As I sat reading my colleague Jason Q. Freed’s account of Hyatt Hotels Corporation’s acquisition of the iconic Driskill Hotel in Austin, Texas, I couldn’t help but think of a debate I had witnessed weeks earlier at International Hotel Investment Forum in Berlin.
The conversation featured Jumeirah Group’s Gerald Lawless and Ted Teng of The Leading Hotels of the World. The topic? Brands versus affiliations.
Lawless did an admirable job donning the brand mantle. He touched on all the usual talking points, espousing the value of a true hotel brand in the realms of distribution, operations and consumer perception.
Teng, who serves as president and CEO of the affiliation network, responded in turn by poking holes in the shiny brand veneer. Not every property needs the names of Marriott, Hilton or Jumeirah sprawled in fluorescent glory to lure a swarm of buzzing travelers, he argued. Some hotels are brands unto themselves, generating 80% of their own revenues.
The other 20%? That’s where an affiliation such as Leading Hotels can come into play. They provide the extra marketing clout, that extra push to boost a property from good to great, Teng said.
For such hotels, affixing a traditional hotel brand—meaning one from the major global chains—can actually be counterproductive and hurt the intrinsic value of the property.
The Driskill is a great example. Built in 1886, the opulent hotel is the beating heart of the surrounding community—a preserved emblem of Austin’s historic past and a central hub within walking distance of nearly everything the city has to offer.
This is one of those cases where slapping on the Hyatt flag probably would have done more harm than good. And kudos to the chain’s executive team for recognizing as much. In a move that signals a new direction for the company, the Driskill becomes the first affiliated Hyatt hotel with no proper hotel branding. Read more
Published in: http://www.hotelnewsnow.com