Re-Branding? Everyone's Doing it, but Beware of Intellectual Property Issues

By Francine Friedman Griesing Founder, Griesing Law LLC | November 30, 2014

Co-authored by Neha Mehta, Law Clerk at Griesing Law and JD/MBA Candidate at Drexel University

For the hotel industry, 2014 may well go down as the year of re-branding. At every turn, it seems that a franchise is adopting a new, catchy slogan, or adopting a fresh style, completing revamping the brand's existing feel. In part, this phenomenon is in response to the intense competition in the hotel industry and the need to cater to a new audience: the millennials. Given these considerations, the re-branding process is generally pushed forward as quickly as possible. However, in order to ensure a more successful transition, franchises would be prudent to spend time considering business and legal implications of re-branding from the start to avoid costly and time-consuming problems down the road. In particular, to reduce costly mistakes and legal risk, hoteliers need to focus on intellectual property matters. To those unfamiliar with legal jargon, it boils down to creating and protecting strong trademarks, trade dress, and an effective web presence. These elements are essential to a successful re-branding and if done properly, they will give a franchise a competitive edge in the ever-growing hotel industry.

Re-Branding - What's Driving It?

You may be wondering what it fueling so many changes in brand names and the associated identity, such as slogans and logos, the elements that give a brand its look and feel and create an impression in consumers, ideally luring them to spend the night at your branded facility. Plainly, if your revenue per available room is robust then you may not be looking to re-brand and the quest to re-establish your identity if likely driven by disappointing results or anticipated heightened competition. Whatever is triggering the rebranding initiative, this is particularly challenging because not all guests are the same. There is always considerable competition in the hospitality industry and hoteliers and operators are looking to distinguish themselves and remain top of mind. There are many demographics across a wide spectrum of travelers, such as frequent business travelers compared to occasional leisure travelers, or high rollers seeking sophisticated amenities compared to budget-conscious families seeking flexible rooms and kid-friendly meals.

The first step in creating a new brand identity is determining the target audience to which you want to appeal. In order to distinguish your facility (of facilities) is to understand which guest groups are you trying to attract given your level of lodging accommodations, extent of amenities, and price point. Ideally, for many hotels you want your re-brand to appeal to a large swath of the traveling consumer but for some, you may want to offer a deluxe experience and hone in on a discerning niche. One example of a theme that hoteliers are focusing on to attract guests, build brand loyalty and motivate customer cheerleaders is identifying the brand as "Healthy" through promotion of special menus, physical activities, in-room yoga mats, educational programs and other offerings intended to create the aura that staying here will promote well-being. Another theme that has been spreading quickly is the "Green" or environmentally friendly concept where lodgers are encouraged to fore-go daily towel and linen changes, be encouraged to use supplies made from recycled materials and feast on locally sourced meals.

Another branding concept that hoteliers are embracing is meeting the needs of the emerging millennial market. As a group, millennials generally prefer open, social spaces rather than big guest rooms and they often favor niche boutique brands over grand scale facilities. They are tech savvy, socially conscious and also want value for their money. Lodging companies are faced with this growth market and seek to modify the brand or re-brand to entice this important sector. Often in lieu of a complete re-brand, hospitality providers are attempting to create a new identity in tandem with the established brand. This is happening to appeal to new demographic groups by age or other characteristic, by interests or geography. So an array of brand identities may exist under an umbrella brand with certain consistent themes such as luxury amenities or special services.

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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.