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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Social Media: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.