Why Do the Biggest Hotel Chains Create So Many Different Brands?
ฝัง
- เผยแพร่เมื่อ 16 พ.ค. 2024
- When you're planning a trip, it may seem like you're wading through a sea of endless hotel options, but many of those hotel brands are hiding a secret - they're owned by the same company. Why do hotel mega-chains spend so much time and money creating these different brands? We've got the answer.
Subscribe to Morning Brew
Sign up for free today: www.morningbrew.com/daily/sub...
Follow The Brew!
Instagram - / morningbrew
Twitter - / morningbrew
Tik Tok - / morningbrew - วิทยาศาสตร์และเทคโนโลยี
I think you left out the franchisee radius protection. When a franchiser gets a Courtyard by Marriott, they don't want another one across the street so Marriott can offer other people nearly identical hotels but with different names so they can maximize profit.
wth i was researching this exact thing yesterday, what a coincidence. so confused by hotels. i stopped getting airbnbs because they're overpriced, so this is useful
If you subscribed morning brew newsletter cookies are snatched and tract what you look for.
It’s not only hotels. This is the best part. See, there are like 4-5 companies that own 95+% of the brands in the supermarket.
VF Imagewear (Vanity Fair) owns hundreds of brand.
ShoeMart owns most of the popular sneaker and boot brands outside of Nike.
Open your eyes.
Airbnb are better many locations but not all. It really depends on your location, how far in advanced you book, and the quality you are looking for.
In the US if use to be Airbnb was cheaper 95% of the time compared to a similar level of hotel room. IMO it’s about 60% now. But in poorer countries like Latin America, Airbnb is almost always cheaper
I worked at Marriott. It just a corporate thing. The one thing Marriott was lucky on was living in Montgomery county. They had so much rich people living near them that need to park their money. It also helps that you’re with the Mormon temple, so you’re in luck with a well known political investor. People forget, but Marriott was about to go bankrupt until they got a lifeline from Pepsi. They told Pepsi they will carry only Pepsi brand if they lend them money. The rest was history. You won’t see a coke product in most of Marriott.
Beyond the different service tiers, the other thing that it helps to be aware of is which brands are for new builds and which are for converting existing properties from other brands (which means they will typically have looser standards for the property). For example, even though Choice advertises Sleep Inn and Quality Inn as being in the same tier, a Sleep Inn will generally be nicer as it is a brand for new builds, while Quality is for conversions (and still allows exterior access properties under its brand standards).
ALBM has also been the final nail in the coffin of the midcentury chains' distinct architectural flourishes like Howard Johnson's orange roofs, because the entities who *do* own the hotel buildings can and will switch brands when one contract period ends, either within a group (for instance, downgrading from a "select" to a "budget" brand rather than make expensive upgrades to an aging building) or from one to another. If you've lived in one place long enough, you have "the La Quinta that used to be a Holiday Inn" in your mental GPS as a landmark.
Just a few days ago I was at a hotel that apparently switched hotel groups, and the taxi driver was confused and pulled over to ask another taxi driver where the hotel was. I didn't speak the language but I could make out "Wyndham" and it was clear from the expression that the other driver had no idea either. Eventually the driver called up dispatch for help and we were on our way.
Voco (under IHG) seems to specialise in ageing luxury hotels
Accor: Hold my beer with 52 brands
Sadly, Accor does not have much hotels in North America, especially USA, thus were left out in this video
Accor has very little hotels compared to Marriott
Accor is definitely a big player worldwide just not in the US. The few they have in the USA are mostly boutique or Fairmont. They have no clue on how to run boutiques. On top of that they moved the headquarter of Fairmont (a Canada chain that has a lot of hotels there) from Canada to Dubai where there are only 2 fairmont.
Capturing market share without looking like invasive monopoly. 👍 ❤ 😂
😂
Why?
For the illusion of choice!
You don't want to have a residence inn across the street from another one. It isn't like starbucks, it is frustrating to customers. So if one is a TownePlace, everyone knows where to go.
That's a good point, although they strangely still do it sometimes with just a very minor modification to the name.
@MarkFunderburk Ultimately the investor that builds the hotel decides
The branding thing never _really_ got answered. It would be one thing if the amenities and other expectations were consistent within a given brand. But, they're not. This just annoys consumers. Or, at least this consumer. I can understand not rebranding if you acquire a new chain. That's not what's happening here. This video actually did a better job of explaining "Residence Inn" and "Towneplace Suites" than Marriott seems to bother with if you use their "Bonvoy" app.
@@ahwhite1398 yeah i'm still waiting for the answer to the question
As much as i hate staying in hotels... fuuuuuuuuuck airbnb.
No Brenda, your shizzy lil tinyhome is not worth $300/night plus cleaning fee
Facts
I watched the entire video and I still don't get why they can consolidate brands to a smaller number.
Buyouts, mergers, acquisitions, and to lessen immediate charges of monopoly.
The second reason is branding and consistency. By branding their "hotels/resorts/etc." as different brands, they can make each of those effectively identical. That was the general premise as far as I can tell. Each brand has a given style/meets a particular need, so rather than having to hunt down a given hotel of countless options, call about and try to figure out what hotel meets those needs, you can look up a given brand of hotel/motel/etc., and know that group 1. Is like an apartment/condo of sorts, 2. Is like a super cheap motel without the continental breakfast, 3. Has the Continental breakfast, 4. Is a more upscale resort, 5. Is a casino, 6. Is part of their small luxury resort offerings of bungalows, 7. is the formal 5 star hotel, 8. Is the 6 star hotel, etc.
Think about it like fast food restaurants. If you go to McDonald's or Taco Time, you know from the branding/food consistency what types of foods are offered at each restaurant, and that each will meet certain consistency guidelines. These hotel brands are using the same principles, but rather than fast food, they are doing it for hotels.
Illusion of choice and having different commodities depending on the name.
Partly for marketing and partly because they don’t care. The money is in the loyalty program.
Also because territorial restrictions. If you sign a Ritz-Carlton on one city corner you can't sign another one across the street but you can probably sign a St. Regis.
Think about a large metro area, especially their airport. You'll want to have a bunch of hotels but you want people to know where they're going. Don't want people going to the wrong property and having to drive/get a taxi for 30 minutes late at night. So having an airport sheraton, westin, aloft makes it much easier for travelers who don't know the area and may not even speak the language. It's only in like Manhattan where you'll have multiple Ws within a few miles
The hotel companies divested their realestate because by leasing it back they could have a known consistant monthly write off, whereas they had to do between a 1- 3 decade depreciation if they kept it on their books.
Plus many real estate investors want to focus on a certain area or slice of the market. There is also a huge private market appetite for hotel real estate (sovereign wealth funds, guys like Bill Gates, local entrepreneurs) that a firm like Marriott couldn't access if they owned all the real estate under the public company.
Try being a cab driver in 1998 when a drunk person gets in and asks you to take them to the Marriott.
"Which one?......there are 17 of them."
Blank stare.
Separate branding helps in bigger cities.
In my country (Singapore) some hotels have changed management & thus their names too, confusing taxi drivers e.g. Hilton today was previously Mandarin Orchard (but the mall inside is still called Mandarin Gallery, although the hotel's restaurants e.g. Triple 3 have been rebranded), while the original Hilton is now Voco Singapore; ParkRoyal Collection Marina Bay was formerly called Marina Mandarin, Concorde Hotel was formerly Le Meridien; Conrad now has 2 hotels - Orchard & Centennial - with the former formerly being Regent
@@lzh4950 Cab driver nightmare.....but I really want to visit Singapore.....
the illusion of choice
Not mad at the company with so many brands, mad that there's no standard within the brands themselves. I've stayed at Days Inns that were cleaner and more modern than a LaQuinta, and in the area of SeaTac airport there's 3 Ramada hotels and 2 of them are dumps.
Notably, they aren't owned by Marriott, but Marriott is managing them.
The Asset Light model works for hotel chains because corporate can just focus on branding and customer prepatory service (e.g. points redemption, data collection, reservation administration, etc). It helps that Marketing & Service are highly value-added, hence why property owners (often some other real estate corporation you probably never heard of) often try to franchise from a hospitality chain to gain visibility and access to their global customer base.
Unrelated but amusing: I happen to have just stayed in one of the towers shown at 8:11 when I watched this video 🏨😂
Most really have very clear design choices making them easily seperable in the price classes.
another point is already established brand loyalty. a lot of these brands are scooped up by Marriott and others, but many average Joe consumers will think things like "I've been staying at Sheraton hotels my whole life, I'd never stay at a Marriott" even though Sheraton has changed hands like 4 times over their lifetime. certain areas are often more loyal to the name that was previously used in that area even if it's the same hotel (or any other service) as the rest of the world.
Sabrina the teenage witch works for morning brew now!?
They don't create multiple brands... They buy multiple brands.
The grocery corporations are starting to try something similar. Albertson's bought out Safeway several years ago, and are now trying to sell to Kroger, putting 3 major brands under one umbrella, but many of the stores won't be changing their names...
My guess really early on is (the main reason anyway) so they are distinguishable especially in huge cities and holiday places... I've gone to the wrong holiday inn a couple of different cities because of taxi drivers and me not being specific and are booked in the 2nd most popular... It's a little different with smart phones and having the address.
I couldn’t help but think of all the categories of commerce no longer really viable to someone as a small retailer. What are the societal effects?
Good stuff MB! I see you guys, you’re up next and the stage is yours!
Actually, many of these hotel brands were acquired by the larger hotel chains via mergers or being bought out. Choice Hotels used to be just four brands (Clarion, Quality Inn, Comfort Inn, Sleep Inn) but they acquired Radisson Hotels as well as a ton of other brands.
It was a fun surprise to see the specific hotel I work at in the video.
Budget brands make more profit. (Low wages & limited staff) imagine you have 200 rooms but just 65 staff (no bellboy no accounting no hr or it)
By the way there are lots of marriott bonvoy members since they acquire sheraton, everyone almost titanium and asking for suit upgrade!?!?!
3:23 Y’all spelt business wrong
You spelled it rong
@xwahhayah7867 No he dint
The want to make it seems like there is competition when one company owns all the hotels
illusion of choice😊
I guess I look at it like this: You go to a high school, and everyone there is collectively known as that school's mascot, i.e. The Rangers. But you look at individual students and they are different. So Marriott, Hilton, etc. is like The Rangers, but each brand is like a student. Differences, but under one umbrella. Once upon a time, I remember Delta and United trying a similar strategy with Song and Ted respectively...
As a Hilton guy myself, I like having the options of the different hotels. If I want to do a more luxury stay, I will look at Conrads or Hilton proper. If I'm looking for budget, Tru. If I don't care, I usually pick whatever ends up being the cheapest without being bare bones (usually DoubleTree or Hilton Garden Inn).
Spent over 2000 nights in Marriott hotels. Lots of them in Residence Inn. Not one had a bar. Most Courtyards do, and I was in 2 Fairfield Inns with a bar, one in Chicago, one in Vegas
3:30 Actually Uber also owned Lion City (car) Rentals in my country (Singapore) as over here, you legally need commercial car insurance to use a car for private-hire services, which is 3-5x more expensive than personal car insurance. So private-hire drivers find it more convenient to rent cars from a rental company, which already comes with commercial car insurance bought by the rental company, rather than to buy their own cars, & Lion City Rentals was setup to meet this need by drivers. When Uber's operations in my region was bought over by regional rival Grab in 2018, Grab continued to own this car rental company
I work for a M brand hotel. And I'd love to give a different perspective from the other side of the desk
They would save a lot of money in branding costs to reduce the number of brands. Having a decent number makes sense as there are differences, but nowhere near the number they currently have.
I'll bet they never thought of that. /s
It's completely different experience in each one. Put me in each and i will tell you which it is for Marriotts and Hyatts.
When a monopoly has an identity crisis
So next step, to see who has the best bath robs
No time for the impact of conglomeration on pricing?
fascinating
Simple answer. Area of protection. The more choices owners have to franchise with the more money the chains will make.
Grosso modo - those hotel "chains" operate like AirBNB - just every host is an independent contractor/franchisee owning and operating the hotel following the standards of the franchiser. They compete on the platform for customers by price and good photographs.
Fascinating, it's wild how the ultra rich play with money.
The multitude of brands in all business sectors, serve several purposes:
1st - The main one is to make you beLIEve that every person has a chance to be as successful by misleading people into thinking that there are competitors in all business sectors.
There are NOT. Everything leads back to the same people who print your money. They own everything because you accept "currency" as the world wide trading standard, and they print it - so they have infinite money. No normal person owns their property or their car, it's all in the small print in every contract. You are all leaseholders or registered keepers. As far as they are concerned you own nothing and they own everything.
Marriot are Operators, they don't actually claim to own any property because they are smart and they know you pay for nothing as an "owner".
2nd - brands are constantly created because psychologically people are drawn to "NEW" things, so branding and rebranding continues to allure the day to day non thinkers. Aside from food, water and basic clothes, everything consumers purchase is not necessary. So branding is basically an extension of entertainment. Bread and circus as they say.
Maintaining the illusion of competition & choice when the reality is neither exists.
3:20 ALBM
Mmmmm love some good monopolies.
Franchising has killed it. Most don’t follow corporate rules
What does this mean when it comes to monopolies??
3 words: Illusion. Of. Choice.
I hate hotel loyalty programs with every ounce of my being. I stay at a hotel like once a year, and points last a year, so there is no world in which one is worth it to me. Despite this I've been unwillingly signed up for multiple programs from front desk agents who refused to accept no when I asked, and that just signed me up without my consent.
I don't really understand what's in it for the real estate investor. He invests in the building of the property and then he needs to pay a management to Mariott. Why wouldn't he just manage the hotel by themselves and keep all the revenue?
Because without the Marriott branding, how do you convince travelers to stay there?
@@jmlinden7 what's makes you think travellers would stay because it says it's Marriott and not because of the quality and price?
@@manyulgarprsch The majority of travelers are business travelers, who tend to care about things like having a large rewards network.
Now obviously independent hotels still exist but they tend to focus on leisure travel, and even in leisure travel, a large percentage of travelers are people cashing in all their points from business travel, so there's still an incentive to join a chain
@@manyulgarprsch because long term consumer research shows it does (probably). My point is if it did not have an impact then real estate investor would have run the business themselves. anecdotally, people tend to prefer things with a name they recognize than they one's they do not, A La clothing industry
3:23 “Buisness”
Makes me wonder what else is wrong, if you can’t get the spelling right.
Town Place Suites are less expensive than Residents Inn. Also Town Place Suites beds are much less quality.
Illusion of choice, it's a scam
Misspelled business at 3:25
Simple. To avoid anticompetitive laws....
It may come off as bit immature but Gaylord Hotel is hilarious.
Just a note that the pronunciation of Marriott is “Marry-it”, not “marry-ought”
I stick with Marriott because they've always been everywhere I wanted to go.... followed by IHG/Choice and third: Hilton properties. I will never stay at a Hyatt because of numerous bad experiences with a range of their offerings 15 years ago (yes I don't even give them a redeeming chance anymore).
Always been a Westin or Aloft person 😂🤣
The Bonvoy program has me hooked. At 90+ nights per year, I love knowing my hotel will be clean and the benefits I get.
Just by reading the title of this I can tell you it's just an attempt at stealthing their incoming monopolies.
I only care about good pillows
What about the nasty sheets😂
I look for the elite lounge access, which in North America is often free snacks and soft drinks every weeknight, and free dinner and alcohol abroad 🍷
antitrust lawsuit against mega corporations !
In summary: Just because
I wish videos that had question in the title answered the question within first 10 seconds. I'm pulled in. Now answer me and then intrigue me more.
Hate what Marriott did to Starwood. They took everything good about Starwood's loyalty program and made it into the Marriott turd.
buisness? Is it me or is this misspelled?
marriott customer for life
Gaylord hotel,im dead 😅😂
Obviously money laundering
YOU CAN SAY WHAT YOU WANT BUT CUSTOMERS KNOW THE TRUTH.
It's so they can dodge reviews. Make more products and just keep branding and re-imaging to keep bad reviews off your back. If they only had one image and things went sour they would loose to much. More brands help each other with cash flow while new brands are created.
After all, a room with a bed is still just a room with a bed.
Intriguing
....so what?🤔🤔🤔
Marriott is pronounced like chariot
First.... Oh well, does these count these days? 😂
Gaylord hotels nice 😂
I love morning brew videos but had to stop watching 50s in because of the horrible bell dings. Please no more of this we are not watching a casino ad.
also pronounced "Mary-it"?
Marry me
Good content but you a seriourly hampering the reach due to poor delivery. Don't just re-hash the format of long time incumbents, improve upon it.
Buisness
I’m sorry but the way you are pronouncing Marriott is just wrong. Most people say re-it and not re-ot at the end of the word.
\mæriːət\ you are wrong
At the 3m21sec mark in the video, you spelled Business as (Buisness) 🫢😜