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Hyatt Regency San Francisco - June 24, 2019
Pebble Beach, CA - June 25-28, 2019
Chicago, IL - August 6, 2019
Best Western Hotels & ResortsBW Premier Collection (upscale)
Carlson Rezidor Hotel GroupQuorvus Collection (luxury)
Choice Hotels InternationalAscend Collection (upscale)
HiltonCurio by Hilton (upper-upscale)
Tapestry Collection (upscale)
Hyatt Hotels Corp.The Unbound Collection (luxury)
Marriott InternationalAutograph Collection (upper-upscale)
The Luxury Collection (luxury)
Tribute Portfolio (upscale)Starwood Preferred Guest allows members to earn and redeem points at certain
Design Hotels, a global collection brand of luxury properties
Wyndham Hotel GroupThe Trademark Hotel Collection (upper-midscale &
Following a glut of boutique and lifestyle hotel brand launches
during the past few years, major industry players are embracing a new darling, the
collection brand, in order to achieve a similar effect. So far, 2017 has played
host to two such brand launches already. In January, Hilton introduced Tapestry
Collection, an upscale complement to its upper-upscale Curio by Hilton collection
brand. Then in June, Wyndham Hotel Group announced The Trademark Hotel Collection
for three- and four-star independent properties.
Collection brands, or soft brands, which bring independent hotels
into a major chain's system without altering the core identities of the properties,
are nothing new. Choice Hotels International launched its upscale Ascend Collection
brand in 2008, and Marriott International added its Autograph Collection brand in
2010. But what have changed in recent years are consumer tastes, as well as business
conditions for hotel owners.
The increase in travelers who desire authentic, local experiences,
and are willing to turn to alternative channels like Airbnb to get them, have challenged
hoteliers to think differently about their hotel products. "People used to
prefer money well spent; now they want time well lived," AccorHotels CEO Sebastien
Bazin said during the New York University International Hospitality Industry Investment
Thinking differently has taken a few forms, from the previously
mentioned launch of boutique and lifestyle brands to acquiring alternative lodging
companies, as AccorHotels did with Onefinestay, to introducing on-property food
and beverage options that cater to the local market.
But even a property's connection to a major brand can repel some
travelers, according to Marriott chief development officer for North America full-service
hotels Noah Silverman. "What we want, in many ways, is to underbrand the hotels
from the traditional Marriott badging so that those independent travelers that may
get turned off by the big brand don't," he said. "At the same time, we
want the pipeline of Marriott Rewards customers to be able to find [these hotels]
and use their points."
While the root idea of any collection brand is to be unique,
hoteliers find that these brands appeal to consumers more broadly than first anticipated.
Choice chief development officer David Pepper said Ascend Collection, with about
130 hotels in its portfolio as of March 31, contributes the most reservations in
Choice's system. When Hilton launched Curio in 2014, the company expected the brand
to appeal mostly to leisure travelers, according to global head of Curio and Tapestry
Mark Nogal. But the brand also has captured interest from business travelers who
similarly are looking to embrace new experiences.
When [owners of independent hotels] go for financing or refinancing of their project, an affiliation with a brand is very attractive. Lenders see value in that."
Hotel Environment Changes
The onboarding of independent hotels by the major chains is as
much about the large companies wanting to meet consumer demand as it is about the
pressures facing small hotel owners and operators.
The hotel industry pays the highest commissions to online travel
agencies, and that expense is only growing. According to CBRE, commission payments
from U.S. hotels to intermediaries, which include OTAs and travel agents, rose 6.8
percent last year. Industry margins also are declining, even as U.S. lodging revenue
climbed to its highest level ever in 2016, $199.3 billion, according to STR. Those
factors place particular pressure on small operators.
Best Western Hotels & Resorts VP of owner relations Michael
Morton said that in working with independent hoteliers for the BW Premier Collection,
he found some were getting 40 to 50 percent of their bookings from OTAs. By joining
with a larger company with scale, he said, independents "are going to see significant
Similarly, as the lending climate for hotel development tightens,
independents can have more success if they're affiliated with a brand. "When
they go for financing or refinancing of their project, an affiliation with a brand
is very attractive," Morton said. "Lenders see value in that."
Most soft brand agreements also bring other perks to the table
for independent hotels, such as loyalty customers, staff training, revenue management
systems and improved purchasing power. "A lot of owners come for the distribution
and business delivery and then they understand all the other parts of the value
proposition that we provide," Choice COO Pat Pacious said. "And that's
really helped keep them in the system and build more hotels with us."
What we want, in many ways, is to underbrand the hotels from the traditional Marriott badging so that those independent travelers that may get turned off by the big brand don't. At the same time, we want the pipeline of Marriott Rewards customers to be able to find [these hotels] and use their points."
What to Expect
While each company sets its own standards for hotels that want
to join their collection brands, it's mostly a laissez-faire agreement designed
to give independent owners autonomy. "[Owners] don't want the 800-pound gorilla
of the brand coming in and telling them how to run their hotel," Pacious said.
Pepper said Ascend sets no brand standards, instead requiring
only that each property provide an experience on par with an upscale hotel. Morton
said Best Western requires BW Premier Collection properties to maintain a AAA/CAA
three-diamond hotel rating or above and a TripAdvisor customer experience rating
of 4 or above.
That hands-off relationship, Kimpton Hotels & Restaurants
CEO Mike DeFrino said, makes collection hotels attractive to many owners but
"a completely different beast" from branded boutique hotels. "There's
complete inconsistency in product delivery; there's no standardization," he
said. "To call a collection a brand is almost contradictory."
What travelers can expect is more soft-branded hotels. In June,
Marriott International announced it intends to grow its three global collection
brands—The Luxury Collection, Tribute Portfolio and Autograph—20 percent this year
and almost 50 percent by 2019. Ascend, which already boasts the largest portfolio
of any soft brand, had 57 hotels in its pipeline at the end of the first quarter.
Similarly ambitious plans are underway for Hilton's Curio and Tapestry and Wyndham's
And there's still room to grow, through both new-construction
properties and the existing supply of hotels. Independent hotels account for almost
a third of the total U.S. room supply, according to STR. Forty-one percent of that
inventory sits in the upper-midscale segment or higher. In Europe, where the ratio
of independent to chain hotels flips, there are even more opportunities for companies
looking to grow their collections.
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