Signs Your Hotel Needs a Brand Makeover

By Mercedita Roxas-Murray EVP Strategy/Brand Planning & Operations, RedPeg Marketing | April 27, 2014

Hotel brand makeovers come in all different shapes and sizes, from a minor brand renovation and facelift, to a complete re-brand or change of brand. It is crucial for hotel operators and owners to understand and be able to identify the signs of when their property needs to undergo a change and what kind of change that may be.

The trends of the last decade have had a significant impact on the current transformation of the hotel industry. During the recession in the early part of the past decade several things were occurring; hotel brands allowed hotel owners that were struggling to pass on required upgrades or changes(1). Now, with the economy rebounding and in many markets "occupancy and average prices" improving, those hall passes are being taken away and brands are making it mandatory for hotel owners and operators to get their properties up to the standards of the brand.

For hotel owners, the price to do so is in some cases is so great that they are not able to and have to downgrade to a less prestigious brand(2).

A second trend is that there was a wave of hotel sales because of the economic down turn and buyers were snapping up properties. With the recent turnaround, all of those properties are starting to be developed. A recent PricewaterhouseCoopers (PwC) reports stated that revenue per available room is expected to jump 6 percent in 2014 industry-wide and that occupancy rates this year are expected to reach 63.2 percent, the highest level since 2006.(3) As a result hotel renovations are growing, especially for those properties in good locations and that are structurally sound(4), as well as new builds. This has created increased competition in the marketplace and lead markets like New York, Las Vegas, Orlando, and Chicago and nationwide are seeing new hotel projects on the rise.

So how can hotel owners and operators identify the signs that their property is in need of a makeover? Look at the environment, your targeted customer and your property itself.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.