Summary of Key Points
Many hotels are frequently changing their brands (replacing their facades) due to owners' dissatisfaction with the performance of the existing brand, hoping to "restart" their business through a brand change. However, the cost of brand change is not low, and it may not solve fundamental issues such as property limitations, intense competition in the business district, or weak sales capabilities. Owners need to make a rational comparison: investing the money spent on brand change in improving guest rooms, sales, or revenue management could be more effective.
1. Why do hotels keep changing brands? — Not meeting expectations, trying again
Most hotels change their brands for the first time because the original brand did not achieve the desired investment returns. When choosing a brand, owners were attracted by the group's membership system, central reservation services, and reputation, believing they would bring stable orders. However, in reality, orders rely more on local businesses, direct sales, and OTA platforms, and the contribution from the group's membership is far less than expected.
For example, the Zhangjiajie Nabilihotel, with a total investment of 1 billion yuan, has partnered with InterContinental, Hyatt, and Howard Johnson, changing brands four times. The property and location remain the same, but after each partnership, the owner felt the brand did not provide sufficient value or additional orders. Since the hotel has already been built and significant investments have been made, changing the brand is at least a new attempt, which is better than leaving it unfinished.
2. How much does brand change cost? — Both visible and invisible expenses
Brand change is not just about changing the facade; it's like a "small restart" with considerable costs:
- Renovation and modification: Guest room furniture, public area design, signage, and bedding must all be updated to meet the new brand's standards.
- Business interruption: The hotel cannot operate during the renovation period, resulting in lost revenue.
- Systems and operations: Replacing the reservation system, updating OTA images, training staff (or hiring new employees), and developing new customers.
- Risk of brand premium: The hotel may attract guests at the opening due to promotions and novelty, but can the prices remain competitive? If guests are not convinced, the previous investments will be wasted.
These costs can be a significant expense for small and medium-sized hotels.
3. Brand change cannot solve fundamental issues
Many hotels still do not see an improvement in business after changing brands because the core problems remain unsolved:
1. Inherent property flaws: Older buildings have small room sizes, limited parking, and poor plumbing, which cannot be significantly improved by changing the brand.
2. Intense competition in the business district: With too many hotels of the same quality in the area, guests are limited, and changing the brand does not increase prices.
3. Weak sales capabilities: Even with a new brand, the same staff use the same sales methods. If the hotel relies on OTA platforms, it faces the same challenges (lack of guests from Monday to Thursday and the need for promotions on weekends, with the new brand's membership resources being unused).
4. Brand premium not valid: If the rooms, breakfast, and location are similar to other hotels, guests will not pay more just because of the brand change.
4. Calculate the costs of not changing the brand before making a decision
Many owners only consider the new brand's benefits before changing the brand, ignoring the potential benefits of investing in business improvements:
- Using the money for partial renovations (such as replacing mattresses and bathroom facilities) can directly improve guest experience.
- Training the sales team to target corporate customers can increase stable orders.
- Implementing sophisticated revenue management strategies (e.g., raising prices on weekends and offering discounts during weekdays) can improve occupancy rates.
- Renovating less profitable room types (e.g., converting small rooms into family-friendly options) can be more effective.
These investments may address the actual problems better than changing the brand. For example, spending 5 million yuan on renovations could potentially increase guest satisfaction and revenue, while changing the brand might only attract temporary interest.
5. Industry reflection: Focus on the business itself, not just the facade
The trend of hotels changing brands is ongoing: 1,572 hotels changed brands in 2024, and this number is expected to rise to 1,897 in 2025. However, more owners are realizing that brands are not a panacea.
Is brand change a "lifesaver" or a "short-term fix"? The key is whether the business operations improve after the change. If only the facade is changed while staff, sales, and pricing strategies remain the same, the business will not improve significantly.
The same building can have its facade changed multiple times, but the real question is where to invest the next round of funds: in changing the brand or improving the business operations.
In conclusion: Brand change is not a universal solution; addressing the underlying issues in business operations is more important than just changing the facade.
(What are your thoughts? Have you stayed in hotels that have changed brands frequently? Did the experience improve?)