Value, experience motivate major brand launches in 2017
 
Value, experience motivate major brand launches in 2017
29 DECEMBER 2017 9:10 AM

Several new midscale and soft brands were announced throughout the course of 2017. Here’s a look at a few key new brands.

GLOBAL REPORT—If there are three certainties in life, they’re death, taxes and new hotel brands. Like most years in recent history, 2017 was a year in which several new brands were announced within the hotel industry.

Many of those brands—like InterContinental Hotels Group’s Avid Hotels—focus in on the midscale segment, anticipating a renaissance for the budget-minded travel. Several others—like Hilton’s Tapestry Collection and Wyndham’s Trademark Collection—are soft brands looking to incorporate some independent flair into large-scale distribution platforms.

C. Patrick Scholes, managing director of lodging and leisure equity research for SunTrust Robinson Humphrey, described the fixation on midscale as “not surprising considering these chain scales are outperforming the industry today.” He added there’s a business rationale for the focus on more lifestyle properties, as well.

“There is a continued push to get guests out of their rooms—reportedly a trend favored by younger travelers who want to be in the public areas,” he said. “Regardless of whether or not they want to converse with others, they still want to be seen, and we continue to see new brands focusing on enhanced revenue-generating public space offerings.”

Michael Bellisario, senior hotel research analyst and VP at Robert W. Baird & Co., said despite any rationale from c-corps, owners are feeling a bit of brand fatigue.

“There are too many hotel brands,” he said. “And I’ve heard from more and more people that the lines are being blurred between brands.”

As far as what brand seems to be the talk of the industry, Bellisario said that distinction actually goes to one launched in 2016, not 2017.

Among owners, “we hear about Tru the most,” he said. “There’s an increased focus on returns for owners. They’re in efficient boxes, and that’s why you see select service in urban markets.”

Perhaps not coincidentally, IHG’s Avid brand operates in the same chain scale as Hilton’s Tru, and with the same rationale of being inexpensive to build and operate.

Those who believe the brand landscape is already too crowded shouldn’t expect any relief in 2018, as Hilton has already promised more brand launches in the new year.

Here is a quick rundown with key facts about some of the more noteworthy brands officially announced in 2017.
(click logos to view)

Brand: Avid Hotels

Parent company: InterContinental Hotels Group

When announced: September 2017

Price target/chain scale: Midscale

Description: Elie Maalouf, CEO of the Americas for IHG, said the brand will “deliver an experience that features modern and stylish designs, superior guestrooms and public spaces and great service—all at an excellent value. I have no doubt Avid Hotels will continue IHG’s success in delivering what our guests want, while driving superior returns for our owners.”
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Brand: The Red Collection

Parent company: Red Roof Inn

When announced: September 2017

Price target/chain scale: Economy and midscale

Description: Red Roof Inn’s first soft brand aims to offer “a portfolio of upscale economy to midscale unique hotels that are hyper-local, drawing inspiration from the local vibe and culture of the city centers in which they are located,” according to a news release.
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Brand: American Idea

Parent company: Trump Hotels

When announced: June 2017

Price target/chain scale: Midscale

Description: American Idea hotels, according to a news release, “will be an alternative, for both guests and hotel developers, looking for an answer to the run-of-the-mill offerings currently in the midscale space. Its properties will be places to relax, to have fun and to experience gracious hospitality. Guests will enjoy local flavor and genuine service in an environment that pays respect to the unique culture of each destination.”
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Brand: Trademark Collection

Parent company: Wyndham Worldwide

When announced: June 2017

Price target/chain scale: Upper midscale

Description: Wyndham’s new soft brand, according to a news release, “is designed for independent entrepreneurs who have built an iconic hotel and are looking to boost its distinctive legacy with unmatched support. The brand invites hoteliers who operate landmark, 3- to 4-star hotels to maintain their individual spirit while taking advantage of Wyndham's scale, distribution, services and loyalty program.”
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Brand: Tapestry Collection

Parent company: Hilton

When announced: January 2017

Price target/chain scale: Upscale

Description: The soft brand “was curated due to customer and owner demand for original upscale hotels that cater to guests seeking reliability and value in their independent hotel choices. Each hotel will maintain its individual spirit, offering guests an experience that is approachable and familiar as well as different from other hotels,” according to a news release.
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Brand: Uptown Suites

Parent company: Starwood Capital

When announced: April 2017

Price target/chain scale: “Upscale, economy-priced”

Description: The extended-stay brand, according to a news release, “strives to meet the increasing demand of value-conscious extended-stay guests by offering economy-priced apartment-style lodging featuring amenities commonly associated with mid- and higher-level hospitality brands.”
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