Are brands becoming relevant again?
— 11 experts shared their view
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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 But that distribution function has largely been replaced by OTAs.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?
So what is a hotel brand - where people book or a brand where people stay? Or both. Operators of hotels spend an inordinate amount of time worrying about where the client books, rather than investing into how a customer feels when they make contact with a brand for the first time That feeling is delivered via building physically and digitally great products, delivering wonderful service and providing rich experiences that reflect their total stay. Global hotel brands from the 80's onwards became transactional booking brands (distribution/loyalty) and forgot to invest in the rest whilst incrementally doing a bad job at retailing their products in the era of the internet.
Cue the now inevitable roster of 30+ “mini brands” per chain that rush to play catch-up. Iconic hotel brands of yesterday and today (from the Savoy Group through to The Standard Hotels) consistently focused “first” on those basics that all operators should do, product, service, experience and interestingly the rest all falls into place especially in an era where reputation counts for so much. In summary, operators of "stay brands"should focus on doing the day job well. The goal of any commercial leader within that stay brand should be to count the number of brand advocates they have generated rather than (overly) obsess about conversion rates & channel mix %