Evolution of Multi-Branded Hotels

By Lawrence Adams Principal, ForrestPerkins | November 04, 2018

Not long ago I coauthored a book published in 2012 titled Hotel Design Planning and Development, Second Edition with Richard Penner and Stephani Robson in which I wrote a chapter on Multi-branded hotels. In that chapter I described one of the newest trends in hotel development, a unique new product, that has since evolved into a significant hotel type with unique characteristics, advantages and challenges. In this article we will look at this relatively new product, how it is being developed today and what the prospects are for future development.

Hotel developers are realizing financial, marketing and operational advantages of building more than one brand on a single site and in many cases sharing a single building. Multi-branded hotel developments usually share back-of-house operations, administration, staff, recreational facilities and meeting rooms, but in order to maintain brand recognition and foster brand loyalty, they most often have separate entrances, separate lobbies and individual architecture and decor corresponding to each one's particular brand standards.

Often driven by high land values and limited availability of suitable sites, multi-branded hotel projects obtain efficiencies in construction through shared facilities resulting in a lower cost per room saving as much as 30 percent on development costs. Operational costs are also reduced through centralized management, staff and services. Cross selling is another advantage for hotel companies as guests staying in one brand get meaningful exposure to an unfamiliar new brand. But there are challenges that must be overcome to realize these advantages as we will review in this article.

AccorHotels is credited with pioneering the first dual-branded hotel in 1984 in Paris with the Ibis/Novotel hotels in the La Defense business district by repositioning an underperforming 600-room hotel in order to target separate price points with two brand names. Marriott first introduced the concept in the United States with the 988-room Orlando JW Marriott collocated with a 584-room Ritz Carlton in 2003. It wasn't until 2007 that Hilton joined the fray with the Homewood Suites and Hilton Garden Inn hotels in Baltimore. Then Marriott followed AccorHotels' lead in Europe in 2011 with the Courtyard/Residence Inn in Munich.

Types of Multi-Branded Hotels

Multi-branded hotels come in a variety of configurations. Early examples of multi-branding involved two distinct buildings that were in close proximity or on the same lot, but were essentially two distinct hotel buildings that may have shared administration, staff facilities and some back of house functions. But by not being conjoined did not achieve the efficiencies afforded by ones physically connected.

The dual-branded Homewood Suites and Hilton Garden Inn hotels in Bossier City, Louisiana
Shown at the far right, as part of The Wharf in Washington DC, The Canopy Hotel by Hilton and the Hyatt House Hotel
Marriott Place in Indianapolis is a multi-branded property containing four hotels in one block and connected via sky-bridge to a fifth Marriott hotel
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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.