• Thu. Jun 20th, 2024

Brand Proliferation Drives Hotel Industry’s Evolution, Execs Say

Bynewsmagzines

May 8, 2023
Kimpton Hotels & Restaurants' Tiffany Cooper and Accor's Ben Cary speak during a panel at the Meet the Money conference. (Trevor Simpson)

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Differentiating each individual hotel brand has never been more important as global brand companies continue to add to their grand totals, hotel executives say.

Speaking during the “Brands & Management: Insiders’ insights to Optimizing Your Deal” panel at the 2023 Meet the Money national hotel finance and investment conference, Ben Cary, vice president of development at Accor, said his company promotes different brands in the U.S. compared to Europe, justifying its 54-brand portfolio.

Accor also has different standards for its brands, such as box size and offerings, which makes selecting a brand easier for hotel owners, Cary said.

“Whenever I’m talking to an owner or developer, I have an idea that it might be … three or four brands that could be a fit, so then I will talk to the client and usually we can narrow it down based on their preference,” he said.

Hilton differentiates its brands based upon the service provided, said Patrick Speer, vice president and managing director at Hilton.

“When we talk to an owner who’s potentially looking at developing a hotel with us, it’s understanding what they want to do. How much food and beverage do they want to offer? How much of a staff do they want? Do they want a concierge?” he said. “A lot of it comes down to service and offerings to the guests than anything else.”

Tiffany Cooper, head of development at Kimpton Hotels & Restaurants, said giving both the guest and developers a larger choice of brands increases the value for each, even if there is some “brand blur” at times. Providing a price for all guests across the master brand’s loyalty program is its strategy to retain customers for years to come.

“The idea is you have a price point for everyone so you can really pull them in, indoctrinate them when they’re young and right out of college, and over the course of the next 40 years of their careers, usually they start at one price point and they end at another,” she said.

Another way to avoid confusion between brands is to only develop or acquire a new brand in a segment yet to be touched. Speer said the past six brands Hilton created were done so organically based upon which segments it hadn’t covered yet.

Cary pushed back on the idea that there are too many hotel brands, citing the evolution of the industry over the past 15 to 20 years.

“It seems like in the old days that there wasn’t a lot of innovation; things were cookie-cutter,” he said. “You hear the thing about people don’t want surprises at hotels; well, that’s no longer true. It’s just impressive the amount of innovation and quality hotels that are being developed today.”

When acquiring a brand, the best course of action is to allow it to continue running as is, Cary said. Accor retains the CEO and other high-ranking members of an acquired brand and gives them significant input to ensure the formula isn’t lost.

“First and foremost, we want to keep the DNA that made the brand special and continue to celebrate that,” he said.

David Kuperberg, head of development of Dream Hotels for Hyatt Hotels Corp., experienced this first-hand after Dream was acquired by Hyatt in February. He said Hyatt initially planned to buy just the management company and contracts but decided to retain the team behind it after learning how Dream operates.

“They really kind of left us alone and said, ‘Look, you guys are doing a great job of what you’re doing, keep doing it, and call us when you need us,’” he said. “I think they’re doing the right approach there.”

Integration into a larger loyalty program is one plus for brands that are acquired, Cooper said. Sharing a platform with other hotels in a large system increases the eyes on smaller hotels, he said.

“You can’t neglect the individual brand, but I do think having a larger focus on the master brand, ultimately there’s going to be a longer-term [return on investment] in terms of just recognition and being able to capture that traveler,” she said.

There’s a fine line to toe, though, when switching to a larger loyalty program in terms of keeping a smaller brand’s culture intact, Cooper said.

“You have to be delicate in how you approach it, but I think there is a way to do it,” she said. “I think leveraging technology, economies of scale, those are probably the most important aspects to try to get the brand fully ramped up and get a [return] on that ultimate acquisition investment.”

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