................................12-22

5.1: Microenvironment.................................................................................................13-15

5.2: Macroenvironment (PEST Analysis)....................................................................15-19

5.2.1: Political / Legal.......................................................................................15-16

5.2.2: Economical.............................................................................................16-17

5.2.3: Social-Cultural........................................................................................17-18

5.2.4: Technological.........................................................................................18-19

5.3: Competitor Analysis..............................................................................................19-22

6.0: SWOT Analysis.................................................................................................................22-33

6.1: Strengths................................................................................................................23-26

6.2: Weaknesses............................................................................................................26-28

6.3: Opportunities.........................................................................................................28-31

6.4: Threats...................................................................................................................31-33

7.0: Marketing Opportunity Identification...............................................................................33-48

7.1: Pros and Cons of Marketing Opportunity.............................................................35-37

7.2: Catching this Opportunity (7 P’s Framework)......................................................37-44

7.3: Measuring the Outcomes (KPIs)...........................................................................44-48

7.4: Limitations of Marketing Opportunity.......................................................................48

8.0: Conclusion..............................................................................................................................49

9.0: SWOT Analysis Chart............................................................................................................50

10.0: Appendix.........................................................................................................................51-52

11.0: References.......................................................................................................................53-61

1.0: Executive Summary:

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Kimpton Hotel Monaco Philadelphia is one of Kimpton Hotels and Restaurants’ best

luxury boutique hotels in the U.S. (at #4); in fact, it is one of Philadelphia’s best hotels (at #3),

according to U.S. News and World Report (“15 Best Hotels,” 2018). This can arguably be

attributed to the fact that as a company, Kimpton Hotels and Restaurants holds much prestige,

merit, and recognition for the strides made in the hospitality industry in the 21st century, most

specifically within the boutique hotel industry. What just started out with a small idea based

upon an entrepreneur’s adaptation of a European boutique hotel in the 1970s ultimately resulted

in the best, most successful boutique hotel chain in in the U.S., today.

Kimpton Hotel Monaco Philadelphia makes lasting and memorable impressions on the

guests, travelers, and tourists it attracts due to its welcoming, youthful, and colorful atmosphere

and ambiance. The hotel’s “Mad Hatter” theme, which is easily identifiable in the lobby, halls,

and rooms is signature in that it is one of a kind and unique. One of the main factors of the Hotel

Monaco brand within its location in Philadelphia, which distinguishes it from its local

competition, is its commitment to ensuring diversity in the artistic layout throughout the hotel,

the employees who work within its diverse internal work environment, and its fulfillment of its

guests’ and target markets’ diverse wants and needs (Monaco-Philadelphia.com).

As a result, Kimpton Hotel Monaco Philadelphia maintains a competitive edge through

its various marketing techniques, strategic value positioning, and consistently maintained

reputation. The unique way that Kimpton, as a company, has branded the Hotel Monaco

Philadelphia not only seamlessly connects Bill Kimpton’s mission and strategy to its ideal,

historically significant location, but it also aligns with an ideal target market, which creates room

to diversify and establish brand new marketing opportunities in the near future.

2.0: Introduction

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Kimpton Hotel Monaco Philadelphia is a luxury four-star boutique hotel located on the

intersection of 5th Street & Chestnut Street in Philadelphia, PA (“Hotels in Center City,” 2018).

The location of the hotel property is in the heart of the historical district of Philadelphia, known

as Old City District, which is situated in Center City District. It is also across the street from

Independence Hall located in Independence Mall. There is also a restaurant directly located

inside of the Monaco called the Red Owl Tavern, which serves American cuisine. Hotel Monaco

is owned by Kimpton Hotels & Restaurants and its parent company, IHG (InterContinental Hotel

Group).

Center City District, Philadelphia, commonly known as Center City, stretches from the

Delaware River to the Schuylkill River, from Vine Street to South Street. Old City, which is part

of Center City, spans from Vine Street to Lombard Street; it represents the foundation of

Philadelphia’s history. Old City is its own business district consisting of multiple restaurants,

bars, parks, art galleries, and historic sites/attractions for tourists and local residents to enjoy.

This specific area of the city holds a great deal of historical significance to the city of

Philadelphia, designed with a charming artistic flair (Oates, 2014). The primary tourist

attractions within Old City are located along Independence Mall, Penn’s Landing, and 2nd Street.

Kimpton Hotels & Restaurants is an independent lifestyle boutique hotel brand that was

founded in 1981 by Bill Kimpton who opened up the first “boutique” hotel in America: The

Clarion Bedford Hotel in San Francisco, CA. When creating the Kimpton brand in the early

1980s, he believed that his brand of hotels should offer “something unique,” with a “European

flavor, good value and a sense of fun,” that would “lift your spirits,” and “not put you to sleep as

you walk in the door” (Oates, 2013). In addition, Kimpton sought to revitalize historically and

culturally-significant buildings into the hotels he created. Ever since Kimpton’s inception, the

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company has accumulated numerous accolades, awards, and distinctions for its guest service,

treatment of employees, and inclusivity to diverse markets. They currently operate restaurants in

35 cities globally; in their restaurants, they seek to offer a unique, one of a kind experience for

their guests with a focus on local, seasonal, and sustainable ingredients (“Kimpton Restaurants

and Bars,” n.d.). In the early 2000s, two major brands under the Kimpton name were released:

the “Hotel Palomar” and the “Hotel Monaco” brands. Prior to this, all other boutique hotels that

were opened by Kimpton in the U.S. were under independent names such as “The Kimpton

Rowan” or “The Kimpton Canary”. Today, Kimpton Hotels & Restaurants is led by CEO, Mike

DeFrino, and is headquartered in San Francisco, CA where they opened their first boutique hotel;

their current net revenue is over $1.2 billion and they currently have 65 hotels and 70 restaurants,

lounges, and bars domestically and internationally consisting of approximately 8,625 employees

(“Great Place to Work,” n.d.).

One of the ways Kimpton was able to breach out of the U.S. and expand itself into

international markets was through the acquisition by its parent company, IHG (InterContinental

Hotels Group) in January 2015. IHG was officially started in April of 2003 after its split from

the retail business (“Mitchells and Butlers”) it used to be associated with. They are

headquartered in Denham, Buckinghamshire, United Kingdom, and led by their CEO, Keith

Barr. IHG’s vision is to deliver “Great Hotels Guests Love” across their 12 different hotel

brands and 5,000 hotels in 100 territories globally; this is rooted within their culture of

committing to act responsibly. Their brands consist of Candlewood Suites, Avid Hotels, Holiday

Inn Hotels & Resorts, Holiday Inn Express, Crowne Plaza, Hotel Indigo, EVEN Hotels, Hualuxe

Hotels & Resorts, Intercontinental Hotels & Resorts, Holiday Inn Club Vacations, Staybridge

Suites, and Kimpton Hotels & Restaurants. Some of their main strategies for continued growth

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is to “ensure responsible business practices”, to “deliver high-quality service”, and to

“incorporate new and groundbreaking ideas” in order to adapt to the modern guests’ and

travelers’ changing needs and wants (“Company Overview,” n.d.).

The Kimpton Hotel Monaco Philadelphia was built in 1907 and opened in 2012; it is

known as “a revolutionary Philadelphia boutique hotel on America’s most historic square mile.”

The “Kimpton Hotel Monaco” brand is one, which is opened within historically-significant

buildings across the U.S. such as the in the original post office in Washington, D.C. built in

1839, and in the old B&O Railroad building in Baltimore, MD. Kimpton Hotel Monaco

Philadelphia was built within a historic Empire and Greek-revival style building, the Lafayette

building, that was originally built in 1907 in honor of the war hero, General Marquis de

Lafayette (“Hotel Monaco Philadelphia is Open,” 2012). In October of 2012, Hotel Monaco

became the second Kimpton hotel built in Philadelphia, in addition to the Kimpton Hotel

Palomar Philadelphia located in Rittenhouse Square, opened in 2009.

2.1: Mission and Vision

Kimpton’s primary mission as a company is “to be the best-loved boutique hotel and

restaurant company by our employees, guests, owners and communities and to genuinely support

our co-workers, provide heartfelt care and comfort for our guests and to deliver superior

financial returns to our investors” (Depatie, 2013). One of the main vision statements and goals

of Kimpton is to “make travelers feel genuinely cared for through thoughtful perks, amenities,

bold, playful design and a sincerely personal style of guest service” (“Working at Kimpton

Hotels,” n.d.).

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The Hotel Monaco follows the company's vision by connecting local guest with leisure

and business travelers to offer the same experience. “Our strategy for high-quality growth

focuses on strengthening our diverse portfolio of differentiated brands, building scale in key

markets, creating lifetime guest relationships, and delivering revenue to hotels through the

lowest-cost, direct channels. Our strategy is underpinned by great technology and our

proposition to third-party owners is highly competitive and drives superior returns” (Kimpton,

2018). Their main goal is to make people’s lives better through human connections. While the

bottom line is certainly a factor, Bill Kimpton created his company with the idea of a different

experience at an affordable price. The Hotel Monaco was voted top 20 hotels in NY state and

the mid-Atlantic as top hotels to travel to. Each day the main goal is to build relationships with

their consumers.

3.0: Current Target Market

Kimpton Hotel Monaco Philadelphia serves a broad number of guests and travelers

among several target markets. Not only are they marketing to the Philadelphia area, but also to

the incoming tourist; their price point is reasonable for mid-to-upper incomes. According to

“The Boutique and Hotel Lifestyle Report 2015”, boutique lifestyle brands like the Kimpton

Hotel Monaco brand seek to attract “customers [that] are generally in their early 20s to mid-50s,

with mid to upper income averages” (McKenney, 2015). This indicates that Hotel Monaco’s

target market consists of the Baby Boomers, Generation X, and Millennials. It also consists of

single people, couples, families, pet-owners, eco-conscious guests, and the independent business

traveler.

The Baby Boomer generation, born between 1946 and 1954, represents a group of 50 to

68-year-old people that grew up during “the American Dream”. In terms of population, they are

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comprised of around 77 million people in the U.S. A defining characteristic of this generation is

the fact that they They are also not as technologically-savvy as their younger counterparts who

usually teach them how to use modern technology. On the other hand, in terms of value to the

hotel industry, Baby Boomers have the highest buying power of any other generation, with an

overall median household income of $60,000. About 89% of them completed high school and

about 29% of them hold a Bachelor’s degree (Lister, 2017). This is the generation that will most

likely want to speak with someone during their service experience; they prefer human interaction

in their daily lives, especially when staying at a hotel. In regards to Kimpton hotels, guest

interaction is a marketing method, strategy and value that Kimpton prides itself on within all of

its boutique hotels.

Generation X, born between 1965 to 1980, consists of a group of 34 to 49-year-old

people who represent the bridge between Baby Boomers and Millennials. In terms of

population, they are comprised of around 46 million people in the U.S. About 79% have

completed at least some form of education. This group is characterized by a working class that

raises children, pays mortgages, and deals with homeownership. 80% of this generation uses

social media channels; thus, they are more technologically-adept than Baby Boomers. Gen. X is

more likely to use social media as way to find, connect with, and follow hotel companies online.

They are also more likely to use direct mail as one of their primary methods of contact than the

Millennial generation (Lister, 2017).

Millennials, born after 1980, is comprised of a group of 18 to 33-year-old people

In terms of population, they are comprised of 83 million people. Around 34 percent have

obtained a college degree within their lifetimes. They are characterized by being the “largest

generation of entrepreneurs,” who use social media the most often out of all the generations, and

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value social issues instead of economic issues. They also play a major role in reshaping the way

marketing strategies and efforts are initiated, due to the fact that they do not respond to

traditional marketing methods. The main way that Kimpton seeks to stay in touch with this

generation is online through its multiple social media channels, including Yelp and TripAdvisor;

this is done by being aware of their presence on social media and having a quick response rate to

any reviews that are posted (Lister, 2017). The way that Hotel Monaco specifically appeals to

Millennials is through its uniquely-designed lobby and hallways, which display an elegant, yet

chic, exciting, and youthful ambiance.

IHG, Kimpton’s parent company, also has several classifications when it comes to

differentiating travelers who stay at Kimpton’s boutique hotel brands: “the new global

explorers”, “new family groups”, “younger ‘laptop and latte’ workers”, “expansive midlifiers”.

“The new global explorers” are travelers mainly from Colombia, Turkey, Egypt, Vietnam,

Indonesia, and Africa who can afford to travel. “New family groups” are defined as extended

families who are now traveling as a result of emerging markets. “Younger ‘laptop and latte’

workers” are “younger business travelers” who enjoy working alongside other people in lobbies

and lounges, and who are not accustomed to working in an office. Lastly, “expansive midlifers”

are above their 50s, sustain healthy lives, and have plenty of opportunities to travel (McKenney,

2015).

According to Mark Jennings, regional vice president of mid-Atlantic operations at

Kimpton, 80% of Kimpton’s overall restaurant business is local clientele (Oates, 2013). When

Bill Kimpton originally created the concepts for his hotels, he wished to emulate the European

boutique hotels’ emphasis of attracting and interacting with local residents. Today, local

residents make up a substantial and important part of Kimpton’s target market as well. For Hotel

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Monaco, finding ways to interact with the local community of historical Old City and

surrounding business districts is essential in bringing in more business to add to the bottom line

of increased profits, and in aligning with Bill Kimpton’s original model.

4.0: Internal Analysis

The following section consists of an analysis of internal information, internal data

collection, and marketing intelligence mainly related to Hotel Monaco. This section also lists

and discusses the property’s various on-site amenities and facilities available and offered to

guests. In addition, it examines internal marketing strategies as they apply to employee

experience within Hotel Monaco among all front-line and back of the house staff.

In terms of tracking, collecting, and reviewing guest satisfaction, experiences, and

information in an efficient manner, Hotel Monaco uses both traditional and technologically

streamlined methods of collecting in-house data. After speaking with management, each guest is

prompted a survey along with their final folio to measure the guest experience. This allows the

guest to report what they liked or disliked about their stay. The front-line staff at Hotel Monaco

also utilizes their POS system Opera to measure guest performance. They also follow how many

covers come from just the restaurant and how many are guest in the hotel. A traditional method

employees also use at Hotel Monaco is guest cards, which record this internal data in order to the

adjust the guest experience. After all data is collected, a yearly report is measured to track

performance.

It should be noted that some of the main distinguishable internal factors, which

differentiate Hotel Monaco Philadelphia from both its surrounding competition and hotels in the

U.S., is its commitment to maintaining a connection with the local historic Philadelphia

community, as well as its exceptional loyalty program for potential, new, and repeat guests.

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Through its connection to the local community, Hotel Monaco ensures that each guest, local

tourist, local resident, and any other visitor is welcomed and accommodated within its “eco-

friendly”, colorful, and “pet-friendly” state-of-the-art lobby, the Red Owl Tavern American

restaurant on-site, and the Stratus Rooftop Lounge. All of the preceding internal environments

provide an atmosphere perfect for promoting the hotel’s daily, weekly, and monthly events,

which are intended to bring guests and the local community closer (“Award-Winning Boutique

Hotels,” n.d.). The The IHG Rewards Club loyalty program is easily comprehensible and

intuitive for guests; each tier that guests can gain by accruing points gives them a surplus of

benefits, perks, and incentives, which not only helps to improve their overall experience, but also

creates more meaningful, memorable interactions between the guests and front-line employees

(“Kimpton Karma,” n.d.).

4.1: Amenities and Facilities

Hotel Monaco has a 130-seat restaurant on-site, the Red Owl Tavern, also owned by

Kimpton, which serves “elevated” American cuisine open seven days a week, consisting of

classic comfort food dishes as well as vegetarian, vegan, and gluten-free menu choices. Hotel

Monaco also features the Stratus Rooftop Lounge open Wednesday through Saturday, which is

one of Philadelphia’s only open-air lounges with a full-service bar on the 11th floor of the hotel

with views of Independence Mall; it promotes a vibrant social scene and serves innovative

cocktails and small plates. Stratus Rooftop Lounge also has ample space for hosting private

events, receptions, and other special occasions. Hotel Monaco has approximately 268 guest

rooms with 17 suites and 25 “King Spa” rooms along with 12,000 square feet of meeting space

with a 3,200 square foot ballroom, great for weddings, receptions, and special events (Stadd,

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2011). Amenities at Hotel Monaco also include complimentary public bikes offered to guests for

a “ride around town”, a yoga mat conveniently placed in each room, complimentary luxury bath

amenities, Wi-Fi, 24-hour in-room dining (via the Red Owl Tavern), a fully-equipped on-site

fitness center, and a valet laundry service and shoeshine, perfect for the independent business

traveler (“Hotel Amenities,” n.d.). All of these amenities contribute to a very positive guest

experience consisting of overall convenience, satisfaction, and enjoyment, all of which

contribute to a memorable stay. This, and the fact that Hotel Monaco holds a “powerful and

historical presence” due to its location and close proximity to local attractions create more of a

likelihood of positive reviews on influential travel review sites such as TripAdvisor and Yelp, a

better chance of first-time guests becoming loyal guests of the hotel and of Kimpton’s Karma

and IHG Rewards Program, and a higher chance of guests reporting their experience to friends

and relatives.

4.2: Employee Experience

Another aspect of that strengthens Hotel Monaco and Kimpton is overall employee

experience. As a result of everyday positive employee experience, guest experience is directly

affected; Kimpton ensures that all employees are not only enjoying their every day work, but

also being taken care of by the company. Kimpton, as a company, seeks to “make people’s lives

better through heartfelt human connections” (“Working at Kimpton Hotels,” n.d.). This shows

how Kimpton ensures an emotional investment to their employees and guests that they will not

find at any other hotel except the Kimpton hotel. It helps to create a sense of belongingness

among employees and guests across all Kimpton hotel and restaurant properties. This promotes

a high level of employee empowerment that is essential in guaranteeing consistent high-quality

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guest service among front-line staff within the hotels, especially in the more personalized brands

like Hotel Monaco. Unlike other hotels in the Old City area, Hotel Monaco allows employees to

be themselves and to bring their authentic personalities when going to work, instead of being

pressed into molds, making way for more meaningful and memorable employee-to-guest

interactions. As former CEO of Kimpton, Michael Depatie stated, “we’ve created an inclusive,

supportive, human culture, where we demand people show up and be who they are... we

celebrate people’s differences” (Buchanan, 2014). This really ties in with how Hotel Monaco

has also tied in with overall employee and guest diversity and inclusivity in regards to race,

gender, and sexual orientation. With its proximity to Washington Square West, a popular district

among LGBTQ folks, Hotel Monaco serves as a model in not only representing Kimpton as an

LGBTQ-friendly company, but also promoting an atmosphere for LGBTQ folks to book events

and weddings. Lastly, a factor that is adds to employee empowerment is humor; Kimpton

believes that all of its hotel employees, especially front-line staff, should be allowed to use

humor in responding to guests, which ultimately contributes to employee creativity in creating

guests’ intangible experiences.

5.0: External Analysis

The following section explains the microenvironment, which includes information

pertaining to the marketing environment including sales, supplier information, publics, and other

important external data directly related to the hotel and company. Then, an analysis of the

macroenvironment will be conducted, which consists of every political/legal, economic, socio-

cultural, technological, and environmental aspect that Hotel Monaco confronts and is, in most

cases, unable to control. Finally, an analysis will be conducted of Hotel Monaco’s competitors

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and their differentiating characteristics and factors that compete and contrast with Hotel

Monaco’s overall marketability, revenue earned, and bottom line of increased profits.

5.1: Microenvironment

A hotel company’s microenvironment is defined as aspects related to the company, which

contribute to how guests are served. In analyzing the microenvironment for Hotel Monaco, it is

important to look at suppliers, marketing intermediaries, and publics. Information related to

competitive intelligence, existing competitors, and competitive differentiators will be explained

in the “Competitor Analysis” section of this report.

IHG works to provide Kimpton with the best industry partnerships and supplier

connections that will best meet the needs of both organizations. Kimpton and IHG’s external

suppliers are divided into four sections: Corporate, Hotel, Marketing, and Global Technology.

Corporate suppliers consist of Human Resources, Travel, Consultancy, Legal, and Travel. Hotel

suppliers are comprised of Beverage, Food, Engineering and Hotel Utilities, and Non-Food.

Marketing suppliers include PR, Fulfillment, Print, Research, Sponsorships, Events, Media, and

Advertising. Global technology suppliers are Hardware and Software suppliers (“Suppliers,”

n.d.). One of Kimpton’s primary suppliers is the Cvent, which serves as the world’s largest

event management and meetings technology company and is “a sourcing tool of choice for

thousands of meeting planners across the country”. As a company, Cvent helps Kimpton to

connect to meeting, convention, conference, and event planner suppliers worldwide (“Kimpton

Hotels,” 2010).

Marketing intermediaries for Kimpton include distribution partnerships with third-party

companies such as Orbitz LLC, Travelocity.com LP, Priceline, and Expedia, Inc. Other guest-

specific media vehicles such as SMS, e-mail, internet advertising, broadcasting, and localized

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print ads are other types of intermediaries that Kimpton uses (Lobo, 2013). Former Vice

President of Kimpton Hotels & Restaurants, Jimmy Suh, stated that Expedia, Inc. is the highest

grossing of all of the third-party distribution partner companies, “contributing from 30% to 40%

of overall business” (“Third-Party Distribution”, n.d). Suh also stated that Kimpton enhances its

industry partnership with Expedia, Inc., along with other third-party firms. For example, this

was done by using “Expedia’s new corporate travel product”. Although they benefit from their

relationship with third-party distribution intermediaries, one of Suh’s goals, which has been the

intention of Kimpton as a company ever since he left the company, was to invest time in working

with their sales and marketing team to decrease the company’s overall dependence on marketing

intermediaries or third party firms. Kimpton most likely wishes to eliminate the middleman that

is the third-party website. Overall, Kimpton has spent millions of dollars on marketing,

especially when forming the reach to its target markets, and in extending relationships with

current and future marketing intermediaries (“Third-Party Distribution,” n.d.). On the other

hand, another perspective on how Kimpton has interacted with third-party distribution channels

is the fact that when prospective guests were looking up personalized lifestyle hotels to stay at on

third-party mediums, such as Priceline, the websites “failed to identify a certain hotel as part of

the Kimpton group” (Lobo, 2013). This perspective sheds light on the fact that there is room for

improvement in the third-party medium website’s engagement with consumers, such as changing

the page title from “Book a stay at Hotel Monaco in Philadelphia”, to “Book a stay at the

Kimpton Hotel Monaco in Philadelphia”.

In engaging with publics and the general public, Kimpton seeks to make sure that it

maintains a consistent relationship with each one of its guests, who Kimpton seeks to make a

loyal part of their brand. This is done through monthly and yearly analyses of Kimpton’s target

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markets by the Sales and Marketing team, in which they seek to highlight the most important

numbers representing overall sales, EBITDA, and calculated projected sales. In terms of most

recent sales and revenue, Kimpton is at a revenue of around $1050 million with a 2.9% increase

in RevPAR (“Preliminary Results,” 2017). They use this information and data to find out new

strategies and techniques to keep their brands new, dynamic, interesting, and constantly

changing. This specifically applies to Hotel Monaco, as it relates to how the hotel can

strategically use their location in America’s “most historic square mile” and in Philadelphia’s

ever-changing Old City as a marketing tactic in order to engage the publics in a new way. This

coincides with the idea of the product concept, in that guests will prefer intangible experiences

through hospitality service products that are the highest quality in features and performance

level; for this concept, it is all about how a product (in this case, a hotel), can make themselves

more appealing in attracting more return guests by either reinventing or improving their service

products.

5.2: Macroenvironment (PEST Analysis)

5.2.1: Political / Legal

The impact of the political climate on the hospitality industry, most specifically the

boutique hotel industry in the United States should not go unnoticed. It is important to consider

the effect that several levels of government, as well as the political climate, have on the

hospitality and tourism industry, especially when finding ways to better market boutique hotels.

The U.S. government is involved in any changes related to the taxation of publicly-owned and

privately-owned hotels, restaurants, recreation facilities, and attractions. The fact that a

hospitality professional would need to take initiative and make effort in gaining the attention of

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government legislators and lawmakers, shows that there is not enough former-hospitality and

tourism workers serving in government positions (Litvin, 2012).

Another political change, as it relates to hotel tax regulation, occurred in 2017 with the

recent sudden change in the Pennsylvania hotel tax from 6% to 11%. This is different than the

hotel tax in New York City and in New Jersey, in which hotel guests only pay below a 10% hotel

tax. Michael Stershic, President of the Discover Lehigh Valley destination marketing

organization stated that this change “puts the entire [hospitality] industry at risk” (Bresswein,

2017). Since Philadelphia serves as the largest city in Pennsylvania rich in historical and cultural

attractions, and is also serves as one of the “most walkable cities in America”, the hotel industry

in Philadelphia will be dramatically affected by this change in the Pennsylvania hotel tax. This

will not only directly affect visitors, but it will also affect local travelers who live near the

Philadelphia area or anywhere else in Pennsylvania, since “Pennsylvanians are one of the largest

single markets for Pennsylvania hotels” (Bresswein, 2017).

5.2.2: Economical

The economic aspects most relevant to the hospitality industry, especially in relation to

the boutique lodging and hotel industry and Kimpton as a brand, are consumer buying power,

income level, and socio-economic status, as well as fluctuation of the economy. Boutique hotels,

in particular, have provided investors with the highest rate of return on all property types

(“Boutique Hotels,” 2008). Guests who have the highest buying power are most likely going to

be considered elite travelers who can afford to travel at any time and to spend the most money,

unlike guests with the lowest buying power, who can only be able to afford to travel once or

twice a year with the rising costs of airfare, hotel, and travel packages over the past few years.

Since all of Kimpton’s lifestyle boutique hotel brands are upper-upscale luxury, this narrows

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down most of the customer base at Hotel Monaco as being one associated with the mid-to-upper

class and mostly higher socio-economic status and income level than average, as well as being

seen as more affluent. In spending their money, travelers have looked for options that breach out

of the norm, and do not offer “cookie-cutter” accommodations typically found at a Marriott or

Hyatt Hotel; rather, they are looking for a more exciting brand that offers creative design,

flexibility, and a personalized touch not offered at other hotels.

The fluctuation of the economy, especially during the recession within the last decade,

proves that the U.S. economy is inevitably unpredictable, and it will continue to be

unpredictable. As a result of the most recent U.S. economic recession, which occurred in the late

2000s, luxury boutique hotel brands, like Kimpton and Hotel Monaco, were forced to offer

special perks and cut down on rates in order to get guest through the door. The recession also

affected the overall occupancy rate (13% drop), RevPAR (20% drop), and ADR of luxury

boutique hotels (Lewis, 2009). This shows how the luxury boutique hotel industry needs to

prepare itself for the next time a recession is likely to occur.

5.2.3: Social-Cultural

Philadelphia is one of the more vibrant cities to be in, since it is one of the most populous

cities in the United States. The way that Philadelphia is perceived by society, in general, as well

as other nearby cities is due to social-cultural conditions and specifics related to demographics.

Philadelphia is Pennsylvania’s largest city with a population of 1.57 million people living in the

city. The city and the surrounding counties are located in the Southeastern-most point of

Pennsylvania. The city of Philadelphia has an area of 1,799.5 square miles. The racial

composition of Philadelphia includes 41% White and 37% Non-Hispanic, as well as 43.4 Black

or African-American, 12.3% Hispanic, and 6.3% Asian. The largest cultural groups that have

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significant ancestry are the Irish, Italian, and German groups. As of 2008, Philadelphia “had

become home to over 500,000 immigrants” (“Philadelphia Population,” 2018). In terms of age,

the median age is 33.5 years; in terms of distribution of gender, it is 46% Male and 54% Female;

in terms of average household size, it is 3.5 persons. As an indirect result of these demographics,

and due to Philadelphia’s historical reputation, Philadelphia has been widely-known as a “blue-

collar city”, meaning that it is a city that is differentiated by the fact that there are many workers

who work in the field of manual labor jobs. Due to the increase of hospitality and tourism

related jobs in the last decade, however, the term “pink-collar” is being attributed to most

Philadelphia jobs emphasize providing guest/customer service, which is redefining how the city

is perceived and attracting men by sheer numbers to these types of hospitality-related jobs

(Francis, 2012).

5.2.4: Technological

The most prominent environment in the hospitality industry that affects tourists, travels,

and hotel guests in the United States, is the technological environment. One of the reasons why

this is the case, is because technology is an ever-changing component of society, and some of the

most current hotel trends, especially among lifestyle luxury boutique hotels, are about

integrating, upgrading, or simply adopting and utilizing new technology in order to streamline

the hotel experience for guests, and the work experience for front-line staff.

Some of the most relevant up and coming technological trends affecting the lifestyle

boutique hotel industry include keyless technology, digital room control, and next generation in-

room entertainment systems. Keyless technology allows guests an easier way to access their

rooms without having to dig for their keycards in their pockets or to worry about the likely

possibility of their keycards becoming deactivated due to other magnetized cards in their wallets.

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This method also not only enables guests to open their room on-command via their smartphone

apps, but it also enables them to operate the door key lock in order to open the door from any

location while staying at the hotel. It allows front desk staff “to track who has accessed a room

at what time” (Price, 2017). Another technology trend is the integration of digital room control

via guests’ smartphone apps in operating in-room functions by being able to control “lights,

temperature, room service, entertainments” and other requests. A location that is popularizing

this specific trend is Las Vegas, and it serves as a model for the lifestyle boutique hotel industry

to follow. Another trend is the fully-updated next generation in-room entertainment systems in

which TVs can easily connect to guests’ smartphones, laptops, or tablets allowing them to sync

their photos, cable provider, and Netflix accounts (Price, 2017). More lifestyle boutique hotel

hotels within the industry would be wise to follow this trend, as modeled by major companies

like Marriott and Hyatt.

5.3: Competitor Analysis

An understanding of competition faced by Hotel Monaco Philadelphia is essential in

market positioning and integrated marketing strategy creation. It is also necessary in

understanding what differentiates Hotel Monaco from the rest of the competition within its

unique offered experiences, as well as how they ensure return and repeat business at their hotel

when guests choose Hotel Monaco, instead of the competition. Maintaining a competitive edge

against existing competitors and potential future competitors is also all about satisfying guest

needs and wants better than other hotels and accommodations in the area. In choosing

competitors for Hotel Monaco, it is important to look at similar mission, vision, goals, and core

strategies, geographic location, as well as similarity of the service products offered. Hotel

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Monaco mainly competes with upper-upscale luxury boutique hotels in the surrounding

Philadelphia area.

In the past, general competition for Kimpton boutique hotel properties, like Hotel

Monaco, created challenges as a result of the expanding scope of larger hotel chain companies

such as Hilton Worldwide, Marriott International, and Starwood Hotels & Resorts as these

companies have debuted their own types of successful independent lifestyle and luxury boutique

hotel brands in the past. STR (Smith Travel Research) senior Vice President, Jan Freitag stated

that in terms of boutique hotels who face challenges due to increasing competition “having cool

furniture and a model behind the front desk is not a sustainable competitive advantage”, meaning

that in order to better market themselves, Kimpton’s boutique hotels would need to find and/or

reinvent new ways to attract guests and to strategically reposition themselves in order to possess

a competitive edge in any city they were located (King, 2016).

Major competitors for Hotel Monaco can best be analyzed from the Competitor Analysis

chart in Figure 3 in the Appendix, which lists how each hotel or accommodation-provider in the

Philadelphia area is differentiated based on service product offered, average price range/price

point (per night), people served (i.e. target market, segmented guests), and specific amenities and

accommodations that distinguish them as a hotel/brand. Before looking at specific competitors,

Hotel Monaco should be analyzed first. As mentioned within this report, Hotel Monaco’s main

product is an upper-upscale lifestyle luxury boutique hotel, which offers a localized,

personalized, and colorful guest stay with rooms and suites within the heart of Philadelphia’s

Historic District. The average price per night is around $284, and it changes depending on the

season. The people served at the hotel are singles, couples, families, pet-owners, eco-conscious

travelers, and independent business travelers of mid-to-upper income margins. Some of the main

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distinguishing accommodations include a rooftop lounge, complimentary pet-related offerings

and services, in-room spa amenities, 24-hour in-room dining via the on-site restaurant, Red Owl

Tavern, and public complimentary bikes offered (MonacoPhiladelphia.com).

A main competitor for Hotel Monaco is the Logan Philadelphia, Curio Collection by

Hilton, which offers a 4-and-a-half-star modern luxury boutique hotel in Franklin Square (still

considered within Philadelphia’s Historic District), with contemporary rooms and suites as its

product. The hotel features modern and contemporary pieces of art throughout the lobby,

restaurant, lounges, meeting rooms, and guest rooms/suites. The average price per night is

around $203, and it is subject to change. Their target market is composed of mainly business

travelers, singles, couples of a mid-to-upper income margin. Distinguishable and similar

accommodations and amenities include the “Assembly Rooftop Lounge” with breathtaking

views of Franklin Square and the skyscrapers of Philadelphia, an on-site five-star steakhouse

restaurant, “Urban Farmer”, an on-site Spa and Health Club, and an indoor pool (“Hotel

Overview,” n.d.).

Another major competitor Hotel Monaco faces Old City is Penn’s View Hotel, whose

product is a smaller, luxury boutique hotel featuring rooms, suites, a dining room, and some

guest rooms offering a fireplace and private balcony. The average price point is around $199 per

night and is subject to change depending on the season. Penn’s View Hotel differentiates itself

in its target markets in that they seek to reach mainly couples and honeymooners, and

occasionally singles, since the hotel offers various “couple” deals and packages. Their

accommodations and amenities consist of free Wi-Fi, warmly furnished spacious rooms, an on-

site Italian restaurant, “Panorama”, which is one of the best Italian restaurants in the city, and a

free complimentary continental breakfast offered every morning (“Old City,” n.d.).

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At another competitor hotel nearby, The Franklin Hotel at Independence Park, a Marriott

luxury boutique hotel, offers upscale accommodations within their rooms and suites as their

product. Their price point runs at about $260 per night, similar to Hotel Monaco, which is

subject to change. Their target market consists equally of independent business travelers,

singles, and couples. Some of their differentiating accommodations and amenities include

complimentary Wi-Fi, free exercise classes, an on-site upscale American restaurant, “Azalea”, an

on-site sauna and an indoor pool (“Center City,” n.d.).

The main ways that Hotel Monaco competes with these nearby luxury boutique hotels is

on price point, which is on average, higher than what the other boutique hotels sell for per night.

They cater to a more diverse group of target markets, providing perfect accommodations for

virtually any type of guest or traveler. Overall, they provide one of the best value modern, yet

historical localized and personalized boutique hotel experiences in Philadelphia.

6.0: SWOT Analysis

6.1: Strengths

6.1.1: Connection with the Local Community

One of the main strengths of Hotel Monaco is that it is locally connected to Old City and

the surrounding residential and business districts; the hotel is known to host local events for

tourists and travelers visiting the nation’s “most historic square mile”, guests staying at Hotel

Monaco, and local residents who have been living in the Old City area for years. The hotel’s

daily programs and weekly local events help to connect employees to guests, employees to

tourists, employees to local residents, and tourists to local residents. One of the daily programs

is “Wine Hour” in the lobby from 5pm to 6pm (also featured in all Kimpton hotels across the

globe) where complimentary select wines are available for guests and locals alike in order to

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“unwind, sip, and savor” (“Award-Winning Boutique Hotels,” n.d.). Another one of their daily

programs and amenities is their complementary morning tea and coffee offered every morning.

One of the things that also differentiates Hotel Monaco from other hotels in the immediate area is

their “Pet-Friendly” program (also featured in all Kimpton hotels), which aligns to one of

Kimpton’s main marketing mantras in providing a “localized experience”. Tourists, travelers,

and guests are going to be walking their pets around the local neighborhoods while exploring

sites and attractions in one of “the most walkable cities in America”; local residents will also be

bringing their pets into the hotel, which will help increase the likelihood of employee-to-guest

and guest-to-local resident interactions, allowing people to remember the quality guest service

and uniqueness of Hotel Monaco (Brown, 2017). A weekly event that Hotel Monaco has been

known for offering is its “Free Yoga Series” hosted by “Three Queens Yoga” which is intended

to “cure winter blues” (Cunningham, 2018). This is not only a great way to encourage guests,

tourists, and local residents to interact with one another, but it also encourages folks to exercise

by doing yoga during the cold winter months.

The Red Owl Tavern located inside Hotel Monaco also features various yearly events for

guests, tourists, and local residents; one of which is the “Chinatown Pop-Up Christmas Dinner”

on the last week of December, which features a Chinese-American inspired menu for guests.

Another yearly event is the “Valentine’s Day Mystery Show” featuring dinner and drinks while

guests solve an interactive “mystery” in the tavern’s private dining room. A monthly event at

Red Owl Tavern is “Brewer of the Month” featuring specific beer brands for guests to drink at a

special price. A weekly event occurring on weekends is “Weekend Brunch” that highlight a

“build your own Bloody Mary bar” and $5 Bellinis (“Brunch and Live Music Events,” n.d.).

6.1.2: Hotel Monaco and Kimpton’s Reputation

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Another strength that applies to Hotel Monaco both internally among all of its guests,

future loyal guests, and externally among all guests who choose to stay at Kimpton hotels, is its

fantastic reputation. Kimpton Hotels & Restaurants has effectively established itself as a majorly

successful independent lifestyle boutique hotel company. It created the some of the very first

trends for luxury boutique hotel design back in the early 1980s after its inception that are still

followed as models by other boutique hotel companies today. Over the past decades, Hotel

Monaco and Kimpton have received numerous significant recognitions, merits, and awards. In

the past decade, Hotel Monaco received recognition as being one of the “Best Hotels in

Pennsylvania” by U.S. News & World Report. Hotel Monaco also received the “Four Diamond

Award” in 2017 by AAA. It was listed as a finalist hotel in Conde Nast Traveler’s Top 20

Hotels in NY State & the Mid-Atlantic. They were also awarded the “Certificate of Excellence”

and the “Greenleaders” merit (Platinum Level) by TripAdvisor (“Press Room,” n.d.).

Some of the major awards and recognitions distinguishing Kimpton and its boutique

hotels is its place as one of the top ten companies to work for, for gay and lesbian employees by

The Advocate magazine, as well as earning a 100% on the Human Rights Campaign’s Corporate

Equality Index rating for 13 consecutive years, which examines corporate policies and

procedures related to LGBTQ employees. Kimpton also received the “Best Places to Work for

LGBT Equality” award and the “2010 Innovation Award for Workplace Equality” from the

Human Rights Campaign, as well. Kimpton prides itself on being a leader in providing benefits

for same sex couples and transgender employees (“Kimpton Hotels,” 2016). Under former CEO,

Mike Depatie’s leadership from 2013-2015, Kimpton “tripled its system revenues” and became

the largest operator of boutique hotels in the U.S. In that time, the company received a high

ranking on Fortune magazine’s “Best Companies to Work For” eight times since 2009, with the

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most recent 2017 rating being #6 out of 100. The company also received recognition as the

“Number One Company for Guest Satisfaction for North American Upper Upscale Hotel

Brands” in 2014 by J.D. Power, as well as having one of the “Best Hotel Bars” by Food & Wine

Magazine in 2013 and 2014 and by USA Today in 2013 (“IHG Agrees,” 2014).

6.1.3: The World’s Largest Hotel Loyalty Program

Another defining strength of Hotel Monaco is that it offers guests to be a part of “the

World’s largest hotel loyalty program”. Previously named the Kimpton InTouch program, the

Kimpton Karma and IHG Rewards Club loyalty program offers a plethora of perks, benefits, and

incentives, which help to improve the guest experience. Through the loyalty program, guests are

able to earn, accrue, and redeem points that they are able to use across 5,300 hotels, 12 IHG

brands, in nearly 100 countries globally (“Kimpton Karma,” n.d.). Since the IHG-Kimpton

merger and acquisition, the program’s name has been commonly referred to as the IHG Rewards

Club, acknowledging and keeping benefits of Kimpton’s previous loyalty program such as bar

discounts, free Wi-Fi, in-room Spa credit, and exclusive offers to social events. Guests can

adopt to have a credit card with the IHG Rewards Club logo in order to earn points. They can

also earn points by staying at any Kimpton hotel, with 1 night equating to 1,000 points earned.

The lowest tier that guests can start out at is the “Club” level with three to four benefits, and the

highest tier that guests can make their way up to is the “Inner Circle” tier with ten significant

benefits that allow for higher-quality complimentary offerings at any one of Kimpton’s hotels,

and even “Exclusive Direct Access to Kimpton’s CEO” (“Kimpton Karma,” n.d.). The tiers

along the way that they can earn include Gold Elite, Platinum Elite, and Spire Elite, with each

higher tier representing more benefits guests can earn.

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6.2: Weaknesses

6.2.1: Lack of Brand Recognition

A weakness that Hotel Monaco faces is the fact that guests become so immersed in the

unique boutique lifestyle offered by the hotel, that some of them completely forget Hotel

Monaco’s parent hotel company, Kimpton Hotels and Restaurants. There is a higher chance of

them remembering the individual hotel experience instead of Kimpton’s name. After their stays

at any independent Kimpton property, travelers would usually remember the defining and

differentiating characteristics of the hotel that made their stay memorable, but unfortunately, they

would not be able to remember, acknowledge, recognize, and associate the lifestyle boutique

hotel experience with Kimpton, as an overarching brand. This, in turn, has the potential to make

guests to think of Hotel Monaco and Kimpton as separate brands and companies. This also

makes it more likely for guests who have just stayed at Kimpton properties such as the Hotel

Monaco, to not recall the name of any of its parent companies. It does not help this issue that the

only lighted outdoor signs and letterings of the hotel’s name is just “Hotel Monaco”, instead of

“Kimpton Hotel Monaco”, a strategic change that would go a long way in allowing current,

future, and prospective guests to properly associate Hotel Monaco with Kimpton. As a result,

they are unable to truly appreciate Kimpton’s influence on Hotel Monaco. Unless the guest is

encouraged to sign up for the IHG Rewards Club loyalty program, it is not likely that they will

know to keep updated on Kimpton as a company, due to the fact that they will not have interest.

Moreover, this weakness faced by Hotel Monaco was indirectly caused by Kimpton, because of

the company’s mission to give each hotel its own unique theme, which makes the individual

hotel more prominent, well-known, and identifiable than the parent company (Lobo, 2013).

6.2.2: Perception of “Pet-Friendly” Atmosphere

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While one may think of Hotel Monaco’s emphasis on providing a “Pet-Friendly”

atmosphere to guests, travelers, and tourists as a benefit, differentiating characteristic, and a

potential strength, it is most likely perceived as a weakness to the property. This is due to the

fact that one of the hotel’s primary target markets, the independent business traveler, will

perceive and deem the “pet-friendly atmosphere” as unattractive and unappealing. Business

travelers may be likely to be “allergic or turned off by the nearness of having of having pet-

friendly rooms” (Turner, 2014). This also creates a liability that the hotels could face as a result

of other pet-owners who bring their unruly, untrained dogs or cats to the hotel and pose a threat

in having their pets potentially biting other guests and releasing fleas into the air. This also

creates the obvious issue of noise disturbance, as it affects business traveler productivity. The

pet-friendly accommodations pose a weakness to the hotel because business travelers have

certain expectations when it comes to their stay. Hotels over the years, have collected data based

on previous guest experiences and it has proved that business travelers will most likely choose

the hotels that give them the best “do not disturb” factor, where the hotel ensures that their

property creates an environment where business travelers “have the opportunity to get the job

done at any time, from anywhere, without disruption” (“Managing and Meeting,” 2014). The

potential for noise disruption and odor caused by nearby animals creates situations that the hotel

will not be able to control any time a complaint is made. Another example that contributes to

this problem is dog and cat hair on hotel furniture that results from shedding; this is an inevitable

aspect of bringing pets into the hotel, and will not create a satisfactory or memorable experience

to the business traveler who sits in the seat only to find dog or cat hair stuck to their hundred

dollar suits and jackets. This issue applies particularly to older business travelers over 50, since

they are a market that tends to be more traditional and conservative when it comes to choosing

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hotels to stay at. Older business travelers will want to make sure that their stay is free of

anything that they are unfamiliar with and the “pet-friendly” atmosphere is no exception, as it

will make them not choose to stay at the hotel in the first place, or make them not return to the

hotel again due to negative pet-related incidents and experiences that the hotel is not able to do

anything about.

6.3: Opportunities

6.3.1: Potential for Worldwide Exposure

As a result of being acquired by IHG, Hotel Monaco has a higher chance of attracting

positive exposure and advancing itself as a brand that will cause new Hotel Monaco and new

Kimpton hotel brands to open in some of the most visited cities worldwide. This is due to the

fact that the merger and acquisition has established Kimpton as “the world’s largest boutique

hotel business”. According to the official press release published after the acquisition, it reports

that there are “significant opportunities identified for IHG to accelerate the growth of the

Kimpton brand within the U.S. and to launch it globally” (“IHG Agrees,” 2014). Additionally,

as an indirect result of the acquisition, Kimpton’s EBITDA (earnings before interest, tax,

depreciation, and amortization), was expected to double by the beginning of 2018, which ended

up being the case. Therefore, this also creates the opportunity for expansion since “there is a

significant opportunity to expand the brand in Europe and Asia” where there is a high demand

for boutique hotel properties. With the exception of the Kimpton De Witt Hotel and the

Kimpton Seafire Resort and Spa located in the Cayman Islands, Kimpton plans to debut new

lifestyle boutique hotel properties in the next decade in the islands of Bali, in Shanghai, and in

Sanya (Hainan Province, China) (“IHG Introduces,” 2017). They also plan to open a new

property in Paris, France in 2020 (“Paris Boutique Hotels,” n.d.). In Canada, they seek to open a

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new boutique hotel in Toronto (“Plans for Toronto,” n.d.). Kimpton will receive a high return on

its investment as a result of opening new properties across the globe. This opportunity will be

fueled by the strategic alignment with some of IHG’s core values and intentions of “building on

a strong track record of developing iconic global brands”, “building owner relationships”, and

“using powerful digital programs” in accelerating growth” (“IHG Agrees,” 2014).

Another differentiating characteristic that contributes to Hotel Monaco’s recognition as a

worldwide brand that will create opportunities for other Hotel Monaco properties to be built

globally is through the product life cycle. Looking at Figure 1 (located in the Appendix), there is

a graph of the product life cycle, which in terms of Hotel Monaco, can apply to the hotel itself

and to its growth and evolution in becoming one of the most prominent, reputable, localized, and

historically-significant boutique hotel properties in the city of Philadelphia. (“All 4 Stages,”

2014). In this case, what differentiates Hotel Monaco and increases its potential to become an

internationally-renowned and recognized brand is the fact that Hotel Monaco did not need to

make any primary decisions in market planning within the “Introduction” stage; rather, when

Hotel Monaco first debuted Philadelphia’s Historic District, it was already in the “Growth” stage

due to Kimpton’s reputation and continued growth as a domestically and globally-recognized

company, and the hotel’s prime location in America’s “most historic square mile”.

6.3.2: Opportunity to Integrate Technology

Another opportunity that exists to improve Hotel Monaco’s growth in RevPAR, and

ADR, and guest rate per day, month, week, and year, is the potential for Hotel Monaco to

integrate more technology to their boutique hotels. Moreover, Kimpton should approve this

strategy, or better yet, release the initiative to install integrated technological systems in all

Kimpton hotels. Due to the fact that Kimpton focuses on making the guest experience more

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localized and personalized, they can take this “personalized” approach a step further by allowing

guests to have the option to either use the new technology systems or to opt for a more traditional

hotel experience. Either way, they will continue to positively contribute to the guest experience

(“Managing & Meeting,” 2014). Technology can be created and installed in their boutique

hotels such as a mobile app for guests’ smartphones, iPads located in guest rooms, and guest-

friendly computer information systems in the lobbies for an easier check-in and check-out

process and access to online insight about the destination surrounding the hotel. Such

technological improvements can streamline the efficiency of guest interactions, allow the hotel to

better collect important guest-related data, and to enable and empower each guest to better utilize

the hotel’s social media channels effectively. All of this streamlines and adds to the guest’s stay

in improving business transactions between them and front-line staff by removing

unpredictability and providing convenience when forming the intangible experiences that make

up the majority of the guest’s stay.

6.3.3: Increase in Leisure Travelers in Philadelphia Market

An opportunity that Kimpton can use to capitalize on is the increase of leisure travelers in

the Philadelphia market. According to marketing research experts, Visit Philly (2017) saw an

increase in leisure travelers by 4.3%. In more recent years, they have marketed to transient

business travelers they took the focus of more leisure business and saw an increase. The change

in gears saw results according to Figure 2, Philadelphia reached 1.1 million dollars in leisure

room hotel nights alone that contributed directly to the tourism revenue for 2017. On average,

the record Saturday night room occupancy was 90%. This is an opportunity for Hotel Monaco

because with their differentiated services they can take advantage of the increase in leisure

travelers on weekends. The increase in leisure was a 334 percent increase since 1997. The city is

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moving in a positive direction, and this is such an opportunity to create loyal leisure travelers and

establish connections (“Visit Philadelphia,” 2017).

6.4: Threats

6.4.1: AirBnb’s Disruption to Lifestyle Boutique Hotel Industry

A threat posed to the lifestyle boutique hotel industry, especially in the case of Hotel

Monaco and Kimpton, is the disruption to the industry as a result of competition created by

AirBnb. Over the past decade, AirBnb has indirectly caused a decrease in hotel tax as well as

posed a difficulty to boutique hotels in particular “in competing on price”. A Boston University

study proved that as a result of AirBnb’s increased presence in major cities across the U.S., such

as Philadelphia, hotels will seek to increase their room supply, “which involves build out,

causing significant marginal losses for the hotel chain” (Hakutizwi, n.d.). AirBnb also seeks to

reach a portion of Kimpton’s target market of Millennial and Generation X individuals who seek

a more localized, personalized, culture-rich travel experience, especially when trying to to learn

about the nation’s history on America’s “most historic square mile”. These individuals in

Kimpton’s target market, in particular, are characterized as allo-centric travelers, who seek to

have a less mainstream, upscale travel experience; rather, they wish to stay in local community

housing in order to have a more authentic experience in the destination. The study also cites the

fact that “AirBnb offers a much wider range of products and services” than boutique hotels

(Hakutizwi, n.d.).

6.4.2: Effects of Current Political Unrest on Boutique Hotels

Another threat that Hotel Monaco and Kimpton both face is the effect of political turmoil

and unrest on the boutique hotel industry, which causes a decrease in overall travel numbers, less

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of an opportunity to open hotels internationally, and an increase in perception change of

traveling to certain destinations. As an indirect result of political unrest in certain locations

around the world, for example in the Middle East and Southeast Asia, people may be unable to

travel due to political situations that disinhibit their ability to travel internationally. Another

unpredictable political situation that poses a threat to the boutique hotel industry, especially for

Kimpton, is protests, whether union-related or not, which can last for months on end (Hakutizwi,

n.d.). Another issue faced by the U.S. lifestyle boutique hotel industry is apparent, especially

after the election year in 2016; Katherine Lugar, President and CEO of the American Hotel &

Lodging Association, stated “I’ve never seen the level of vitriol in Washington [D.C.] right

now... it’s troubling” (Brandau, 2016). This creates a higher chance of international visitors not

traveling as a result of associating a major city like Philadelphia with the nation’s capital,

Washington, D.C.

6.4.3: 13 New Hotels to Open in Philadelphia in 2019

In the year 2019, 13 new hotels are set to bring massive competition in the Philadelphia.

There are many choices of hotels, different parent companies, and different brands; however,

among those 13 new hotels, at least three are planned to be boutique hotels. This is a threat to

the Hotel Monaco for the reasons that the guest will be intrigued to stay at a new hotel, to

explore and experience the service. According to Philly Curbed, one specific boutique hotel may

be in direct competition. “Developer Roland Kassis plans to build a 125-room boutique hotel

next to Frankford Hall in Fishtown. Most recently, residents voted in favor of a proposed

rooftop pool with a 6-foot overhang on Leopard Street. The current structure at the site is being

restored as part of the project” (Romero, 2018). The Hotel Monaco currently does not offer a

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pool, so during the hottest months (which are the busiest months), guests are more likely to

choose a hotel that offers extra amenities and value-added such as an outdoor pool.

7.0: Marketing Opportunity Identification

An opportunity identified for Hotel Monaco Philadelphia is the creation of a boutique gift

and souvenir shop in the lobby. This directly aligns with the mission and vision of the company

in being “the best loved hotel and restaurant company” by creating an experience that “makes

travelers feel genuinely cared for through thoughtful perks, amenities, bold, playful design and a

sincerely personal style of guest service” (“Working at Kimpton Hotels,” n.d.). The hotel

currently does not offer an entity to purchase items outside of food and beverage, so this would

be something new and refreshing. Boutique hotels are turning to luxury shops that offer a

differentiated feel, and advantage toward their competitors. This will also offer more revenue in

the hotel by adding value-added amenity. A boutique hotel brand that currently does this is the

W Hotel, a Marriott luxury boutique hotel, and it has been successful for them. The hotel will

partner with local suppliers to fill the gift shop with the best of the best. In urban and

metropolitan city areas like Old City, this trend of opening gift shops in luxury boutique hotels

reflects guests’ increasing overall interest for shopping in boutique stores in that these stores are

“benefitting travelers who need last minute cuff links or simply a shopping fix”, especially when

it comes to last minute shopping for luxury items and professional attire for classy events

(Herman, 2007). Another fact that supports guests’ increasing wants to shop in luxury boutique

stores in urban areas is that a luxury boutique stores are more convenient, accessible, and easier

for guests in terms of finding specific luxury brand name items that are spread throughout and

more difficult to find in an upscale commercial shopping mall or an upscale city or suburban

shopping center. As Bill Kimpton always mentioned, the company believes in staying connected

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to the local community. The shop will sell everything from local Philadelphia souvenirs and

memorabilia to high-end clothing. In an instance where a guest may have left their cocktail dress

or button up dress shirt to enter Stratus Rooftop Lounge there will be items offered below in the

gift shop. Also, there will be beautifully-crafted paintings from local Philadelphia artists. This

boutique shop will be the exciting spark that Hotel Monaco Philadelphia needs to engage their

guests. “Shops are one of the remaining opportunities hotels have for people to say ‘This place

is different, better, cleverer and more exciting than I expected,’ ” said Bjorn Hanson, divisional

dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at

New York University (Trucco, 2011).

7.1: Pros and Cons of Marketing Opportunity

This marketing opportunity of opening up a boutique gift and souvenir shop can be

justified through an analysis of the pros (or benefits) and cons (or drawbacks) that it presents and

brings to the hotel. In analyzing these benefits and drawbacks, it is important to consider

whether or not this marketing opportunity will contribute to the overall guest experience, internal

and external atmosphere of the hotel, and bottom line of increased profits.

One pro of opening a boutique gift shop in the lobby is that it will bring in more business

to Hotel Monaco. It will be a proven return on investment for the hotel. Revenue dollars will

come in the form of new business and repeat business for tourists, travelers, and guests staying in

the hotel who wish to purchase items such as souvenirs that they are not able to purchase

anywhere in the surrounding Historic Philadelphia and Old City area. There are little to no

opportunities to purchase memorabilia that reminds guests and local travelers of their stay in

Historic Philadelphia, so the boutique gift shop will be a perfect way to serve as a new marketing

tactic for Hotel Monaco to add to their individual brand image as a Kimpton property, and to

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draw more revenue to Hotel Monaco, especially with the luxury items sold at a higher price

point. The appeal for this shop in the lobby will also align with the major strength of connecting

with the local community, allowing for more opportunities for positive, memorable, intangible

customer service interactions that will add to the dynamic of guest and customer experiences at

the hotel. In addition, this boutique gift shop will add more of an incentive for tourists, travelers,

guests, and local residents to “spend more money and time” at the hotel; the shop will also add

“another layer that makes the overall experience more engaging” (Trucco, 2011).

Another pro that the boutique gift shop will bring is the opportunity for Hotel Monaco to

form strategic alliances with third-party suppliers in bringing in products and merchandise to

sell. Forming connections with third-party industry suppliers can not only strengthen Hotel

Monaco’s reputation with the companies that they partner with, but also strengthen their

reputation as a luxury brand through the luxury items, which they sell. These suppliers will

include art companies, high-end clothing companies, jewelry companies, and local Philadelphia

brand souvenir companies. Since Kimpton, as a company, places an emphasis on diverse values

and LGBTQ values throughout their company as a whole and among many of their brands, there

is no doubt that Hotel Monaco will seize the opportunity to create industry partnerships with

diverse local industry suppliers, especially those in a highly diverse city like Philadelphia.

Strategic alliances with these companies are not going to be short-term either, they will be more

long-term, and will give Hotel Monaco the opportunity to form long, lasting business

partnerships with companies that they partner and work with.

A few cons that could affect the hotel could be that “renovations directly affect a hotel’s

marketability, functionality, profitability, perception and value, this issue has significant

implications for hotel executives, owners and operators” (Keller and Burke, 2016). The first con

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is the cost of construction, and time length of renovations. Big changes to the layout of a

property take at least to a year to fully execute. Any savvy business owner will begin

renovations and additions during slow months when occupancy is low to maximize efficiency of

the project. This addition added to the hotel is a big bill that must be budgeted for. The hotel’s

management team must draft a well thought out proposal. A proposal must be drafted and

presented for capital expenditures within a significant amount of time to be approved by the

owners of the property. The hotel must prove that gift shop will benefit the bottom line to

receive these funds. However, as mentioned the hotel’s profitability will be affected by the

amount of the bill.

Another con could be as a guest of a hotel, it is not aesthetically pleasing to see

renovations going on in an establishment as well. This directly affects perception of the hotel as

well. As a luxury brand, it is important to maintain Hotel Monaco’s reputation. It can make the

Hotel seem less than its true value. Renovations can also affect the functionality of the hotel by

creating added noise. Noise from renovations can upset guests, and cause them to leave unhappy

if it inconveniences them in any way. This project must be thoroughly thought out before

planning it in order to enhance the hotel to its true potential.

7.2: Catching this Opportunity (7 P’s Framework)

When analyzing how this opportunity of opening a boutique gift and souvenir shop will

be caught, it is important to look at it through the 7 P’s of product, people, place, promotion,

process, physical evidence, and price. Within this analysis, an examination of diverse marketing

will be conducted related to place, promotion, and price.

7.2.1: People

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The target customers that Hotel Monaco will directly market to will be the hotel’s guests

and initial target market. As mentioned, its target market consists of guests who are in their

“early 20s and mid-50s, with mid to upper income averages”, which already serves as an ideal

market to attract to align with the luxury status of the hotel. Since the hotel also maintains a

commitment to connect to the local community, once the hotel successfully attracts hotel guests

to the boutique gift shop, the hotel will indirectly be able to attract local tourists, as well as local

residents; this will however, be secondary to attracting primarily hotel guests. The direct target

market for the boutique gift shop includes Baby Boomers, Generation X, and Millennials; within

these generational markets consists of single individuals, couples, and families, with an emphasis

on the independent business traveler (Lister, 2017). According to IHG’s classifications, the

predicted guest and consumer behavior will most likely range from guests who are younger folks

that are “laptop-savvy” and enjoy working in the lobby space, to “emerging [family] markets”

and “business travelers” from “[ages] 20 to 50”, who are easily adapting to new technological

trends (McKenney, 2015).

The boutique gift shop will employ two front-line sales representative employees behind

the check-out desk at the back of the boutique gift shop. These employees will be selected based

upon their prior experience in the hospitality industry or luxury hotels, and hired as frontline

hotel employees who will also work as part-time Guest Service Agents; they will go a step

beyond in their customer service at the boutique gift shop from what guest service agents at a

front desk usually provide. This is because these sales representatives will demonstrate a

comprehensive understanding of both the history of Philadelphia due to the shop’s prime

location in Historic Philadelphia, and a knowledge of all of the luxury products offered in the

store.

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7.2.2: Product

Since the Hotel Monaco is set at a higher price point due to its status as a luxury boutique

hotel, the boutique gift shop will sell luxury, tangible products that reflect the hotel itself, other

distinguishable intangible, “guest experience”-related hospitality products offered in the hotel,

and the overall service experience offered. As stated, the boutique gift shop will partner with

local, diverse third-party suppliers such as art galleries, high-end clothing companies, a jewelry

company, a fragrance and perfume company, and a Philadelphia souvenir manufacturer. Since

the hotel is directly targeting hotel guests, with an emphasis on the independent business traveler,

and the Stratus Rooftop Lounge has an official dress code and slogan of “Dress to Impress”,

these guests traveling for business will be able to buy “last-minute” items such as jewelry, suits,

sport jackets, button up shirts, ties, and dresses in order to meet the dress code of classy events.

Third-party suppliers that specifically sell high-end men’s and women’s clothing, which the

hotel can make available to purchase at the shop is Jos. A. Bank and Men’s Wearhouse, in which

long-sleeve “dress shirts”, “sportcoats”, “suits”, “ties”, and “bowties” that can be sold for

“business professional” and “business casual” events at the Hotel Monaco (“Suits,” n.d.).

Women's high-end clothing company that offers “luxury dresses” to be sold at the boutique shop

are from Michael Kors, which feature a variety of “romantic”, “floral”, as well as “embroidered”

dresses to choose from (“Dresses,” n.d.). In terms of art that the boutique shop will sell, the shop

will partner with the local Bluestone Fine Art Gallery in Old City, in offering paintings on-site

(“Bluestone Fine Art,” n.d.). The jewelry supplier that the shop will partner with is LAGOS Fine

Jewelry for women in Rittenhouse Square, in which we will offer “bracelets”, “rings”,

“necklaces”, and “earrings” (“Lagos Rittenhouse Square,” n.d.). A perfume and fragrance

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supplier that the shop will partner with is Gucci, offering an assortment of selected “unisex”,

“women’s”, “men’s fragrances” (“Perfume,” n.d.). In terms of offering souvenirs, the boutique

shop will partner with VisitPhiladelphia in securing a third-party manufacturer that creates and

provides us with “mini” Liberty Bell statues, small “LOVE” magnets representing LOVE Park,

and historic Philadelphia-themed snow globes; these items will be in their own separate section

at the checkout section of the shop to pick up while guests are checking out.

7.2.3: Place

In regards to the exact place where guests can purchase the luxury products, it is first of

all, going to be on-site at the boutique souvenir and gift shop located in the lobby of the Hotel

Monaco. Only after construction is done, sales representative employees are hired, and every

luxury item is strategically situated within its specific spot in the shop, will guests be able to start

purchasing the aforementioned products. The boutique souvenir and gift shop will be the first

boutique shop to open in a boutique hotel in Philadelphia, as well as within a Kimpton hotel

among the two in Philadelphia; it will also be the only one of its kind that offers products to its

guests synonymous with the dress code at the conventions or events hosted at the hotel in the

near future.

In pursuing this marketing opportunity through the “place” lens, the strategy that Hotel

Monaco will use is creating an additional distribution channel: the boutique gift shop’s own

website and online store. Prospective and current guests staying at the hotel can find a page

leading from Monaco-Philadelphia.com to the boutique gift shop’s website, where they will be

directed to an organized website home page, which both informs and visually-represents the

different types of products sold, such as “Clothing”, “Jewelry”, “Fragrance”, and “Art”. Over

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the first month, it is predicted that since this is the only boutique souvenir shop in the Historic

Philadelphia/Old City area, that the shop will receive a high volume of searches in online search

engines, especially for search engines on third-party marketing intermediaries (i.e. Orbitz,

Priceline, Trivago) while, in turn, driving positive results in search engine optimization (SEO).

According to a study conducted by Apparel Magazine (2017), most shoppers “reported

convenience as the reason why they shopped online” due to “the wide range of merchandise”,

“free shipping and returns”, and “online customer reviews” (“New Survey,” 2017). The fact that

there are “in-store” and “online” store options in regards to buying luxury products, especially

when there is a point-of-purchase sale involved, repeat guests are going to want to know about it;

the existence of the online store and any deals or discounts offered to first-time shoppers will be

made known through online publicity of official hotel press releases and newsletters sent to loyal

IHG Rewards Club members and guests, updated posts for followers on social media channels

for Hotel Monaco, online travel articles in boutique lifestyle hotel magazines, or simply through

word-of-mouth from previous guests. This strategy also ties in with promotional aspects of

attracting potential guest shoppers via sales promotion through mass emails sent to guests who

have just stayed at the hotel or those that have inquired and expressed a prior interest in learning

more about the shop during the construction period.

7.2.4: Promotion

As mentioned, in terms of public relations techniques, Hotel Monaco intends to use

official press releases and a weekly newsletter in spreading information to guests about the

existence of the shop website, discounts and packages available for first-time and loyal guests,

and any general updates related to the boutique gift and souvenir shop. Official press releases

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and newsletters, in particular, are advantageous to improving the overall image of the hotel itself

in bringing “increased sales potential, positive credibility for the public eye”, and in terms of

advertising strategies, since this marketing opportunity is mostly directed towards attracting hotel

guests, either potential or current ones, there will not be much focus on advertising this shop to

every local tourist, traveler, and resident residing in the surrounding Historic Philadelphia

districts; rather, it will be over a gradual course of time that non-guests will be expected to find

out about the boutique shop, themselves, especially if they are attending a professional event at

Stratus Rooftop Lounge and happen to walk past the shop in the lobby.

In pursuing this opportunity through the “promotion” lens, the strategy that Hotel

Monaco will use is by using interactive marketing via its various social media channels of

Facebook and Instagram. Through content marketing, as soon as and within the first few weeks

after the opening of the boutique shop, these social media channels will be used to inform,

educate, and showcase particular products and areas of the shop that provides an instant

convenience by notifying guests. Specifically, interactive digital online marketing will be

conducted through content marketing in providing relevant, useful, resourceful, and intuitive

content to followers related to the informing of the current internal conditions of the boutique

shop via visual imagery, and to support the buyer decision-making process in searching for,

choosing, and buying specific products at the store and on the website and online store. This

content, specifically for the Facebook page of Hotel Monaco, will range from articles posted that

discuss essential items needed for events, to articles specific for the young millennial

independent business traveler. On the Instagram page of Hotel Monaco, “followers” will be able

to see the interior of the boutique shop visually represented well. Through this promotional

method, Instagram “followers” of Hotel Monaco will be able to positively associate the hotel’s

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method and strategy to indirectly redesign and revamp its own image and reputation in

Philadelphia.

7.2.5: Process

Given that existing products are being introduced to an already existing market, the

service transaction that will take place will be simple. Companies like Lagos, Michael Kors, and

Joseph A. Bank will receive their products from their original suppliers as normal. Next, the

company, Lagos, for example, will act as the intermediary to then supply every product that will

be sold to the Monaco. Once these items are received, they will then be unpackaged, placed on

the shelves of the gift shop, and sold to guest inside of the Hotel Monaco. Guests will have the

option to either purchase with debit, credit, or cash, or to charge the items to their rooms and

settle at check out. As mentioned, another unique concept that will be offered is the option for

online shopping. With the online option, the gift shop will still operate as normal out of the

hotel. All orders that are received online will be taken care of by the night staff to be package

and shipped to consumers.

7.2.6: Physical Environment

The bold color themes of the Hotel Monaco will be highlighted inside of the boutique gift

shop. With the world revolving around social media, the shop will also offer a specific webpage

on their social media channels on Facebook and Instagram that guest can take photos with props

that directly tie into the historic district of Philadelphia. Guests will then be able to post the

hashtag “we made it to the #HMP”. The Hotel Monaco will use scent marketing by spraying the

fragrances offered on all of the clothing similar to Hollister and Abercrombie and Fitch concept.

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The hospitality industry is an intangible service industry, so tangibilizing the product through

scent marketing will allow guests to fully connect with the products offered, and the shop itself

within the lobby of the Monaco. The lights will also mimic the vibrant theme of the hotel. The

idea is to capture not only the bold theme of the hotel, but the vibrant life that resides in the city

of Philadelphia.

7.2.7: Price

As mentioned previously, Stratus Rooftop Lounge has a strict “Dress to Impress” dress

code. Since it is open to the public, offering this boutique gift shop for anyone who may not

have brought their Sunday’s best will be provided for. For the boutique gift shop, the Hotel

Monaco will utilize prestige pricing to introduce these new items to our current market (hotel

guests). In order to convey the image of Joseph A. Bank, and Lagos jewelry companies (just to

name a few), the Monaco will enter the market that shows price equals quality. By showing that

both align with the price, the Monaco’s boutique gift shop is living out its mission. These prices

will be consistent across the life cycle of the gift shop because the perception of the hotel will

continue to thrive. The founder Bill Kimpton speaks to staying connected to the local

community; by adding the only boutique gift shop in Independence Mall, there is a secondary,

indirect aspect of allowing travelers from all over to experience a bit of Philadelphia in the

comfort of their own lobby. This is unique and different and sets the Monaco apart from the rest.

Therefore, it is appropriate to utilize the prestige pricing strategy in this case.

7.3: Measuring the Outcomes (KPIs)

In measuring the expected business outcomes during the first few months after the

boutique gift shop has been built in the Hotel Monaco lobby, it is important to consider key

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performance indicators and financial benchmarks, as well as guest/customer metrics related to

overall sales, satisfaction, and guest experience within the boutique gift shop.

7.3.1: Survey

One way in which the Hotel Monaco will measure specified guest feedback, as it pertains

to their individual experiences at the boutique gift shop, is through offering every guest the

opportunity to fill out either a paper card survey or an online survey, at the end of their stay. It is

good to offer both paper card and online surveys to guests due to the fact that some guests prefer

writing their thoughts down because they can best express their thoughts on paper, and the

experiences will be more fresh in their mind. Online surveys, distributed to guests, who have

just stayed at the hotel, via email, will give guests the convenience to fill out the surveys in their

own time. The format of the questions will be the same on both the paper card provided to the

guest, as well as the online survey. The questions are as follows; “Did you visit our gift shop?”

If guests answered “yes”, the survey would then list questions to ask such as “What aspects of

the shop did you like?”, “Are there any other products in the shop that you would like to see

more of?”, and finally, “What aspects of the shop would you improve on?”. It is the hope that

these questions will accurately measure and gauge essential guest responses and criticisms.

As an important key performance indicator (KPI), the survey will not only align with the

marketing goals of Hotel Monaco by meeting guests’ wants and needs through careful in-depth

consideration of their honest feedback and feelings regarding the boutique shop, but it will also

increase the likelihood of repeat business. Through this method, the Hotel Monaco is able to

collect valuable feedback that allows them to “learn services that [customers] like and dislike…

and reveals what makes them repeat customers”; the surveys also allow the hotel to establish

new “customer-driven products and services” (Gee, 2012). Through these questions, the Hotel

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Monaco will determine whether or not the boutique gift shop has been a successful return on

investment thus far, and if there are any improvements, which need to be made. Within the first

month, it is expected that boutique shop sales will be positively correlated with the feedback

provided on the surveys. As a result, the surveys will also serve as both a relevant indicator in

ensuring market growth in both on-site and online sales, and an indicator in measuring employee

satisfaction with service provided at the shop.

7.3.2: Revenue Tracking

The Hotel Monaco will also measure the success of the gift shop by tracking revenue.

The Hotel Monaco will use this key performance indicator to analyze the progress of the shop

through sales and ultimately how much revenue the gift shop is adding to the bottom line. This

is the most important aspect, because this will determine if the gift shop has been profitable. To

track the success of the gift shop, there will be a seperate line added to the traditional P&L

statement. The progress of the hotel will be checked every month. Hotel Monaco will budget

for the gift shop to make at least 5% of the hotel’s revenue. If this does not meet the required

budget, the hotel will then begin adjusting its promotions. As mentioned, this aligns with the

marketing goals of the Hotel Monaco in “its commitment to ensuring diversity in the artistic

layout throughout the hotel, the employees who work within its diverse internal work

environment, and its fulfillment of its guests’ and target markets’ diverse wants and needs

(MonacoPhiladelphia.com). This is a relevant indicator given that this market already exists, it is

just filling a void where there is potential to generate additional revenue. If the gift shop does

what it was intended to do, it will not only give guests a unique experience in store and online,

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but it will also bring in additional revenue allowing the Hotel Monaco to thrive higher than its

competitors with this added value option.

7.3.3: Measuring Quality Perception

In addition to guest card and online surveys, another way in which the Hotel Monaco will

measure overall guest feedback regarding the boutique gift shop through customer metrics, will

be by measuring quality perception on third-party marketing intermediaries and distribution

channels. Third-party marketing intermediaries such as Orbitz, Travelocity, Priceline, and

Expedia, as well as distribution channels like TripAdvisor and Yelp will be tracked for online

guest reviews that are posted related to the overall perception of the boutique gift shop, what

guests did or did not like about the shop, and how sales representative employees at the shop can

better serve them or improve their service in the future. It is also important for the hotel

management to take note and respond to guest feedback on the the aforementioned marketing

intermediaries and distribution channels in order to encourage positive online employee-to-guest

interactions, as well as repeat business for the Hotel Monaco and the boutique gift shop, itself.

Through measuring quality perception, the hotel management should also make sure that one

each one of these third-party websites, that the store reviews accurately reflect the guests’

respective expectations of the tangible products offered and the intangible service provided.

The main advantages with using quality perception measurements as a key performance

indicator is that it “increases brand awareness, [especially] through word-of-mouth advertising”

and how well the shop is “connecting with the right audience and maintaining their interest”, so

that the hotel can increase how much they are generally engaging with their guests online (Selby,

2016). As a result, analyzing guest reviews of the quality perception of the gift shop, itself, this

47

will align with how well marketing objectives and strategies of the Hotel Monaco are being met

in how well the shop is effectively connecting with guests’ ever-changing wants and needs, how

well the price point of the luxury products is matching guests’ expectations, and how much

guest’s feel that the boutique gift shop has added extra value to their overall stay. Along with

using surveys, quality perception measurements will also serve as a method in improving guest

service and diversifying the variety of luxury products offered at the shop in the near future.

7.4: Limitations of Marketing Opportunity

This is a large project to complete. Altering the floor plan of the Hotel Monaco will be

one limitation due to the adjustments through the lobby that will also have to take place. The

hotel was not initially created with the intent to have a gift shop in the lobby. Without altering

front desk and waiting area, an extension will have to also be placed due to the original floor

plan. This can take months to conclude, and will have to be completed in the pre-planning stages

in order to ensure a smooth renovation. The Hotel Monaco currently has a beautiful lobby, and

the limitations placed upon the shop directly affect this. The Red Owl Tavern is also located in

the lobby; the construction times will be limited to off times of the restaurant so that the guests

are not disturbed. Standard check-in time for the Hotel Monaco is also at 3 pm, construction

times will also be limited so that incoming guests are not disturbed. Another limitation would be

staying within the budget of the allocated funds. Given that a business must budget for a project

as large as this, it is imperative to stay within that designated budget. There are several

limitations for a capital project such as adding an addition to the Hotel Monaco, they are heavily

considered.

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8.0: Conclusion

In short, through Kimpton Hotel Monaco’s marketing strategies, internal strengths,

external opportunities, competitive edge, and sustained reputation as one of the top independent

lifestyle luxury boutique hotels in the city of Philadelphia, they have established a name and

legacy for themselves, which has fulfilled Bill Kimpton’s original vision of connecting with local

guests, and impacting lives by creating lasting connections. The pioneers of the boutique

industry, Kimpton Hotels and Restaurants, have done an excellent job of bringing Bill Kimpton’s

vision to life.

By adding this boutique gift shop, it will not only highlight the uniqueness of the

boutique hotel, but it will also allow the Monaco to thrive amongst its competitors. This idea

will bring guests staying at the Hotel Monaco a new and creative way to shop for luxury items

without having to leave the comfort of their hotel. This will aim to provide added-value as well

as a convenience for all guests. This boutique gift shop will be the flare that the Hotel Monaco

needs to soar to the top of all boutique hotels in Old City and Historic Philadelphia.

9.0: SWOT Analysis Chart

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Strengths: Weaknesses:

· Hotel Monaco is locally-connected; hosts local events for tourists and local residents· The hotel is backed by Kimpton Hotels & Restaurants; known for being a majorly successful independent boutique hotel company· Offers guests the option to be part of the World’s largest hotel loyalty program

· Lack of brand recognition and guests’ failure to acknowledge Kimpton· “Pet-friendly” atmosphere may be deemed as unattractive to business travelers

Opportunities: Threats:

· Potential for exposure and expansion of Kimpton brands worldwide· Integrating technology in boutique lifestyle hotels· A recent increase in leisure travelers in Philadelphia market

· AirBnb and similar accommodation-platform systems disrupting lifestyle boutique hotel industry· Political unrest and its impact on the hospitality industry as it applies to boutique hotels· Competition resulting from 13 new hotels that are set to open in Philadelphia by 2019

10.0: Appendix

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(Source: PR Newswire, 2014)Figure 1

(Source: Visit Philly, 2017)

Figure 2

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Competitor Analysis

Kimpton Hotel Monaco Philadelphia

The Logan Philadelphia

Penn’s View Hotel

The Franklin Hotel at Independence Park

Product • Upper-upscale lifestyle luxury boutique hotel offering a personalized guest stay• Unique, colorful, and creative rooms and suites with views of Independence Mall

•4-and-a-half-star modern luxury boutique hotel accommodations and amenities• Contemporary rooms and suites (some with views of the Benjamin Franklin Parkway)

• Smaller luxury boutique hotel accommodations and amenities• Well-kempt rooms and suites (some offering a private balcony)• Dining room

• Upscale luxury boutique hotel accommodations and amenities• Luxurious rooms and suites

Price $284 $203 $199 $260

People • Pet-owners• Eco-conscious travelers• Singles• Couples• Independent business traveler

• Independent business traveler• Singles• Couples

• Couples• Honeymooners• Singles

• Independent business traveler• Singles• Couples

Amenities and Accommodations

• Stratus Rooftop Lounge• Pet-related offerings and services• In-room spa amenities• 24-hour in room dining via on-site restaurant• Public complimentary bikes

• Assembly Rooftop Lounge• On-site steakhouse restaurant• On-site Spa and Health Club• Indoor pool

• Free Wi-Fi•Warmly-furnished spacious rooms• On-site Italian restaurant• Free complimentary continental breakfast

• Complimentary Wi-Fi• Free exercise classes• On-site upscale American restaurant• Sauna and indoor pool

Figure 311.0:

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