NEW YORK—What is the value of a hotel brand? A lot, some might say. A strong brand speaks for itself, answering consumers’ questions before they’re even posed: How is the room quality? Will I have a uniquely tailored experience? Am I getting the best rate?
Brand equity is largely based on consumers’ experiences, which is equally dependent on the quality of the brand. It is also tied to a company’s financial performance as well as market share.
Measuring the overall health of hotel brands is the 28th annual The Harris Poll EquiTrend Brand Equity Index, which calculates its value using three factors: familiarity, quality and purchase consideration. More than 3,800 brands are compared across 500 categories over time and against key competitors, according to the company. The data is used to determine a brand equity rating for each hotel brand.
“The idea behind it is there’s this hypothesis that there are certain core things brands have to deliver on no matter what the category,” said Joan Sinopoli, VP of brand solutions at Nielsen, which owns the Harris Poll. “Quality being a central one; familiarity—think about human relationships; quality is the high opinion of the brand; and consideration means, ‘How do I want to interact with you and how frequently?’ We ask those questions and that’s how we assign scores, seeing where brands stand within the world of brands. It’s not just how I look against other hotels or classes of hotels, but how do I measure up in a study as a whole.”
Hotels within the general travel category are really dominating that segment, with hotels scoring at 62.0; airlines at 59.1; OTAs at 58.7; and cruise lines at 57.2, according to the study. “It’s interesting there’s something fundamentally aspirational about hotels. For hotels in particular, it’s less about how you get there or how you book, and more about the destination.
“Luxury and full-service from an equity perspective are top of the list. People in practice are budget conscious, but what they aspire to—what kind of hotels are top of mind—is the luxury and full-service line. They’re strong in momentum. Consumers believe they are on the way up more so than other classes of hotels,” she said. “We don’t see that in every category. For example, value airlines perform better than full-service airlines. Luxury and full-service hotels promise a certain experience; they have the amenities people want when they travel; and they deliver on it.”
In reviewing the study, full-service and luxury are at the top and separate from all other hotel types. Next tier down is mid-market and extended-stay and they’re still with reasonably strong equity ratings, noted Sinopoli. “The economy hotels just aren’t cutting it relative to other classes. There are big separations,” she said. “It reinforces people talking about the economy recovering and people are feeling better about travel. They may not be willing to extend that dollar, but if they travel they don’t want to give up on something that is really more appealing than staying home.”
So, how did some of the major players fare? Among the hotel brands, Hilton Hotels & Resorts and Marriott Hotels are in a neck-and-neck race for the top spot, scoring 71.1 (a 5.8% year-over-year change) and 70.2 (a 4.1 year-over-year change), respectively. Holiday Inn and Holiday Inn Express are among the most familiar and used by most consumers, while The Ritz-Carlton and W Hotels and Resorts are tied for highest quality, according to the study. Also, nine out of the top 10 leading travel brands are hotels in the report.
“Hilton and Marriott are very close competitors, obviously, and the brands that tend to rise to the top are ones with strong loyalty programs, consistency of excellence and have undergone chain-wide renovations in the last couple of years,” she said. “They really work to stay ahead and do it across hotel brands. So, it’s another thing if you’re staying at different tiers of a Marriott or Hilton, you’re getting a certain level of service you can count on. While there are sub-brands, they manage it from a philosophy as a master brand. They want you to have a good experience no matter what level you’re paying at.”
—Corris Little