Shuffled Not Shaken Out: How Hotel Giants Will Handle All Those Brands Post-Coronavirus
Recent brand buildup by global hotel giants has caused some analysts to caution against brand cannibalization, but the coronavirus downturn isn’t likely to change the push for more flags.
Coronavirus travel fears have temporarily shuttered many hotels around the world. But when those doors reopen, the trend of rampant hotel brand expansion seen in recent years may take on a different look.
Coronavirus travel fears have temporarily shuttered many hotels around the world. But when those doors reopen, the trend of rampant hotel brand expansion seen in recent years may take on a different look.
With the rise of alternative accommodation competitors like Airbnb, hotel companies began to add brands that appealed to different price points as well as different tastes. Marriott wound up with 30 brands following its 2016 merger with Starwood. Hilton launched its 18th brand, the "affordable lifestyle" Tempo, earlier this year. Accor operates 39 different hotel brands around the world.
IHG CEO Keith Barr cautioned against brand buildup becoming brand bloat. Analysts said the trend would be vulnerable in a downturn. The current coronavirus downturn is greater than almost anyone could have predicted, but that doesn't necessarily mean the industry is on the cusp of a wave of brand extinction.
"A hotel company is going to have to look hard at how to recover all those brands," said Makarand Mody, a marketing professor at Boston University's School of Hospitality Administration. "That said, the decision to lose a brand is still a big one."