The power of hotel branding – brand equity

The power of hotel branding – brand equity

Consumer awareness and associations lead to perceived quality, implied attributes and ultimately brand loyalty. This perspective is labeled customer-based brand equity. A strong brand provides a series of benefits to the service firm, such as greater customer loyalty and resilience to withstand crisis situations, higher profit margins, more favorable customer response to price changes and licensing opportunities, and brand extension.

Successful brands provide consumers with a variety of functional and emotional benefits that positively influence their perceptions and subsequent behaviors associated with that brand. It has been shown that such brands can be important intangible assets of the company with demonstrable financial value.

A distinctive brand personality can create a set of unique and favorable associations in consumers’ memory and thus increase brand value. Coca-Cola estimates that only about 4 percent of its value can be attributed to its plants, machinery and locations. The real value is in its intangible assets and foremost among them is the brand.

Hilton hotels have used branding to expand their market share by introducing new brands, such as Doubletree, Embassy Suites, Hampton Inn, and Conrad, when existing markets have become saturated. This allowed each different brand to establish its own position in the market. An approved brand strategy places a well-established name on a group of products or services. By supporting a range of products, the leading brand can lend its good name and image to the entire brand family. Marriott estimated that adding the Marriott name to the Fairfield nn increased the occupancy rate by 15 percent.

Hospitality organizations successfully franchise their brands, whereby the owner company allows others to sell the product using their model and specifications in exchange for royalties. Intercontinental Hotels Group successfully franchised Crowne Plaza Hotels, allowing the brand to grow rapidly.

There are some doubts about the effectiveness of hotel branding. It is argued that the abundance of hotel brands and branding strategies can lead to confusion among consumers. The UK market is now saturated with many low budget chain brands such as premier inn which are currently ideally placed to survive the current economic recession.

There, the national advertising campaign with a well-known celebrity has also clearly targeted its audience as a quality budget brand that has the potential to steal many customers away from more luxury brands. The most important factor is the price right now. However, the Premier inn brand represents quality at a low price. Users can also get other benefits in its advertising such as comfort and entertainment due to the advertising images.


Hotels traditionally focus on describing their services and facilities. Malmaison focuses its marketing on experiencing the “small life” and eat, drink, sleep philosophy, which again creates certain images and expectations, known as emotional branding.

Loyal customers may place more importance on perceived brand image and associations as a reflection of themselves than on hotel services. A testament to the power of customer-based brand equity. Recently, Malmaison has enjoyed a more prominent brand image due to the increasing number of celebrities visiting the brand in various cities and the growing trend of celebrity endorsements in the media. Exposure to this publicity strengthens the brand within their market and may also expose it to others.

The brand also helps to motivate team members to really perform because working for a well-known and liked brand is much better than working for one that is not. The growth of the hotel market in Europe will be driven by branding and franchising. As the brand continues to grow with the opening of more Malmaison properties, consistent quality may be one of the brand’s biggest challenges.

The continued success and growth of a brand must be carefully managed by constantly monitoring and adapting to the target market environment. The product must constantly review its added values ​​and remain innovative to differentiate itself from its competitors, especially when the market expands or becomes saturated. Brand images must continue to adapt and appeal to the values ​​and associations of the target market. Malmaison must continue to deliver a consistent product to be the first choice in the consumer’s mind, as inconsistency can very quickly damage a long-standing positive image. There is no doubt that brands play a crucial role in gaining competitive advantage. It’s fair to say that a brand can be one of the most valuable assets a company can own. It is also perhaps the most vulnerable asset.

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