The coronavirus pandemic has sparked the worst year for the travel industry on record, and business leaders are in a survival mode of shedding unnecessary expenses and assets. But beefed-up hotel brand portfolios are likely here to stay.
Industry critics have chided hotel companies in recent years for adding so many brands. Five of the world’s leading hotel companies — Accor, Hilton, Hyatt, Marriott, and Wyndham — have more than 120 between them, ranging from Super 8 to the Ritz-Carlton and everything in between.
Not even coronavirus can deter the hotel industry’s growing embrace of so many brands operating within a single company. But global companies have to maintain distinct brand identities rather than inflate concerns of brand bloat.
DISTINCTION OVER SATURATION
Major hotel companies are banking on travelers craving familiarity when they once again start booking vacations following coronavirus lockdowns. Business can rebound through a combination of new cleaning protocols and brand awareness, the thinking goes.
“In challenging times, strong brands win,” said Phil Cordell, global head of new brand development at Hilton. “I think it all comes down to the strength of the individual brands. We have 18 brands, and each has a distinct value proposition for owners and guests.”
“As long as it gives attractive returns to owners and gives a differentiated experience to owners and guests, there’s no magic number,” he said. “We’re in a good place. Could there be other companies who need to be maybe a little more thoughtful in the approach? Probably.”
Marriott hit the 30-brand threshold following its 2016 merger with Starwood.
BRAND BLOAT?
Even if there is a method behind brand expansions, criticism isn’t likely to abate.
Analysts still argue the brand build-up push would be vulnerable in a downturn. IHG CEO Keith Barr cautioned at a Skift forum last year against brand buildup becoming brand bloat. IHG operates 16 brands, according to its website.
“I think there are too many brands out there,” Lesser said. “There continues to be a proliferation of brand expansion and new brands coming up. It’s becoming harder and harder to differentiate.”
“I don’t think it’s going to necessarily cease,” Lesser said. “Hotel companies today are families of brands and the name of the game is expanding their critical mass.”
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