The Power Of Hotel Branding – Brand Equity

The consumer’s awareness and associations lead to perceived quality, inferred attributes, and eventually brand loyalty. This perspective is labelled as customer-based brand equity. A strong brand provides a series of benefits to a service firm, such as greater customer loyalty and higher resiliency to endure crisis situations, higher profit margins, more favourable customer response to price change, and licensing and brand extension opportunities.

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

A distinctive brand personality can create a set of unique and favourable associations in consumer memory and thus enhance brand equity. Coca-Cola calculates that only about 4 per cent of its value can be attributed to its plants, machinery and locations. The real value is in its intangible assets, and first among these is its brand.

Hilton Hotels have used branding to widen their market share by introducing new brands, such as Doubletree, Embassy Suites, Hampton Inn and Conrad when existing markets have become saturated. This has allowed each different brand to establish its own position within the market. The endorsed brand strategy puts a well-established name on a cluster of products or services. By endorsing a range of products, the lead brand can lend its good name and image to the entire brand family. Marriott estimated that adding the Marriott name to Fairfield nn increased occupancy rates by 15 percent.

Hotel organizations have successfully franchised their brands, whereby the owning company allows others to sell the product using their model and specifications in exchange for royalties. Intercontinental Hotels group has successfully franchised Crowne Plaza Hotels, which enabled the rapid expansion of the brand.

There are some doubters as to the effectiveness of hotel branding. It has been argued that the plethora of hotel brands and branding strategies may lead to confusion amongst consumers. The UK market is now becoming saturated with many low budget chain brands such as premier inn which are ideally suited at the moment to survive the current economic recession.

There 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 from the more luxury brands. The most salient factor is price at the moment. However Premier inn brand does portray quality at a low price. Consumers may also possibly receive other benefits in its advertising such as comfortable and fun due to its advertising imagery.


Hotels traditionally have focused on describing their services and facilities. Malmaison focuses its marketing on the experience of ‘mal life’ and eats, drinks, sleeps philosophy, which again creates certain images and expectations, known as emotional branding.

Loyal customers may attach more importance to the perceived image of the brand andassociations as a reflection of themselves rather than the hotel services. A testament to the power of customer-based brand equity. Malmaison has more recently enjoyed a more publicised brand image due to the increasing number of celebrities frequenting the brand in various cities, and the increasing trend to publicise celebrities 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 deliver, because working for a well-known, and liked brand is much better than working for one that isn’t. The growth of the hotel market in Europe will be driven by branding and franchising.As the brand continues to grow as more Malmaison properties open, consistent quality may be one of the biggest challenges facing the brand.

Continued success and growth of the brand must be carefully managed by constantly monitoring and adapting to the environment of its target market. The product must continually revise its added values and remain innovative to differentiate itself from its competitors, particularly as the market expands or becomes saturated. The brand’s imagery must continue to adapt and appeal to the target market’s values and associations. Malmaison must continue to deliver a consistent product in order to be the first choice in the consumer’s mind, as inconsistency can very quickly damage years of a positive image. There can be no doubt that brands play a crucial part in obtaining a competitive advantage. It is fair to say that the brand can be one of the most valuable assets a company can own. It is also, perhaps, the most vulnerable asset as well.