Heard of Ziva, Miraval, Canopy, Glo, Jaz or Moxy? No? Well, there’s no need to worry, according to the experts. These days, it seems brands are not as relevant as reviews, for example. Smaller chains and medium-sized companies in particular can take advantage of this – and not just for ‘Generation Lifestyle’.
text: Anke Pedersen
Best Western copies Motel One” announced the “Handelsblatt” business newspaper as the new Best Western brand “Vib” launched, shortly before ITB 2017. More than 4000 hotels around the globe belong to Best Western. And while Motel One is successful, they have less than sixty hotels to boast of in Europe. That’s a fact. Ultimately, explained the investigative reporter from “Handelsblatt”, Best Western are “just a loose association of independent hoteliers”, while the “Motel One model ranks as one of the most successful hotel concepts in the industry”. And so, it’s no wonder that said hotel association “is emulating the successful model of its competitors from Munich”. Poor Motel One founder Dieter Müller, one might think, facing so many other chains who are now claiming his concept for themselves. But in all seriousness, with each day that passes, a new brand seems to pop up. And each new sub-brand claims that they alone are the definitive place-to-stay for ‘Generation Lifestyle’. The absolute “ultimate” for urban, constantly connected, uncomplicated individualists in search of authentic hospitality. Hyatt’s Ziva, Hilara, Centric, Andaz, Miraval (total brands: 13) compete with Hilton hipster brands such as Canopy, Tapestry, Curio, Tru (total: 14), while Accor (total: 28) has Jo & Joe, Mama Shelter and 25hours up against Moxy and Aloft by Marriott/Starwood (total: 30).
The question is, are guests really in a position to find their way through such a maze of brands? When they make a booking do they know that Radisson RED and Prizeotel both belong to Rezidor? Do they know that Jaz in the City is a Steigenberger product or that they can collect points in the Starwood loyalty programme when staying in their Design Hotels? “No,” declares Michael Lidl, Managing Partner at the Treugast Solutions Group, with a smile. “The majority of people outside the industry have no understanding of hotels at all.” Generally speaking, they might be able to name two or three hotel brands in a survey.
So if guests are already baffled – do all these promises put forward by new brands even get through to them? “Previously, a brand stood for a specific brand promise,” admits Lidl. “But today, you can read reviews about every hotel to decide whether it appeals to you or not. So the brand promise is no longer really relevant. If Novotel has bad reviews in one city, then I’d rather choose an independent hotel with a good rating.”
For those running independent hotels, the decrease in brand loyalty could, however, represent THE chance to excel by focussing on specifically providing individual services (more on that to come, on page 24 and page 28 of this issue). And what is more, perhaps such increasing complexity has even contributed to the fact that reviews are gaining in importance. A joint study by the VIR (Internet Travel Sales Association) and guest feedback platform Trustyou, showed that between 2014 and 2016 alone, the number of reviews increased from around 78 million to an incredible 90.5 million.
AirBnB may have strongly encouraged this trend. That’s because the company hasn’t had to live up to a brand promise in the traditional sense – quality assurance for a certain product. All this newcomer had to do was promise a smooth booking and billing process. This alone was enough to enable millions of different customers to be offered a product specifically tailored to suit them – worldwide. Reviews from previous visitors were all that was needed as a guarantee for the quality of the product in question – “what you see is what you get”. It’s the kind of scenario every sales representative dreams about.
It’s not for nothing that hotel groups in particular are currently investing a great deal of time, effort and money in upgrading their loyalty programmes. In order to attract and retain guests in the face of declining brand loyalty, it has now become the norm for big players such as Accor to offer savings of up to 15 percent on the current daily rate, with upgrades, last-room availability and late check-out.
But the loyalty programmes work less well for the growing number of Group-owned brands. Where brand loyalty is becoming less and less effective, customer programmes are set to replace their binding power. Above all, they are designed to encourage the guest to book directly – and not via meta-search engines or OTAs. “Over and above any growth initiatives is the overriding desire to become independent of other sales channels,” states Lidl, Head of Treugast. And what could be better for stabilising the direct booking rate than establishing the most comprehensive customer databases possible?
Lidl is sure that “blatant brand copying” reflects chains trying to keep up with the variety offered by OTAs, meta-search engines and even AirBnB. “Growth is a key objective in this era of online sales,” says the expert. To remain competitive in sales today and keep new or existing investors happy, global players need complete market coverage. And the goodwill of investors comes before all else, says Lidl. “The customer perspective isn’t the deciding factor here.”
The alternative? Not offering a distinct product everywhere for each target group I spy a chink in the armour here! If the guest isn’t even the target in this game, then regional hotel chains and independent hotels will be able to really step on it in the future: “Smaller hotels always have the advantage of being able to be more flexible, more agile and faster than a huge tanker,” says Treugast Boss Lidl. The tanker might be more stable, “but that also means it’s slower. For example, Accor Hotels are buying up lifestyle brands, because they know that they can’t cover this market themselves.”
The question remains as to why a normal hotel operation should cover every market, or want to! Or why they shouldn’t do it, like Motel One or even hotel chain Maritim; by deciding against leading the life of a jack of all trades. “For us, brand copying isn’t currently an issue at all,” says Maritim sales boss Roland Elter. “We operate hotels that have different approaches under one brand and this is producing good results. We aren’t focused on being everywhere with a product for every single target group. In any case, as a private company we are not comparable to the large, international hotel groups and have a somewhat different agenda.”