Nomads plots dual brand strategy for backpackers
Nomads World Hotels is working through its property portfolio in a bid to drive up standards, but will continue to develop a dual brand strategy in order to capture both ends of the market.
In their first media interview since acquiring the business in 2007, Directors Michael Ebert and Daniel Bunning said their mission was to create a “flashpacker” and “standard” range of properties, with good coverage across the main hubs.
“We’ve got a branding strategy we’re rolling out which will help differentiate the brands,” said Bunning. Although they refused to reveal the brand names, Nomads Flashpacking and Nomads Partypacking feature on their business cards.
Ebert said customer expectations were growing all the time and that Nomads was renovating existing properties and driving up standards in new locations in a bid to satisfy demand. He added: “You can charge nothing for a bed and the customer still complains on a website, it’s just their nature. So the sensible way is to offer better quality and charge a bit more.”
The company operates a flexible model, owning the leases of four hostels in Cairns, two in Byron Bay, two in Melbourne and one in Auckland and managing properties on behalf of the owners with two in Sydney, one in Wellington and one in Auckland. The pair acknowledged this led to variations in property standards across the portfolio, hence the dual-brand approach, but insisted they are managed to the same standard. “To the customer, it’s all the same thing,” said Ebert.
He added Nomads’ 850 beds in Pitt Street, Sydney, gave the group “a little bit of control over the movement of the customers” while Bunning stressed the importance of a presence in the gateways. “You’ve got to get yourself in a gateway,” he said. “If you had 100 properties in Australia and not one of them was in Brisbane, Melbourne, Sydney or Byron, you’d be stuffed.”
Ebert said Nomads’ Queenstown property, which is due to open at the beginning of July, is “the highest standard we’ve ever done” and Nomads Auckland, previously a BASE property, was originally named one of the top five hip hostels in the world.
The pair said any further expansion was likely to be via the leasing model, which gives them more control of the product. However, they said they were in no rush and were looking for the right deals rather than specific locations. Ebert added: “We’ve moved fast – we’ve acquired five properties in a year so we have no targets, it’s just how many good deals come up.”
By Alice Terlikowski · May 20th, 2009 at 9:37 am
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Comments
20 May 09
1:42 pm
“Flashpacker” I reckon that might catch on
22 May 09
9:02 am
I don’t understand the distinction between ‘flashpackers’ and ‘partypackers’ . I think flashpackers are more inclined to pursue hedonistic pursuits than those travelling on a really tight budget.
22 May 09
10:11 am
And are we absolutely convinced that travellers actually want that stuff – or aren’t the highest rating hostels on sites like HostelWorld those that are just clean, have awesome common space and an actual real like-minded traveller atmosphere e.g. Rainbow Beach, The Park in Tongariro, Southern Laughter in Queenstown, The Haven in Alice, Calypso in Cairns etc?
22 May 09
11:47 am
You got it, Dan
22 May 09
12:02 pm
Having 2 brands with the same main name causes big problems with customer expectation. For example a customer books into a flashpacker hostel has a brilliant time and the next time goes to the net and books another property with the same main brand name, but a party hostel where the standards are lower and ends up totally confused as to what the main brand is supposed to stand for.
Dan is right . The research that I have done and been involved with showed that if you do the basics right. your hostel will rate high and be talked about. The hostel industry often misses the point that the reason that the customers are staying there is that they are there to visit the destination first and foremost not to eat and drink in a hostel bar or be wrapped up in big fluffy towels.
The above things are great for differentiation if you could actually show them in the initial descriptions on booking engines. But what happens when differentiation becomes the norm? Those who do the basics right will always end up at the top no matter how flash the hostel is or how much money the owners spend or what the call it.
25 May 09
10:04 am
Thanks for your valued opinions, we appreciate it. The article itself is wrong to assume brand names we might use which is why we usually fly under the radar, don’t do interviews and just do our thing. I think however that it is possible to do a nice fitout in a modern building and still create the vibe which is what we are trying to achieve in Byron Bay and Queenstown. I agree that hostels mentioned by Dan are great but i think Arts Factory deserves to be on his list and that’s one of ours. When a location needs more beds it usually isn’t possible to find an existing vibe driven site to expand, hence the new Flash ones.
Michael Ebert
Nomads
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