Flagless Flagships: The Lifestyle Appeal and The Evolving Relevance of Brand identity and Loyalty Programs
By Jackson Thilenius Principal, Retail Design Collaborative | March 18, 2018
It started with a couple of air mattresses and a simple idea. In just 10 years, Airbnb has grown into a $30 billion-dollar company. Why start a discussion about brand flags and loyalty programs with a fact about Airbnb? Because with every hospitality panel discussion, seminar, conference, convention and trade show I attend, inevitably the topic of Airbnb comes up. Similar frequently asked questions include, "Can Airbnb really compete in the hotel market?" "How long will the fad last?" and, "When will Airbnb be regulated?"
Meanwhile, all I can think is: you're not asking the right questions.
The Rise of the "Sharing Economy" and The Lifestyle Appeal
The growth of Airbnb and other shared home and vacation rental sites including VRBO, Wimdu, Roomoramma and HomeAway have directly impacted the traditional hotel model and their brands in a dramatic way. This new shared economy model is evidenced by an explosion in the realm of lifestyle boutique hotels and the seemingly endless release of new brands carrying the flag of their parent company, including Curio, Autograph, Moxy, and Canopy.
In their quest to keep pace, global hotel chains have been vigorously exploring ways to offer a similar lifestyle model that appeals to millennials who are driving much of this demand as well as cost-savvy, spirited travelers seeking unique experiences, authenticity and affordability. Hotels are now doing anything they can to stay ahead of the trend, whether that means downsizing, scaling back, becoming more accessible, more affordable or touting local flavor with every new brand they create - it's now all about the lifestyle appeal. Reducing labor models, combining amenities, streamlining guestroom design and using creative finish choices to bring room costs down are all signs of the uphill battle these brands are facing to recapture market losses. It's not only the empty rooms and reduced rates that are taking a toll on traditional hotels, it's also the ancillary revenue losses associated with food and beverage, spa, and other service and amenity offerings affecting the bottom line as well.
"Poshtels" and Surface Branding