Why it matters who your parents are – even if you’re a hotel

By James Bland

(Brand Margin® - the 2017 leaders)

Parent brands are becoming more and more prominent.  Last year, IHG began adding ‘an IHG Hotel’ to those in its stable, with Wyndham following suit earlier this year.  AccorHotels’ most recent UK advertising campaign puts AccorHotels front and centre, with its ‘trading’ brands shown at the end.  However, as our Brand Margin® data confirms, the undisputed leader of exploiting a strong parent brand is Hilton.

To execute our Brand Margin® methodology, we first divide hotel brands in four tiers by assessing them qualitatively on price, facilities, standing and positioning.  Any fewer than four tiers, and we feel that eventual comparisons lose meaning.  Any more, and administering the survey becomes impractical, and the comparative groups become too small.

 

The power of the parent – why it pays to be “by” someone in the economy and mid-market tiers

Hampton by Hilton records the highest economy tier Brand Margin® in fifteen of the nineteen territories assessed, just losing out to Holiday Inn Express in Hong Kong, Poland and Turkey, and to Centra by Centara in South East Asia (Singapore, Malaysia and Thailand).

In the mid-market tier, only Novotel (in Argentina/Chile) and ‘Imperial Hotel’ in South East Asia top a member of the Hilton family.  Hilton Garden Inn leads in Spain, Belgium/Netherlands, Russia and Hong Kong, and the ‘by Hilton’ handle dominates the other markets: Home2 Suites by Hilton leads in Germany and Italy, and tru by Hilton leads everywhere else. These are astounding results for a brand without a flag outside the US, illustrating the power that a parent brand can have.

 

Upper full service and Luxury tiers

The power of the ‘by Hilton’ is strongest when applied to the lower tiers – brands in the economy and mid-market segments can feed off the prestige of the parent.

It happens to a certain extent in the upscale tier too – Embassy Suites by Hilton, Homewood Suites by Hilton and Canopy by Hilton claim top tier ranking in Australia, South East Asia, Russia and Italy, while the Hilton core brand leads in Germany and Turkey.  Hyatt, Park Plaza and Club Med each lead two countries, with Sonesta, AMBA Hotels, Sheraton, Crowne Plaza, Hotel Indigo, Meliá and Okura leading one market apiece.

In the luxury segment, however, even Hilton declines to deploy the ‘by Hilton’ tagline, suggesting they see it adding little value to Conrad and Waldorf Astoria.  The latter of these features twice in the list of ‘top-ranked luxury brands’, as do St Regis and The Luxury Collection.  W Hotels and The Ritz-Carlton provide further representation for Marriott International’s brands, with Me by Melia, Peninsula, Kimpton, Banyan Tree, Six Senses, Leading Hotels of the World, Kempinski, Mandarin Oriental and Preferred Hotels & Resorts leading a country each.  Raffles in France and Fairmont in Russia provide wins for AccorHotels, with Kimpton IHG’s sole luxury tier leader in China, despite having yet to make its debut.

Brand Margin® is BDRC’s unique, proprietary measure of the value that a hotel brand adds to a hotel room.  Each year we use our global Hotel Guest Survey to assess hundreds of brands across more than 20 countries to see how much value they add to (or, in some cases, subtract from) a hotel’s offering.  You can learn more about our Brand Margin® approach to the hotel sector here.

While we consider Brand Margin® to be the missing piece in the brand selection puzzle, we don’t believe it is the definitive measure of a brand’s health. That’s why we developed Brand Advantage – you can find out more about Brand Advantage here.

 

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