Comment: Don't let your branding creep

Columnist Guy Wilkinson suggests studying brand theory before taking on a project

Guy Wilkinson
Guy Wilkinson

The Oxford Dictionary defines creep (noun) as ‘a detestable person’ or ‘a person who behaves obsequiously in the hope of advancement.’ I think we all know someone like that. So when I first heard the phrase ‘brand creep’, which I now know is a piece of marketing jargon, applied to hotels, I must admit I had a schoolboy snigger.

As I understand it, ‘brand creep’ uses the word creep as a verb, meaning of ‘a negative characteristic or fact occur or develop gradually and almost imperceptibly.’ In a hotel, it’s when the original meaning of a brand gets distorted into something it was never intended to be.

In the Gulf region, this is unfortunately something that happens quite often and can be a major problem for hotel operators when dealing with owners or developers. The principle of multi-brand hotel chains is basically that with each subsequent brand beneath their flagship luxury brand, the facilities and services are successively peeled away until at the bottom of the ladder, you get a basic bed and breakfast — and sometimes not even breakfast.

I was quite surprised recently when reviewing the building requirements of today’s four-star chain hotels, many with rooms of 25 to 30 square metres, no banquet hall and no spa, for example.

If I was surprised, my client (a developer) was totally shocked. Such modest proportions hardly came up to his own grand vision for the project, which involved a majestic edifice in which excessively large guest rooms and public spaces were to be not only his gift to the future guests, but in his mind, a key competitive advantage.

I must clarify that I do admire such enthusiasm. Without the passion and drive of hotel developers, our region would not be so full of wonderful hotels, and the entire hospitality market here so defined by luxury. However, the chains now have such established systems for differentiating hotels through branding, that developers would do well to cotton on and ‘build to spec,’ if they want to attract the right operators.

Needless to say, the chains don’t create these differences just to make sense of their brand stables. Each brand has a different economic formula that goes with it. The more luxurious a hotel, the more it should cost to build, the more expensive should be the land it stands on, the more facilities, services and staff it should have, and the greater the amounts of cash it should generate — but with a lower profit level as a proportion of revenues, due to the higher expense of the operations.

The less luxurious, the reverse is true of all these characteristics. The different brand formulae thus not only fit different hotel locations, but also different development budgets.

The difficulty occurs when a developer doesn’t quite appreciate all of this underlying thought. I have heard several would-be hotel developers retort that they can afford to build a super luxury property in an industrial area, so what possible objection could the operator have? In this case, the logic behind the development formula goes beyond branding to speak to appropriate ‘types’ of hotel (and essentially, hotel brands are linked to hotel types).

In an industrial area, you typically don’t have the correct environment for a super-luxury hotel, which should instead be situated on a fancy downtown boulevard or an exclusive strip of beach.

However, in industrial locations, there will often be demand for an affordable hotel, which can be as utilitarian as you like in terms of amenities, as most people just want a bed for the night and a hearty breakfast before their day’s work.

Another irony is when developers vow to build ‘the best three-star hotel in the market’, with the predictable huge rooms, multiple outlets, marble lobby, etc. It’s a contradiction in terms!

The best three-star hotel becomes a four-star hotel, and if it competes in the three-star market, it will be a hotel that is built too expensively, that’s all.

Therefore, even developers who want to operate their own hotels, without the benefit of a third-party chain or brand, should really study the theory before undertaking a project, or else risk suffering a bad case of brand creep.

About the Author:
Guy Wilkinson is a director of Viability, a hospitality and property consulting firm in Dubai. For more information, email: guy@viability.ae

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