Scott Mayerowitz writes about the proliferation of brands across the lodging industry.
The world’s 10 largest hotel chains now offer a combined 113 brands at various price points, 31 of which didn’t exist a decade ago.
Lifestyle Brands are the Flavor of the Month
Hyatt launched its new lifestyle brand in January.
‘Hyatt Centric’ confused me at first — modern luxury is supposed to be Park Hyatt, while Andaz is more hip urban. So what space exactly does Hyatt occupy with their new brand? Apparently it’s like Andaz, with greater variation, but at a lower price point. The ‘variation’ lets it be a conversion brand. Like Doubletree, where about the only thing tying things together is that you get a cookie.
Lifestyle brands are all the rage, IHG had so far to date been unsuccessful in building one so they acquired Kimpton.
“The big hotel chains are in the business of pretending they aren’t big chains. They want you to think they are boutiques,” says Pauline Frommer, editorial director for Frommer’s, the travel guide company founded by her father, Arthur Frommer. “This dizzying array of brand names is a good way for them to hide. The vast majority of the public is not going to keep track.”
Hotels Add Brands in Order to Achieve Growth
Some of the brand proliferation may be driven by a desire for hotel chains for growth, to sign more operating agreements, rather than identifying unique customer segments — the Marriott name, for instance, is already saturated across New York so to add more properties into their portfolio they need to call themselves something else.
Starwood is in an interesting spot, they aren’t growing quickly in most of their brands — quickly enough to break out from being a ~ 1200 property chain into the ranks of Hilton, IHG, and Marriott — so they’ll either need a new driver of expansion in a big way or they’ll need to be acquired or make several acquisitions.
Does Brand Proliferation Undermine a Hotel Chain’s Core Business?
A brand can communicate quickly and efficiently a lot of information to consumers. You know that Westin gives you an upscale experience, relatively modern, with comfortable beds and curved shower rods in the bath. You know that Marriott stands for ‘consistent’.
A consumer might know a brand, like a brand, and choose hotels flying that flag because the brand tells them just what they’re going to get – that consistent experience they’re comfortable and familiar with and feel favorably towards.
But with too many brands, and brands that don’t clearly distinguish themselves, it’s hard for guests to ‘get’ the brand idea. With conversion brands, or brands whose story is that they’re unique to their locations, there’s not really even a clear brand idea to start with.
At that level, a new brand still:
- Allows a chain to grow without diluting the brands that are clear (you name hotels that don’t fit ‘something else’ so that those chains don’t undermine your existing brand)
- Can communicate consumers should choose a hotel chain because of its affiliated loyalty program (Hyatt Centric has Hyatt in the name)
But many of these brands don’t even communicate their affiliation to the other brands consumers know and are familiar with. Four Points “by Sheraton” tells you they have the same points program as Sheraton (Starwood Preferred Guest) and likely initially created a halo effect. But Four Points is hugely inconsistent, with its properties rarely the best mid-scale choice in a given market, and Sheraton itself has lost much of its meaning at least in the US domestic market — it’s not in any way a signal of quality although some hotels remain excellent (and the Sweet Sleeper bed is certainly excellent).
Does someone not paying close attention know that Springfield Suites, Fairfield, and Moxy are part of Marriott? Is it clear enough so that they might choose the property – as a Marriott Rewards member – when booking online with Expedia? (And do most consumers even know whether they will receive points from a given chain when booking with an online travel agency?)
Can you name all of your primary hotel program’s brands? Do you think all of your siblings and cousins can?
Just yesterday in looking at hotel options through pointshound or rocketmiles, I had to google brand names for a refresher as to which chain they belonged to. So other than Hyatt which, with the exception of Andaz, has Hyatt in every brand name, I would be unable to accurately name most brand affiliations…
Hyatt’s not too bad. With the exception of Andaz, they normally feature Hyatt in their name: Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt Place, Hyatt House. So it’s not too hard to keep track of.
And then there’s Hilton. Reasonably clear, but Doubletree has no real brand identity at all and I’m still not sure what the point is of having Hilton Garden Inn and Hampton Inn is after the remodeling of Hampton Inn.
Marriott? Christ if know
Your statement proves everything. An individual focused on FF miles — which you definitely are as you wish to earn FF miles instead of hotel points given the site that you are on, or one not caring either way, could very well be confused.
Those who follow hotel points — and I admit that there are less of us out there — would have no problem knowing which brands belong to which chains.
I think that you are missing the key point that developing different brands allows greater saturation of a market by franchisees. You can’t have a McDonalds on every block, but you could have different fast food places all operated by McDonalds on every block and no one would think anything about it as they are all slightly different products. Remember that the hotel chains don’t (in general) own these hotels. If some owner wanted to open a Marriott too close to another, they could say “how about a Fairfield Inn instead”? That’s the real point about having so many brands.
I actually like the approach that Marriott has taken with their “Autograph Collection” brand, where they bring good local boutique/luxury hotels under the Marriott Rewards program umbrella without actually changing the name of the property. In other words, Atlantis is still Atlantis but it is “part of the Autograph collection”. In many cases, the Autograph properties are “iconic” for their area. This allows Marriott to expand their presence within a city without diluting existing brands and increases the chance that a Marriott Rewards member will choose to stay at a Marriott-affiliated property instead of the competition.
@James K – Hilton is reasonably clear with Canopy, Curio, Homewood and Home2?
The are basically copying the German car brands strategy of ever increasing market segmentation. Not so long ago there were basically 3 types of BMW, 3-5-7 series. Look at it now, 1-2-3-4-5-6-7-8 plus the SUV variants.
I have booked at a stay at the Hyatt Centric Chicago with no idea of how the hotel is going to be. As its a new hotel, there are 0 reviews.
@Tom: BUT at the end of the day, a BMW or Mercedes is still branded as such. I think a wider variety of offerings is good, BUT they should still retain the main brand name somewhere for most of the properties.
At the same time, I don’t understand the marketing idiots at some of the chains. Marriott is obsessed with millennials, which are a lost cause. They’re usually going to favor staying at a friend’s / couch-surf / AirBnB than do a traditional full-service hotel. Business people are still going to do the traditional full-service hotels and there’s no shortage of business travelers, nor will there be a shortage of them in the future. I’d like to see the chains work on improving the lesser properties and getting a more cohesive product and experience. Service, service, service. I normally won’t stay at a Best Western, but there are two of them my office uses which have decent/passable rooms but outstanding service.
What’s up HB 237!!!!!
In some cases, there certainly is brand overlap. But the independent/boutique groups for the big hotel chains–begun with SPG’s Luxury Collection, followed by SPG’s Tribute Portfolio and now SPG’s addition of Design Hotels, and copied by Marriott Autograph and Hilton Curio–offers a unique hotel experience while being able to benefit from elite status, earn points, and/or redeem award nights. Many people prefer the consistency and simplicity of the normal Sheraton/Westin, Marriott, Hilton hotel…but nowadays more and more people are enjoying the authenticity and uniqueness for these un-brands (including me). While there are a lot of brands, the average consumer likely would just pick whatever is best located and cheapest or ranked higher on tripadvisor. The more frequent customer likely does know the brands with each chain; the elite customer certainly knows the brands. So those customers that are most important to hotels chains are likely the ones who pay the most attention.