Market positioning and repositioning: How to reposition for financial success
Positioning of a hotel, resort, casino or other hospitality asset is uniquely complex among real estate property types. Changing market factors, including outside economic forces, shifts in demand patterns and changing competitor pressures, can all influence a property’s success and constantly force an owner to reevaluate an asset’s position. A sound repositioning strategy is an effective way to maximize a property’s future financial returns.
If this is your situation
- You are bidding competitively on a hospitality asset and your return on investment will be tied to the value you can create by improving the property's marketplace position.
- Your aging hotel's franchise agreement will not be renewed by its brand.
- The major demand generator in your market moved and you must address your property's business strategy going forward.
- Your management team brings you a comprehensive expansion plan and wants your sign-off on a major capital spend.
How PwC can help you
The industry professionals within PwC's Hospitality & Leisure practice possess extensive experience in successful product positioning. Knowledge of the local market, the latest in competitive product offerings and effective branding strategies are vital to create a successful repositioning strategy. Our specialists possess that knowledge, as well as the skills to formulate a creative vision for a market-based, property-specific repositioning.
PwC professionals employ proven methods to analyze and quantify potential financial benefits to the owner. We not only suggest a plan to reposition a property, but take the next step to help the owner understand how to implement the repositioning strategy.
PwC specialists investigate possibilities for a property’s potential repositioning based on historical and current market conditions and the property’s past and current positioning in the market. Conducting a thorough market analysis and obtaining a solid understanding of the local economy, area demographics, demand generators, market trends and related area-specific characteristics are only the first steps necessary to formulate an effective repositioning strategy. To determine a relevant solution with an optimal financial payback, we consider every aspect of a property’s operations in relation to its local market competition and the needs of the local market.
PwC Hospitality and Leisure professionals can help you to:
- Assess the effectiveness of a property’s operations and evaluate if physical changes to the asset, through prudent capital deployment, or changes to the property’s service offerings could help to improve profits.
Outsourcing an under-performing food and beverage outlet to a well-recognized, branded restaurant chain could contribute a steady stream of lease income to the property, and thereby decrease the human resource needs of the owner and improve the property’s image in the market.
Market analyses conducted by our specialists could indicate that the property is well suited to do more group meetings business. Converting underutilized restaurant space to new, innovative conference space can be a financially sound decision for the property owner and a solution to capitalize on the existing demands of the market.
- Assess how best to deploy limited capital when repositioning an asset to grow the financial returns to the owner
An owner could have limited capital resources to deploy to maintain the current branding on a hotel. Our market analyses might conclude that changes in demand patterns within the local market, coupled with product shuffling among the brands represented, provide an opportunity for the owner to rebrand the asset at a lower price point, increasing return on invested capital for the owner.
Successful repositioning can extend a hospitality asset’s useful life, thereby increasing its owner’s financial return potential. PwC specialists perform thorough analyses to identify repositioning opportunities and follow through to enable actions that produce results.
- Assist in the development of a comprehensive marketing plan for a property that delivers results on the targeted strategy envisioned with a repositioning strategy that has been implemented.
A property is repositioned, through renovation and re-branding, from an older, full-service hotel that had a significant amount of functional obsolescence to a fresh, technology-rich, limited-service product with a leading brand affiliation. The targeted customers for the repositioned asset may not be the same as before the renovation. Our seasoned professionals can help create a focused marketing plan that aligns the sales and marketing initiatives of the property’s management with the objectives of the owner.