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Starwood gains a London hotel – and an insight into hotel economics

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If you are a Starwood Preferred Guest member (the loyalty scheme for Sheraton, Westin, Aloft, W, St Regis, Le Meridien etc) you will be pleased to know that they have added a new London hotel.

The Great Northern Hotel in Kings Cross station is joining Starwood’s nascent ‘Tribute’ brand as its 2nd property.

The hotel was fully renovated as part of the redevelopment of Kings Cross and reopened two years ago with a definite 1930’s feel.  I was, by coincidence, in the Great Northern for the first time last month with John McAslan, the architect behind the Kings Cross rebuild, but that is a story for another day.

Great Northern Hotel

I wrote about Tribute in this article.  Rather like Marriott’s Edition and Hilton’s Curio Collection, Tribute is aimed at independent hotels which want to benefit from the advantages of being part of a chain but which do not want to be bound by the ‘operating manual’ structure of a normal franchise.

From 9th September, you will earn SPG points when you stay at the Great Northern, and it is also available for redemption.  Your SPG status benefits will be honoured.

The hotel is looking good value for SPG redemptions.  It is showing as 12,000 points per night – a bargain compared to 25,000 points per night for the Park Tower, W London or Le Meridien Piccadilly.  For a random date I picked in October, a cash room was £299 so you would be getting 2.5p per SPG point.  Be aware, though, that the entry level Couchette Rooms are reportedly very small.

The hotel itself has just 91 rooms.  To quote from the Starwood website:

“Our 91 sumptuous rooms offer complete serenity blending innovative design with bespoke furniture, period features and cutting-edge technology. Uninterrupted views across the strikingly remodelled King’s Cross and St Pancras stations add to their charm.

Discover a new favourite or rediscover a classic amid a distinctive dining ambience. Elegant and relaxed, Plum + Spilt Milk serves seasonal, British dishes with a twist. With its seductive interiors, our Belle Epoque-style GNH Bar is one of Europe’s most glamorous railway bars.”

The economics of hotel marketing in 2015

In an article in the Financial Times, the owner of the hotel explained why he had signed up with Tribute.  The figures are fascinating:

The hotel was spending £300,000 per year on ‘search engine optimisation’ and pay-per-click advertising.  I am stunned by this, frankly, especially for a hotel with just 91 rooms.  HfP ranks OK on Google and my entire SEO expense was £17 for a copy of ‘Search Engine Optimisation for Dummies‘, which I recommend.

Tribute is a cheaper way for him to sell rooms than ‘generating online buzz’.  (If true, he was paying the wrong people to generate his buzz!  Head for Points occasionally features interesting hotels in London, eg here and here and here, and I would certainly have written about Great Northern if they had invited me round.  Which they didn’t.)

Online Travel Agents generate 45% of his bookings ….

…. but he is paying them 20% – 21% commission.

Starwood, on the other hand, is taking just 4% – 6% of his room revenues.

The move to Tribute is expected to see ‘cost of sales’ as a % of room revenue fall from 18% to 12.5%.

When I was in the Great Northern, I did wonder why it was not part of a chain – especially as there are a lot of tourists emerging from Eurostar just a few seconds away and looking for a reliable place to stay.  Whilst I never got further than the downstairs areas, it is an impressive looking hotel and a good addition to Tribute and to SPG.


How to earn Marriott Bonvoy points and status from UK credit cards

How to earn Marriott Bonvoy points and status from UK credit cards (August 2022)

There are various ways of earning Marriott Bonvoy points from UK credit cards.  Many cards also have generous sign-up bonuses.

The official Marriott Bonvoy American Express card comes with 20,000 points for signing up, 2 points for every £1 you spend and 15 elite night credits per year.

You can apply here.

American Express Marriott Bonvoy credit card

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You can also earn Marriott Bonvoy points by converting American Express Membership Rewards points at the rate of 2:3.

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EDIT: Until 25th October 2022, there is an exceptionally generous sign-up bonus on The Platinum Card. You will receive 60,000 Membership Rewards points – double the usual amount – and £200 to spend at Amex Travel. You need to spend £6,000 within six months to earn the bonus.

American Express Platinum card Amex

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You can also earn Marriott Bonvoy points indirectly:

and for small business owners:

The conversion rate from American Express to Marriott Bonvoy points is 2:3.

Click here to read our detailed summary of all UK credit cards which can be used to earn Marriott Bonvoy points

(Want to earn more hotel points?  Click here to see our complete list of promotions from the major hotel chains or use the ‘Hotel Offers’ link in the menu bar at the top of the page.)

Comments (37)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • David says:

    £300k per year SEO/PPC for a hotel with 91 rooms?!?!
    – That is over £9 per room, per night!

    Wonder what the occupancy figures were like. I wonder if they really were delivering him guests paying more 9 pounds per night (on a fictional 100pc occupancy) than he would get without that.

  • JK says:

    Sounds like he got taken for a ride by his marketing folks.

    • The_Real_A says:

      I think obvious consulting costs… Probably to one of the Raffles readers here 🙂

  • RIccati says:

    Perhaps there is not as much in demand for £299 rooms at a train station hotel.

    For comparable money, one can find something decent at Langham or other de la crème place.

    • erico1875 says:

      I wonder what the average occupancy level was?

    • Brian says:

      Quite. For 299 pounds, you have such a wide range on offer that there is no reason to go for something near King’s Cross. The points price is okay – just don’t assume that you are getting 2.5p per point in value, as Rob says – unless you’d be stupid enough to actually pay that cash price!!

  • Sam says:

    Wowzer. I managed PPC in my last role for a few much larger hotels and we spend no where near that, love to know which agency he was using!

    Presumably pouring a lot of money into keywords like “hotels in london” which are expensive but deliver virtually no revenue. A few solid corporate deals, some well placed articles, some targeted keywords/SEO based on location and proximity to Eurostar etc and some OTA busting cheeky value adds I can’t believe it wouldn’t have been possible to build a nice business here as it is a nice hotel.

    • Erico1875 says:

      How much ppc is “hotels in London” ?

      • Rob says:

        I would imagine well over £1.

        I did some Google ads for HFP once, using one of the those ‘free £50 trial’ codes that float around, and I was paying 29p per click for terms like ‘avios points’ which are not exactly highly sought after.

        • Roberto says:

          Probably nearer to £4 for some key words to get you towards the top of the front page on Google. In fact they suggest that £2.78 is the minimum start price for the search term “hotels in London”. With an average phrase search of 167,000 (world wide ) per month it is certainly in the highly competitive search bracket.

          My guess is that they pay about £3 per click net net after fees bringing 100,000 visitors to their page. The return on investment differs from sector to sector but if they want to fill rooms its money well spent I guess.

          I work in that field and am never surprised how much companies are prepared to invest to drum up business. Conversely I did some work for a local company in June who called me yesterday and asked me to pull their adverts off google asap as they dont have enough time to answer the inquiries. They invested just 500 euro over 4 months and made their money back after 9 days.

          • Rob says:

            Given the rates this place charges, you’d need to be mad to bid against ‘hotels in London’ given that only a tiny fraction of the audience would be willing to pay £200-£300 per night. But they probably were.

            On the other hand, if you Google ‘langham hotel london review’ you will usually see the article I wrote about them on the first page (on a desktop). Most companies would pay a fortune to get a ‘soft’ article promoting their business on page 1 of Google – indeed, Langham was so pleased that they later gave me a room for a competition prize.

            ‘Crowne Plaza Kensington review’ finds me top of page 2. ‘Corinthia hotel london review’ finds me bottom of page 1. This is for searches done using in-private browsing so they are not distorted by my search history.

            Feel free to let me know what I should be charging for this sort of thing!

            PS. I am delighted to see that if you search ‘amigo hotel brussels review’ my slating comes up half way down the first page. I must be costing them a fortune (the headline is ‘The decline of the Hotel Amigo, Brussels reviewed’ and the slug is ‘The financial problems at Rocco Forte’s hotel group seem to be hitting standards hard’). They deserved it, of course.

  • gnarlyoldgoatdude says:

    I currently work in the area. Although I probably won’t need a hotel room for the rest of my contract, it’ll be interesting to see if you will be able to get starwood points for dining here.
    If they do that it might lure people away from the myriad other options in the area.
    Subscribing to the St Pancras twitter feed, for example, often yields bargains and occasionally free meals.

    • Rob says:

      I assume you would if Tribute hotels follow all the SPG guidelines. Wonder about the bar?

    • Andrew (@andrewseftel) says:

      I work in KX too! Any more info on the sort of thing you get in the Twitter feed?

      • gnarlyoldgoatdude says:

        A couple of weeks of free burgers at Prime Burger, if that’s your sort of thing.

  • Hingeless says:

    For anyone who hasn’t been to Kings Cross recently it has changed beyond all recognition and is full of good bars and restaurants. Our office is in the area so I have seen it regenerate over the past decade. Plum and spilt milk – the restaurant in the great northern is also really nice.

    Kings cross is no longer an area to be avoided, it is a destination.

    • David says:

      Agreed.
      Very surprised by the “at a train station” comment earlier.

      • Leo says:

        Yes I second that. Plum and Spilt Milk is well regarded – the bar downstairs is always full! Kings X has has up and come!

      • RIccati says:

        Nicer than Gare du Nord but the place is still very busy a train station, with a crowd of people and traffic noise.

  • Erico1875 says:

    As I have nothing better to do this morning, I thought I would run a couple of searches via Trivago and Hotelscombined.
    searched Kings Cross, applied filters 5 star and sorted Distance, price and rating
    Great Northern came out TOP via Hotelscombined although only 2 hotels showed up with t.hose filters
    However wiith Trivago it ranked DISTANCE 3rd page, no 55 out of 103 . for “PRICE it does a little better, 2nd page no 40, RATING 3rd page no 59, POPULARITY 2nd page no 45
    I would be seriously worried about the info being inputed into Trivago as if I had £250 a night to spend, coming off the train at Kings Cross , Trivago are not pushing me to The Great Northern!

  • Leonid says:

    Raffles, considering that you live in London, I am a bit surprised you often mention that you value good 4- and 5-star London hotels in various chains. Why would it be the case? I also live in London and could not possibly imagine a scenario when I would like to spend Avios, points or cash for staying in London hotel when I have my own place here and I am not a tourist in the city… Yet, you seem to value this a lot. What am I missing?

    • Rob says:

      The reason I tend to cover smart London hotels is that a lot of HFP readers are business travellers who occasionally stay in London so find the articles useful.

      It is also very easy for me, as I live here, to accept invitations to tour hotels in London. I also enjoy poking around hotels!

      I also – if there is a silly promo like the Park Plaza £29 one this year – will buy rooms to use as office space, because it makes a change from Regus and is a tax write off anyway. I also get to do a review of the place as well.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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