Hotel company expansion and diversification is also a strategic defense against online travel services like Expedia and Airbnb, which offer thousands of varied listings in one place. Like such aggregators, more hotel companies can offer their own spectrum of listings, from a basic night’s stay to a luxury resort.
“The more hotels and choices we can offer, the more competitive we are,” said Tina Edmundson, Marriott’s global brand officer, “and front and center is we want people to book directly with us.” For the hotel companies, guests who book through the company website bring more revenue and opportunities for direct customer contact.
Some hotel buildings now house multiple brands under one roof. Hotels near hospitals and military bases often have a mix of overnight and extended-stay guests, Mr. Pacious said. So within the same building, his company might have a Sleep Inn for short-term guests and a MainStay Suites for longer stays. The two sets of guest rooms would share a lobby, housekeeping services and back-office staff.
Marriott, which has more than 50 dual-branded hotels, is building its first tri-branded hotel. The new building opening next year in Nashville will house an AC Hotel, a Residence Inn and a SpringHill Suites.
The increase of soft brands is another driver of brand proliferation. “Unique, boutique or historical hotels want to keep their identity,” Mr. Pacious said, but also get the benefits of a larger company’s reservation system, marketing efforts and rewards programs. The Port Inn Kennebunk in Maine and Big Horn Resort in Montana, both formerly independent, are now part of Choice’s Ascend Hotel Collection, which gives members access to business aids like revenue management tools and management training, Mr. Pacious said.
Further complicating the ecosystem, new brands like InterContinental Hotels Group’s Even Hotels are being introduced to focus on evolving traveler preferences like healthy dining options, better workout areas and sustainable practices.
But how many brands are too many? Each requires spending on signs, advertisements, websites, social media and customer research. And each brand needs to be nurtured to stay relevant. To revitalize the Comfort Inn brand, Mr. Pacious said that over the past few years, Choice International terminated contracts with 600 lower quality properties and invested $40 million to spruce up the rest, including updates like modern lobbies, flat-screen TVs and faster Wi-Fi. More than 50 additional Comfort Inns are planned or under construction.
Still, industry experts say that too many similar brands and price points can cause problems. Cathy Enz, a strategy professor at Cornell University’s School of Hotel Administration, said that when a company has too many brands aimed at similar customers in the same segment, they can all start to look alike. “The downside is competitive convergence and the commoditization of the industry,” she said. In that case, they are left to compete just on price, she said, a situation most companies try to avoid.
“I’m just looking for a safe hotel with free Wi-Fi and a comfortable bed and they’re all pretty similar to me,” said Margaret Sharp of Seattle, who travels in the Pacific Northwest and Canada as a technical writer and project manager. “Holiday Inn Express, Candlewood Suites, SpringHill Suites — they all blend together.”
To educate guests about a large family of brands, hotel websites will list similar hotels together and offer them grouped by travelers’ needs. The distinction between some monikers, like “luxury” versus “modern essentials,” or “wellness” versus “lifestyle,” may be more obvious to some guests than others.
“It is easy for customers to ‘trade down,’ when similar choices are listed together on a website,” said Dave Reibstein, a marketing professor at the Wharton School at the University of Pennsylvania.
If they get the loyalty points in any case, he added, “why not stay at the hotel that is $10 cheaper per night?”
And despite company efforts to give each brand a unique position, the tiers are not always clear-cut. Damon Igl, a technology-focused business consultant who has traveled extensively for his work, said that in some cases a newly built hotel with a lower-quality brand name may offer a much better experience than a more prestigious brand nearby in a poorly maintained, older building. “If I have a few choices in the area, I might look to see which opened most recently,” he said.
Managing brand reputations within a growing portfolio is another challenge, said Professor Reibstein, who has researched the topic. He said that associating a more luxurious hotel with a lower-scale brand dragged down the value of the more upscale name.
“That’s why you’ll never see Marriott call its five-star Ritz-Carlton hotel chain ‘Ritz by Marriott,” he said.
Professor Reibstein said he believed that some brands would be retired. “It makes sense to have a portfolio of brands to go after different segments,” he said, “but you need one brand going after each segment, not two or three.“
Retiring brands, however, can be difficult. Because hotel companies now lease their names to operators, they have contractual obligations, among other reasons, to maintain existing brands.
Marriott performs comprehensive “brand health” studies, Ms. Edmundson said, and does consider retiring or combining brands. But, she added, “that bumps up against investment made in the brands, the contracts we have, and loyal guest followings.”
Mr. Igl, a frequent Marriott guest, said he knows which of its brands have a kitchen, which offer larger rooms and what to expect on the free breakfast buffet from the brands that offer one.
“If I’m going to be spending time in a new city and there’s a Courtyard Marriott, Residence Inn, Fairfield Inn and a SpringHill Suites all nearby, I might stay in each of them once to see which I like the best,” he said, “and then book the rest of my stays there.”