HB ON THE SCENE: Defining Emerging Brands

BALTIMORE—Shuffle through a pile of press releases and the term “emerging brand” will make an appearance more than once. While the use of this term is becoming more commonplace, the meaning of “emerging brand” is up for debate—and that’s a discussion worth having.

Held last week at Hotel RL Baltimore Inner Harbor, the 2017 annual Hotel Business Owners and Developers Roundtable, hosted by RLHC (Red Lion Hotels Corporation), welcomed panelists from across the hotel industry to discuss the impact of emerging brands. Arthur J. Gallagher & Co. Real Estate and Hospitality Services and Sobel Westex sponsored the roundtable, which consisted of 15 speakers in total.

Right off the bat, Stefani C. O’Connor, executive news editor at Hotel Business, challenged panelists to define the term “emerging brand,” which prompted varying opinions from participants. Bill Linehan, EVP and CMO at RLHC, took the first stab at her question and restricted the term in question to new entrant brands.

“I think new entrant brands offer choice,” Linehan said to his fellow panelists.”They offer differentiation from what is existing out there in terms of the norm. It doesn’t mean that existing brands are not conforming to be emerging. I think most of them are, but it’s interesting in that emerging brands offer two things: one, to consumers, they offer more choice, more choice that fits a traveling persona, and to hoteliers, they offer an opportunity for more inventory, which is offering more consumer choice.”

Other panelists discussed the importance of emerging brands customizing experiences for guests; there are additional opportunities to tailor to guests’ needs. “What’s cool about emerging, or any brand that’s reinventing itself, is this idea of getting closer to the customer and their specific needs, whatever that segment is,” said Paul Breslin, managing director at Horwath HTL. Compared to legacy brands, these emerging brands are doing their own research in advance.

“They’re looking at the customer, or that niche, and kind of wrapping the brand around a demographic, and I think that’s the difference,” said Brian McSherry, COO at M&R Hotel Management. “The difference is instead of moving to the customer, we’re creating for the customer.”

But panelists also voiced concern around how emerging brands have been developing themselves around a particular age demographic. “What happens when the customer grows up, and they evolve, and they’re no longer in that emerging brand or that particular product?” he said. “What happens to the investment we made?”

While Bill Reynolds Jr., senior managing director at MCS Capital LLC/The Marcus Corp., agreed with McSherry and other panelists, he also provided insight on how designers have taken the fear of guests aging out of properties into consideration by introducing more movable parts into properties. “I think that the designs are so clever today,” he explained. “If you look at this lobby upstairs, or you think about The Envoy if any of you have been to it up in Boston, it’s a stage set. There’s nothing architectural to do later, so when you want to reinvent it, it’s like changing the scenery on stage, which is very clever on the part of designers. I think that’s how you’re able to keep it fresh, keep it new, keep it interesting.”

It’s that adaptation where emerging brands are finding themselves ahead, even from a developer’s standpoint. “For us, it’s the ability to change quickly and to fit into that demographic as they grow, and so it allows us to localize from market to market, allows us to change quickly on a dime, whereas the past brands, potentially at times, came so built into a box that it was tough, it was cost prohibitive and it also made the consumer go and try different things. And so the emerging brands, the smart ones, are allowing the adaptation and are allowing for that in the future,” said Kerry V. Ranson, chief development officer at HP Hotels.

The roundtable also conversed about when a brand can be called a brand; why properties may or may not need to be associated with a brand to obtain financing; and how consistency can impede creativity.

Other panelists included Roger Bloss, EVP and president of global development, RLHC; Isaac Brown, president and CEO of Extended Hospitality Group LLC; Elliott Estes, principal, Woodmont Lodging LLC; Bhavesh Patel, principal at ADM Hotels & Development; Ravi Patel, president at Hawkeye Hotels; Brad Rahinsky, president and CEO, Hotel Equities; Lou Schaab, CFO at Chesapeake Hospitality; Ben Seidel, president, Real Hospitality Group; Larry Spelts, president and chief development officer, Expotel Hospitality; and Steve Van, president and CEO at Prism Hotels & Resorts.

(Look for more coverage on “Emerging Brands: The Industry’s Energizers” in the Sept. 7 issue of Hotel Business.)