Monday June 23rd, 2014 - 1:23PM
If you didn’t have enough evidence before about the power and potential of soft branding in the lodging industry, Hilton Worldwide has officially thrown its hat into the ring. At the NYU Conference earlier this month, in a move that came as a surprise to virtually no one, Hilton launched its newest “brand.”
After all, Hilton’s president and CEO Chris Nassetta had all but said in recent months that a boutique or lifestyle brand was in the offing. Curio—A Collection by Hilton is defined by the company as a collection of boutique hotels that will operate under the company’s umbrella. From a branding standpoint, Hilton describes Curio with words like “authenticity,” “individuality,” and “character.” Stop me if you’ve heard any of this before.
Some in the industry were surprised and you could even go as far as to say disappointed that what Hilton rolled out wasn’t a creative new, ground-up brand but rather another ‘collection’ similar to Autograph by Marriott. However, while some may refer to Curio as a copycat brand and not very imaginative, the reality is it was very much necessary.
Hilton, which has been operating as a publicly traded company since December, could no longer sit on the sidelines for this competitive boutique/lifestyle soft-branding race, which also includes Starwood’s Luxury Collection, Choice’s Ascend Collection and most recently the Quorvus Collection by Carlson Rezidor Hotel Group.
Launching a brand and getting it to reach critical mass takes lots of time and resources and with new construction still tough to get to pencil out, particularly in light of how difficult it can be to get lenders to underwrite a loan for an unproven brand with no track record, it’s especially challenging. Conversely, consider that Marriott’s Autograph Collection has grown to include some 60 properties in less than four years.
So if you’re Hilton, and others, why not appeal to the scores of independent properties looking for the benefits of a brand, such as the reservation system and loyalty programs, while maintaining their own look and feel? In fact, just weeks after the launch Hilton had already identified five properties that would soon be joining Curio and the company has publicly stated that it expects some 25 properties by the end of the year.
The bigger question to me is what does this say about the overall future of hospitality branding? These traditional brands are effectively helping the plight of the independents, which in many cases are competing directly against other luxury offerings from the very same brand companies in major markets. In addition, the power of the independents has never been greater as consumer loyalty continues to shift towards the Priceline’s and Expedia’s of the world, not to mention newer companies like Airbnb.
For Hilton’s Curio brand it’s going to be all about the execution, particularly in what has become a crowded, maybe even overcrowded, segment. So its latest brand iteration may not be the next Hampton or Homewood Suites but the potential for growth is just as great, probably even greater. And if you’re not convinced, stay tuned, it seems the company has plans to introduce a lifestyle brand in the fall. Let the speculation begin.