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Each year, global hotel brand IHG does an in-depth review and analysis of one major trend impacting hospitality. Its most recent Trends Report identified the concept of “provenance” as a significant driver of change in the industry.
The concept of provenance, initially used in the art world but now extended across archaeology and other fields, is about tracking the history of an object. Provenance acknowledges that the heritage of a given thing -- whether object, brand or person -- is at the core of the thing. Provenance provides a historical record and suggests how that past influences the future.
For a hospitality brand, provenance is a philosophy of nurturing a brand’s heritage as a long-term asset, as a farmer might tend to a field. Provenance builds authenticity in a guest’s mind, offers a foundation for marketing, and unites employees with a clear brand story. These qualities deepen trust and encourage sustainable growth, says IHG CEO Keith Barr:
“In today’s uncertain and fragmented world, a brand’s provenance links its past, present, and future, delivering an assurance of expertise, authenticity, and authority that can deepen consumer trust. We believe provenance in a brand is an essential foundation for industry leadership and enduring success.”
The report identifies five stages of the “provenance chain.” When taken together, IHG believes that provenance provides a foundation of “consistent, relevant, and distinctive heritage” that ensures sustainable success in today’s hotel business. Here are the links in IHG’s provenance chain.
Stage 1: Provenance
The obvious first step is to define a brand’s heritage; its past becomes the “brand's legitimate source of expertise, authenticity, and authority. It is familiarity, quality, leadership, and trust.”
To successfully “sell” a brand’s provenance, It must come from a place of authenticity and honesty. There's no point in faking it; consumers will catch on and it will have the opposite effect, reducing trust.
So why develop provenance? It comes down to loyalty as an effective marketing tool. In an era of rising customer acquisition costs across third-party channels, brands must find techniques that keep existing high-quality customers coming back.
“The provenance of a business is its consistent, motivating, relevant, distinctive heritage from its past theme. The power of provenance is not about preserving everything from the past; it is about preserving the best of the past for the present and future. Companies are using provenance to help build brand preference.”
Stage 2: Perceived value
Perceived value is “the customer's assessment of the trusted quality and worth of the branded offer.” Brand managers might think one thing, yet the guest might perceive another. That’s why “trust is a critical element of perceived value.” With greater trust comes greater perceived value -- or perhaps less inherent skepticism.
“Trust is fundamental in building and maintaining long-term relationships: personal and brand-business. It enhances the quality of a relationship, and minimizes perceived risk.”
The provenance chain positions brands to take advantage of reduced trust in formal institutions. The consumer trust crisis creates tension among consumers; those brands that defy the deficit will come out ahead.
“This trust deficit presents an enormous opportunity for brands to become the ‘trustworthiest’ sources of relevant and differentiated promises. Provenance is trustworthy evidence of a brand's authentic character, expressing what the business stands for internally and externally.”
The perceived value equation also takes internal perspectives into account. When the story resonates across staff, they're more likely to live and breathe that story with guests. This improves employee satisfaction, thus reducing turnover and trickling down into the guest experience.
Stage 3: Increased preference
There's a simple equation work here: a well-defined and engagingly crafted story about a brand’s provenance builds trust. Guests think, “this brand has been around for a long time, which means that they know how to take care of their customers. I can trust them -- and that they will be around for a long time.”
As guests feel comfortable with what a brand stands for -- and its consistency of experience -- they become more loyal. An increase in preference for one brand over another is the ultimate benefit. You’ve won big when guests choose your brand over the competitor, even if priced at a premium. This is the power of the brand.
The report distinguishes preference from merely repeat visits. Loyalty doesn’t always construe an emotional connection, whereas preference shows some level of deeper attachment to the brand:
“Preference is not the same as repeat behavior, which lacks emotional bonding and can be a result of mere convenience or habit. Preference is a result of commitment, not just convenience.”
Stage 4: Trust capital
Like a bank account, trust can be overdrawn. Trust can also grow, with the balance eventually drawn upon. Large deposits are possible; even larger withdrawals are feasible too.
Unlike a bank account, there is no written ledger of trust. It’s an invisible measure of trust earned and trust lost. And once the trust account is overdrawn, it can take longer to return it to the block. Trust is hard to win but easy to lose.
“Trust capital is a form of organizational wealth, along with financial, intellectual and human capital. Goodwill is the part of trust capital that appears on the corporate balance sheet.
Goodwill is the excess of the price paid for a company over its fair market value. Trust capital is the confidence stakeholders have in the goodwill of an organization to consistently deliver promises of value.”
The concept of ‘trust capital’ is the backbone of provenance. A brand’s heritage is a base of trust to build on, to leverage into further growth and stability. Every time that a hotel brand succeeds in delivering promises to customers, the trust capital it earns further strengthens its provenance. The more you do this, the more trust capital you'll naturally accumulate.
Stage 5: Revenue growth
So how does this make your hotel more money? High-quality revenue growth, of course! These aren't incremental dollars, or one-off transient business brought in through advertising. This is revenue from the perfect guest: net promoters who love your property, usually stay there at rack rates and resonate with your brand promise.
“Trust builds lifetime loyalty, which can then lead to increasing both quantity of sales and quality of sales. Revenue growth comes from having more customers who purchase more often and are more loyal. This leads to increased market share and lower price sensitivity, and helps grow revenues, profits and shareholder value, through greater loyalty.”
The virtuous cycle continues: as trust capital builds through a consistent experience, loyalty grows, and provenance entrenches further. Rinse and repeat for each hotel brand across the portfolio.
The three imperatives
Provenance is a direct answer to the question, "why should I believe the promise you are making to me?"
A strong, powerful provenance is a competitive advantage that differentiates individual hotel brands in a crowded hospitality market. It unites internal stakeholders with external messaging, making for a more consistent guest experience that increases guest trust and long-term loyalty.
As Edelman warns in its marquee 2018 Edelman Trust Barometer, only 48 percent of the general population in the United States trusts businesses." Highlight heritage, build trust, and be consistent -- these are the three imperatives for hoteliers navigating the year ahead.
Download the full report and the executive summary.
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