Before COVID-19 happened, the world’s biggest hotel companies seemed to be in a buying spree of brands and smaller companies. In 2018 and 2019, InterContinental Hotels Group (IHG) bought Six Senses and Regent, respectively, while making even more headlines was Accor, which in the last few years, acquired renowned brands like Fairmont, Raffles, Swissotel, and Movenpick.
And concurrently, hotel giants were also building brands from the ground up. IHG recently came up with Voco and Avid, while Hilton Worldwide recently launched Tapestry Collection, Motto, and Tempo.
Creating these big umbrellas of brands does signify that in the world of hotels, more is better—after all, these companies wanted to cater to every market segment and psychographic. They keep in mind that millennials, who gravitate more towards destination storytelling rather than run-of-the-mill hotel experiences, make up more and more of both leisure and business travelers.
But if there’s one company that has consistently believed that more brands is indeed better, it’s Marriott International, especially when it acquired Starwood Hotels and Resorts, adding 13 more brands into the fold. The historic 13-billion dollar deal made Marriott the world’s biggest hotel chain.
Before delving deeper into the discussion, it’s important to refresh on how Marriott classifies its brands. Officially, Marriott has 30 brands, and foremost, it classifies them into two main groups, classic and distinctive. Under those two groups are three parallel strata—luxury, premium, and select.
In a nutshell, Marriott groups its brands by their image and offerings. For instance, in its premium offerings (i.e. upscale to upper-upscale, or a step below luxury), “classic,” which includes the Sheraton and Marriott, uses descriptors like “time-honored,” while “distinctive,” which includes the Westin, Renaissance, and Le Meridien (a personal favorite), offer “memorable experiences with a unique perspective.”
Stratifying the brands, mixed with exciting buzzwords and other marketing language, was a smart move on Marriott’s part, as it persuaded not only its customers but also the company’s stakeholders (most especially its hotel owners and franchisees) to buy into its mega-acquisition of Starwood. It gave the impression that they were devoting resources to differentiate each one and make them attractive and sellable to consumers.
But ultimately, the challenge was communicating it to customers as the merger went along, when the average consumer “will not be able to list the brands that belong to the different companies or necessarily tell you what the differences are,” a view shared by Prof. Makarand Mody of Boston University’s School of Hospitality Administration to New York Magazine.
That’s not to say hotel brand equity doesn’t matter; it does, even for the occasional traveler. A Marriott is a Marriott, and a Sheraton is a Sheraton. However, for some of Marriott’s brands, their positioning is quite similar that to the untrained eye, they’re practically the same. Marriott’s Global Brand Officer, Tina Edmundson, in a 2019 analyst meeting, admitted that there are brands “that are similar or occupy the same tier, price point, or consumer benefit,” and from these similarities, they derive synergies and strategies to differentiate each brand.
She used the example of the St. Regis and the Ritz-Carlton:
Both brands target the global affluent traveler. However, they are each positioned against a different psychographic and therefore, they offer different experiences in terms of product, design, facilities, signature rituals and services. So, for example, at St. Regis, to support the positioning of ‘live exquisite,’ we bring the brand to life via signature services like the Bloody Mary ritual, unexpected events like Midnight Suppers and Butler Service, which is a true brand differentiator in the luxury space. At Ritz-Carlton, we create indelible moments by focusing on delivering anticipatory services through our ladies and gentlemen and creating long-lasting memories and storytelling through design.”
Now, the question arises, how are they executing these differentiations? While there are, of course, corporate travelers who collect miles and points, many consumers who search for the best deals on online travel agencies wouldn’t be able to necessarily differentiate how a Fairfield differs from a Courtyard or how Aloft differs from Moxy. These consumers are a considerable portion of the market that aren’t necessarily attuned to hotel trends, making marketing and communications all the more challenging.
Well, to be fair to Marriott, it is making great strides to refresh its brands and incorporate new differentiators. For example, with its flagship Marriott brand, it has been rolling out the “Marriott Modern Design” in its new-build and renovated properties, and based on personal experiences in new-build properties in Bangkok, Yogyakarta, and Hua Hin, the look and feel of the rooms and common areas were similar that I have a lasting mental picture of what a Marriott looks like.
In addition, it has been executing well-thought-out marketing activations to create awareness and goodwill for their brands. For Aloft, it enlisted renowned singer-songwriter Troye Sivan to promote its Live at Aloft series, a brand offering in which it invites local musicians play at its properties on certain weekends.
On the other hand, Element, true to its positioning towards wellness, collaborated with Bon Apetit Magazine to come up with videos of “restorative, healthy” recipes that can be done while traveling. (Side note: Element’s long-stay studios and suites offer a kitchen.)
These focused, nuanced approaches to differentiating and promoting the brands can be credited to, in large part, Marriott’s strategy of creating divisions of similar brands—e.g. luxury, lifestyle—each led by a brand leader. Speaking to Skift, Mitzi Gaskins, vice president and current brand leader for JW Marriott, claims this strategy allows them to be more like small, agile business units where they can focus their resources.
All the work seems to be paying off. In its 2019 hotel brand survey, Business Travel News named the Ritz-Carlton (2nd place) and JW Marriott (6th place) among the top luxury brands, while the Westin topped the upper-upscale division, with Marriott (4th place) and Sheraton (6th place) also joining the list.
This is on top of Marriott’s Q4 2019 (i.e. pre-COVID-19) results, wherein Arne Sorenson, Marriott’s CEO, announced, “We grew rooms nearly 5 percent, achieved record RevPAR index gains, drove higher guest satisfaction scores, and maintained global hotel profit margins in a low RevPAR growth environment.” Brand loyalty was also enhanced with its new, heavily-marketed Marriott Bonvoy program.
But of course, COVID-19 happened, and the industry is sure to be changed forever. Some hospitality leaders acknowledge that some brands might not even survive, likely to be consolidated into the bigger, more established ones—especially with grim projections of up to a 20% drop in hotel brand valuations.
If any, the aftermath of the pandemic will be the ultimate test on all the effort Marriott has put up establishing its brands. Will all the 30 survive? Only time will tell.
All photos and videos above are courtesy of Marriott International.
