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Walking the brand standards tightrope

Profile Photo By: H L
April 11, 2013

Walking the brand standards tightrope

BOSTON?The hotel owner/brand relationship can be tenuous, though both sides share common goals, brand executives said Tuesday during a general session at the Hotel Equities and Lender Perspectives conference.

?Brands want the same things owners want: having a profitable hotel that delivers on the brand promise and keeps guests coming back,? said Scott E. Melby, executive VP of development planning and feasibility for Marriott International.

Lynne Dougherty, senior VP of owner relations and franchise at Starwood Hotels & Resorts Worldwide, said the company keeps a close focus on its franchise relationships. She said?Starwood?executives understand that many owners have hotels under various brands, so the company strives to keep its revenue support systems simple.

Likewise, Dexter E. Wood Jr., senior VP of global head of business and investment analysis at Hilton Worldwide, said the company?s priority is to help owners realize average-daily-rate growth. Mentioning its Hampton Inn & Suites owners, Wood saidHilton?is trying to get its owners to embrace its revenue-management system.

?We want to drive the top line,? Dougherty said. ?We want to hold hotels accountable to the ownership and management companies.?

Brand standards
Despite the shared goals, pushing through brand standards can be a struggle at times. To reach the two sides? shared goals, standards need to be re-addressed because customer expectations change, panelists said.

For instance, Melby said customers expect hotels to have flat-screen TVs, and those that don?t lose some of their relevance.

The company does not want to add costs that are not absolutely necessary, he said.?Marriott?monitors hundreds of guest touch points to see what is still relevant and if there are new standards that might need to be implemented.

Regardless of what the brand might be seeing, Dougherty said the brands need the owner/operator?s input, too.

?It?s a balancing act,? Melby said of working with owners on brand standards. ?You have to remember brand standards are really ? customer requirements so we need to adjust as we go.?

Jim Chu, senior VP of franchise and owner relations for Hyatt Hotels & Resorts, tabbed the availability of high-speed Internet access as one amenity that might not be mission critical for hotels. He said research has shown that customers won?t change their purchase decisions based on Wi-Fi access.

?Not having high-speed Internet is one of the things that bugs customers but not enough to change where they?re staying?unless it?s really bad,? he said.

The panelists were asked when the brands might start offering free Wi-Fi access to all guests. ?As soon as one of these guys (do),? Melby said, gesturing to his fellow panelists.

Dougherty said it seems that all the brand companies are waiting to see who might jump first. ?We?ve all thought about it,? she said.

A tier-based pricing model in which guests pay more for the highest Internet speeds is ?interesting,? but could yield problems, Chu said. If guests are paying a premium price for Internet, that connection better work flawlessly or else the hotel is setting itself up to have angry guests on its hands.

Regardless, hotels have to continue to spend money to innovate with technology, Melby said. ?We can no longer save our way to prosperity,? he said.

Brand expansion
The panelists were asked if their respective companies have given any thought to drawing in the reins on global expansion, given the difficulties non-U.S. brands have had in trying to gain a foothold in the United States.

Their answer: No.

?So many of the international customers are thirsting like no other for international brands, and we represent those,? Melby said.

Hilton, for example, has had success in growing its DoubleTree by Hilton brand through conversion abroad, Wood said.

?Our business has become globalized as our customers have become globalized,? he said.

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