facts, it’s working for hotel com-
will happen.
panies. And in the same way that P&G ceased to be a manufacturer of household products and became a marketer of brands, hotel
Investing in ho-
companies changed from being in
the business of selling hotel
tels is seen as
rooms to weary travelers, and
an attractive
found themselves in the business
real estate play by many investors, and it is the ac-
cepted wis-
of selling brands to investors.
The market demand Of course this would only work if there were enough developers and investors building hotels, and enough of them wanted to brand the asset. Both of these condi-
dom that hav-
tions were met: investing in ho-
ing a brand
tels is seen as an attractive real
over the door
estate play by many investors, and it is the accepted wisdom
makes the in-
that having a brand over the door
vestment less
makes the investment less risky.
risky.
The demand for brands grew rapidly and, it would appear, is still
growing. At play is a virtuous circle that predicts the infinite growth of ho-
Traveler apathy It’s much easier to choose a branded hotel than an independent, and if one travels frequently
it just doesn’t make a lot of sense to “explore” hotel options in every city, every time. Loyalty program membership (if the guest remembers which loyalty clubs they are
members of and which hotel brands belong in each loyalty program) makes it even easier to choose without having to think about it – and as human beings
we resist thinking as much as possible (no kidding!)
tel brands: as any hotel company
The weak underbelly of the
acquires more brands and hotels,
beast
they acquire more loyalty pro-
We have seen that brands have a
gram members which is seen as
lot going for them, including, but
assurance of success in new ho-
to a somewhat lesser extent, the
tels, which drives demand for
fact that guests find them a con-
brands, which drives the need for
venient way of navigating the
new brands. If this happy merry-
very complicated world of hotel
go-round stops, who knows what
choice. But this convenience is Page 3