Hotel operators have a brand for all seasons

These days they even manage to squeeze in multiple brands within same property

Image Credit: New York Times
Guests Henry Acevedo and his twin grandsons eat breakfast at the Sleep Inn/MainStay Suites in Meridian, US, Choice Hotel’s first Dual-Brand prototype. The proliferation of brands under one parent company is a by-product of hotel company consolidation, the introduction of new brands and the creation of so-called soft brands that gather a group of similar independent hotels into a collection.
Gulf News

The name Marriott has come to mean many types of lodgings — a full-service hotel in a big city, basic low-cost hotels with free Wi-Fi that are aimed at the business traveller, a newly renovated beach resort. Through acquisitions of other hotel companies, including Starwood Hotels & Resorts last year, and introductions of its own new hotel groups, Marriott International now manages 30 brands under its corporate umbrella.

Marriott is typical of hotel companies with increasingly expanding portfolios of offerings. The Wyndham Hotel Group has 18 brands among its 8,000 hotels. Choice Hotels International’s 6,400 hotels include 11 brands. Hyatt Hotels Corp. carries a portfolio of 13 brands, distributed among about 700 properties.

AccorHotels, based in Paris, manages 17 brands worldwide. The list could go on.

Hotel chains have expanded and diversified their offerings to capture more of the travel market. The proliferation of brands under one parent company is a by-product of hotel company consolidation, the introduction of new brands and the creation of so-called soft brands that gather a group of similar independent hotels into a collection.

Companies have aided in the expansion, in some cases, by licensing their names rather than owning each property.

Travellers’ needs vary over time — with travel for business and leisure, alone or with family, locally or internationally, and requiring a short stay or extended stay — and hotel companies want to capture them all. “We want a brand for each price point and each occasion,” said Patrick Pacious, president and chief operating officer of Choice Hotels International.

The company, known for economy and mid-range brands like Comfort Suites and Econolodge, is expanding its Cambria luxury brand.

Hotel company expansion and diversification is also a strategic defence against online travel services like Expedia and Airbnb, which offer thousands of varied listings in one place. Like such aggregators, more hotel companies can offer their own spectrum of listings, from a basic night’s stay to a luxury resort.

“The more hotels and choices we can offer, the more competitive we are,” said Tina Edmundson, Marriott’s global brand officer, “and front and Centre is we want people to book directly with us.”

For the hotel companies, guests who book through the company website bring more revenue and opportunities for direct customer contact.

Some hotel buildings now house multiple brands under one roof. Hotels near hospitals and military bases often have a mix of overnight and extended-stay guests, Pacious said. So within the same building, his company might have a Sleep Inn for short-term guests and a MainStay Suites for longer stays.

The two sets of guest rooms would share a lobby, housekeeping services and back-office staff.

Marriott, which has more than 50 dual-branded hotels, is building its first tri-branded hotel. The new building opening next year in Nashville, Tennessee, will house an AC Hotel, a Residence Inn and a SpringHill Suites.

The increase of soft brands is another driver of brand proliferation. “Unique, boutique or historical hotels want to keep their identity,” Pacious said, but also get the benefits of a larger company’s reservation system, marketing efforts and rewards programmes.

The Port Inn Kennebunk in Maine and Big Horn Resort in Montana, both formerly independent, are now part of Choice’s Ascend Hotel Collection, which gives members access to business aids like revenue management tools and management training, Pacious said.

Further complicating the ecosystem, new brands like InterContinental Hotels Group’s Even Hotels are being introduced to focus on evolving traveller preferences like healthy dining options, better workout areas and sustainable practices.

But how many brands are too many? Each requires spending on signs, advertisements, websites, social media and customer research. And each brand needs to be nurtured to stay relevant.

To revitalise the Comfort Inn brand, Pacious said that over the past few years, Choice International terminated contracts with 600 lower quality properties and invested $40 million to spruce up the rest, including updates like modern lobbies, flat-screen TVs and faster Wi-Fi. More than 50 additional Comfort Inns are planned or under construction.

Still, industry experts say that too many similar brands and price points can cause problems. Cathy Enz, a strategy professor at Cornell University’s School of Hotel Administration, said that when a company has too many brands aimed at similar customers in the same segment, they can all start to look alike.

“The downside is competitive convergence and the commoditisation of the industry,” she said. In that case, they are left to compete just on price, she said, a situation most companies try to avoid.

“I’m just looking for a safe hotel with free Wi-Fi and a comfortable bed and they’re all pretty similar to me,” said Margaret Sharp of Seattle, who travels in the Pacific Northwest and Canada as a technical writer and project manager. “Holiday Inn Express, Candlewood Suites, SpringHill Suites — they all blend together.”

To educate guests about a large family of brands, hotel websites will list similar hotels together and offer them grouped by travellers’ needs. The distinction between some monikers, like “luxury” versus “modern essentials”, or “wellness” versus “lifestyle”, may be more obvious to some guests than others.

“It is easy for customers to trade down, when similar choices are listed together on a website,” said Dave Reibstein, a marketing professor at the Wharton School at the University of Pennsylvania.

If they get the loyalty points in any case, he added, “why not stay at the hotel that is $10 cheaper per night?”

And despite company efforts to give each brand a unique position, the tiers are not always clear-cut. Damon Igl, a technology-focused business consultant who has travelled extensively for his work, said that in some cases a newly built hotel with a lower-quality brand name may offer a much better experience than a more prestigious brand nearby in a poorly maintained, older building.

“If I have a few choices in the area, I might look to see which opened most recently,” he said.

Managing brand reputations within a growing portfolio is another challenge, said Reibstein, who has researched the topic. He said that associating a more luxurious hotel with a lower-scale brand dragged down the value of the more upscale name.

“That’s why you’ll never see Marriott call its five-star Ritz-Carlton hotel chain ‘Ritz by Marriott,” he said.

Reibstein said he believed that some brands would be retired. “It makes sense to have a portfolio of brands to go after different segments,” he said, “but you need one brand going after each segment, not two or three.”

Retiring brands, however, can be difficult. Because hotel companies now lease their names to operators, they have contractual obligations, among other reasons, to maintain existing brands.

Marriott performs comprehensive “brand health” studies, Edmundson said, and does consider retiring or combining brands. But, she added, “that bumps up against investment made in the brands, the contracts we have, and loyal guest followings.”

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