World Panel
Viewpoint23 April 2019

Are brands becoming relevant again?

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Are brands becoming relevant again?

Traditionally hotel brands largest added value has been distribution. A hotel got branded and was quite rapidly connected to a massive flow of reservations, on all the channels that existed. It helped guests search, travel agents book and hotels get filled. But that distribution function has largely been replaced by OTAs. So much so that, a few years ago the CEO of a large European Owning company publicly questioned why he should keep his hotels branded instead of going independent.

Today with brands adding new sub-brands every year it becomes unclear what a brand really is. But at the same time, the market is growing and they are making more revenue so it seems like the market accepts the new brands. Google has added a brand search functionality into their metasearch product and the conversation has shifted away from "are brands still needed". The millennial generation is supposedly not loyal to brands. Loyalty programs are getting revamped but costs are increasing. So have brands become relevant again? Are we entering a new golden age for the hotel brands?

This viewpoint was created by
Martin Soler, Partner at Soler & Associates
Martin Soler
Partner at Soler & Associates

There is an inherent value in brands as a way of reassuring guests of a certain quality due to standards imposed by brands. Especially when going to an unknown location. While online reviews have helped independent hotels for some time it is hard to know what standards the reviewer had. Hence brands can help reassure travellers. For corporate travel - they undoubtedly play a huge role as companies don't want to negotiate with hundreds of hotels but prefer a central point of contact. 

The multitude of sub-brands is a good way to retain the reassurance of a brand while offering some fresh new experiences to guests. 

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