Are there too many brands for guests to choose from?
 
Are there too many brands for guests to choose from?
19 APRIL 2016 7:28 AM

What customers want out of a guestroom has changed over time, but as hotel companies rush to fill every niche with a brand, perhaps the amount of choice has an overwhelming effect.

When Henry Ford introduced the Model T, he was asked what colors it came in.

Ford famously answered that customers could have it in any color they wanted, “as long as it was black.” No matter. So entranced was the American public with this wondrous new machine—which promised not only to provide freedom but literally change lives—that it was available in only one color made no difference.

Now, of course, the automobile has become a necessity, a commodity in many ways and, yes, a fashion and lifestyle statement. Not only can customers choose from a wide range of colors, they can build their own cars on automakers' websites, with countless design, engineering, safety and entertainment options. A vehicular smorgasbord.

Now consider the hotel business. At the time, a room was a room was a room. All customers expected and wanted was a clean and comfortable place to spend the night.

But that changed when hotel categories began to include luxury, upscale, midscale and economy offerings. Then came all-suite, extended stay, focused service and others, each of which then—like amoebas—separated into upscale and midscale versions of each. Categories, sub-categories and categories of sub-categories. And we're now in the midst of a wave of recently introduced lifestyle brands as hotel companies look for ways to attract and retain a new breed of customers.

With the understanding that most consumer products must adapt to changing demographics to stay desirable and relevant, a number of questions should be raised: Is having a seemingly endless array of product choices and categories—some of which are barely discernible from one another—a good thing, or does the industry risk confusing customers by slicing the bologna too thin? Does a hotel company really need a list of brands that reads like a telephone book? More to the point, does the customer want that?

Hilton Worldwide Holdings currently boasts of having 12 brands, InterContinental Hotels Group has nine and Hyatt Hotels Corporation has 11. The mother of all brand menus will be born with Marriott International's pending acquisition of Starwood Hotels & Resorts Worldwide, a combination that will result in 30 brands.

There's no arguing with the compelling business and competitive advantages inherent in having numerous brand names under one umbrella. A company with a wide range of brands can appeal to a diverse group of potential franchisees; a franchisee in a company's luxury brand can expand his portfolio to midscale hotels while staying in the company's family. Similarly, a customer calling to book a room at a Hilton or Marriott brand property can, if her first choice is sold out, be referred to a Doubletree or Courtyard, thereby keeping that customer in the corporate fold. And there's the issue of shelf space. Coca-Cola wants as many of its brands on the soda aisle as possible. It’s the same with hotels in the minds of travelers as well as franchisees.

But back to the question about customer preference and potential confusion. The fact of the matter is that, at least here in the U.S., consumers pine for more choices. It's part of the American psyche. Having the ability to choose, to determine for yourself what you want your experience to entail, suited to your specific tastes and needs, is a characteristic that has defined American business for years. It's why Baskin-Robbins, with its 31 (actually more) flavors caught on; ice cream lovers no longer had to settle for the chocolate, vanilla and strawberry offered up by the local soda fountain. Many initially scoffed at the advent of Starbucks; who would pay more than $3.00 for a cup of coffee? And no free refills!

But it was choice that was attractive and appealing. Sure, you could get a simple cup of coffee—like you could order a vanilla cone at Baskin-Robbins—but you could “design” your own beverage, creating your own frappa-caffa-presso-macchiato with precisely three-fifths of a shot (distinctly between two-fifths and four-fifths).

While the demand for choice is most prevalent in the U.S., we are seeing more of it globally as market economies free up, allow for more customer discretion and disposable income increases in nations around the world. There's a reason hotel companies and investors are opening up a wide range of property types in such countries as China and India. Franchising continues to become more prevalent in Europe and Asia, the result of which will be more brand and property choices for customers who, upon being exposed to new brands (and increasingly able to afford more choices), will become more brand-discerning.

A reasonable debate can be had as to if and when there can be too much of a good thing, when choice can morph into potential consumer confusion. But in the end, the market speaks. If a brand or property type fails to capture the customer's imagination, it will by economic necessity cease to exist. That's the market, an efficient machine. In the meantime, let the choices roll.

Marc Grossman is a senior communications executive who served as senior VP, corporate affairs, for Hilton Hotels Corporation, where he was responsible for all global corporate communications, investor/financial relations, public affairs, brand/marketing public relations, crisis communications and internal communications. He also held senior positions with three leading international communications firms. He can be reached at mgrossman6@msn.com.

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