How Flagged Hotels are Competing with the Independent Boutique Experience

If you ask the average person how many hotel brands are owned by Marriott Hotels, you’d be hard-pressed to find anyone who knows the right answer — let alone be able to name all of them or actually know the difference between each of the brands. (For the record, the answer is 30.)

While Marriott Hotels is currently by far the largest flagged hotel conglomerate (since their acquisition of Starwood Properties), it isn’t the only company with overwhelming and, albeit, confusing branding. Coming in closest to Marriott’s dominating lead is Wyndham, which now has 20 brands with the majority located in the Northeast, then InterContinental Hotels Group which now boasts 17 separate brands mostly on the coasts, Hilton with 15 brands dominating in the Southeast, and the Hyatt Hotel Corporation has 14, mostly in the South and Midwest.  

A Crowded Arena

With so many brands, it's becoming more and more difficult for these companies to distinguish themselves from one another. For instance, Marriott attempted to categorize their hotels into either “classic,” meaning their “standard” hotel, or “distinctive,” meaning the hotels have more boutique amenities and character. They then subcategorized further with each brand being designated as either “select,” “premium,” or “luxury". Most guests can’t tell the difference, nor does it seem like they care as long as the beds are comfortable and they are accumulating rewards points.

As more brands emerge from these major hotel and resort companies, customers have less and less brand loyalty — many may not even know if the resort is part of a certain flagged hotel group. It seems that the brands mean more to the hotel and resort owners than the customer.

Creating More Brands Over De-Flagging?

The challenge for most hotel and resort owners is deciding whether to continue to be a flagged hotel or to de-flag and venture out on their own. While being a franchisee of a large hotel or resort company comes with obvious advantages such as leveraging their prestige, reservation system, and marketing resources, they have to follow exacting standards laid out by the company. To de-flag means owners will have the freedom to create their own style and marketing.

Having a unique identity can play well, especially with many millennials who value an experience over a standard, cookie-cutter resort or hotel property. You won’t get many social media likes for staying at a Sheraton or a Holiday Inn, after all.

The major hotel and resort companies know this and are now catering to customers who value a more personalized stay or local feel in their hotels. Recently, flagged hotels and resorts have started integrating non-flagged hotels as “soft brands” and “lifestyle brands". Typically these independent hotels keep their original name but must meet the parent company’s standards. “Soft brands” and “lifestyle brands” feel more like independent boutique hotels that are designed to fit a particular community, providing a more authentic local experience. This could also mean focusing on things like a more social atmosphere, health and wellness, or ecologically-friendly amenities.

New soft and lifestyle flagged properties from Marriott include Luxury Collection, Autograph Collection, and Tribute Portfolio which all attempt to distinguish themselves from the traditional Marriott properties. Wyndham also launched their own soft brand, The Trademark Hotel Collection, which debuted back in 2017.

While these soft brands are able to better compete with non-flagged, independent hotels, they still need to follow certain company protocol. Non-flagged hotels, on the other hand, can create their own protocol and easily integrate the latest trends such as more personalized experiences and advanced, smart technology — in other words, they can adapt to customers’ needs faster.

With more hotel and resort mergers, we’ll see even more new brands compete, not only with non-flagged properties, but among their own company’s brands as well. Distinguishing their individual identities and trying to draw in customers will be a constant challenge in this highly competitive industry.

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