A room in The Bell, a pop-up hotel open in August 2019 by Taco Bell.

The interior of The Bell, Taco Bell’s pop-up hotel in Palm Springs, which sold out in minutes with rooms available for $169 per night. Photo from Taco Bell

Taco Bell, the Irvine-based fast food chain that has brought fast, low-cost, Mexican-inspired foods to markets around the world, debuted a pop-up hotel, The Bell: A Taco Bell Hotel and Resort in Palm Springs on June 27. The hotel will be open for four nights in August. Chiranjeev Kohli, Cal State Fullerton Mihaylo College marketing professor, examines the chain’s decision to launch the hotel, its impact and what it might mean for the future.

With more than 7,000 locations around the world on five continents, Taco Bell has come a long way from its first location launched by San Bernardino entrepreneur Glen Bell Jr. in 1962. But on June 27, 2019, the chain, now a subsidiary of Yum! Brands, captured the world’s attention with the launch of a redesigned Palm Springs hotel and resort, replete with a taco theme.

Known as The Bell, the initiative for now is limited to accommodations for only four total exclusive nights beginning on Aug. 8. The experience features a poolside lounge with an in-house DJ, salon, gift shop, movies, gym and Taco Bell-themed menu.

According to Mihaylo College’s Chiranjeev Kohli, a marketing professor and former consultant for Taco Bell, the strategy is all positives for the Orange County fast food giant.

“This is a promotional strategy, with the idea of creating more buzz and being in front of everyone’s face and getting a lot of publicity. They sold out in minutes” says Kohli. “They’ve already earned enough in returns to compensate for whatever investment they must have made on this, and it has been covered on a lot of media outlets. Of course, a few days is nothing. It’s a 70-room hotel, and you have almost 300 people nationwide booking, which isn’t much, but it creates a lot of favorable buzz and looks very impressive.”

Cal State Fullerton Marketing Professor Chiranjeev Kohli

Chiranjeev Kohli

A Company Famed for Creating Buzz Takes a New Leap

While a “tacotel” might seem far-fetched, Kohli says The Bell is in keeping with the company’s history of creative publicity, such as giving free tacos if the Los Angeles Lakers won big.

“It is in line with their personality and positioning – live mas. It’s a bigger than life type of thing, live big,” says Kohli. “They’ve been good at that. They’ve also co-branded with Doritos and capitalized on that, too.”

While trending high on social and traditional media, Kohli doesn’t see The Bell as a game changer for the company’s brand image.

“When you talk about brand image, it’s not going to do wonders for it. But the idea behind brand image is that you create it once and stay consistent with it, and in that respect, they’ve been consistent with it,” he says. “This is something like a cross between public relations and advertising. They spent the money to start the hotel and got a lot of mileage out of it, so it definitely helps in that respect.”

Asked how Taco Bell will measure its hotel venture, Kohli points to metrics of exposure, which would not only include the number of participants, but also success on social media.

“Their product is still fast food. They could also open up hotels, which would be launching a new product, or technically, a brand extension. But that’s not what they’re doing for now. This is strictly promotional,” he says. “They can’t measure attitudes all the time because it’s difficult to measure incremental change while advertising is still going on. So by measuring exposure, they can look at how many people actually participate, and also with the rise of social media, how many tweets there are, how many retweets, how many mentions on Facebook, and the like.”

Should consumers expect a chain of taco-themed hotels, maybe with innovative architecture shaped like tacos or burritos? Kohli doesn’t think so.

“If they were going after the product and not seeing this as a promotion, this would be considered a test market, and a few days wouldn’t be long enough. Taco Bell test markets its products for three months,” he says. “Also, running a hotel is a completely different ball game than creating new menu items, which is where they should be focusing their attention. Also, the hotel industry is growing, but not by leaps and bounds, and companies usually go into new products in high-growth markets.”

The Future of Fast Food

For more than half a century, fast food has taken the world by storm, complementing the rise of the automobile and modern schedules in cities and towns around the world.

As technology and social trends continue, Kohli expects the fast food revolution to continue into the foreseeable future but will take a new form.

“Fast food is, by definition fast, but also, even though not by definition, tends to be very cheap. Thus, fast food attracts people looking for food that is delivered fast and is cheap,” says Kohli, while acknowledging that some customers don’t fall into the value-conscious category, such as his daughter, an occasional fan of Taco Bell and Del Taco. “But the significant majority are going for both convenience and cheaper prices.”

On both counts, Kohli anticipates changes in the offing. “Labor costs are going up, so that increases pressure on costs. And with the development of more IT and smartphones, it is possible to make the experience even faster. Since consumers often don’t even go in to fast food places to sit down, but instead drive away with the food in their cars, it would make sense to make an order by phone while still in your car, get it at the drive through and then head off. That’s where the growth might be.”

Increasingly, health consciousness is also transforming fast food. “This might seem a bit contrary to the basic foundation of fast food, but there is more awareness of the importance of eating healthily, and more people want a component of the menu focused on healthy fare,” says Kohli.

Above all, Kohli anticipates that the fast food field will always be evolving. “Unlike family-run restaurants that don’t have to change much over decades, which is often actually their charm, fast food places must stay up with the times.”

 

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