Asian-Americans Represent Significant Opportunities for Hotels and Beverage Brands

This article was originally published in Hotel Business Review

As competition in the hospitality industry grows fiercer by the day, many hotel chains are looking for any edge they can find to win the support of key markets. Customers from varying cultural backgrounds have different expectations when they utilize hotel services, and even the slightest details can have a lasting impression on these demographics. Everything from room amenities to supplemental or complementary services can be adjusted to fit the needs of multicultural audiences. Even something as simple as the choices of beverages that a hotel offers to its guests can easily sway guest perceptions one way or the other.

Multicultural beverage marketing can be a difficult segment to break into - particularly for the travel and entertainment industries. Fortunately, there's a special on tap.

According to a recent Pew Research report, Asian-Americans are the fastest-growing segment of the marketplace. Since the 1965 Immigration and Nationality Act, 51 percent of new immigrants have come from Latin America and a quarter from Asia. Asian-Americans are projected to eventually overtake the size and importance of the Hispanic market.

Opportunities abound for marketers in this arena. Save for the occasional cliche-rich, half-hearted Lunar New Year promotion, no brand has ever seriously courted Asian-American consumers with the same seriousness and rigor they have shown general-market, Hispanic, or African-American drinkers. But opportunities are ripe for first movers.

Thanks to the number and affluence of Asian-Americans, it's surprisingly simple - and absolutely worth it - to reach them in the media. Here's why America's fastest-growing consumer segment is a worthwhile target and how you can best cater to it.

Sophisticated Spenders

When you look at the statistics, Asian-Americans tend to make more, spend more, and be more successful when compared to other groups. Asians outspend the overall market by 19 percent, and they outspend Millennial households by nearly 40 percent annually. And the gap is just as wide (or wider) in key sub-categories such as housing, food, and food away from home.

The average Asian-American household income is $66,000, compared to the national average of less than $50,000. In addition, 28 percent of Asian-American households have incomes greater than $100,000, compared to 18 percent of total U.S. households. This is likely due to the fact that half of Asian-Americans have a bachelor's degree, compared to less than 32 percent for Americans overall.

Success has driven the majority of this upwardly mobile segment. Asian-Americans continue to move from gateway urban clusters out toward the suburbs, where they are buying homes of a larger size and higher value than average suburbanites. On an index where 100 is considered the average, Experian ranks Asians at an index of 372 in the purchase of homes over $750,000, while non-Hispanic whites index at 92. Asian-Americans are also more than twice as likely to carry a platinum-level credit card and drive an imported luxury car.

Because Asian-Americans tend to be wealthier, they can be the perfect target for brands that cater to affluent customers. With more money to spend - and the willingness to spend it - they may be more likely to build brand loyalty with you through your beverage marketing and overall guest experience. These touchpoints can build overall brand equity in their minds and make them loyal to your brand for years to come.

To Exceed Expectations, You First Have to Meet Them

The Asian-American segment is an undeniably lucrative target, but like any group, it is nuanced. To properly relate to Asians and Asian-Americans, you have to take time to understand their culture.

Consider the recent stay of a Chinese couple at a mid-priced Santa Monica hotel. Yu Chao Ling and his wife were in town for a quick business trip but were shocked to find that their hotel room didn't include slippers, teakettles, or toothpaste (all standards in Chinese hotels). Even worse, the hot breakfast bar failed to feature any dishes remotely resembling a Chinese breakfast, such as rice porridge. These small changes could have made all the difference in the couple's experience with that hotel's brand.

In an attempt to appeal to more Chinese travelers like this couple, several high-end hotels in Southern California are starting to offer Chinese menus, newspapers, slippers, teakettles, and razors. With Chinese tourists spending 55 percent more per U.S. visit than other overseas visitors, they're worthwhile targets for extra investment.

If international visitors tend to frequent your hotels, take the time to understand their cultural preferences. A complimentary razor and shaving cream kit may not be anything to write home about, but for some cultural groups, it's a deal breaker.

Break down your demographics, and do your due diligence to discover what they value and what they don't. For instance, perhaps one cultural group requires slippers but couldn't care less about having an in-room dining option. If that group becomes a major part of your customer base, you might consider providing additional free amenities and cutting the superfluous, underutilized services.

Know the Palate to Quench the Thirst

For those with a good beer selection, you'll be glad to know that Asian and Asian-American beer consumption continues to rise. The BBC reports that in 2011, residents of Asia drank 67 billion liters of beer, compared to 57 billion in the Americas and 51 billion in Europe.

Dark spirits in general - particularly Scotch whisky and cognac are very popular among Asian-Americans. Johnnie Walker, Chivas, Hennessy, and many others sustain dedicated marketing initiatives in Asian-American media, retail, and on-premise channels. A 2012 Mintel report shows that Asian-American drinkers are more likely than any other ethnic group, including whites, to consume any dark spirit.

Creating prominent displays in your bar featuring dark spirits - or even including them in your advertising efforts - is a great way to catch the attention of this lucrative group.

This strategy extends beyond your beverage marketing as well. Too many hotels make the mistake of "gold plating," or adding products and services that boost costs but not market share. Instead, take time to make sure your value adds are actually meaningful to customers. For example, most hotel guests agree they would be willing to pay more for improved services such as a good Internet connection, comfortable beds, and attentive employees. But what appeals to them varies greatly within different demographic segments.

Customers in every segment, for example, say they could do without the hotel retail shop to lower costs. But as one moves up the luxury guest scale, customers are less likely to part with services such as in-room dining and luggage services. In addition, they're more likely to pay more for bathroom soap products, improved Internet, and a nicer TV.

How to Make the Sale

By creating an emotional connection with guests on their first visit, you'll build customers for life. Make sure first-time visitors receive exceptional service and the amenities and services they'd appreciate most. One Gallup analysis showed that hotels would be much better off cutting out amenities customers don't value a putting the money into selecting and developing the right employees with good problem-solving skills and a commitment to service.

It's important to note, though, that this emotional connection starts long before guests walk in the door. If the Asian-American market is a key target of yours, consider tapping into the already-robust media sphere to help you solidify relationships with this affluent and thirsty segment. The trick is to use media strategically without accidentally committing any cultural faux pas.

There are already more than 1,000 Asian-American media outlets in existence, including TV, print, radio, and digital. In fact, a Asian-Americans are more likely to be found online or on mobile devices than any group in America. Behavioral marketing tools are available to track Asian beverage consumers from Facebook all the way through Asian-language websites.

Find out where your target already is, and meet them there. Connect with them on Facebook via promotions, coupons, or compelling and shareable content that encourages them to interact with your brand.

Think of your journey with each customer as a funnel. Initial promotions and ads should get them excited about your brand, whether it's because they're getting a good deal with you or they just appreciate your brand's sense of humor or values. Then, once you have them on board, cultivate that relationship through additional outreach, retargeted ads, social contests, and other follow-ups.

Don't Patronize Your Guests

While it's important to connect with any group on strategic forms of media, your messaging to Asian-Americans should be relatively similar to that of the general-market consumer. Given that most, if not all, major beer and spirits brands easily execute global campaigns in Asia, it should be relatively easy to adapt messaging to the needs of immigrant markets in America.

Merely frittering away money on the occasional holiday promotion - such as Chinese lamp displays for the Lunar New Year - does not build any long-term loyalty or preference. Like all American consumers, any day might be a purchase day for the thirsty Asian consumer. So regular sustained efforts are needed to fully tap the market's potential for volume growth.

While the finance, gaming, and telecommunications industries have been courting Asian-Americans for decades, the hospitality industry has, for the most part, been ignoring them. That gives you an edge to catch their attention and build loyalty ahead of your competitors. Just be sure to meet them where they are, communicate authentically and honestly, and keep their beverage preferences in mind with your promotions.

 

Yuriy Boykiv is the co-founder and CEO of Gravity, a full-service advertising agency that helps brands connect with cultural and international consumers. Connect with Yuriy on Twitter.