REPORT FROM THE U.S.—Several hotel franchisors are taking fundamentally different approaches to marketing their brands. Each said there are advantages and disadvantages to the approaches they’ve chosen.
Some franchisors choose to market their umbrella of brands, such as Choice Hotels International. For example, consumers will see TV commercials for Choice Hotels rather than Choice’s individual brands.
“Through our research and media mix modeling it became very evident that the multibrand marketing approach is really the most effective for us,” said Alexandra Jaritz, senior VP of brand strategy and marketing for Choice. “It makes sense, right? You’re pooling a lot of dollars and really making the best possible media buy and thereby driving the best incremental (return on investment) you can.”
On the other end of the spectrum, InterContinental Hotels Group executives have decided their individual brands should carry the most weight. They choose to advertise Holiday Inn, for example, as opposed to the umbrella approach.
“At IHG we believe we have a competitive advantage more like the classic brand-management approach where each brand lives on its own and communicates a differentiated message to the marketplace,” said Larry Light, chief brands officer. “Each of our new brands, Hualuxe (Hotels & resorts) and Even Hotels, will develop their own clarity.”
Light said IHG embarked on a marketing research project last year that resulted in a strategy by which each brand will focus on a specific guest need or set of needs.
“Our goal, our business and marketing objective, is to build a brand preference for each of our brands,” he said. “We’ve reorganized the marketing functions and have brand managers assigned under each brand.”
Hybrid approach
However, IHG is not lost on the advantages of promoting the parent brand, so the group will move this year to a more hybrid approach where it will continue marketing each brand individually while at the same time dedicating some marketing resources toward the parent company.
Light said the renaming of IHG’s points program from Priority Club Rewards to IHG Rewards Club is one example of IHG attempting to create consumer awareness around the IHG brand. In tandem with that launch on 1 July, IHG will also change the URL on all of its brand websites to include ihg.com. For example, the Crowne Plaza website will move from www.crowneplaza.com to www.ihg.com/crowneplaza. On www.ihg.com, Light said, each of InterContinental’s hotel brands will be displayed prominently across the top of the page.
“There are opportunities where we must advance the IHG brand,” Light said. “Therefore, we have a separate person focused on the IHG brand. But we are not going to redefine our brand so it becomes Holiday Inn by IHG.”
Light said the benefit to promoting IHG as a brand more is that it provides cross-selling opportunities within each of the brands.
“A few members who joined Priority Club through Holiday Inn were unaware they could redeem points at InterContinental Hotels & Resorts,” Light said. “IHG Rewards Club has 73 million members; it’s a huge asset, tying that to IHG.”
Wyndham Hotels Group takes a similar hybrid approach, which largely depends on the target audience, said Flo Lugli, executive VP of marketing for parent company Wyndham Worldwide. For marketing efforts toward owners and other business-to-business ventures, the company takes an umbrella approach. But for consumer marketing, most of the strategy has been to take advantage of the value that lies in the individual brands.
That said, Wyndham is “looking at opportunities to leverage Wyndham Hotel Group as well,” Lugli said. “We’ve been utilizing what we call our ‘brand bar’ a lot more to consumers. For instance, on the branded website, Wyndham Hotel Group is much more visible than it has been in the past.
“We try and balance the relationship between the two,” she said.
Lugli said the approach Choice is taking makes the consumer do extra work. “You won’t go down the road and see a Choice Hotels sign,” she said.
However, Jaritz said single brand marketing provides the best return on investment online, so her approach is to direct consumers to www.choicehotels.com and then create a linkage between Choice Hotels and the individual brand.
“When you want to communicate the single brand message—and you can do it so much more effectively these days—you can do online commercials rather than the big TV commercials and the cost associated with that,” Jaritz said. “We’ve really gone around primarily multibrand for awareness and spending the bulk of our dollars there and telling the individual stories online.”
Keeping owners happy
Franchisees enjoy seeing commercials specific to the flag they are flying, Jaritz admitted. However, if a consumer sees a commercial for a particular brand and that brand is not available in the city to which he or she is traveling, it could have a negative effect. For example, many Cambria Suites owners want advertising directly promoting the Cambria Suites brand, but Choice executives won’t allocate resources to that until the brand has enough market saturation.
Lugli said conversations with owners are less about driving home the brand message and more about how the company best drives revenue to its owners. “It’s not about an ego perspective; it’s making sure we’re reaching the customers,” she said.
For many of Wyndham’s brands, the cross-selling approach is the best approach. For Baymont Inn and Suites, for example, the franchise fees do not generate enough marketing dollars to justify a TV campaign. However, by pooling the funds and advertising Wyndham Hotel Group, the Baymont brand gets exposure it wouldn’t get by itself.
“Single brands would never be able to afford sponsorship, so our job really is to identify the opportunities that really make sense or not,” Lugli said. “We will continue to evaluate the inter-relationships, and the final decision criteria will be what is going to drive the best value for the owners and the consumers.”