Hamburger Logic – More Brands, More Hype, Less Meaning

bigmacWhat in a brand name? Plenty, if you ask me. Things like history, meaning, experience, intent, and – hopefully if it’s a good brand – pride, love, honesty, integrity and satisfaction. A brand should stand for something. And in the hotel world it once did. But now I’m not sure, especially where the major hotel management and franchising groups are concerned.

The biggest are companies that typically started small with a single brand, in some cases named after the founder.

The company generally owned and maybe even developed all the hotels on which their name or brand was placed.

In other words, the owners were the operators and involved in the brand at every stage of the process, creating, nurturing and growing it.

But those days are long gone. Owners and operators are now quite different beasts with sometimes competing agendas.

A major catalyst has been the shift out of ownership by many of the larger hotel companies.

For various reasons – drag on the balance sheet, better use of capital, seemed like a good idea at the time – many have cashed in their real estate portfolio.

Now they have become brand factories.

To name but a few: Marriott International has 18 brands, Accor 15 brands, Starwood Hotels 9 brands and the InterContinental Hotel Group 7 brands.

In each company there is an enormous amount of cross-over.

Accor for instance has three five-star brands – Sofitel, Pullman and MGallery – and a slew of budget offerings, which it has started to cull (more on that in a moment).

Hell-bent on winning over owners, you get the feeling at times that certain brands have been created by hotel companies purely to win management business from investors and owners.

Some would say that some of the newer brands have no heart or soul, just a business plan targeting a certain demographic.

That could be vegetarian Gen Xers with desperate technological needs, or budget conscious road warriors or affluent families or people with too much money and time to waste.

You get the idea.

At times it seems as if the lunatics – the marketers, the brand visionaries – are running the asylum, and that branding decisions are being made as if hotels are a soft drink.

But it’s the hospitality industry, not Fast Moving Consumer Goods – very different, much more complex.

Or maybe not…

In announcing that Ibis will become Accor’s primary budget brand, subsuming Etap Hotel and All Seasons, company chairman and CEO Denis Hennequin chose a fast food analogy to justify the consolidation.

“Now Ibis is to become the iconic name of the economy segment – the Big Mac of Accor,” Mr Hennequin told the Financial Times.

An interesting comment but no surprise when further research reveals that Mr Hennequin ran the European division of McDonalds for 26 years.

“The restaurant business is of course different from the hotel business but there are strong similarities – the importance of brands, the direct contact with the customer,” Mr Hennequin says.

Yes, there can be no disputing the importance of brands – but so many?

In a rich serve of irony, McDonald’s has less burger brands than Accor has hotel names.

So, how to maintain standards and values across so many brands, regions and cultures?

On this Bill Marriott, descendant of the company founder J. Willard Marriott, who started the business with his wife 85 years ago, should have the last word.

Marriott has grown from two employees in 1927 at a food stall in Washington DC to more than 300,000 staff today.

After creating a catering empire, the Marriott family opened its first hotel in 1957 and branched out into hotel management during the early 1970s.

“We’ve expanded from a nine-stool root beer stand to about 3700 hotels in 71 countries,” Bill Marriott wrote in his blog last week (October 5).

“We’ve been able to do this because of our core values, one of which is conducting business with integrity.

“We believe that how we do business is as important as the business we do.”

And, he could have added, ensuring that all 18 brands now operated by Marriott, which includes its premium JW Marriott offering, actually mean something.

That is a very big challenge – one all the big groups face.

Indeed I wonder if Accor’s Ibis move represents a tipping point – that the trend toward hotel brand expansion has now peaked.

Travelling life would certainly be much simpler if that was the case.

Ends.

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One thought on “Hamburger Logic – More Brands, More Hype, Less Meaning”

  1. Good article Martin. Multi Branding propells buzz “Wall Street” talk in terms of diversification as a robust business strategy. Business Logic. When it comes down to consumers and operating through the finer and subtle variations by brand the game is completely different. Customer Logic.
    Both logics rather sound, meeting those half way, today’s great challenge. The Steve Jobs glorification is somewhat over done in the last few weeks but, still, how many sub brands Apple has?

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