LOS ANGELES — At a period when many hoteliers are hyper-focused on preserving profits, many may be wondering whether the fees paid to brands are still ultimately worth it.
But CEOs speaking at the 2022 Americas Lodging Investment Summit said the value of hotel brand is alive and well.
"I think that brand is extremely important in many ways," said Peter Strebel, president of Omni Hotels & Resorts. "It kind of tells the customer what's the experience they'll get, who you are and what your personality is."
He said the "integrity of the brand and the consistency of the brand is so very, very important," but the exceptionally high number of hotel brands can dilute that benefit.
"There is just a ton of brands launched every day, and I think there's a big brand confusion out there," he said, adding his company has no plans to go beyond its flagship Omni brand.
George Limbert, president of Red Roof, agreed that consistency is key in brands providing value to guests and owners, and he said that's not just true for high-end brands.
"Any brand really gives you equity or a feeling, just like when you're driving down the street and you see the golden arches. You get a feeling, and you get an understanding of what that brand is about," he said.
But Hubert Viriot, CEO of the now 12-year-old Yotel brand, said brands do need to adapt to the current realities for consumer behavior. He said at the most basic level, what consumers want from a hotel is "to have a great room, and they want it to be affordable."
To achieve those goals, Yotel focused on highly designed but smaller than industry standard guest rooms, removing what Viriot called "unnecessary space," and investing in better public spaces and technology.
Limbert said that even legacy brands like Red Roof have been forced to evolve over the course of the pandemic, as guest behaviors have changed, as well. He said longer stays and remote work have boosted the outlook for extended-stay brands, which have "really outperformed during the pandemic."
"And they're still outperforming," he said. "So it's interesting to see their evolution and how the guest is changing."
The Importance of Loyalty
One of the biggest reasons hotel brands hold up as signs of their value are the size of their loyalty programs and the promise they can drive demand to specific properties.
Panelists said brands need to be thoughtful, though, about how and if they're driving true guest loyalty.
Strebel said that Omni "has never been in the points business," instead focusing on a loyalty program that promises repeat guests worthwhile experiences.
"So, for example, with business travelers, one of the benefits of joining our program is that you get coffee delivered to your room every morning, free and when you want it," he said.
He said another novel approach Omni takes to loyalty is determining the value guests provide not on the number of nights they stay but how much money they spend on property and how much value they bring.
Yotel doesn't have a loyalty program, Viriot said, while noting the concept of loyalty is core to the success of any hospitality brand since it's so much cheaper to get repeat business than acquire new customers.
He said outside of developing a points-driven program, loyal guests can still be rewarded by giving them recognition and providing them "simple, easy upgrades when it's possible."
Limbert said his company does offer a more traditional points-based loyalty program and it's important for Red Roof's direct bookings, but those programs need to change.
"The evolution of our guests means we have to evolve our loyalty programs, as well," he said. "You have to meet the needs of the guests differently than we did before."