Monday, June 2, 2008

Best Hotel Flags Debate Continues...

A fun analogy that I heard from a hotel developer last week: the hotel industry is in many ways similar to the Japanese auto industry when it comes to the perceived quality differences among brands. This is one of those analogies that could easily be taken to far, but it is interesting to think about the similarities.

If we assume that the top two major automakers, in terms of perceived quality and resale value, are Toyota and Honda they seem to match up pretty nicely with the top two hotel franchises, Marriott and Hilton. It's broadly accepted that those two are the best, but when it comes to declaring a clear winner it's more a matter of taste and opinion than hard facts. You could say the Camry and Accord are the reliable workhorse models in the same way Courtyard and Hampton Inn generate volume and solid earnings for Marriott and Hilton. To take it a step further the Lexus and Acura luxury brands represent the same play for the high-end consumer as the Ritz Carlton and Waldorf Astoria brands. In both industries it gets a little murkier after the top two brands, but that doesn't mean that Nissan and Mazda aren't selling plenty of cars or that Starwood and Intercontinental don't have some great hotels, they just aren't up to that top tier.

In both the car and hotel worlds it's all about careful market segmentation and creating customer loyalty that leads to repeat customers coming back to buy more and more expensive products, be they cars or room nights.

Given the success of the Prius and other hybrid cars should we expect all the major players to introduce green hotels soon, or am I taking the analogy too far?

Llenrock Group

1 comment:

Matt Aquiline said...

Perhaps they could sell "Green Rooms" which are really just the exact same room, but cost more so the hotel can purchase carbon offsets equivalent to the footprint the consumer left. That way the wealthy can assuage their guilt without actually changing their lifestyle!