Let’s talk about brand launches.
Oh, it’s been awhile, hasn’t it? The last time we saw a significant number of new brand launches was 2019, when the final count hovered around 20. Just to jog your memory, 2019 was the year that brought us Signia Hilton, Atwell Suites from IHG and a batch of others. It doesn’t help that between then and now we had a global pandemic, so these 2019 brands aren’t really fully part of the conversation quite yet.
This year so far is starting strong when it comes to brand launches: We’ve had Spark by Hilton, Handwritten Collection from Accor and Sonesta Essential.
What’s interesting about brand launches this year is that we will see companies reacting for the first time to changes in travel behavior wrought by the COVID-19 pandemic.
Case in point: Hilton launched an economy brand. When did we ever think that would happen?
Let’s talk about Spark by Hilton for a moment, because I think this one really is emblematic.
Chris Nassetta, Hilton’s CEO, loves to launch brands. We know this. Nassetta also loves net unit growth, because his shareholders do. It’s a classic success formula for a public hotel company.
But Hilton has never dabbled in economy. Until now.
This is going to be such an interesting brand to watch. The challenge for Hilton will be to keep Spark firmly in the economy space, with tunnel vision on this particular traveler … a traveler they’re not quite accustomed to yet.
This is good for Hilton because it will bring in travelers who haven’t stayed with Hilton in the past and it will bring in net unit growth pretty quickly via conversions.
Yes, our first inclination is that Spark will be lighting its metaphoric fire under Choice and Wyndham franchisees first, which may very well be the case. But I’m also interested to see whether this becomes an opportunity for older product already in the Hilton family (hey old Hamptons, I’m looking at you) to convert down to a Spark, opening up space for a new-build Hampton or a Tru.
Again though, I think it will be a huge challenge to keep Spark in its place. In order to succeed, this can’t be a brand that creeps up and all of a sudden offers 19 flavors of yogurt at breakfast and commands a $139 average daily rate. Honestly, I think it might be tougher to keep Spark down than it is to keep Waldorf Astoria up.
And the required top-to-toe renovation may keep some potential franchisees away, though the investment into the Hilton Machine may be enough to overcome that sticker shock.
Back to the larger brand launch conversation: I always think to myself, “Why are you launching a new brand when you haven’t even opened five of Brand X that you launched four years ago?” but that’s not how successful branding executives think. They know that it’s key to plant the flag now even if the colony won’t materialize for another couple of years.
And given the current thirst for travel at all levels, it’s safe to say franchise companies can be pretty confident that brands they launch today, provided they’re backed by solid consumer research, have staying power.
But what about those brands that launched back in 2018 and 2019 that were hit by the pandemic and may not be relevant now that they’re finally in a position to pick up steam? That’s the big question. I think we’ll see more than a few of them fade off into the sunset.
What do you think? Let me know. Email me, or find me on Twitter or LinkedIn.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or CoStar Group and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to contact an editor with any questions or concern.
Editor’s note: Chris Nassetta serves on the board of directors for Hotel News Now’s parent company, CoStar Group.
Return to the Hotel News Now homepage.