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 But that distribution function has largely been replaced by OTAs.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
Larry Mogelonsky
Managing Director Hotel Mogel Consulting Limited

Another 'exciting' are brand from the XYZ Hotel Company. Am I excited? Is the consumer excited? Doubtful. Brands without marketing support are merely exercises for marketing gurus who like to play with logos and interior designers. The whole aspect of multiple brands has nothing to do with the guest. Rather, it has to do with the hotel corporations who need more brands to sell more franchises. The more brands there are, logically the less units there are for each brand and the more diluted the accommodations field becomes. It is no wonder that younger travellers have minimal brand affiliation: the brands have not given them any reason to secure their loyalty. With one exception: younger travellers are loyal to Airbnb.

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