The importance of brand differentiation
Aaron Greenman, Executive Vice President, Acquisitions & Development – EMEA at Interstate Hotels & Resorts, moderated the panel discussion on “Brands: Differentiatiors” at this year’s International Hotel Investment & Design Conference. Here, Aaron shares his thoughts on the topic and the importance of brand differentiation for hotels.
Why is a strong brand so important for hotels?
For any hotel, branding/positioning is obviously important – whether it’s under an independent name or an affiliation with an internationally-established brand, the hotel’s identity establishes the consumer’s first impression, so it must be the right fit for the target demographic. Effective branding differentiates the hotel in the marketplace in the eyes of consumers, and it also adds value to the asset.
That being said, brand is just one factor determining the success equation, with location, management and service quality all critical as well.
As a third-party hotel operator, how do you work with your clients to identify the right brand?
We work with our owners to understand their individual requirements and advise them, using our extensive expertise, on which brands could provide the best fit and drive the highest benefit to cost.
At the same time, of course, we are also constantly liaising with the brands to ensure our managed properties meet their required standards.
Our clients are often paying significant franchise fees for brands and so rightfully, they expect real and measurable return on their brand investment. The easiest way to measure such value is through segmentation achieved at property level and the level of actual brand system contribution.
How are hotel brands evolving in response to consumer demands?
In the present climate, consumers are becoming increasingly focused on the illusion of a special and lifestyle-focused experience, sometimes reflective and sometimes aspirational.
Personally, I worry a bit that brands have swung their strategies too far from a too general “all things to all people” positioning to a multi-brand, micro-niche strategy that dilutes core brand strength and confuses the market.
What is the biggest challenge hotels face in establishing their brands?
The biggest challenge is cutting through the noise – not only in the sense of amplifying their message sufficiently, but also in creating an offering and positioning truly unique that creates genuine interest and traction.