Soft Brands: the hybrid option
There is a third way that appeared a few years ago. This is a new concept that has recently gained ground in the luxury hotel and catering sector, especially among the major brands of American origin: the Soft Brand.
Examples of this type of mixed solution are the Autograph Collection from the Marriott chain or the Curio Collection from Hilton, where hotels are managed independently, but under the umbrella of a large global brand. With this solution, independent hotels retain all the individuality and personalisation of a family boutique hotel, mixed with the financial power and marketing and distribution expertise of some of the world’s largest brands.
This is a two-way alternative: on the one hand, independent hotels and boutique hotels, which operate alone and without a strongly positioned brand, can jump on the bandwagon of an international brand, obtaining greater direct income and enjoying its benefits (reservation system, representation in the global sales network, loyalty programmes, rate negotiation with agents such as Expedia or Booking, etc.)
The use of centralised booking systems and unified loyalty programmes also means that the small independent hotel can reduce its percentage of the most expensive OTA bookings and generate more revenue directly through its own websites.
On the other hand, it provides large hoteliers with the ability to attract customers who are looking for authenticity and reject the rigour and standardisation of a large corporate brand. This model also allows brands to get great ideas from developers and owners who have found ways to operate in their local market. Whether in design, marketing, operations or personnel, there are creative ideas that brands could incorporate into their systems or into all collections. The big brand captures a kind of intellectual capital, in addition to the scale and inventory capital that is gained by incorporating each new hotel.
Encouraged by the success of exclusive luxury brands, such as Hilton’s Curio collection, and the growing demand from owners and consumers for a slightly lower version of the same concept, the soft brand is slowly infiltrating the three- to four-star segment, which offers hoteliers and travellers on a slightly lower budget than luxury, a combination of independence and tranquillity that was previously out of reach.
Perhaps the biggest challenge with this model is that more traditional brand owners may start to want some of the flexibility that the collections enjoy. If other brands at the same price level as the one they are competing with, perhaps even affiliated to the same hotel company, are able to make the decision not to comply with the brand’s standards, the owner linked to the big traditional brand could feel very much at a disadvantage.
It remains to be seen whether “Soft Brands” will stand the test of time and the coexistence of one brand subject to the standards of another, with the differences in customer experience that can be generated.
At Mandarina Brand Society we can help you with the creation and management of the brand for your hotel boutique or independent hotel. Shall we talk?