What will future brand standards look like? The answer lies in improving what brands already do well.
There is a growing sense among industry colleagues that I speak with that the franchising model or cycle to which we have grown accustomed to is evolving.
Several factors are involved. These include the established, enduring marketplace strength of online travel agencies and our continued efforts to devise strategies and use them to our best advantage. Next, we must work with changing consumer tastes, especially the desire by guests to book not just a room, but receive a memorable experience in exchange for their hard-earned dollars. At the same time, we must adapt to the realization that while the baby boomers remain a potent economic force, millennials are now our largest adult demographic group.
Additionally, as technology advances, operators can access some of the systems and technologies, including reservation or revenue management systems that have been pioneered by the brands—at competitive costs.
Signs of this sea change, perhaps accelerated by the Marriott-Starwood merger, include renewed emphasis on an innovation in the areas of guest loyalty programs and related affinity programs. The growing importance of soft branding, where operators can customize a property in certain ways, but remain within the brand, is another sign of new market forces at work.
This prompts us to ask: What do the brands do well and how can we make the best use of our brand affiliations while minimizing the costs they entail?
First, it is easy to underestimate the resources spent by the major brands in studying and testing how to connect with guests. This includes large corporate entities that can reserve large blocks of rooms for conventions or companywide business travel to individuals or families out on vacation.
The reality is that outside the largest markets or resort areas, where outstanding independent hotels can thrive, the brands are clearly vital guest magnets. We become the beneficiaries of the name attraction and promise of an assured experience, enforced by long-established brand standards. Overall, our expectation is that the brand will deliver us a quality guest of higher value.
Another brand advantage is the ability to economically design and resource both hard goods and soft goods. This expertise at materials selection and pre-construction design is valuable both for new builds and during renovation cycles. Again, this is an area where value can be easy to underestimate when we look at that franchise fee or try to make sense of what the modern guest is asking of us.
For starters, I think we can identify three areas where we expect brands to adapt or improve in the days ahead.
The first is loyalty programs. The brands will need to move from traditional frequent stay platforms to ones that offer immediate gratification for guests. Not everyone has the patience or desire to wait and build up enough “points” to earn a free roomnight or an airline flight. Today, the needs of guests fluctuate by stay, by city and by property. The available incentives need to be meaningful and reflect that reality. The days of incentive programs that require too much “busy work” for the consumer, like having to speak with customer service people on the phone or endlessly navigate through complicated web sites should be ancient history.
We talked about the great customer knowledge that the brands possess and the power to sell to large user groups. However, in recent years, as technology has tended to dominate, we find that those who were true sales people have perhaps morphed into “order-takers.”
Backed by a consistent, one-point contact, group sales and marketing is an area where the best brands have a lot to offer operators and we would like to see greater emphasis by all brands on “relationships and results.”
Last, backed by both market insights and advanced technologies, we expect an even greater role for soft branding in the future. Market intelligence and common experience tells us that today’s more sophisticated guests are not only great bargain hunters/comparison shoppers, but, also, they are looking for unique and memorable experiences from their hotel stay. Not only is that understandable, but, working with our brand partners, it is a welcome, energizing mandate that is within our power to deliver.
The best brands recognize these trends. They are fine-tuning platforms that are willing to “make a statement” by appealing to distinct guest profiles. We think we can go even further in that regard without diluting traditional brand strengths.
What will tomorrow’s brands be like? Clearly, what we decide to make of them. Done well, and they can be more agile, more guest-focused, more inventive and more profitable.
Kerry Ranson, a 21-year veteran of the hospitality industry, is chief development officer at HP Hotels.
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