Signs Your Hotel Needs a Brand Makeover
By Mercedita Roxas-Murray EVP Strategy/Brand Planning & Operations, RedPeg Marketing | April 27, 2014
Hotel brand makeovers come in all different shapes and sizes, from a minor brand renovation and facelift, to a complete re-brand or change of brand. It is crucial for hotel operators and owners to understand and be able to identify the signs of when their property needs to undergo a change and what kind of change that may be.
The trends of the last decade have had a significant impact on the current transformation of the hotel industry. During the recession in the early part of the past decade several things were occurring; hotel brands allowed hotel owners that were struggling to pass on required upgrades or changes(1). Now, with the economy rebounding and in many markets "occupancy and average prices" improving, those hall passes are being taken away and brands are making it mandatory for hotel owners and operators to get their properties up to the standards of the brand.
For hotel owners, the price to do so is in some cases is so great that they are not able to and have to downgrade to a less prestigious brand(2).
A second trend is that there was a wave of hotel sales because of the economic down turn and buyers were snapping up properties. With the recent turnaround, all of those properties are starting to be developed. A recent PricewaterhouseCoopers (PwC) reports stated that revenue per available room is expected to jump 6 percent in 2014 industry-wide and that occupancy rates this year are expected to reach 63.2 percent, the highest level since 2006.(3) As a result hotel renovations are growing, especially for those properties in good locations and that are structurally sound(4), as well as new builds. This has created increased competition in the marketplace and lead markets like New York, Las Vegas, Orlando, and Chicago and nationwide are seeing new hotel projects on the rise.
So how can hotel owners and operators identify the signs that their property is in need of a makeover? Look at the environment, your targeted customer and your property itself.
Where Does Your Property Rank With the Competition?