Saying Goodbye Doesn't Have to Be Hard to Do: Reflagging Best Practices
By Steve Van President & CEO, Prism Hotels | May 19, 2013
In my last column, I discussed best practices for managing a hotel renovation: telling a story, getting customers actively involved on the front end, and having a strategy to help guests and staff cope with the change. While much of that information pertains to both flag changes and standard renovations, there are certain components that apply only to brand transitions.
We are going to be seeing more and more hotels change flags this year as loans come due and many franchisors stop giving out "hall passes," to properties with no money to renovate. These franchisors are tired of waiting for properties to live up to current standards and are going to insist on fulfilling the Performance Improvement Plan or changing the flag.
Consumer preferences and expectations are also evolving in new and different ways that are having significant impact on certain markets. As my Vice President of Marketing Allison Handy told me, "when Vera Wang launches a clothing line for Kohls, you know traditional boundaries of luxury and economy are no longer clear-cut." This is an important cultural observation that we see with travelers as well. Some travelers, armed with TripAdvisor searches, no longer care about brand name and prefer independent boutique style properties. Others, still recovering from the recent economic downturn, are turning to more budget friendly brands than those they've frequented in the past.
What this means for hoteliers is they can no longer sit back and bank on a brand attracting enough of the right customers. They can't expect to put a new flag on the building and open the doors to find people lined up to get in, nor can they expect that all of their previous customers will immediately switch over to the new brand. In an industry based on relationships, hoteliers have to be especially careful not to burn bridges with past guests while actively recruiting for new guests in the process of reflagging. But done right, owners can confidently make the right business decision for their hotel without a painful goodbye.
This article explores how successful owners, managers and brands should work together during the reflagging process to maximize ROI and ensure a smooth transition.
Partnering with a new brand