Challenges To Hotel Companies (Part 2)
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.
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