Sunday, 4 December 2016

Hotel branding: how peculiar sometimes!

As the major hotel brand owners consolidate, more and more brands identifying hotels of differing types of luxury and status (and therefore of
price?) are finding themselves under a single ownership roof. This poses special branding challenges, as the conglomerates seek the best way to maintain brand equity in the house mark while at the same time attempting to distinguish each of the separate branded hotels. This can lead to some interesting results. Let us consider two examples.

The first relates to a situation where the company is apparently prepared to tolerate actual confusion between two hotels, each owned by the same company. In connection with the 2015 International Trademark Association Annual Meeting in San Diego, this blogger made his way to what he thought was the Hotel Palomar. Upon arriving at the hotel and making some inquires, he was told: “Sir, you are at the wrong hotel. You don’t want the Hotel Solamar, you want the Hotel Palomar” (which is about a 10-minute walk away). I then continued: “How often does it happen that a person confuses one hotel with the other”? The answer, “From time to time, but we don’t really care, since both the Hotel Solamar and the Hotel Palomar belong to the same group, the Kimpton Hotels.” So, there it was—as a consumer I had been confused, but from the point of view of the trade mark owner, confusion was less of concern, it would seem, than the time and expense of rebranding one of the two hotels.

The second refers to a recent piece that appeared on entitled “Marriot and Starwood Reveal the Future of Their Luxury Brands”. As readers may recall, Marriott’s acquisition of Starwood will result in expanding Marriott’s brand holdings (at 19 brands, already the biggest in the world) to 30 brands. What does Marriott intend to do with these multiple brands? In an interview with Bloomberg, Tina Edmundson, the global brand officer of Marriott, set out her company’s branding strategy. The following points made in the interview are particularly noteworthy.

1. For the moment, all 30 brands will remain, even if the author of the piece, Nikki Ekstein, commented--“We remain skeptical about that in the long run.” Interestingly, Edmundson had previously worked for Starwood for 18 years prior to joining Marriott, so her connection with all 30 brands is long-standing and intimate.

2. When one hears the words “Marriott” and “luxury”, he or she will likely think in terms of Ritz-Carton, Ritz-Carlton Reserve, Bvgari, St. Regis, Edition, the Luxury Collection and JW Marriott, all of which are designated “luxury” by the company. But not all Marriott luxury hotels are equally “luxurious”, it would seem. Ritz-Carton, St. Regis, and JW Marriott will all be identified as “classic luxury”, with the other hotels will all be designated as “distinctive luxury”. The first category focuses on traditional and business travelers, while the second addresses patrons seeking a modern, boutique-y hotel experience.

3. Of particular interest will be how the Ritz-Carlton and St. Regis brands, which Ekstein likened in the piece to two boxers “occup[ying] opposite corners of the same boxing ring”, and which are “very similar in style and taste”, will move from competing over the same type of customer to sharing them. The company apparently will do so by segmenting luxury customers into two distinct categories—the Ritz-Carlton consumer is about “discovery”, while that of the St. Regis patron is about “status and connoisseurship”; the Ritz-Carlton “is about connecting people to places”, while the St. Regis “itself is the place where people want to see and be seen.” Will this work, or will the two hotel brands simply cannibalize each other’s customers? Obviously, Edmundson thinks that it will succeed.

Whatever one’s lodging preferences, from the IP and branding point of view, what Marriott has embarked on in seeking to maintain 30 different brands, including eight different “luxury” brands, seems to be uncharted branding waters. Indeed, the success of the company in doing so may shed light on the the extent to which consolidation in the hotel industry involving companies of this size can work side by side with successfully supporting multiple brands.

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