Why Branded Luxury Hotels Win Over Unaffiliated Hotels
In the initial phase, hotel developers and owners encounter a fundamental question:
i. Open a branded hotel (by partnering with a brand), or
ii. Open an unaffiliated hotel (by going for it alone).
Brand-owning corporations have a similar decision to make:
i. Growing through the expansion of hotels within existing brands, or
ii. Extend their current family of brands and develop a new brand to serve another market niche.
In either case, it is a brand or a part of it (sub-brand).
Research shows that branded hotels outperform the unaffiliated ones. Branded hotels particularly are immediately recognizable and indicate a certain level of quality, service, and commitment. Branding reduces customers’ search costs, decreases price sensitivity, and strikes the familiarity chord with the customer.
Why You Should Create a Brand
A brand is a legacy. And legacies are made by establishing strong relations built on trust.
Creating a brand requires investing your most valuable resource: your time. From giving time to the smallest of details for your brand to waiting until it yields results at scale, it’s all about time. Once nurtured, your brand will flourish towards progress.
Brand is not transactional. Brand is forever. — GaryVee
Achieve higher RevPAR
Branded luxury hotels significantly outperform unaffiliated luxury hotels in terms of their RevPAR (Revenue Per Available Room). This is due to their ability to attract more customers through their vast distribution channels and corporate sales programs.
Luxury is a Business Model
The business model of luxury is fundamentally different from mass-market models. Some features of such a business model are:
- Build a one-to-one relationship with clients
- Set pricing higher than the average price
- Craft exceptional quality
- Deliver an exclusive experience
- Maintain full control of the value chain
- Leverage the local culture in your offerings
The Luxury Strategy is “Not to Sell”
The identity of luxury brands is exclusively unique and creative. However, they don’t have a positioning since they stand incomparable to any competition.
The laws of marketing become anti-laws for luxury marketing. The luxury strategy is such that it appeals even to customers outside the target market, making them desire goods and services which they currently cannot afford.
Brand equity: a billion dollar brand comes from making guests feel one in a million.
An unaffiliated hotel would eventually be another hotel in the fleet, competing against prices. In the long run, however, branded luxury hotels, get the return on brand value. Inevitably, it is these branded hotels that get to keep flourishing through the years.
