Taking the Guest Experience Home? A Look at the Potential of Hotel Brand Extensions
By Rick Garlick Vice President, Strategy Consultant, Magid | January 2020
Brand extensions are a common part of corporate growth strategies. Sometimes they work well; sometimes they don't. In the 90s, Blockbuster was the biggest name in video rentals, but when it attempted to expand its entertainment footprint into other areas (e.g., music, gaming, play zones, etc.), it found its iconic brand did not translate into additional success outside its core business.
Blockbuster eventually scaled back to its original concept of video rental outlets before fading from existence all together as the market changed relative to how entertainment content was delivered. Had Blockbuster been successful in its brand extension efforts, it might have found a way to survive to present day.
Over the years, numerous retail and entertainment brands have expanded into the hospitality business. On the retail side, luxury brands such as Armani and Bulgari are now associated with five-star hotels in beautiful destinations. The decor and styling of these hotels directly reflect the brands after which they are named. Parachute, Shinola, Muji and Williams-Sonoma are also among those opening branded hotels.
The furniture and home furnishings retailer West Elm announced that it will open branded hotels in five U.S. cities, joining a list of high-profile retailers and consumer products suppliers that are expanding their brands into hotels as a way of more directly targeting aspirational customers, notes Building Design + Construction.
Perhaps the most intriguing brand extension was the recent opening of The Bell: A Taco Bell Hotel and Resort. This hotel integrates all things Taco Bell into the hotel design and branding and so far, seems to be a great success. Retail and product brand expansion into hotels, explains Conde Nast Traveler, lets companies cut out the middleman and market themselves directly to aspirational hotel patrons. "Design brands flowing into the hotel business is an opportunity for devotees to live the lifestyles the companies espouse," writes the magazine.
Another new entrant extending its retail brand into the hotel space is Restoration Hardware, an upscale American home-furnishings company. Restoration Hardware sells furniture that is uniquely suited for boutique hotels and is now opening its own branded hotel, a 14-room property in New York City's meatpacking district, that will serve as a showroom. This seems like a perfect brand extension as guests get to 'try before they buy' Restoration Hardware's home products. They can literally take their hotel experience home.