And do you need one?
WorldHotels (no pun intended) launched its newest collection of hotels: WorldHotels Crafted Collection. “Crafted is not just another lifestyle brand; it is a new generation of lifestyle hotels made for a new generation of travellers that crave creativity, immersive experiences, great design, and ingenuity,” said Gregory Habeeb, President of WorldHotels, North America. But do travellers that crave creativity, experiences, design and ingenuity actually look for (soft) brands?
Nothing wrong with the hotels joining the Best Western stable: the hip ACME Hotel Company in Chicago, the recently revamped 100-year old Hotel Haarhuis in Arnhem, The Netherlands, a hotel set in a former early 20th-century bank, The Vault in Helsingborg, Sweden and Milan’s candy coloured ODSweet Hotel, created by the owner of one of Italy’s most prominent chains of sweet and savory products.
WorldHotels Crafted Collection is just one of many soft brands, collections or lifestyle groups now offered by most of the major chains. WorldHotels is the name of the former prestigious SRS or Steigenberger Reservation Service and was bought by Best Western in 2019. It used to be what is called a ‘voluntary chain’ of individual member hotels. Maybe the most famous example of such a chain is The Leading Hotels of the World, which was established in 1928. Other well known organisations in this field include Relais & Châteaux, also an oldie -from 1954-, Preferred Hotels & Resorts and Small Luxury Hotels of the World. These voluntary chains mainly focus on marketing and sales, and in lesser extent to distribution.
Design Hotels also used to be a voluntary chain. In 2011 Starwood Hotels acquired 72% of Design Hotels. Starwood itself was acquired by Marriott later. Although its individual members indeed defined the brand and made it into a benchmark in the lifestyle sector, being part of Marriott has made the brand certainly more corporate and less independent.
Corporate (soft) brands vary from chain to chain, ranging from more strict brand standards to seemingly none at all. This can include the brand name, or an individual hotel name with an additional ‘by…” like by Hilton or by Hyatt. In the latter case it seems that the brand needs another bigger name to be associated with.
Some brands by the major chains:
- Marriott: Autograph Collection, Design Hotels, Tribute Portfolio, The Luxury Collection
- IHG: voco, Hotel Indigo
- Accor: 17 brands and more coming
- Jin Jiang: Radisson Individuals, Golden Tulip
- Hilton: LXR, Curio Collection, Tapestry Collection
- Best Western: WorldHotels (four sub brands)
- Hyatt: Unbound Collection, Destination, JDV
- Wyndham: Trademark Collection
- Choice: Ascend Hotel Collection
What you see is that corporate soft brands mostly market to institutional owners and investors. Also, third party companies who manage portfolios for these owners and investors often soft brand properties which do not fit the standards of the major brands, seemingly just to keep the property in the chain’s (distribution) system and favourable contracts. Which is not a particular good way for building a brand as it lacks a deeper connection. Voluntary chains usually target family owners while owners that choose corporate soft brand chains see the hotel as a financial asset.
Should you (soft) brand?
The most common stated reasons to join soft brands of a large hotel company are sales, marketing, loyalty, and distribution networks, technology systems, and other resources while retaining independence and operating decisions as well as regional, cultural, and architectural distinctions that give them local charm. Even a voluntary chain like Small Luxury Hotels has joined Hyatt for its loyalty program and Mr. & Mrs. Smith (a high-end OTA) joined the IHG program. Do take into consideration that chains charge fees for bookings by its loyalty members and you have to accommodate guests on points rather than billing them.
Here are some other questions to think about:
As an entrepreneur you should first and foremost have the client in mind. Can your customers really distinguish the brand you have in mind? And do they have a feeling about – do they connect with it? The large variety of brands are confusing for most customers. For example, what is the difference between Marriott’s Autograph and Tribute brands? Or what is the difference between Hilton’s Curio Collection and Hyatt’s Unbound? Or Wyndham’s Trademark Collection and Choice’s Ascend? Are you a Best Western, Best Western Plus, Best Western Premier or Best Western Signature Collection? Is Signature better than Premier?
Does the brand have enough volume? Some brands have just a few members and major chains do like to stress the importance of their brand’s ‘pipeline’. The reason for that is that numbers count. For example, if you operate a property in Bangkok is it useful for you that other members are in London or Buenos Aires? Accor’s multi multi brand stable (even more coming with the announced merger with Ennismore) has some brands with just a few properties. Accor is heavily betting on the lifestyle sector, as the food and beverage outlets of these properties have a substantially higher profit than non-lifestyle hotels. But does the brand define you or are you defining the brand?
Sales and marketing are well organised with the major chains, with large teams often well connected and having world wide coverage. You will see them in the media and at major fairs. However, they will be promoting the chains and all of its brands, rather than highlighting individual properties. Again, the brand defines the hotel i.s.o. the individual member defining the brand. There is little room from individuality, as members are presented in a standardised website and on social media. Of course you can have your own (media) channels, but still most brands dictate a certain uniformity. Does a brand add to your regional, cultural, architectural distinctions and local charm? Do you need global representation?
Regarding distribution and technology, major chains are often seen as leading. But with size often comes a more rigid structure. The one-size-fits-all does not only apply to its main brands, but also to its soft brands. Nowadays there are property management systems and channel managers far more advanced and made to measure than the major chains’ systems with tens and even hundreds of (distribution) channels. Including access to niche channels not offered by the major chains. Yes, major chains do negotiate better commission rates with OTA’s, but are usually topped by loyalty fees by the chain, even if bookings are made direct, the most lucrative channel for a hotel.
Probably the prestige of a brand has to be taken into account, and that is something which usually lacks measurement of ROI. Are you fine with that you cannot really lay your finger on the brand’s influence on your marketing efforts? Or do you tend to lean towards a more public relations kind of promotion?
Bottom line. In general hotel quality standards and brand-wide initiatives reduce the autonomy of the hotel owner and although a soft brand’s cost of affiliation is lower than traditional franchises, costs remain high. Do you need that affiliation, or do you prefer your own autonomy?