Major hotel brands are increasingly pondering the idea of a refresh, but there are certain intricacies in play when it comes to this consideration.
Accor's Fairmont Hotels & Resorts recently announced that it is embarking on a “significant global renovation program,” with 20% of its portfolio “undergoing active transformation across the Americas, Europe, Africa, and Asia — driven by a commitment to 'Make Special Happen.'”
It’s not unusual for brands, including those at the top of the market such as Fairmont, to announce a refresh — or as Fairmont called it a transformation. Others might call it a repositioning, a reinvention or a renewal, but the import is the same. The brand’s leaders have decided they need to present a new face to the marketplace even if the product itself is still appealing and doing well.
Omer Acar, CEO of Fairmont, said in the announcement: "While we celebrate our profound heritage, Fairmont is unequivocally a brand of the future. New properties like Fairmont Doha, Fairmont Hanoi, and Fairmont Tokyo are defining the urban landscapes and cultural narratives of their cities, just as our original grand hotels did. Our commitment lies in continually renovating and adapting our heritage hotels, guaranteeing they deliver unparalleled experiences for our discerning guests globally.”
This is increasingly viewed as a necessity for long-term success.
“Brands need to continuously improve to survive and thrive," Chekitan Dev, distinguished professor at Cornell University's Nolan School of Hotel Administration, said. "If a brand is not improving, it is falling behind, and if it falls behind too far, it will fail.”
Daniel Peek, president of JLL’s Hotels & Hospitality Group, said that one reason for the need to refresh is that “today’s traveler is different than he or she was 30 years ago, and so hotels have to reinvent legacy brands.”
He noted that in the 1970s or 1980s, full-service brands often featured a high-action lounge with a DJ. That is no longer. Meanwhile, fitness centers are now almost a universal standard.
Why refresh?
Amar Lalvani, president & creative director of The Lifestyle Group at Hyatt Hotels Corp., said refreshes are necessary “because brands drift."
"Not in one moment," he said. "Slowly, decision by decision, until one day the brand is no longer doing the thing that made people love it. There are two causes: stewardship changes and scale. Different people make different calls over the years, and each one is defensible on its own. Growth pushes you toward what is easy to replicate rather than what is right.”
Lalvani said Hyatt-operated brands Andaz and Thompson “are great brands” that both “have been loved for a long time.” And that's exactly why he believes they were in need of a refresh and that work "is worth doing.”
When a brand is that strong, he said, “you protect it and keep it sharp. We are not inventing anything. We are making sure every hotel delivers on the promise that made it great in the first place.”
Brands “should evolve when there is an opportunity to better meet guest expectations, strengthen consistency across a global portfolio and reinforce their position in an increasingly competitive market,” said Leonard Gooz, global brand leader at Hilton.
Hilton’s “legacy of innovation,” said Gooz, “continues to shape how we evolve the brand today.”
Most recently, Hilton introduced a renewed vision for the brand.
“Not to change who we are, but to ensure we create an experience that meets the needs and desires of guests today while building on the qualities guests have known and trusted for more than a century,” he said.
One visible expression of that process is updating the company logo.
“As one of the world's most recognized and trusted hospitality brands, the strength of the Hilton name gave us the confidence to modernize our visual identity while preserving the recognition and trust we've built with guests, owners and travelers," he said.
Management companies, because of their role facing both owners and brands, often find themselves in the middle of refreshing initiatives, negotiating with the brand to maximize desired changes while working with owners to make sure that there is a return on any investment.
“The manager is an extension of the owner,” said Will Woodworth, senior vice president, investments, for Peachtree Group. “If you have a focus on profitability, you need to look at the physical product and delivery. When you see profitability eroding and decide that it’s the product and not the market. Then you have to think about how to get back on track.”
There is a built-in tension with refreshes, Woodworth said, with brands seeking to enhance the product while owners maintain an eye on profitability. It is the management company’s mission to navigate that tension.
“Owners are opinionated,” he said. “They’ll say, ‘That’s a good idea but won’t generate enough of a return.’”
At the end of the day, “brands are top-line folks who need to maximize revenue and get the most out of customer relationships. While they don’t ignore the bottom line, owners are more sensitive to the bottom line,” Woodworth said.
It’s important for multi-brand operators such as Marriott and Hilton to keep track of all their brands at all times to insure that each one continues to produce, he said. This has grown only more important with capital investments lagging dating back to the onset of the COVID-19 pandemic.
“There are a lot of legacy properties becoming less resonant with customers,” he said.
The question for brands, Woodworth said, is: “How do you continue to serve that owner and help make that property attractive while also saying, ‘You have to do this big renovation, with the requisite investment.’”
And while technology investments have always been challenging, the accelerating revolution in technology now makes that even more difficult. A refresh, he noted, might not always be consumer-facing but might involve PMS or other back-office issues.
“Getting 5,000 owners to agree to $50,000 per hotel can be a long, expensive and complicated process,” Woodworth said.
When to refresh
Any refresh has to be done over time, Peek said. What brands will do is look for success stories. Instead of a small kiosk, for example, one hotel might put in a real coffee bar which creates a jump in sales. The brand will then ask franchises: “Wouldn’t you like to duplicate that?”
Lalvani said the decision to refresh is all about the gap between what the brand says it is versus what a guest actually gets on property. That gap will show up commercially long before anyone calls it a brand problem.
“A calendar is the worst reason to touch a brand,” he said. “Renovation cycles and rate pressure are the moments you act, not the reasons you act.”
There isn't a one-size-fits-all timeline for a brand update, Gooz said.
“The right time comes when guest expectations, travel behaviors, design trends or technology have shifted enough to create an opportunity to better serve travelers,” he said, noting the strongest brands “are constantly listening to guests and evaluating how they can remain a trusted choice for travelers.”
Sometimes a chain will make a significant investment to kickstart a refresh, Peek said. For instance, Marriott bought the W Union Square in Manhattan and undertook a major renovation to show where it wanted W to be going. There was a similar example at the Sheraton Phoenix where Marriott showed where it wanted to take Sheraton. Hilton and others are doing the same thing.
Another issue to consider with multi-brand operators is whether to maintain the space between brands or not, Peek said. If Marriott is upgraded, where does that leave W or Edition?
“How do we modernize W so there’s still space between other brands?” he asked.
But he believes there's still a simple bottom line.
“What’s the best way to have owners invest in a brand where it doesn’t cannibalize the system?” he asked.
Woodworth noted owners and managers have different expectations as far as returns on investment. In addition, there are differences between institutional owners who might own 100 hotels and mom-and-pop hotels that are still a significant part of the ecosystem.
“We have the benefit [as large-scale owners and operators] of being on several advisory councils of larger groups and can provide direct feedback on what’s working and what’s not working,” he said.
What to call it
So, should the word be "refresh," "reinvent" or something else? It depends, Lalvani said, “on what the goal is, and the word matters because it tells everyone what you are protecting.”
He outlines it like this:
- Refresh: How a brand with strong DNA shows up for today's traveler. The intent does not change. The expression does. It is about getting back to the basics of what the brand did originally.
- Reinvention: What you do when the DNA is not there or is not worth keeping. Harder and riskier.
- Repositioning: Moving the brand to a different guest or segment.
He said Hyatt’s current initiatives are refreshes.
“If I called Andaz a reinvention, I would be telling the team to throw out the thing that makes it great,” he said.
The terminology can also be interchangeable and very much depends on the scale and intent of work being done, Gooz said.
Some updates, he said, “may evolve some elements of the guest experience, such as accommodations, social spaces and design, while a broader reposition or brand evolution reflects a more significant strategy shift in how the brand is presented in the market.”
What does a refresh involve?
Once a refresh is decided on, Lalvani said, “then comes the hard work.” Architecture, identity, experience pillars and campaigns are the visible and easy parts. The real work, he said, involves three mindsets:
- Every decision is filtered through a brand lens. Every deal, every design review, every hire, every menu, every capital request. If you only filter the marketing, you have done nothing. The people in the brand represent it, believe in it and are trained for it. A Thompson person and a Standard person are not interchangeable. Homogenize the team to tidy the organization chart, and you have commoditized the brand.
- It runs into the field. You cannot do this from a corporate office. Build whatever you want at the enterprise level. If it falls short on property, you are dead.
- A brand is not a logo. It is a culture. It touches every part of the business, not just marketing. This business is not about brand managers. It is about everybody pulling in the same direction.
And what about existing properties and the responsibilities of the owners?
“Because we are going back to the original intent rather than imposing something new, most of what is required is behavioral, not capital,” Lalvani said.
That includes:
- Standards, service, training, culture, hiring. Immediate, and largely not a capital question. This is the bulk of it and where the drift happened.
- Identity, signage, collateral, digital. Modest and sequenced.
- Physical product. Aligned to the natural renovation cycle. “We are not asking owners to rip out a lobby on our timeline. “
Most owners are not resistant to brand investment, Lalvani said. They are resistant to brand investments they do not believe in. And none of this happens at the portfolio level.
“You do not fix a brand by announcing a brand,” he said. “You fix it hotel by hotel, GM by GM.”
Gooz said beyond physical renovations, a brand’s renewed vision “can crystallize areas of focus and how they are brought to life across every facet.”
Hilton, he said, “recently evolved its positioning to focus on the moments that matter most to today's travelers — iconic gatherings, fostering energizing connections and showcasing the best of local culture and global hospitality across more than 600 hotels in nearly 100 countries and territories.
“It’s more than making a hotel feel new, but ensuring that it meets the needs of the next generation of travelers while simultaneously preserving what the brand is known for,” he added.
Will a refresh always work?
The bigger problem in the industry is upstream of all the refresh conversation, Lalvani said. Brands are often created “without any insight or vision.”
“Somebody sees white space in the market and builds a brand to fill the hole," he said. "Or they build it by focus group, so it is technically correct but has no soul. Those are easy to spot. They are all over the industry. And no refresh will save them, because there was never anything there to go back to.”
And he believes a refresh should be ongoing.
“Drift is the default condition of any brand at scale," he said. "The brand lens is not a project you complete. It is how you keep it from getting that far again.”