The following perspective is the sole opinion of the writer, free of endorsement by HOTELS Magazine.
I have said it before, and am doing so again, there are too many hotel brands.
Recently, I moderated an industry panel and posed this question to the panelists: “How do hotel companies validate the need for a new brand?” One response, from a franchise development executive: “When there is no more space within a defined geographic area for us to plant a flag, we come up with a new brand.”
Frank, yes, but illogical, all the same. The idea that brand saturation can only be remedied by creating new identities is antithetical to becoming a better, stronger company.
Although many new hotel brands claim to identify and cater toward unique customer segments, there is little if any differentiation that clearly distinguishes them from one another. Additionally, the more brands any single lodging platform has, the greater the risk of cannibalization within the same brand family. While introducing new brands are attempts by lodging companies to enhance their management and/or franchise fee revenues (i.e., growth), doing so confuses travelers and in many cases alienates hotel owners.
Instead of more identities, 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. The hotel companies, and their attendant brands, that can truly differentiate themselves will be best suited to withstand the next downturn, which will, inevitably, occur.
The notion that “there is no such thing as too many hotel brands” is erroneous. As a longtime lodging industry advisor, I am confused about what differentiates many brands from one another, and if I cannot comprehend, I cannot imagine the traveling public does, either.
Perhaps that is the idea? Hotel companies spend significant sums of money on new television spots and other collateral championing a brand ostensibly for consumers benefit. The reality is, it is the hotel developer they are targeting. From Hilton to Marriott, these are publicly traded companies and almost all do not own assets. They manage some, yes, but their engine growth is through franchising, or deriving fees for using their name and likeness. The way they grow fees is by adding new hotels, known as net unit growth, and something Wall Street uses considerably to measure the health and performance of a hotel company.
Proctor & Gamble owns more than 65 brands globally, far more than any one hotel company. The difference: P&G is a product company; hotel companies are service platforms. The hotel industry should be making brands better; not adding new ones. It only confuses the traveling public.