Why Do the Biggest Hotel Chains Create So Many Different Brands?

When you're planning a trip, it may seem like you're wading through a sea of endless hotel options, but many of those hotel brands are hiding a secret – they're owned by the same company. Why do hotel mega-chains spend so much time and money creating these different brands? We've got the answer.

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[michaelobrien]

I think you left out the franchisee radius protection. When a franchiser gets a Courtyard by Marriott, they don't want another one across the street so Marriott can offer other people nearly identical hotels but with different names so they can maximize profit.

[donnyvu]

I worked at Marriott. It just a corporate thing. The one thing Marriott was lucky on was living in Montgomery county. They had so much rich people living near them that need to park their money. It also helps that you’re with the Mormon temple, so you’re in luck with a well known political investor. People forget, but Marriott was about to go bankrupt until they got a lifeline from Pepsi. They told Pepsi they will carry only Pepsi brand if they lend them money. The rest was history. You won’t see a coke product in most of Marriott.

[treyshaffer]

wth i was researching this exact thing yesterday, what a coincidence. so confused by hotels. i stopped getting airbnbs because they're overpriced, so this is useful

[calebplumleeoutdoors]

As much as i hate staying in hotels... airbnb.

No Brenda, your shizzy lil tinyhome is not worth $300/night plus cleaning fee

[Default]

Beyond the different service tiers, the other thing that it helps to be aware of is which brands are for new builds and which are for converting existing properties from other brands (which means they will typically have looser standards for the property). For example, even though Choice advertises Sleep Inn and Quality Inn as being in the same tier, a Sleep Inn will generally be nicer as it is a brand for new builds, while Quality is for conversions (and still allows exterior access properties under its brand standards).

[nlpnt]

ALBM has also been the final nail in the coffin of the midcentury chains' distinct architectural flourishes like Howard Johnson's orange roofs, because the entities who *do* own the hotel buildings can and will switch brands when one contract period ends, either within a group (for instance, downgrading from a "select" to a "budget" brand rather than make expensive upgrades to an aging building) or from one to another. If you've lived in one place long enough, you have "the La Quinta that used to be a Holiday Inn" in your mental GPS as a landmark.

[bddnytb]

Capturing market share without looking like invasive monopoly. 👍 ❤ 😂

[pat-orl]

You don't want to have a residence inn across the street from another one. It isn't like starbucks, it is frustrating to customers. So if one is a TownePlace, everyone knows where to go.

[xyzzy]

another point is already established brand loyalty. a lot of these brands are scooped up by Marriott and others, but many average Joe consumers will think things like "I've been staying at Sheraton hotels my whole life, I'd never stay at a Marriott" even though Sheraton has changed hands like 4 times over their lifetime. certain areas are often more loyal to the name that was previously used in that area even if it's the same hotel (or any other service) as the rest of the world.

[choatican]

Try being a cab driver in 1998 when a drunk person gets in and asks you to take them to the Marriott.

"Which are 17 of them."

Blank stare.

Separate branding helps in bigger cities.

[TheJagjr]

The hotel companies divested their realestate because by leasing it back they could have a known consistant monthly write off, whereas they had to do between a 1- 3 decade depreciation if they kept it on their books.

[Coz]

I watched the entire video and I still don't get why they can consolidate brands to a smaller number.

[BrandanTheBroker]

Not mad at the company with so many brands, mad that there's no standard within the brands themselves. I've stayed at Days Inns that were cleaner and more modern than a LaQuinta, and in the area of SeaTac airport there's 3 Ramada hotels and 2 of them are dumps.

[pat-orl]

Notably, they aren't owned by Marriott, but Marriott is managing them.

[huey]

Actually, many of these hotel brands were acquired by the larger hotel chains via mergers or being bought out. Choice Hotels used to be just four brands (Clarion, Quality Inn, Comfort Inn, Sleep Inn) but they acquired Radisson Hotels as well as a ton of other brands.

[paradonym]

Most really have very clear design choices making them easily seperable in the price classes.

[umadbra]

They don't create multiple brands... They buy multiple brands.

[rhy]

Sabrina the teenage witch works for morning brew now!?

[aj]

The grocery corporations are starting to try something similar. Albertson's bought out Safeway several years ago, and are now trying to sell to Kroger, putting 3 major brands under one umbrella, but many of the stores won't be changing their names...

[doujinflip]

The Asset Light model works for hotel chains because corporate can just focus on branding and customer prepatory service (e.g. points redemption, data collection, reservation administration, etc). It helps that Marketing & Service are highly value-added, hence why property owners (often some other real estate corporation you probably never heard of) often try to franchise from a hospitality chain to gain visibility and access to their global customer base.

Unrelated but amusing: I happen to have just stayed in one of the towers shown at 8:11 when I watched this video 🏨😂