On today’s show we’re talking about hotels and some of what’s happening in the hotel industry.
The first major trend is that the hotel landscape is changing dramatically. Major hotels chains are launching more and more brands as they try to gain market advantage.
Here’s what I believe. The value of a brand is called its brand equity. There is a ladder of brand equity that starts at the very basics
- Brand Awareness
- Brand Preference
- Brand Insistence
- Brand Advocacy
I’m a pretty astute world traveler. I’ve visited over 55 countries in the world. That’s not going to break any records. But it’s fair to say that I’ve traveled. I’ve stayed in roadside hotels on the freeway at under 40 Euros a night, and I’ve stayed in luxury 5 star properties from Shangri La in Asia.
I’ve stayed in Taj hotels in India, and Accor Group Hotels all over Europe. When it comes to hotels, I find that I struggle to keep pace with the proliferation of hotel brands. It’s like there is a hotel brand arms race underway.
All the major hotel groups including Hilton, Marriott, IHG, Best Western and Hyatt have multiplied their brands.
ntercontinental Hotels purchased Kimpton Hotels back in 2015.
The company breaks down their business into Mainstream hotels and luxury and lifestyle.
Their best known brands is Holiday Inn. Atwell, Avid are new brands that complement Holiday Inn and Holiday Inn Express as part of their mainstream portfolio. Some of the growth has taken place through acquisition, but much has happened as a result of launching new brands with positioning.
Luxury and lifestyles (Intercontinental has 65 hotels under development). There are new brands like Regent, 6 senses resorts, and Indigo.
Almost all of the 6,000 hotels in the IHG portfolio are owned by independent 3rd parties.
At Hilton, they’ve added new brands like Tempo, Motto, Signia, Canopy, Tru, Home2, Homewood Suites, the Curio Collection and the Tapestry Collection.
Marriott is now the largest hotel group in the world after having acquired the Starwood Group that owns Sheraton, and Westin.
Hyatt has expanded with new brands including Andaz, Alila, and Thompson Hotels.
The hotel groups are eyeing the growth of the middle class on a global basis as the main driver for demand.
There has been considerable focus in the industry on bringing additional value to guests through loyalty programs. Someone who earns their Hilton Honors points at the airport Hilton when traveling for business will use their points at a vacation destination using one of the other brands when traveling for leisure.
Today’s traveler is looking for specific amenities. When I travel, whether it’s for business or pleasure, the number one amenity that I look for is a refrigerator in the room. If it doesn’t have a fridge, I’m not staying there.
It’s common in the downtown core of a major city to see many competing hotel brands, when in fact many are
The seven largest hotel companies boast a mind numbing 134 brands. There has been so much consolidation in the hotel industry that even iconic family run hotel names like Waldorf Astoria, Fairmont and Ritz Carleton, are all part of a global conglomerate.
So why are the hotel companies proliferating the number of brands?
Strong brands like those under the Marriott and Hilton families attract the most visitors. They also attract the highest valuations from the REITs that aim to purchase performing hotels.