It’s time to beat our branding addiction
 
It’s time to beat our branding addiction
03 MARCH 2016 8:45 AM

Hoteliers need to stop branding for the sake of branding and replace that addiction with fewer, more meaningful, consumer-focused brands.

Picture it: I’m standing at the head of the table in a hotel boardroom.

Sitting around the table are the regional team of a major hotel brand, the brand’s on-property management team, as well as the property’s ownership group, asset manager and banker—and I’ve been asked to share my opinion as to why the property has been underperforming.

After conducting primary research against the hotel’s past guests and meeting planners, collecting secondary research and completing an in-depth competitive analysis, the answer was abundantly clear to me.

“It’s the brand,” I said, “and it’s cookie-cutter brand standards, expensive ‘who cares’ loyalty program, ‘stock-image filled’ website, non-engaging social media and lack of property-specific marketing in favor of supporting the brand’s regional footprint.”

I then took out a crisp $100 bill, laid it on the table, and said, “If anyone can express meaningful differences between a Marriott-, Hilton-, Sheraton- or Hyatt-branded hotel, you can have the money.”

No one said a word. They just sat there, looking back at me with stunned faces, for a long and awkward couple of moments. I then picked up the bill, put it back in my pocket and said, “That’s what I thought.”

It’s a true story. I’ve played this game in a few board meetings lately, all in an effort to make a point. Beyond a generalized class of service and rates, there are few meaningful differences between today’s hotel brands.

The proliferation of hotel brands
Adding to the frustration is the proliferation of hotel brands, whether they’re hard, soft, boutique, lifestyle—whatever terms we use to help us feel better about the nearly 270 hotel brands we’ve pushed upon traveling consumers. They don’t seem to care. As such, the brands have lost much of their mojo.

I understand and agree that if you’re not priced competitively—and have consistent service offerings, desirable locations, comparable amenities and some form of loyalty program—you’re not going to win in the hospitality industry. But these are the basic necessities of the hotel business today, not the basis for building brands.

True branding should be a reflection of the customer. At its core, the brand should answer the all-important question: “Who am I when I use this product or service?” Think Apple, Starbucks, Ikea, Mercedes-Benz or any of today’s great global brands, and think of the imagery, feelings and connection they create among the ranks of loyalists.

Sadly for the hospitality industry, with few exceptions, the definition of branding comes down to a couple of overly simplistic identifiers: class of service and price. Even if you look at ultra-luxury hotel brands such as Four Seasons, St. Regis, Ritz-Carlton or Waldorf Astoria, you will discover little to no brand differentiation.

I found this especially true while attending a brand launch party at the Americas Lodging Investment Summit in Los Angeles in January. The comments I heard while walking the floor of the mocked-up lobby and guestroom ranged from “nothing new” and “looks and feels just like (name omitted but think any new hotel brand focused on millennials)” to “who cares,” “yawn,” and “meh.”

And these were industry investors, operators, media and other professionals. Imagine how little consumers will care.

The hotel “brandscape” is becoming impossible to define in any meaningful way. This is why brand equity is owned by consumers rather than the hotel companies, and consequently why brand loyalty has eroded to near immeasurable levels.

It’s also what has fueled online travel agencies’ dominance—because consumers have decided that if it’s simply a matter of service level and rate, the OTAs do a much better job of differentiating hotel brands—and the incredible growth of the sharing economy’s darling Airbnb.

Researchers report time and again that too much choice doesn't free us, it numbs us. We cope by opting out, making disinterested decisions—or simply going elsewhere.

Bottom line, what we need is quality, not quantity, going forward.

But perhaps you're saying to yourself, “We live in a free market, John. This is business. It's about share of market and revenue.”

That is exactly my point.

Just a few short years ago, P&G cut its Head and Shoulders brand from 25 to 16 products, and profits rose 10%. General Motors cut its brands from eight to four, and dealers reported a 16% increase in sales.

Branding for the sake of revenue just degrades the equity that the core hotel brand has built. Research illustrates that consumers simply stop buying and begin to look for a more simple solution or channel—can you say OTAs? There certainly aren’t hundreds of them in the mix.

It’s time we beat the addiction to branding for the sake of branding and begin to replace it with fewer, more meaningful, consumer-focused brands.

I realize that not everyone is going to agree with me—I’m certain there are more new hotel brands being prepared for roll out as I write this—but I’d like to get your thoughts. What are you and your organization doing in the way of hotel branding? If you own branded properties, what have been some of your experiences, good, bad or ugly? Please feel free to share your opinions, stories, ask questions or comment here.

John Fareed, principal of John Fareed Hospitality Consulting LLC, is an internationally recognized authority in the field of hospitality marketing. He holds a Master of Science degree in Hospitality Management from the Dublin Institute of Technology's School of Hospitality Management and Tourism in Dublin, Ireland—where he is currently pursuing a PhD—as well as professional designations from the prestigious International Society of Hospitality Consultants and the Hospitality Sales and Marketing Association International. Fareed’s consulting clients include Fortune 500 companies, brands, lenders, developers, REIT’s, management companies, investors, owners, attorneys, and insurers. To learn more visit www.johnfareed.com or contact Fareed directly at jf@johnfareed.com.

The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Columnists published on this site are given the freedom to express views that might be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.

6 Comments

  • jnewbury March 3, 2016 10:56 AM Reply

    Great article John - I think you have perfectly articulated what most people in the industry are thinking.

    I don't think it's totally the fault of the franchise brands though - I think there has been a fundamental shift in the way that consumers research and book hotels in the last 5-7 years and that has changed the loyalty landscape. The new consumer cares more about the authenticity of the individual hotel they are staying at rather than the brand and traditional loyalty programs are becoming less and less relevant - especially as they have been devalued over time for the consumer.

    The franchise brands have been forced to become more creative with their offerings, hence the rise of the franchise collections (just yesterday Hyatt launched "Unbound by Hyatt") but these new brands are also a cynical ploy to circumvent geographical restrictions in existing contracts.

    The world's 10 largest hotel chains now offer a combined 113 brands at various price points, 31 of which didn't exist a decade ago. I wholeheartedly agree with you - no one can remember, even in the industry, which brand belongs to which company and no one cares. We need more differentiation of brands not more brands!

    • johnfareed March 3, 2016 12:21 PM Reply

      Thank you for the kind words. I agree with you, we do need more differentiation, not more brands. Well said!

  • Tom Ferree March 3, 2016 1:49 PM Reply

    Finally! John, glad to see you articulate the problem. The OTA's are rightfully taking major market share from brands because consumer can't see any real difference between various brands in a market segment. As a search firm we talk with hundreds of candidates working for all brands. The people working hotels "get" what's going on with the brands. Doesn't appear people in the trenches are being listened to.

    I realize, it is difficult to differentiate brands when franchises are in markets from NYC or LA to some small town off the beaten track. But those are the marketing challenges chains should be addressing on behalf of their franchisees.

    I watch/read ads for hotels and think "That's the basic I would expect from any hotel." Brands need to give customers a reason to affiliate with the brand...and that reason needs to be different in different markets.

    • johnfareed March 3, 2016 4:01 PM Reply

      Thanks Tom. So agree with your comment. Brands do need to give customers reasons to affiliate with them—personal, authentic, genuine, meaningful ones—and those reasons really do need to be different in different markets. That is the marketing challenge for hotel brands today. You get it Tom!

  • Doug Kennedy March 3, 2016 2:01 PM Reply

    Well said John! The major players have created a "choice overload" problem for consumers. In mystery shopping brand CRO's and regional brand sales offices, our team often finds that even the staff there cannot begin to explain the differences from one brand to another within the same family.

  • johnfareed March 3, 2016 4:10 PM Reply

    Thanks Doug! If hotel staffers can't articulate the differences between brands within the same family, I doubt that consumers can see any meaningful differences or brand value. Thanks for sharing!

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