The problems of hotel brands, Holiday InnBy Tom Dougherty
9 July 2014
Hotels brands don’t understand
What is the difference between a Motel 6 and a Super 8 motel? Beyond a generalized class of service (and cost), is there any real difference? Hotels, motels, inns, and resorts have done a remarkable job of being successful in spite of themselves.
BRAND should be a reflection of customers when they use a specific product or service. At its very core, BRAND should answer the question, “Who am I when I use a product or service?” Unfortunately for the hospitality industry, with very few exceptions, the definition of BRAND is something wildly different.
Traditional Hospitality Industry Definition of Hotel Branding
Traditionally, the hospitality industry has used the idea of brand as nothing more than an identifier that serves to do two things:
- Tell the customer where the BRAND fits in terms of class of service and price, and
- Allow for identification of the property
A vast majority of hotel brands define hospitality this way. (Once you take brands like Ritz-Carlton, Waldorf Astoria, Four Seasons, and some independent ultra-luxury hotels out of the equation.)
This is especially true when you consider how most travelers choose hotels. For business travelers, cost, consistency of service, location, amenities, and reward/loyalty programs certainly play into the selection.
Those things also play a role in selection for pleasure travelers and families. For the business traveler, affinity programs may play a larger role in the decision-making process.
For pleasure travelers and families, cost may play a larger role. But the typical decision-making criteria are similar for both segments. Cost is always at the forefront.
A sales model drives hotel brands
However, being competitively priced, offering consistency of service and having convenient locations is a definition of a hotel. For that matter, you must also have comparable amenities and good loyalty/reward programs. These “table stake” claims are descriptions of the lodging business. They are not the basis for building brands.
Most hotel brands claim to be the “best” or “cheapest” or “best value” or “softest beds” or “most attentive.” That’s a sales model. It’s not a marketing model. Each industry player must position itself against the competition in terms of who the customer is when they use the brand. It comes down to an industry-wide misunderstanding of what brand is and is not. The misunderstanding is summarized as:
- Brand is the same as image
- Good brands are for everyone.
Holiday Inn as proof
Let’s use Holiday Inn as an example of a misdirected hotel brand. Here are a few excerpts from a press release by InterContinental Hotels Group, the parent company of Holiday Inn.
24 October, 2007 InterContinental Hotels Group (IHG) announces worldwide brand re-launch of Holiday Inn InterContinental Hotels Group (IHG) today announces a worldwide re-launch of the Holiday Inn brand family, comprising Holiday Inn, Express by Holiday Inn and Holiday Inn Express (‘Holiday Inn’). All Holiday Inn hotels will be required to implement the relaunch programme, focused on delivering consistently best in class service and physical quality levels, including a redesigned welcome experience, signature bedding and bathroom products.
Redesigned brand signage will be installed at hotels once they have implemented the relaunch programme. This will give Holiday Inn a refreshed and contemporary brand image. Established in 1952, Holiday Inn is one of the world’s most recognised hotel brands with over 400,000 rooms (3,125 hotels) open and a development pipeline of more than 110,000 rooms (942 hotels).
More of the press release
IHG will make a non-recurring revenue investment of up to 30 million pounds to accelerate implementation of the re-launch. IHG expects to generate a strong return on this investment through RevPAR increases across the Holiday Inn brand family following completion of the re-launch.
Chief Executive Andrew Cosslett, said: “This is an important moment in Holiday Inn’s history. The brand is the largest and one of the most successful in the hotel industry and its re-launch We have spent a considerable amount of time getting the facts and the insights to enable us to make these changes, in partnership with our owners.
Check out these paragraphs.
The Holiday Inn sign is seen by hundreds of millions of people every day around the world. The changes we are making will ensure the Holiday Inn brand goes forward into the future with a strong and confident new image. We want our guests to get as much enjoyment from Holiday Inn hotels over the next 50 years as they have over the last 50.”
Rick Takach Jr., Chairman of the International Association of Holiday Inn (“IAHI”) representing nearly 3,000 of IHG’s hotel owners and operators, added: “Holiday Inn is a legend in the hotel industry. It has a proud history, and IHG is now demonstrating its commitment to keep the brand fresh in the minds of both hotel owners and guests with its renewed focus on quality and innovation. The IAHI strongly supports this development and looks forward to the business improvement it will deliver.”
In summary, the press release makes the following points:
- IHG has decided to “relaunch” a Holiday Inn brand focused on “…delivering consistently best in class service and physical quality levels, including a redesigned welcome experience, signature bedding and bathroom products. Redesigned brand signage will be installed at hotels once they have implemented the relaunch programme.”
- The stated purpose of this “relaunch program” is to “…give Holiday Inn a refreshed and contemporary brand image.” and to … ensure the Holiday Inn brand goes forward into the future with a strong and confident new image. We want our guests to get as much enjoyment from Holiday Inn hotels over the next 50 years as they have over the last 50.”
- This “relaunch program” is slated to cost $1 billion.
Make no mistake about it. This is not a rebranding campaign. This is a re-imaging campaign. The first summary point makes it clear that there is great confusion between the business of Holiday Inn’s business and the business of its BRAND. In order to be competitive in the hospitality industry, a hotel must have consistently good service and quality.
That is not the Holiday Inn BRAND. It’s Holiday Inn’s business. Image is not BRAND. However, a new logo and identity CAN make customers visualize the brand. But fundamental organizational change just be a part of it. However, that is not the case here. Holiday Inn’s stated purpose is to “…give Holiday a refreshed and contemporary brand image.” Unfortunately this $1 billion expense is all about signage not about brand.
Holiday Inn Re-imaging
So let’s take a look at what Holiday Inn is going to do with this “re-imaging” campaign.
The heritage element has left. Holiday Inn sports a lot of under-exploited brand equity in its heritage alone. Most everybody in America can remember this sign: Even the words in the marquee – “The World’s Innkeeper” – echo elements of a long lost brand opportunity. There is an old adage in marketing, “be different and better.”
The new logo is certainly different. But better? In fairness, Holiday Inn (at least in their Express brand) had the makings of a BRAND in its “Smart” campaign. Its issue is that the tongue and cheek approach did not make travelers feel smart. It made them feel entertained.
Customers will be disappointed, unfortunately. Especially if they have a connection with the heritage aspect of the old Holiday Inn brand. Or are looking for a clarity of choice in the their hospitality choices. As much as Holiday Inn and the rest of the hospitality industry would like to believe, brand is not identity. Identity is certainly part of brand. It is too much to ask for your logo to be the sole vehicle of your brand. (You can read a market study on the destination and tourism industry here.)
The Hospitality Problem is a Hotel Branding Problem
The issue here is not unique to Holiday Inn. For years, hotel brands have traditionally built their brands on “image” alone. They have used this pseudo-strategy to do nothing more than give travelers the illusion that their brand is somehow different. A few have done a remarkable job in an otherwise unremarkable landscape. For example, take W Hotels.
They have capitalized on the letter “W” and created a whole brand mythology around the “W”. It has turned it into a lifestyle brand. Staying in a W Hotel is not about hospitality or lodging anymore, it is about style and vibrancy. Granted, W is not for everyone. But the best brands are not for everyone.
This brings us to the second brand misconception among hotel brands. Good brands are for everyone. Sure, it makes sense to “dumb” down your brand message to be all encompassing. After all, occupancy is what dictates revenues and revenues keep hotels in business. A brand for everyone is for nobody.
This is the reason why the industry players have had a difficult time in differentiating themselves. Each is trying to say and do the same thing.
What hotel brands should do.
The best brands tell the target consumer who they are (and subsequently are not) for.
W Hotels makes no qualms about telling the market that they are for the style conscious and lifestyle-seeking, chic traveler. The W Hotel is not for the budget-minded, family oriented, no-frills consumer.
In fact, to that customer, the W Hotel might seem cold, ostentatious, and utterly ridiculous. But the W Hotel’s clarity of who the brand is for is exactly the element that the vast majority of hotel brands are missing today.
At is brand core, W Hotels cater to those who believe that “what others think of me is most important.” Why? Style is not about the person who exhibits it. It is about those who SEE the person exhibit it. Style-conscious people will say they “like the way something looks.” What they are really saying is, “I like it when someone notices me.” The W Hotel brand is about being noticed.
A Different Model for the Hospitality Industry and Hotel Branding
The rest of the industry would be wise to take notice to what W Hotels have done. The W Hotel brand is not about the hotel. It is about the customer when they stay at the hotel. It is not enough to just say it, however. The W Hotel brand affects everything it does. It affects its website to its restaurants to its rooms.
As the number of hotel brands continues to grow, competition for each and every lodging dollar will become increasingly intense.
According to the American Hotel & Lodging Association, in 2006, the industry-wide average occupancy rate was only 63.3%, signifying how competitive the industry has become. The industry is ripe for a player to separate itself from the noise of the market through the careful and thoughtful execution of BRAND.