In an earlier post I posed the question, what does it mean to be loyal to the consumer? I encouraged us to think twice about how to engage our current and potential guests in a more personal way, ensuring they maintain a sense of loyalty to our respective brands.
In the United States, an edge may be the strategic way in which brands set themselves up for success and longevity, both internally and publicly. Here, in the most branded country in the world, the business model is quite unique. Many rely on tri-party agreements among an asset manager, a brand operator and a unit operator to maintain a brand’s success and growth.
Having worked for decades overseas, I cannot help but think about this difference. Here, the industry reinforces the idea that you may run a business like it belongs in real estate rather than in hospitality. Like the flipping of assets in real estate, many focus on the short-term gain of commoditization and forget about customization, which is increasingly important in today’s market.
This trend is becoming a new “norm.” Vote in favor of the capital gain on the transaction, and forget about the property’s long-term growth and value creation through continuity with a brand of preference. Growing brand equity over the long term, however, is more difficult in hospitality than in most other service industries. Commoditization and customization are more likely to be at odds with one another in hospitality because of that additional opportunity to separate out the asset manager, the brand operator and the unit operator.
I believe no one operates a hotel better than the brand itself, mostly because it leverages its own systems more effectively than third parties, dealing with a large variety of brands.