The Evolution of Hotel Branding: The Changing Focus of Hotel Brands
June 25, 2014 6:24am
by Randy Hulce
Travelers who favor a particular hotel brand know what to expect when they arrive. The rooms look identical whether they are located in Maine or California. Guests don’t know, or care, if the franchising company or the franchisee owns the property. Everything is the same.
This is an ideal situation for property owners who wish to identify strongly with a brand. The name attracts a predictable type of guest, and the owners have fewer decisions to make. They don’t have to worry about furnishings or layouts; they just have to follow the master plan.
Because of the rising popularity of this enforced uniformity, many major hotel companies altered their focus from owning the real estate to franchising and managing it. This saved the expense of land acquisition and new construction while simultaneously creating new income streams. In exchange for lucrative fees, the franchisees benefited from the franchisor’s name recognition, marketing, reservation referrals and computer systems.
On the other hand, some hotel owners don’t care for the cookie-cutter approach. They want to express their own individuality and produce a unique product. However, financing for independent companies is often harder and more expensive to obtain than it is for a branded hotel. In addition, the smaller companies have more limited means to attract international customers or to develop new technology for reaching potential guests. Fortunately, there is another alternative available for these determined hoteliers. A hybrid type of branding has arisen to address their needs.
Soft branding may provide the best of both worlds for these entrepreneurial owners. Some major brands have created collections of independent hotels that pay a monthly fee for marketing, distribution and sales support. The hotels can retain their own look and feel with charges that are considerably less than franchising fees. Lenders appreciate the brand alignment and offer more favorable terms for quasi-brands than they do for independents. Some brands with an increasing presence of affiliated properties include Choice Hotels International (Ascend Collection), Marriott (Autograph Collection) and Red Lion (Leo Collection).
Although hoteliers are adapting their methods and changing with the times, seasonal resorts remain predominately independent. The short season may not generate enough revenue to justify the expense of franchising or soft branding.
In any case, there is no one-fits-all solution. The branding decision depends on the personality of the owner, fees, projected revenue and the location of the property.
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