CEOs speaking on a panel at The Lodging Conference said the number of brand offerings will likely continue to grow, which works as long as it meets consumer needs.
PHOENIX—The proliferation of brands in the hotel industry—especially from the big companies such as Marriott International and Accor—will likely increase, and that’s a good thing, executives said at The Lodging Conference.
Speaking on the “A view from the top” panel on Day One of The Lodging Conference, Heather McCrory, CEO of the Central and North America region at Accor, said her company has 39 brands and aims to meet a consumer need with each those brands.
“There’s a lot of controversy. Should you have more brands? Should there be less brands?” McCrory said. “It is about the DNA of the brand. If the customer is looking for that, it is really important. Whether it is design, whether it’s art, whether it is service levels, whether it is style of hotel, people are looking for those things, and a brand will only survive as long as what the customer is looking for is delivered.”
The number of new brands being offered will fall off eventually, but for now, she expects it will continue to grow.
Brands are moving more toward lifestyle offerings, which speakers said should continue.
David Kong, president and CEO of Best Western Hotels & Resorts, said a lifestyle offering must have “a service component to go with it, and you’ve got to make people feel very alive and very excited to be in that kind of space.”
He added that the lifestyle segment is “gaining a lot of energy” because those brands tend to have better performance results than more traditional brands.
Hoteliers looking spend the money to renovate their properties should consider repositioning their hotels to lifestyle hotels, Kong said, noting guests might pay more for the experience, resulting in an uptick in average daily rate.
Tyler Morse, CEO and managing partner of MCR Development, said he would keep launching new brands if he were in the shoes of the big companies.
“When brand companies left the owned business, they are in the business of more units. You can’t put more units because of radius restrictions, so if you create a new brand, all of a sudden you can put more hotels across markets,” he said.
Thoughts on Oyo
Asked if he was worried about the rapid growth of India-based Oyo Homes & Hotels, Jon Mehlman, president and CEO of Hospitality Investors Trust, said he sees the company as a player in secondary markets where there are “a variety of buyers of different ethnicities, and they are really the epitome of the American dream story to build their family (business).”
“So far we’ve sold about 25 hotels in the last couple years, and most of them have come out of (this area),” he said. “I believe this is where Oyo can be a player to consolidate this type of (buyer) investor and take advantage of the synergistic play they have in those types of markets.”
Tracking, retaining talent
In an environment in which labor is hard to come by and keeping good people is key, Mehlman said his company does so by meeting with property managers for conference calls on a weekly, quarterly and monthly basis.
Having a trusting relationship and good communication with property managers helps retain talent, he said.