Exploring the Pros and Cons of Hotel Branding: Is Going Brandless a Better Choice?

Los Angeles, CA – Most leading hotel companies are constantly acquiring or creating new brands to expand their portfolio. Marriott, Hilton, IHG, Hyatt, and Accor, for example, have an extensive range of brands under their umbrella. While the choice to brand a hotel may seem obvious, there is another option that is often overlooked – operating a hotel without a brand.

Branding a hotel comes with several benefits. First, it provides name recognition, making it easier for guests to choose a hotel they are familiar with. Hotel companies invest in traditional advertising, social media, and other techniques to ensure their brands are well-known and trusted. Brand standards also create uniformity among different properties, enticing travelers who value consistency. Additionally, hotel brands offer reservation systems and loyalty programs that simplify the booking process and increase occupancy rates. Lastly, in times of trouble, brands can provide support and troubleshooting expertise.

However, there are also challenges and costs associated with branding. Hotel owners must bear the costs of developing and maintaining a brand, which can include various fees such as food and beverage fees, marketing fees, and information technology fees. Brand standards can be inflexible and costly to comply with, and long-term agreements with brands can be burdensome if the brand loses favor or imposes challenging standards. Furthermore, the proliferation of brands within a hotel company can result in competition among properties targeting the same customer or demographic.

When deciding whether to brand a property, hotel owners need to consider several key factors. First, they must assess whether they have the resources and expertise to operate a hotel without a brand. Creating a strong identity and attracting guests without the help of a recognized brand can be a challenging task. The availability of funding is another crucial consideration, as lenders and investors often prefer to work with established brands that have a track record. Hotel owners also need to evaluate whether they have a capable team of hotel professionals who can navigate the highly regulated hospitality industry.

To make the right decision, the assistance of expert consultants who specialize in the hotel industry is invaluable. They can help owners identify the goals of their property and analyze market fundamentals to determine the best brand or operator candidates. By comparing the terms and demands of different brands, they can ensure owners make an informed decision.

Ultimately, the decision to brand a hotel or operate without a brand depends on several factors, including available resources, target clientele, access to funding, and the expertise of the hotel team. While branding offers certain advantages, operating without a brand can give hotel owners more flexibility and potentially reduce costs. Hotel owners should carefully assess their specific circumstances and consult with industry experts before making a choice.

Los Angeles-based Robert Braun, a Senior Member of JMBM’s Global Hospitality Group, and Jim Butler, founding partner of JMBM’s Global Hospitality Group, provide legal and business advice to hotel owners, developers, and investors. With extensive experience in the hospitality industry, they have been involved in billions of dollars of hotel transactions worldwide. Through comprehensive analysis and consultation, they assist clients in making informed decisions regarding branding and management agreements.

For more information on branding and hotel management agreements, visit the JMBM Global Hospitality Group’s website.