Hotels expand portfolios to capture travel market

Published 5:16 am Tuesday, May 9, 2017

The name Marriott has come to mean many types of lodgings — a full-service 
hotel in a big city, basic low-cost hotels with free Wi-Fi that are aimed at the business traveler, a newly renovated beach resort.

Through acquisitions of other hotel companies, including Starwood Hotels & Resorts last year, and introductions of its own new hotel groups, Marriott International manages 30 brands under its corporate umbrella.

Marriott is typical of hotel companies with increasingly expanding portfolios of offerings.

The Wyndham Hotel Group has 18 brands among its 8,000 hotels. Choice Hotels International’s 6,400 hotels include 11 brands. Hyatt Hotels Corp. carries a portfolio of 13 brands, distributed among about 700 properties. AccorHotels, based in Paris, manages 17 brands worldwide. The list could go on.

The proliferation of brands under one parent company is a byproduct of hotel company consolidation, the introduction of new brands and the creation of so-called soft brands that gather a group of similar independent hotels into a collection. Companies have aided in the expansion, in some cases, by licensing their names rather than owning each property.

Travelers’ needs vary over time — with travel for business and leisure, alone or with family, locally or internationally, and requiring a short stay or extended stay — and hotel companies want to capture them all.

“We want a brand for each price point and occasion,” said Patrick Pacious, president and chief operating officer of Choice Hotels International.

The company, known for economy and midrange brands like Comfort Suites and Econolodge, is expanding its Cambria luxury brand.

Hotel company expansion and diversification is a strategic defense against online travel services such as Expedia and Airbnb, which offer thousands of varied listings in one place. Like such aggregators, more hotel companies can offer a spectrum of listings, from a basic night’s stay to a luxury resort.

“The more hotels and choices we can offer, the more competitive we are,” said Tina Edmundson, Marriott’s global brand officer, “and front and center is we want people to book directly with us.” For the hotel companies, guests who book through the company website bring more revenue and opportunities for direct customer contact.

Some hotel buildings house multiple brands under one roof. Hotels near hospitals and military bases often have a mix of overnight and extended-stay guests, Pacious said. So within the same building, his company might have a Sleep Inn for short-term guests and a MainStay Suites for longer stays. The two sets of guest rooms would share a lobby, housekeeping services and back-office staff.

Marriott, which has more than 50 dual-branded hotels, is building its first tri-branded hotel. The new building opening next year in Nashville, Tennessee, will house an AC Hotel, a Residence Inn and a SpringHill Suites.

The increase of soft brands is another driver of brand proliferation. “Unique, boutique or historical hotels want to keep their identity,” Pacious said, but also get the benefits of a larger company’s reservation system, marketing efforts and rewards programs. The Port Inn Kennebunk in Maine and Big Horn Resort in Montana, formerly independent, are part of Choice’s Ascend Hotel Collection, which gives members access to business aids like revenue management tools and management training, Pacious said.

Further complicating the ecosystem, new brands like InterContinental Hotels Group’s Even Hotels are being introduced to focus on evolving traveler preferences like healthy dining options, better workout areas and sustainable practices.

But how many brands are too many? Each requires spending on signs, advertisements, websites, social media and customer research.

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