The new brand bandwagon rolls on
04 NOVEMBER 2014 6:28 AM
New hotel brand introductions finally caught up to the hotel industry’s economic cycle. Are more new flags on the way?
Finally, hotel companies are getting the message that it’s time to roll out some new brand concepts before the current upbeat economic cycle tips in the other direction.
As I wrote earlier this year, a bullish hotel industry environment is often accompanied by a slew of new brand introductions. The trick, of course, is for hotel companies to launch their new products and get enough steam behind them to survive through the next downturn.
In the mid to late 2000s, several new brands came on the scene. And while the recession mostly stunted their early growth, several of them are blooming and on their way to becoming major players in their segments.
Cambria Hotels & Suites, Choice Hotels International’s lifestyle product, launched in 2007 and today has 21 hotels open with 30 under development. Home2 Suites by Hilton, a midscale extended-stay brand, was introduced to the industry in early 2009—possibly the worst time possible—with its first property opening two years later. Today, the brand has 41 open properties. NYLO Hotels has had a tougher time: The brand was introduced in 2004 but has just five hotels open with another under construction.
The pace of new brand introductions slowed to a crawl during the downturn and in the early portions of the rebound. That changed this year, especially in the second half, with at least 10 introductions during 2013 and so far this year, mostly in the lifestyle segment. The list includes:
- Curio—A Collection by Hilton, a soft brand;
- Canopy by Hilton, the company’s lifestyle entry;
- Vib, another lifestyle product, this one from Best Western International;
- BW Premier Collection, Best Western’s attempt at a soft brand;
- Hotel RL, a 3-star brand from Red Lion Hotels & Resorts;
- Niccolo by Marco Polo, a brand extension;
- Hub by Premier Inn, a budget brand from Whitbread;
- Pendry Hotels, an upper-end lifestyle flag from Montage Hotels & Resorts;
- VieVage, a lifestyle brand from Auberge Resorts; and
- WaterWalk, a hybrid extended-stay hotel/apartment complex from serial brand creator Jack DeBoer.
Will they all survive and reach some level of critical mass? Will the industry enter a downturn before some of these brands gain traction? Will some crash and burn never to be heard from again?
No one knows the answers.
The question of critical mass is an interesting one. During last month’s Lodging Conference, La Quinta Holdings President and CEO Wayne Goldberg suggested a hotel brand hasn’t reached critical mass—the milestone in which it has become part of the consciousness of travelers, potential owners and developers, and the financial community—unless it has opened 200 hotels within 10 years of its launch.
Of course, that’s an arbitrary definition and one that more likely fits the hotel industry of 20 years ago than today. Today’s travelers are less brand-centric and more focused on uniqueness, experience and value than brand standards. To them, a hotel they like can be a brand of one.
By that standard, it’s meaningless to measure brand impact by whether it has 200 properties in a neat geographic splay. Some of the 10 flags launched in the past 18 months might never reach the once-magical 200-property landmark, but that won’t necessarily mean they aren’t relevant.
Undoubtedly, some new brand offerings will be introduced in the next year or two or until the economic cycle turns in the opposite direction. A few of them might reach Goldberg’s 200-property critical mass mark; most won’t, but many of them will be relevant with five, 10, 20 or 50 hotels.
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