Four new brand announcements in 24 hours is too much.
In the last 24 hours, I learned about four new hotel brands. In the 10 seconds it took for you to read that sentence, another one probably launched.
One was a real launch: Red Roof Inns’ foray into soft branding with the “upscale economy” Red Collection. And three were unofficial but straight from the horse’s mouth, so to speak: Hilton CEO Chris Nassetta speaking at the Skift Global Forum about plans for an “urban micro-brand;” a new Five-Star-level soft brand, which he described as a “capstone” to Curio and Tapesty; and a “Hilton plus” brand, or “a higher level of Hilton,” in his words.
Umm, say what now?
This is getting a little out of hand.
The last few months—nay, the last few years—have given us a bumper crop of fresh brands. While the choice is good, I fear the industry is starting to hint at desperation a little.
Why do I say that? Because it seems clear to me that these brands no longer are about the customer at all. They’re of course about net unit growth at any cost (you can all thank Marriott for convincing Wall Street it was possible) and fee-based business growth through franchising.
But still, with each of these launches or conversations about new brands, the company tries to position it as customer-centric. Every single CEO talks about “an unmet consumer demand” that only their brand or soft brand can meet—nevermind that their competitor launched the same thing last week or last month and is furiously scrabbling after the same developers, locations and dollars.
It’s almost like they’re shifting the action on to the consumer. “Well, you clearly asked for an upscale, two-and-three-quarter-star, extended-stay hostel with luxury lifestyle elements and a yoga studio and rooftop lounge that only costs $10 a night. I can’t help it that the owners of it started charging and getting $15 a night, so now I need to launch the same thing but at the two-and-five-eighths-star level.”
Did we ask for that, though? Do we as consumers need an economy-to-midscale soft brand from “Insert Company Name Here”? Or a cold-brew coffee-centric wellness brand that shatters the barrier of unmet demand between midscale and upper midscale?
Of course we don’t. But do we need pumpkin spice-flavored cough drops? No, and yet … here they are.
New brand launches always have happened and they always will, and I’m glad we’re in an industry that encourages choice and options. New brand launches also tend to come in waves, often tied to certain moments in the cycle. But this time around, the feeling is different. There’s a whiff of desperation in the air.
Most of the global hotel brand companies appear to be in an “eat-or-be-eaten” mode. Marriott’s acquisition of Starwood started everyone on the path of growth at all costs, to please stakeholders, to gain negotiation footing with OTAs, all of that.
Of course that does filter down to the customer. To get developers on board and reach those net unit growth goals, hotel companies have to make the case that not only is there “unmet demand,” but that it’s unmet demand from loyal customers who are just wishin’ and hopin’ that they could stay with your brand family, but they can’t find one because there isn’t one on every single corner of the globe.
That may be true for some brands with die-hard loyalists, but that’s not true for all. Just like how growth through brand expansion may work for some companies, but it’s not a one-size-fits-all success module.
The market will decide all of this at the end of the day, and that’s the beauty of our industry. Some will eat; others will be eaten.
I’m enjoying watching it play out.
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