Brand overload

Another day, another new hotel brand announcement. Recent weeks have seen details emerge about Starwood’s Tribute Portfolio, Loews Regency, Equinox Fitness Club Hotels and WoodSpring Suites. A splashy Starwood Hotels & Resorts full-page ad in the April 16th Wall Street Journal stated, “There’s a power in independence. Our newest brand, Tribute Portfolio, gives guests access to exceptional independent hotels around the world with all of the rewards of SPG.” Above a picture of the Royal Palm Miami Beach, the first Tribute Portfolio hotel, the ad stated, “Tribute Portfolio (Stay Independent).” Whatever that means …

Lee Pillsbury, senior advisor to Brookfield Asset Management, hit the nail on the head when he recently said, “Brands aren’t as strong as they were. They are not adding as much to the value chain. They are great at competing, but poor as collaborators. There is no reason why third parties, like Expedia, should exist except for lack of collaboration. Brands are becoming less valuable and less relevant to hotel owners and customers. Loyalty is diminishing as a differentiator. Millennials are less inclined to develop brand loyalty.”

Anthony Capuano, global chief development officer for Marriott International, was also spot-on with the statement, “It’s not a question of how many brands. It is a question of the right brands.” However, he went on to say, “We may need more [brands]” — a statement that I respectfully disagree with.

The industry needs to stop the introduction of bewildering new hotel brands. As a long-time lodging industry advisor, I am confused about what differentiates many brands from one another. If I don’t get it, I can’t imagine the traveling public does either.

Instead, hotel brand families should focus on bolstering and reinforcing their existing brands by making clear to their customers what they will get out of staying at one versus another. Hotel companies and brands that are able to truly differentiate themselves will be best suited to withstand the next downturn, which will eventually occur.