Brand Creation in Troubled Times

Despite the tumbling economy, consumer desire continues to grow for services that in past days were considered a luxury – those that are highly customized to individual preferences while offering out-of-the ordinary experiences.

In recent times, hotel groups have rose to the challenge by creating more segmented brands – earlier examples being Starwood’s Aloft and Element. But as funding sources have become scarce the introduction of new microbrands is a riskier investment. The brakes have been put on some brands, either slowing them down or putting them on hold completely, such as with Baccarat, Crillon and 1Hote1. Perhaps once Starwood Capital’s newly announced SH Group finds it feet, financial lending will have loosened up a bit and these brands can move forward. But as travelers are tighter than ever with their disposable income, is it a smart time to introduce the over-the-top luxury of Baccarat and Crillon? Or will there always be a market for super premium lodging?

Hilton’s announcement of their new microbrand Home2Suites seems to take a more practical response to guest requests by targeting tech-savvy extended-stay travelers who also would like “sensuous retreat services.” This concept has a theme also seen in our earlier post about women-only hotel floors: the desire of travelers to be pampered during off-work hours.

Is now the time to increase the promotion of spa services to your extended-stay business guests for added revenue? How can your hotel capitalize on this trend?

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