Log In   |  Register Free Newsletter Subscription
Skip navigation
Zibb
Subscribe to Hotels

Challenges To Hotel Companies (Part 2)

January 12, 2009

I have written previously about the proliferation of brands in the hotel business. And, in my last Deal Tracks post, I challenged hotel franchise companies to provide some basic physical data for the benefit of the development community. (I want to note the contribution of John Slaughter, director of franchise development at Choice Hotels International , who sent me a note after the publication of my last post, and sent me some information about some of the Choice brands, with a nice bit of encouragement.) This post is a continuation of the thread of my last rant.

In the face of its request for billions of dollars of taxpayer assistance, General Motors has announced that it is going to pursue its ongoing efforts with only four brands from its lineup – Chevrolet, GMC, Cadillac and Buick. This means, one presumes, that it will attempt to sell Hummer, Saab, Saturn and Pontiac. (I put Pontiac last only because I have fond teen-aged memories of the old Firebird.) Or, I suppose, it can do with one or more of these brands what it did with Oldsmobile, and that is to mothball it. This is an enormous departure for a company whose legendary Chairman Alfred P. Sloan, [offered] "a car for every purse and pocketbook." (Source: New York Times).

Is there a lesson in this decision for franchise brand hotel companies, particularly the big three brands? In times when hotels and hotel owners are suffering, does the plethora of brand choices confuse the public and the development community? Or, does the number of brands promote additional development that contributes to the oversupply and current downturn in the industry? Is it helpful to the industry overall that the franchise companies are still selling franchises of its many, many brands? And, is Hilton really about to introduce yet another brand in a couple of weeks? 

For a man from a state that can’t seat a senator and whose governor is apparently on his way out, I ask a lot of questions. Here’s one more: As a corollary, has any hotel company actually “mothballed” one of its many brands in the last, say, 10 or 15 years?

In Part 3, as promised, I’ll ask my readers to try out a brand matching test.

Posted by Michael Shindler on January 12, 2009 | Comments (12)

January 28, 2009
In response to: Challenges To Hotel Companies (Part 2)
Donald Frey commented:

I do not think that there are to many brands. I feel that it is better to be able to have the choice to pick the hotel that bests fits your needs rather than a cookie cutter hotel that tries to meet most peoples needs.


January 13, 2009
In response to: Challenges To Hotel Companies (Part 2)
chasd commented:

"separating the chaff from the grain"??? methinks the phrase is just another cleverer way of branding "bankruptcy"!!


January 13, 2009
In response to: Challenges To Hotel Companies (Part 2)
RAMESH GOKAL commented:

There are too many brands and as an operator of a new brand I am noticing the increasing confusion amongst hotel owners in their franchise selections. Your follow up point regarding over supply of hotel rooms in America is also very relevant. Another brand that was moth balled and recently revived is Budgetel. One distinction that must be pointed out, however, regarding some of the "


January 13, 2009
In response to: Challenges To Hotel Companies (Part 2)
RAMESH GOKAL commented:

There are too many Brands and as an operator of a "


January 13, 2009
In response to: Challenges To Hotel Companies (Part 2)
Opinionsarejustlike... commented:

Too many brands, yes, I had such a tough time before I bought cloth bags when they asked me whether I wanted paper or plastic. We are making ourselves crazier with brands, branding, choices and I think this economy will help separate the chaff from the grain. ( Whatever that means!)


January 13, 2009
In response to: Challenges To Hotel Companies (Part 2)
London commented:

There are few genuine 'brands', but an abundance of hotel names. Most 'brands' lack any true identity, which leads to the problem of consumers being unable to distinguish between them. For example (and Michael won't like this!)...to me there is no real 'brand' distinction between a Hyatt Regency and a Grand Hyatt. Nor do I see any real distinction between a Marriott and a Renaissance for example. In short, hotels are not great at creating genuine brands that resonate with consumers. That is not to say however that the likes of Starwood, Marriott, Hilton, IHG etc. should not operate with multi-brand strategies as, when the brands are well defined and executed, they can add a great deal of value to the development community.


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
Anthony commented:

Franchise company introduced brands to avoid impact study to existing contract conflict. Then they get too creative with designers brand etc. The matter is does the brand big enough to achieve the minimum size to support and service the infrastructure promised to the owner and guest?


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
Get Rich Quick commented:

Suites brand. The limited-service Wingate Inn brand was folded into the Wyndham brand and renamed Wingate by Wyndham. The company is in the processing of phasing out the limited-service Ramada Limited tier.


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
Get Rich Quick commented:

Wyndham Worldwide folded its Villager extended-stay brand into its budget Knights Inn and its limited-service AmeriHost Inn brand into the limited-service Baymont Inn &


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
chasdowney commented:

Kudos to U Michael!!! Be it hotels, autos, appliances or deoderants the manufacturers and suppliers have all bought way too far into "consumer choice"!!! In these recessionary times the consumer is now looking for fewer differentials but is eyeing more the old GOOD - BETTER - BEST scenarios at a VERY GOOD $$ VALUE. The suppliers that reign in their product line and concentrate on "core value $$" delivery will shed a lot of overhead and expense and be able to deliver a real value - an easly understood product at a great price point. My prediction (unpopular as it may be) - this recession could go on for several years and those that simplify their business, cut costs and provide clear differation will be the ones who survive with the consumer be it hotel rooms or widgets!!! Nobody asked but I say the mantra now should be simplification and clear differation at good value points not the mantra of "consumer choice" to ad-nauseum and minute product differations.


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
Andrew M commented:

I think that Best Western has the right approach - a single brand that consumers understand. With so many brands coming on line, it is giving strength to the independent hotel sector - and with the increasing Internet channel (for consumers to acess reviews and property information), consumers just don't need to rely on a brand for a guarantee of quality.


January 12, 2009
In response to: Challenges To Hotel Companies (Part 2)
BRUCE HUTCHEON commented:

Of course there are way too many hotel brands, but don't expect that to change anytime soon. What (if any) incentive would the franchisor have for limiting their reach? As an analogy, why worry about menu size if you don't have to pay for the food cost?

POST A COMMENT
Display Name
captcha

Before submitting this form, please type the characters displayed above. Note the letters are case sensitive:

Advertisement

HIO Virtual Investment Forum

Advertisement

Resource Center

Newsletters
HOTELS' Daily News Service
HOTELS' eMarketplace
Newsfeed
Recipes & Ideas
eBurger, eBurger
Beverage Briefing
Regional Cuisines
Noncom Niche
In Balance
R&I and Chain Leader eMarketplace
Chain Leader Executive Briefing
Quick Service Reporter
Flashnews
Service Insights
The Specifier
When to Replace
FE&S eMarketplace



Please read our Privacy Policy

About Us   |   Advertising Info   |   Site Map   |   Contact Us   |   FREE Subscription   |   Useful Sites   |   RSS   |   Help
© 2010 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy