The Relevance of Brand Relevance
iPhone, iPad, iEverything - the world of Apple has become a prime case study for brand marketers, as they continue to boast legions of fans around the world; many of whom would willingly brave the elements in a bid to emerge victorious with the latest iPhone in hand.
But what's in a brand?
Quality, consistency, and now - an ideology. CitizenM seeks to "inspire a new generation of modern travelers", affectionately referring to its guests as citizens, while Aman's discreet, exclusive luxury has enthralled more than its fair share of Aman junkies. As consumers continue to seek the novel and unique, the attractiveness of the consistency and peace of mind that traditional brands have promised are coming into question. But are brands really becoming irrelevant, or have they simply taken on a more complex meaning?
Branding: From security to "obscurity"
Brands have long served as a safe haven for those seeking a sense of security and comfort in knowing what to expect. Cookie cutter hotels were quite literally built on the basis of providing the same experience and service anywhere in the world, and is a concept that brands thrived on for a long time - until now.
The value of brands in today's world has become a contentious topic. While major hotel brands like Marriott and Wyndham continue to dominate the hotel scene, the likes of the anti-brand movement and growing sentiment that traditional hotel companies are "boring", point towards the opinion that brands are losing their value - people no longer need safety and comfort; they want fresh and inspiring.
The seemingly fading relevance of brands -
With an overwhelming 83% of users on TripAdvisor reporting the importance of hotel reviews, it is no surprise that OTAs have become the preferred method of booking. For consumers, the rising dominance of online travel agents (OTAs) has meant more choices and greater price transparency. Yet for businesses, this may have inadvertently eroded the meaning of brands, as it is perhaps becoming more important to have high ratings and to be listed on the first page of Expedia or Booking.com than the name of the hotel.
In this era of all things Instagrammable, the focus has also shifted towards "experiential design", with the aesthetics of a hotel coming to play an equal - or even bigger role than the hotel's name - which may mean further diminishing the competitive advantage of brands. Add to that greater perceived individuality and a generally better ability to personalize services, it comes less surprisingly that boutique hotels are commanding higher rates and faster growth than their branded counterparts.
Speaking of boutique hotels, the growing popularity of soft brands also reflect the desire of today's travelers for uniqueness, as they present an interesting blend of non-cookie cutter designs and experiences, whilst still offering the assurance of certain brand standards. In other words, these travelers seek the invisible comfort of quality, without the loud-and-proud brand promise that tells you what to expect. As hotel companies themselves gravitate towards the boutique hotel scene with this idea of a "brand without a brand", it is evident that the industry itself is becoming increasingly willing to let it loose with the traditional meaning of brands and the consistency they propose.
- Or simply a tougher brand marketplace?
In addition, some may argue that the generations of today are more brand averse, although the track records of companies like Starbucks and Apple prove otherwise. However, the better explanation seems to be that the younger generation is more willing to explore new brands than stick to the tried-and-tested. But this does not necessarily mean that they are less brand loyal. Rather, they are more selective in who they pledge their allegiance to, as they seek brands whose values resonate with theirs.
Consequently, branding is no longer simply about the logo, but also the story it tells and the values it represents. The concept of reverse branding has been borne out of this need for brands to "prove their worth", and is a principle that many successful brands take to today - creating a strong brand that draws customers towards them, instead of trying to woo customers themselves. By espousing values that speak to their audience, brands like Aman and CitizenM have managed to amass fans around the world and keep them coming back, without even needing a loyalty program.
Therefore, rather than saying that Brands are becoming less relevant, conversely, brands are perhaps more relevant than ever. The difference is that it now takes much more detailed planning and curation to craft a meaningful brand that can capture an audience at a time when choices are aplenty.
Standing out: Crafting stories and building emotions
If Apple were to build a hotel tomorrow, what would you imagine it to be like? High-tech, sleek designs, (and expensive) are probably some words that would come to mind. And what if one of the major hotel chains were to begin producing smartphones? Many hotel companies today sell their brands on stunning hotel designs and their ability to deliver service excellence - but how truly differentiable are brands?
The burgeoning of hotel brands has meant that the divide between each one has inevitably become less distinct; the top 5 hotel brands by room count alone boast a repertoire of almost 100 different brands. To call a brand entirely unique would thus be near-impossible. After all, there is only so much beautiful designs, over-the-top amenities, and good service can do for a brand. Instead, as brands like 25hours and Zoku have demonstrated, a compelling brand story is key to capturing fans, along with fresh and dynamic energy that is consistent throughout the brand image.
Next, the roots of hospitality lie in evoking emotions; we appreciate a good service experience because it makes us feel something. So, what if we used our guests' senses to create meaning and induce loyalty? The Ritz Carlton plays on our sense of smell with specially crafted fragrances at its individual properties, while the Music Concierge produces bespoke soundtracks for luxury hospitality and retail establishments, to charm their visitors into coming back. Done right, leveraging the power of the human senses could inspire new meanings for brands. As research has shown, nostalgia marketing is a potent tool for brand marketing; similarly, using the human senses could help you to subtly capture and retain your market - without the flashing signs and neon lights of in-your-face advertising.
Rome wasn't built in a day, and neither are brands. Greater choices and higher purchasing power have left control in the hands of consumers, who increasingly seek brands they can identify with. If Apple were to launch a hotel brand tomorrow, you would probably have an idea of what to expect, and it would likely see throngs of customers flocking to try it out - because it's Apple - and that, is the power of a brand.
All in - or fold?
As consumers continue to hunt for experiences that are off the beaten track, how relevant a brand remains will hinge on its ability to live up to its purported standards, whilst offering a unique and authentic guest experience. Brands which fail to prove themselves "worthy" may sit among the ranks of those still trying to charge a premium for their brand name, though eventually, many will likely fall victim to "sort by price".
With that said, however, this does not mean that hotels without a strong brand are doomed to fail. Rather, a clear choice should be made between investing into building a brand, or simply providing the right mix of service, amenities, and price (i.e. offering value-for-money). The strategy, it seems, is to go all-in and make your brand stand for something, or to fold your hand and compete on price. There certainly still is a market on either side of the course, but nobody is interested in paying for tired, lackluster brands anymore - so if you're going to do it, you'd better make it worth it.
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EHL Hospitality Business School
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